Centre working on ‘bank-driven', not government-driven, solution for bad assets: FM Nirmala Sitharaman

Finance Minister Nirmala Sitharaman (File image: Reuters)

Disinvestment is a very responsible, transparent and open process, said Finance Minister Nirmala Sitharaman stated on February 7. The statement comes six days after tabling the Union Budget 2021-22 in Lok Sabha.

"Disinvestment is a very responsible, transparent and open process; not a random list. It involves a huge process of consultation before a call is taken about disinvesting. Even then, the way it has to be disinvested is layered and at every stage it is vetted," the FM said while addressing the media at Yogi Sabhagruh at Mumbai's Dadar.

The Union Finance Minister while reacting to opposition's allegation of 'selling family silver', stated that the government for the first time has devised a clear strategy on divestment so that taxpayers' money is spent wisely, adding it wants few public sector enterprises in specified sectors to do well.

"It is not what the Opposition says about selling family silver, it's not at all. Family silver should be strengthened, it should be our takat (strength)... Because you've spread it so thinly, there are many of them (PSUs) that are not able to survive; and the few that can perform do not get the due attention," she added.

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Sitharaman also said that the government had come out with a 'Banks-driven' solution and not a government-driven solution to deal with bad assets or disposal of bad assets.

The Union Minister noted that at this moment banks can't be blamed as they are not equipped to deal with bad assets. She added that the Reserve Bank of India (RBI) was working with the banks on the issue.

The FM even cited that banks had started appointing risk-assessment managers while speaking about professionalisation of banks.

"Banks need to run with a lot more sense of business, with more understanding of credit requirements and professional decision making," she said.

On the issue of GST compensation, Sitharaman said that the government was releasing GST compensation to respective states promptly every Monday and she personally took note of the data, as of which state had to be given compensation and the amount of GST compensation.

Asked on the issue of Agriculture Infrastructure and Development Cess (AIDC), brought in the Budget 2021, Sitharaman replied that it had been done as customs duty was reduced to some extent. She mentioned that following this an importer would probably pay less than before, when there was no cess at all.

"With this cess, the government will have some money for funding agricultural infrastructure activities. Since such infrastructures are built at the state level, the money collected will go back to states," she said.

Earlier in the day, Congress workers showed black flags to Union Finance Minister Nirmala Sitharaman to protest against the 2021-22 Union Budget and the increasing fuel prices. Though the police stopped the protesters from reaching near the venue of her visit, around 400 to 500 Congress workers around 400 to 500 Congress workers started shouting slogans against her.

She began her address stating that as it was necessary corollary for a Budget to get discussed in Mumbai. So, she arrived to do that duty.