Banks need to get back to their core business of mobilising deposits and lending, finance minister Nirmala Sitharaman said, laying down a marker for them amid concerns over slowing deposit growth.
The 12.5% capital gains tax on property without indexation, which the FM announced in the July 23 budget, is “fair”, she told ET in an interview.
Sitharaman said the government will try and resolve the ongoing angel tax cases. “It can’t be that we’ve removed a tax but those litigations are going to hang fire for some time. That cannot be a fair treatment. We will have to work out something,” she said.
In her budget speech Tuesday, the finance minister said the angel tax will be abolished effective April 1, 2025.
Read FM Nirmala Sitharaman’s full interview: ‘Word we gave post-Covid on fiscal glide path will have to be honoured’
Bank deposits grew 11.1% as of June 28 from a year earlier, according to the latest data from RBI, slipping well behind the 17.4% surge in credit, a situation not seen as sustainable.
“Overall, the earlier approach that banks need to mobilise deposits has come down over the decades,” FM said. “I still hold on to this principle that banks need to focus on their core business, which is to mobilise deposits, lend money. Nothing stops them from doing anything else, but this is core,” Sitharaman said, making clear what is expected from banks.
On employment generation schemes announced in the budget, she said industry had been extensively consulted while designing them and will be involved at the implementation stage as well. “After the passage of the budget in parliament, we will have industry engagement, but now to implement it,” Sitharaman said.
Replying to a question that disinvestment did not get mentioned in the budget, FM said the policy continues to be guided by the 2021 budget statement that all sectors of activities now will be available for the private sector as well. Asset monetisation “can be better”, she said.
The FM said GST Council is going to look at rate rationalisation for daily-use goods, in context of the budget doing enough to raise rural incomes.
