Finance minister Arun Jaitley. Photo: Abhijit Bhatlekar/Mint
Finance minister Arun Jaitley. Photo: Abhijit Bhatlekar/Mint

Govt seeks Parliament nod for extra spending of 15,000 crore

The second batch of Supplementary Demand for Grants for 2018-19 involving a gross spending of 85,948.86 crore was tabled by finance minister Arun Jaitley in the Lok Sabha today

New Delhi: The government on Thursday sought Parliament approval for an additional net spending of 15,065.49 crore during the current fiscal. The second batch of Supplementary Demand for Grants for 2018-19 involving a gross spending of 85,948.86 crore was tabled by Finance Minister Arun Jaitley in the Lok Sabha.

Economic affairs secretary Subhash Chandra Garg on Wednesday said the government is likely to make additional capital infusion in public sector banks. Asked whether the government is considering to make additional capital infusion in state-owned banks, Garg said, “Yes...wait for the supplementary which is coming up tomorrow. Most probably tomorrow".

This will be over and above 1.35 lakh crore capital infusion announced by the government for the public sector banks (PSBs) in October last year to meet global capital risk norms called Basel III.

Additional capital infusion will be done through recapitalisation bonds. This does not have any impact on the fiscal position of the government as recap bonds are part of below the line items.

According to sources, the government is considering additional capital infusion of up to 30,000-40,000 crore in public sector banks since they have been unable to raise required funds from the markets.

As part of the capital infusion plan announced by the finance ministry in October 2017, the government envisaged that public sector banks would raise 58,000 crore from the stock markets by March 2019 to meet Basel III norms.

However, due to subdued market conditions, banks have been unable to raise enough funds from the markets so far. In addition, non-performing assets of many banks have seen a spurt in the first two quarters of the current fiscal, putting a stress on their bottom lines. However, banks have got a breather in respect of capital conservation buffer (CCB), a part of Basel III norms.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed

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