Finance Minister Nirmala Sitharaman on Saturday said that a "clean, reliable, robust financial sector" is required to achieve the Government's target of USD 5 trillion economy. While presenting her second Union Budget, the Finance Minister also emphasised that a "robust mechanism" is in place to monitor the health of all commercial banks. She informed the house that Rs 3.50 lakh crores have been infused as capital in public sector banks in past years while acknowledging that there is a need for greater private capital in banks.
The Finance Minister said, "Financial inclusion is key. A clean, reliable and robust financial sector is critical for a robust economy. In our efforts to achieve the $5 trillion economy, the financial architecture should evolve and it should keep evolving and move from strength to strength."
"The insurance cover for each depositor is currently Rs 1 lakh. We are raising it to Rs 5 lakh per depositor," said Nirmala Sitharaman. Finance Minister said the government plans amendment to facilitate separation of government pension trust from Pension Fund Regulatory and Development Authority (PFRDA). She also said the government's balance holding in IDBI bank will be sold to private retail investors.
The Finance Minister said that the government has permitted DICGC to raise deposit insurance coverage by five times to Rs 5 lakh. Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of the Reserve Bank of India, provides insurance cover on bank deposits. "Deposit insurance coverage will be enhanced from Rs 1 lakh to 5 lakh per depositor," the Finance Minister. At present, the DICGC provides Rs 1 lakh insurance to a depositor regardless of deposit in case the lender fails or liquidated.
Finance Minister Nirmala Sitharaman recited a verse in Kashmiri while presenting the Union Budget to a packed Parliament. The Narendra Modi government has come up with a 16-point plan to ease the farm crisis, including liberalising the agriculture sector, FM Sitharaman said in her budget speech. The FM also added that the budget was broadly divided into three major themes — aspirational India, economic development and building a caring society that is humane.