FM Sitharaman: India’s aspiration needs 20 SBI sized institutions

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Finance Minister Nirmala Sitharaman on Sunday said the country required at least 20 institutions of the size of the nation’s largest lender, State Bank of India (SBI), to be able to meet its aspirations.

Speaking about the Budget’s other proposals, Sitharaman said the idea to have a development finance institution (DFI) had internalised learnings from the IDBI episode, and added that there would be private sector play as well in the space, which will force the state-run DFI to be efficient.

She rejected the Opposition’s charge of “selling family assets” through the Budget stress on privatisation, terming it as a “lazy allegation”. “It is not what the Opposition says about selling family silver, it’s not at all,” she said, addressing a meeting of business people in Mumbai. “Family silver should be strengthened, it should be our takat (strength),” she said.

All the previous governments have done disinvestment, and the current regime has formulated a clear policy on which companies to be divested, she said, adding there was no proposal on the table regarding a Bank Investment Company to house the government stakes in banks and wondered what resulted in the discussion.

Sitharaman said the government would work with the Reserve Bank for execution of the bank privatisation plan announced in the Budget, but declined to comment on any specific details about which will be the candidate chosen for privatisation. In the Budget, Sitharaman had announced the privatisation of two banks as part of its disinvestment plan. Bank unions have opposed the move. “The details are being worked out. I have made the announcement but we are working together with the RBI,” she said, when asked about the proposal.

Sitharaman said despite reforms of the past, “socialist baggage” hindered businesses, and many state-run firms had been lacking professional expertise to grow or were present in sectors which were not strategically important. GST revenues have shown handsome growth in the last three months on overall recovery in the economy and on help from technology in plugging leakages, she said. Differing with those panning such revenue collections as “tax terrorism”, she quipped that this can be termed as “technology terrorism”.

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