Reserve Bank of India (RBI) deputy governor SS Mundra said on Tuesday that the Budget was pragmatic with the government deciding to stick to its projected fiscal deficit target.
“I think taking the overall assessment, it is quite a pragmatic budget. The fiscal consolidation roadmap is very much adhered to. The thrust on rural economy and job creation are very positive for the long term benefit. The social and public investment thrust should also be important. So overall it is a very balanced budget,” Mundra said.
On the issue of consolidation of banks, Mundra pointed out that the current clean up of banks should come to a conclusion before any step on consolidation.
“I think we did indicate that everything needs right sequencing. While the consolidation can be meaningful but the work which is already on hand, let it reach to a definite conclusion. But there is no specific discussion at this point in time as far as I know,” he stated.
“Wait for the announcement. The next monetary policy is in April,” he further added when asked about any possible rate cut.
Mundra said while the central bank had indicated some extra allocation of capital might have been helpful for the banks, the government’s assurance of finding resources was a helpful assurance.
“We had indicated probably some extra allocation could have come handy for the banking system. Having said that, I think he (Finance Minister) has very clearly mentioned that while the R25,000 crore allocation is happening now, if there is a need to provide more capital, the government will find the resources. I think it was a very clear and emphatic assurance which the FM has given,” Mundra observed.
He indicated that the capital that is provided now would work for the time being and if the need arises the government will find a way.