While replying to a question in the Lok Sabha, Thakur also said the RBI was also not considering any proposal to give permanent status to the commission. “No, Government of India is not considering any proposal to give permanent status to Finance Commission,” the Minister of State for Finance said in a written reply to the lower house. Core responsibilities of the finance commission include evaluating the state of finances of the Union and State governments, recommending the sharing of taxes between them, laying down the principles determining the distribution of these taxes among states.
The government in November extended the term of 15th Finance Commission, headed by former bureaucrat NK Singh, by one year to October 30, 2020. The term of the commission was originally set to end in October 2019, but was extended by one month to November 30. Singh presented the first report pertaining to financial year 2020-21 to the government in December 2019.
“The recommendations made by the Finance Commission will be examined in the ministry in consultation with various departments and approval of Cabinet will be sought,” Thakur said in the House. In accordance with approval of the Cabinet, “an explanatory memorandum as to the action taken on the recommendations made by the 15th Finance Commission will be laid on the floor of both the Houses of Parliament during Budget Session,” he added.
Bad loans of PSBs fall to Rs 7.27 lakh crore at end of Sept 2019: FM
Finance Minister Nirmala Sitharaman on Monday said public sector banks’ (PSBs) bad loans came down to Rs 7.27 lakh crore at the end of September 2019, on host of measures taken by the government to improve financial health of the banks in the country.
“The government has instituted comprehensive reforms in PSBs to improve, governance, underwriting, monitoring and recovery, and has leveraged technology in all aspects of banking, resulting in reduction in their NPAs,” Sitharaman said in written reply to a question in the Lok Sabha.
She said bad loans of PSBs stood at Rs 7.27 lakh crore at the end of September 2019, down from Rs 8.96 lakh crore at the end of March 2018.
“Record recovery of Rs 2.03 lakh crore over the one-and-half year period ending September 2019, 12 out of 18 PSBs reporting profit in the first half of the current financial year, and the highest provision coverage ratio in seven-and-half years,” she said. She said the Banking Trend Report published by the Reserve Bank of India (RBI) in December observed that the health of the banking sector hinges on a turnaround in macroeconomic conditions.
“The government has taken significant steps towards speeding up the insolvency resolution process under the Insolvency and Bankruptcy Code (IBC) and easing of credit, particularly for the stressed real estate and non-banking financial companies sectors, and that the impact of critical measures taken to boost investment present green shoots for growth in the second half of 2019-20 and 2020-21.” The RBI’s Financial Stability Report stated the capital adequacy ratio of scheduled commercial banks has improved significantly.