New Delhi [India], June 20 : As part of the preparations for the Union Budget, Finance Minister Nirmala Sitharaman chaired the second pre-budget Consultation with leading experts of the financial and capital markets sector here today.
The discussions touched on issues ranging from the NBFC sector, GST rules and improving the capital market.
Raman Aggarwal, co-chairman, FIDC, said they conveyed in the meeting that NBFCs credit-to-GDP ratio stood at 12.6 per cent as of March 2023 and there is a case to look at the funding.
He said they need a direct handle from the government and there could be allocation of funds to SIDBI or NABARD to refinance NBFCs.
The NBFC sector has grown to become 18.7 per cent of banking sector assets as on March 2023 as compared to 13 per cent ten years ago.
He said the regulatory framework for her NBFCs had been harmonized for banks and it will remain incomplete if they are not given recovery tools like SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002).
He said there is TDS deduction issue for loan borrowers.
Aggarwal said there is GST demand based on core lending and there is need of more clarity. He said if there is a service element that should be specifically mentioned.
He said there was also discussion concerning GIFT City to ensure that capital is retained in the country and does not go out.
George Alexander, MD, Muthoot Finance said that there were some suggestions from mutual funds. "We also gave suggestions like improving the capital market,. improving the funding to the retail sector."
On June 19, a group of economists met the Finance Minister with its recommendations for upcoming budget. Sources said the suggestions included boosting capital expenditure and reducing the fiscal deficit.
Sitharaman is set to present the Union budget for 2024-25 in the third week of July.
Sitharman had presented an interim budget on February 1 ahead of the Lok Sabha polls. She has so far presented six budgets in a row and will create a record when she presents the full-fledged budget for the new term of the BJP-led National Democratic Alliance government.
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