{"id":4868,"date":"2021-05-05T09:00:50","date_gmt":"2021-05-05T09:00:50","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=4868"},"modified":"2021-05-05T09:03:28","modified_gmt":"2021-05-05T09:03:28","slug":"new-budget-through-the-viewpoint-of-nbfc-and-banking","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/new-budget-through-the-viewpoint-of-nbfc-and-banking\/","title":{"rendered":"Studying New Budget Through the Viewpoint of NBFC and Banking"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The Union Budget 2021-22 has displayed a rapid growth in Capex allocation (up to nearly 26% YoY) and outlining manufacturing as a major pillar for the Indian Economy while indeed permitting a higher financial shortage low-interest situation, the viewpoint of <a href=\"https:\/\/swaritadvisors.com\/nbfc-registration\" class=\"text-primary\"><strong>NBFC<\/strong><\/a> and Banking. This Budget has attached the present year&#8217;s budgetary shortage at 9.5% (Financial Year 20-21). The financial shortage target has been above the market hope for both years. The expectation for Financial Year 20-21 was approx 7.5%, while for the Financial Year 2021-22 was around 5 to 5.5%. In this article, we will examine the new Union Budget through the viewpoint of NBFC and Banking.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3a8f67056ad\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3a8f67056ad\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/new-budget-through-the-viewpoint-of-nbfc-and-banking\/#What_are_the_Key_Highlights_for_Union_Budget_2021-22_%E2%80%93_Infrastructure\" title=\"What are the Key Highlights for\nUnion Budget 2021-22? \u2013 Infrastructure\">What are the Key Highlights for\nUnion Budget 2021-22? \u2013 Infrastructure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/new-budget-through-the-viewpoint-of-nbfc-and-banking\/#Disinvestment_Programme_Receives_a_Foremost_Push_in_Union_Budget_2021-22\" title=\"Disinvestment Programme\nReceives a Foremost Push in Union Budget 2021-22\">Disinvestment Programme\nReceives a Foremost Push in Union Budget 2021-22<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/new-budget-through-the-viewpoint-of-nbfc-and-banking\/#Viewpoint_of_NBFC_and_Banking_is_Main_Focus\" title=\"Viewpoint of NBFC and Banking\nis Main Focus\">Viewpoint of NBFC and Banking\nis Main Focus<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/new-budget-through-the-viewpoint-of-nbfc-and-banking\/#Government_Focus_on_Increasing_Farm_Income_%E2%80%93_Viewpoint_of_NBFC_and_Banking\" title=\"Government Focus on Increasing\nFarm Income &#8211; Viewpoint of NBFC and Banking\">Government Focus on Increasing\nFarm Income &#8211; Viewpoint of NBFC and Banking<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/new-budget-through-the-viewpoint-of-nbfc-and-banking\/#Commercial_Vehicles_Gap_Receives_an_Impulsion_in_the_Union_Budget_2021-22\" title=\"Commercial Vehicles Gap\nReceives an Impulsion in the Union Budget 2021-22\">Commercial Vehicles Gap\nReceives an Impulsion in the Union Budget 2021-22<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/new-budget-through-the-viewpoint-of-nbfc-and-banking\/#Budget_Progress_on_Direct_Taxes_for_Individuals\" title=\"Budget Progress on Direct Taxes\nfor Individuals\">Budget Progress on Direct Taxes\nfor Individuals<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/new-budget-through-the-viewpoint-of-nbfc-and-banking\/#Higher_than_Expected_Financial_Shortfall_and_Government_Borrowing\" title=\"Higher\nthan Expected Financial Shortfall and Government Borrowing\">Higher\nthan Expected Financial Shortfall and Government Borrowing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/blog\/new-budget-through-the-viewpoint-of-nbfc-and-banking\/#Conclusion_%E2%80%93_Viewpoint_of_NBFC_and_Banking\" title=\"Conclusion\n&#8211; Viewpoint of NBFC and Banking\">Conclusion\n&#8211; Viewpoint of NBFC and Banking<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Key_Highlights_for_Union_Budget_2021-22_%E2%80%93_Infrastructure\"><\/span>What are the Key Highlights for\nUnion Budget 2021-22? \u2013 Infrastructure<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol><li>As per the anticipation, the\nGovernment of India has its capital expenses <strong><em>GBS (Gross Budgetary Support)<\/em><\/strong>\nallowance by Rs. 5.54 lakh crores in a budget to elevate infrastructure\nspending, focusing on economic recovery. Moreover, Rs. R lakh crores for the\nextra Capex to nudge states, allowing Rs. 20,000 crores toward the development\nof DFI to have a lending portfolio of Rs. 5 lakh crores over the upcoming 5\nyears to activate funding requisite to satisfied NIP. It&#8217;s to create various\nopportunities in major segments or areas such as defence, railways,\ninfrastructure power, roads, etc.<\/li><li>Highways and Roads were the\nmost flexible part of the infrastructure sector. In general Capex front for\nHighways and Roads, the revised approximates Financial Year-21 spends is fixed\n12% higher at Rs. 92,053 crores vs budgeted estimations of 81975. Even for\nFinancial Year-22, the Indian Government has fixed the road Capex at 108230\ncrores, a growth of 17% YoY on an honest RE base. The Government of India is\nalso seeking to deliver alternative financing source by monetising five\noperating projects worth Rs. 5000 crores via <strong><em>NHAI INVIT<\/em><\/strong>.<\/li><li>Most significantly, the Union\nBudget also provides for another source of financing, such as establishing DFI,\nmonetisation of assets across sections such as Roads, Highways, Airports, etc. <\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disinvestment_Programme_Receives_a_Foremost_Push_in_Union_Budget_2021-22\"><\/span>Disinvestment Programme\nReceives a Foremost Push in Union Budget 2021-22<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In the Budget 2021-22, the <strong>Finance Minister<\/strong><sup><a href=\"https:\/\/finmin.nic.in\/\" class=\"text-primary\"><strong>[1]<\/strong><\/a><\/sup> announced the target of Rs. 1.75 lakh crores for disinvestment. Outstandingly, all plan stake sales announced already would be finished in the Financial Year-22E, while <strong><em>Niti Ayog<\/em><\/strong> has been assigned with working of the following lists of <strong><em>PSUs (Public Sector Undertakings)<\/em><\/strong> for disinvestment. Among all the new entities in which the Indian Government stake would be monetised next year has integrated two banks and a general insurer. Remarkably, the <strong><em>Life Insurance Corporation of India (LIC)<\/em><\/strong> would also become a part of the Financial Year-22 disinvestment programme. The Government of India has also notified an asset monetisation plan for encashing some operational assets like NHAI Toll Roads, Sports Stadium, Gas Pipelines, Power Transmission Projects, Tier 2\/3 Airport Assets, etc.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Viewpoint_of_NBFC_and_Banking_is_Main_Focus\"><\/span>Viewpoint of NBFC and Banking\nis Main Focus<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Establishing an <strong><em>Asset<\/em><\/strong>\n<strong><em>Reconstruction\nand Management Company or ARC <\/em><\/strong>or a bad bank, to begin with, existing\nstressed assets with a special focus on resolving stressed assets recovery\nremain confident for the banking sector, especially PSU banks. Moreover, Rs.\n20,000 crores, capital infusion to strengthen PSU&#8217;s banks&#8217; balance sheet and\nfocus on the growth. The development &amp; infrastructure push from Union\nBudget to books the banking credit growth from the viewpoint of NBFC and\nBanking.<\/p>\n\n\n\n<p>After this Government of\nIndia introduced a combination of thirteen public sector banks into the five\ncentral banks, the Government has taken the 1st step towards privatising\nstate-run banks; begin with the disinvestment of two <strong><em>PSUs (Public Sector Undertakings)\nBanks, <\/em><\/strong>in a bid to speed up long-awaited reforms in a banking sector.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Government_Focus_on_Increasing_Farm_Income_%E2%80%93_Viewpoint_of_NBFC_and_Banking\"><\/span>Government Focus on Increasing\nFarm Income &#8211; Viewpoint of NBFC and Banking<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Government of India\nremains dedicated to increasing farm income with record achievement of farm\nproduce (Pulses, Rice, and Wheat) from domestic farmers for the Financial Year\n2021. Rice procurement is ar Rs. 1.72 lakh crores for the Financial Year 2021,\nwheat acquiring at Rs. 75,000 crores and pulses at Rs. 10,00 crores. It also\nhighlighted doubling the funds under NABARD for micro-irrigation for the\nFinancial Year 2022 at Rs. 10,000 crores vs Rs. 5,000 crores in the Financial\nYear-2021. The Union Budget 2021-22 also set a goal for agriculture credit at\nRs. 16.5 lakh crores for the Financial Year-2022. It also discussed the\nintroduction of agricultural transportation and improvement cess on actual\nproducts.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Commercial_Vehicles_Gap_Receives_an_Impulsion_in_the_Union_Budget_2021-22\"><\/span>Commercial Vehicles Gap\nReceives an Impulsion in the Union Budget 2021-22<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>For auto-space, the\nannouncement of the Budget introduced <strong><em>India\u2019s vehicle scrappage policy <\/em><\/strong>for\na commercial vehicle older than fifteen years &amp; personal cars older than\ntwenty years. Entities across a value chain (tire players, OEMs, tire chemical\nsuppliers, forging players) stand to gain as a result. Other initiatives in\ncommunications &amp; transportation space and the agricultural Economy (focus\non farm incomers) are positive for some leading auto OEMs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Budget_Progress_on_Direct_Taxes_for_Individuals\"><\/span>Budget Progress on Direct Taxes\nfor Individuals<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol><li>ULIPs (Unit-Linked Insurance\nProducts) with top premiums of more than Rs. 2.5 lakhs per year will be subject\nto tax on development. It will bring taxation on top value ULIPs at par with\nmutual funds;<\/li><li>Extra deduction of 1.5 lakhs on\ninterest on the housing loan for reasonably priced housing has been increased\non home loans up to 31<sup>st<\/sup> March 2021. The scheme was announced in the\nyear 2019 Union Budget and has been extended since then;<\/li><li>No noteworthy changes in income\ntax slabs\/rates for corporates or individuals;<\/li><li>Tax release on any interest\nearned on employee\u2019s contribution towards a variety of PFs or Provident Funds\nhas been limited to year grant of Rs. 2.5 lakhs.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Higher_than_Expected_Financial_Shortfall_and_Government_Borrowing\"><\/span>Higher\nthan Expected Financial Shortfall and Government Borrowing<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Due\nto the higher shortfall, the borrowing from the bond market is higher also. The\nFinance Minister has announced an extra Rs. 80,000 crores of market borrowing\nin the present Financial Year, while for the Financial Year 2021-22, a gross\nmarket borrowing is fixed at Rs. 12 lakh crores. The bond market was\nanticipating a gross borrowing of around Rs. 10 crores for the Financial Year\n2021-22. As the reaction of the bond market has been unfavourable, the bond\nmarket has dissatisfied with zero announcements about a road map for the insertion\nof Indian Sovereign Bonds in international bond indicators, leading to major\ninflows.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion_%E2%80%93_Viewpoint_of_NBFC_and_Banking\"><\/span>Conclusion\n&#8211; Viewpoint of NBFC and Banking<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Financial or Fiscal Sector is the strength of the Economy of India and has been one of the significant areas in the overall scheme of getting back in demands and encouraging the Economy from the viewpoint of NBFC and the Banking Sector. The Finance Minister has announced Rs. 1 lakh crore liquidity boosts at the present Financial Year. This is not only the supply of money for Non-Banking Financial Company, but this will be a new source. Hence, it would add to the whole liquidity condition for Non-Banking Financial Companies will have a positive thing. The Finance Minister highlighted that funding should be available to necessarily sound NBFCs by mutual funds and banks.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/foreign-investment-criteria-for-nbfcs\/\">A Comprehensive Analysis on Foreign Investment Criteria for NBFCs<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Union Budget 2021-22 has displayed a rapid growth in Capex allocation (up to nearly 26% YoY) and outlining manufacturing as a major pillar for the Indian Economy while indeed permitting a higher financial shortage low-interest situation, the viewpoint of NBFC and Banking. This Budget has attached the present year&#8217;s budgetary shortage at 9.5% (Financial [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":4871,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[58],"tags":[626],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/4868"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=4868"}],"version-history":[{"count":8,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/4868\/revisions"}],"predecessor-version":[{"id":4877,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/4868\/revisions\/4877"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/4871"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=4868"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=4868"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=4868"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}