New Delhi: The Prime Minister’s Office (PMO) is likely to take a call on the utilisation of funds received by the government to the tune of Rs 1.76 lakh crore from the Reserve Bank of India (RBI) last week.
Sources aware of developments said that top officials of the finance ministry could meet senior mandarins from the PMO most likely in the coming week to chart out a process of putting these funds into stimulating the sagging economy.
The intervention by the PMO seems all the more likely after finance minister Nirmala Sitharaman said recently that the government was yet to decide how to utilise Rs 1.76 lakh crore. “I can’t talk about how to utilise it now. We will take a call and then let you know,” she had said while replying to a question at press conference in Pune after attending an interaction with traders, entrepreneurs, and industry experts. The government could prepare a blue print for reviving the economy and sources further indicated that it could work out a stimulus aimed at bridging the revenue shortfall and cut down on borrowings. On August 26, the RBI’s central board had decided to transfer Rs 1,23,414 crore of surplus for the year 2018-19 and Rs 52,637 crore of excess provisions identified by a revised economic capital framework. The RBI’s decision to transfer Rs 1.76 lakh crore to the government came after the central bank accepted the recommendation of a panel led by Bimal Jalan, a former governor of the bank. The move though received a lot of criticism from various quarters. Now with the funds available with the government, it is keen to put them to good use, concerned as it is by the poor economic growth, which has sunk to a six-year low of 5 per cent.
Aiming to revive economy and attract foreign investment, the government had announced merger of 10 PSU banks into four major financial institutions on August 30. While on August 23, it had announced major sops like rolling back surcharge on foreign portfolio investors, and also the angel tax levied on startups.
For the auto sector, the finance minister had announced a slew of measures, including lifting the ban on the purchase of vehicles by government departments and allowing additional 15 per cent depreciation on vehicles acquired from now till March 2020.