New Delhi: Finance Minister Nirmala Sitharaman presented the Union Budget 2024 on Tuesday, highlighting the Modi govt 3.0’s priorities across multiple sectors.
Banking leaders express optimism over the Union Budget 2024’s focus on MSMEs, agriculture, skill development, and regional development, highlighting positive impacts on credit accessibility, employment, and economic growth.
Ajay Kumar Srivastava, Managing Director & CEO, Indian Overseas Bank, The focus given in the Union Budget 2024 to the MSME sector is going to provide a huge boost to the growing number of entrepreneurs in the country. The initiatives announced such as – credit guarantee schemes for MSMEs, increasing the limit of Mudra loans to INR 20 lakhs to those who have paid back the loans earlier, creating alternate methods to evaluate eligibility of MSME for loans, as well as expanding branches by SIDBI, all of these initiatives are expected to provide the much-needed accessibility to credit and additional support required for further growth of the sector. We are optimistic and committed to leveraging these initiatives to foster growth and create socio-economic impact across the country.
Debadatta Chand, Managing Director & CEO, Bank of Baroda: The Union Budget complements the main takeaways from the Economic Survey and focuses clearly on medium-term development of the economy. The thrust on agriculture, skill development, and MSMEs consequently leading to employment generation will continue to be the main focus areas for the government in the coming years. The overall size of the budget has remained almost unchanged from the Interim one. The budget has shown strong intent on moving along the fiscal prudence path and targeted the fiscal deficit at 4.9% for the year. The said action will keep the growth steady as well as robust not only for the economy but also banking. This will make it easier to touch the 4.5% mark in FY26 as per the FRBM target. More importantly for the financial year, the overall gross borrowing and net borrowings have been pegged at almost the same level as in the Interim Budget. This means that it is virtually neutral for the market in terms of liquidity and bond yields, which has a positive impact on the economy.
The banking sector can see substantial positive takeaways from the Budget which goes beyond the neutral impact on liquidity. First, there is a focus on MSMEs with a credit guarantee scheme being brought in. Any support to the MSMEs will be positive growth of not just GDP but also employment. Second, at the retail level, there is emphasis on education loans which will also help in skill building which is the need of the day. Third, the Budget speech also spoke about recovery and the focus will be on debt recovery tribunals. Fourth, the balanced regional development goal also includes setting up more touch points in the North Eastern Regions which will help to make banking more universal. Lastly, the reiteration of the budget to encourage housing also means that banks will have a larger role to play in carrying out this programme at both the rural and urban levels.