Finance minister Arun Jaitley on Thursday asked banks to look at ways to improve credit growth and also assured them of non-interference from the government in commercial decisions.
“There is an immediate need to give impetus to credit growth,” he said at a pre-Budget meeting with representatives of financial institutions, pointing out that credit growth, on Y-o-Y basis, declined to 10 per cent in September 2014, with public sector banks recording a growth of 7.9 per cent. Growth in deposits also declined to 12.9 per cent as of September 2014 from 13.7 per cent as of March 2014.
Meanwhile, bankers sought a higher tax exemption limit under Section 80C of the Income Tax Act while insurers suggested a separate bracket under the section for insurance products. “The Rs 1.5 lakh limit under Section 80C can be further increased to channelise more savings. Further even within the 80C limit, there can be segregation for insurance and pension products,” TM Bhasin, chairman and managing director, Indian Bank said.
Banks also suggested that fixed deposits with a maturity of more than three years can also be considered under the Section 80C limit and reduction of the compulsory lock in period of five years to three years for tax saving fixed deposits.
Trai sticks to stand on pricing of 3G spectrum
NEW DELHI: The Telecom Regulatory Authority of India (Trai) has stuck to its recommendations on 3G spectrum pricing and slammed the Department of Telecommunications (DoT) on Thursday saying that the department was “totally and irrevocably wedded to 2010 prices” for spectrum in 2100 MHz band, which according to the authority were inflated due to severe supply constraint.
Trai had recommended a reserve price of Rs 2,720 crore per MHz pan India for 3G spectrum, which was 80 per cent of its overall valuation, and about 19 per cent lower than the value realised in 2010 auctions.
Following this, the DoT had asked the regulator to reconsider its pricing suggesting a higher price, closer to Rs 3,350 crore per MHz realised in 2010. Claiming that the department was “cherrypicking” from Trai’s recommendations, the regulator reiterated its recommendations that “even if high auction prices are realised in the auction, the gain would be myopic.
“The fiscal gap would be bridged but consumer interests would suffer, industry would not be able to find resources for further investment, and the non-performing assets of the banking sector were likely to increase.”
Trai cautioned against a split auction for 2100 MHz spectrum, saying that the spectrum shortage in February will set an unnatural high price as anchor for the pricing of the subsequent 3G spectrum auctions, only cementing the position of service providers with “deep pockets.”