‘A pragmatic Budget, but issues such as NPA of banks not addressed’

“NPAs of banks not addressed as expected”

February 05, 2017 01:39 am | Updated 01:39 am IST - VISAKHAPATNAM:

Financial and tax experts from the KPMG here on Saturday said Union Finance Minister Arun Jaitley presented a pragmatic budget, but certain key issues such as NPA (non performing assets) of banks was not addressed as desired.

This was pointed out by Amit Jain, tax expert from the KPMG at a post-budget analysis session, organized by the Vizagapatam Chamber of Commerce and the A.P. Information Technology Association.

Demonetisation

According to him, the Minister provided only ₹10,000 crore for recapitalisation of the banks, but at the same time banks have NPAs of over ₹5 lakh crore. And most of the NPAs belong to infrastructure companies, he added.

On demonetisation, Mr. Jain said its impact was still to be assessed as it was a huge exercise. But what was important was the FM’s assurance that it would not have any disruptive impact during the current fiscal. “Even if remonetisation takes place at the expected pace, we still have to wait and watch,” he said.

About the likely impact of the proposals on Andhra Pradesh, Mr. Jain said the plan to introduce a new Metro Rail Act and give importance to building airports in tier-two cities would benefit the State in the long run.

Metro rail

“The State has plans to take up metro rail projects in Vijayawada and Visakhapatnam and wants to build about 13 new airports in each of the districts. This Act will benefit the State,” he said.

Another expert Sumit Gupta said though Mr. Jaitley had not raised the exemption limit to ₹4 lakh to ₹5 lakh per annum for the salaried class, he had rationalised the tax structure and given some relief to the lowest bracket of tax payers by reducing the rate to 5 per cent from 10 per cent. Sanjay Ahuja, in his presentation, pointed out that the reduction of corporate tax from 30% to 25% for MSMEs would boost the manufacturing sector.

The special rate of 10% on income earned through transfer of carbon credits would mitigate the litigation relating to the issue.

Monish Row, president of the Vizagapatam Chamber of Commerce, spoke.

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