InvestorQ : Do you see any major bold steps taken in the Union Budget announced by Nirmala Sitharaman on Monday?
Riya Dwivedi made post

Do you see any major bold steps taken in the Union Budget announced by Nirmala Sitharaman on Monday?

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shrinidhi Rajan answered.
4 weeks ago
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In short, there were a number of very bold and significant steps taken in the Union Budget 2021, which could have long term ramifications

· The budget has given a go ahead to the idea of a Bad Bank to take over the toxic assets of banks and hive off through a pass-through structure.

· The bad bank will take over toxic assets and either sell it as a block or create homogenous portfolios and securitize the same.

· The budget has conceptualized a domestic financial institution or DFI structure dedicated to the infrastructure space.

· This DFI will start with a government sponsored capital base of Rs.20,000 crore and it will build its book to Rs.500,000 crore in 3 years.

· In a bold move, the budget has gone beyond disinvestment and committed to privatize most companies not in specified strategic sectors.

· LIC, BPCL, CONCOR and SCI are proposed to be privatized during the fiscal year. The total divestment target is Rs.175,000 crore only for minority stake sale, but including LIC.

· The privatization boost will include 2 large PSU banks, apart from IDBI Bank, and 1 insurance company, apart from LIC.

· The government has enhanced the FDI or foreign direct investment in insurance from 49% currently to 74% which allows global players to play a bigger role.

· The budget will also push through the idea of a super regulator by merging the SEBI Act, Depositories Act and Securities Contract Regulation Act.

· The budget has also laid out the plan for one of the biggest monetization of government assets including roads, highways and gas pipelines.

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