The government's massive divestment programme as part of which it plans to privatise at least two state-owned banks besides other public sector firms, should not be seen as "selling the family silver", Finance Minister Nirmala Sitharaman said
"An effort is being made by the authorities to prime public sector assets so they meet the aspirations of growing India," she said. "The government wants to make it clear through its budget policy that it intends to have a bare minimum presence in strategic areas," Sitharaman added.
The minister, talking during the “ Sarvasparshi Arthasankalp 2021” event in which she interacted with business leaders, charted accountants, tax practitioners and corporate professionals said that she wanted to guarantee Mumbai, India and every taxpayer that "I value every rupee you give" and will spend it meaningfully.
Speaking about India's banking sector, the minister said that the country needs at least 20 banks the size of SBI to meet its needs. The banking sector has faced immense stress over the past few years, with non-performing assets surging following an RBI-initiated crackdown in 2015 to recognise hidden bad assets, and exacerbated by the economic slowdown.
The NDA government has taken several steps to clean up the sector's NPAs -- such as introducing the bankruptcy code, announcing a mega capital infusion package, and merging several banks among others. In Budget 2021, FM Sitharaman said the government would privatise two PSBs and also announced the creation of a 'bad bank', or an asset reconstruction company that will take over bad loans from banks to help them clean up their balance sheets.