In a bid to boost the economy, the central government today announced mega funds infusion of 2.11 lakh crore in the banking sector. 1.35 lakh crore will be made available through bank recap bonds whereas the remaining 76,000 crore will be sourced through market loans and budgetary support. The mega funds infusion is likely to bring back the confidence of bankers, especially during a time when the banking sector has been hit by rising NPAs (non-performing assets). As per available data, the overall NPAs across 39 listed banks have risen to a staggering 8.35 lakh crore. The funds infusion by the government will certainly provide relief to banks and improve their lending capability. Increased credit lending will in turn boost the economy and create more employment opportunities.
The government has also announced funds infusion worth 7 lakh crore for building new roads measuring 83,000 km. Speaking about the mega funds infusion, Finance Minister Arun Jaitley said that the government has come up with the plans after carrying out an extensive economic survey and in consultation with the Prime Minister Narendra Modi. Jaitley said that the funds infusion into banking and road development would help boost the economy. He also said that more reforms will be introduced after the recapitalization of public sector banks is completed. However, he did not provide any details of the same.