P Chidambaram also ripped into the special outlay for poll-bound states.
Senior Congress leader and former finance minister P Chidambaram criticised the 2021 budget today on several counts, including special outlays for election-bound states and the measures announced for the Public Sector Banks or PSBs. "The intent of the government is clear -- to let the PSBs bleed slowly so that they can be privatized," he said.
While presenting the Union budget today, finance minister Nirmala Sitharaman had spoken of stressed asset resolution. "The high level of provisioning by public sector banks of their stressed assets calls for measures to clean up the bank books," she said.
"An Asset Reconstruction Company Limited and Asset Management Company would be set up to consolidate and take over the existing stressed debt and then manage and dispose of the assets to Alternate Investment Funds and other potential investors for eventual value realization," the minister said.
To further consolidate the financial capacity of Public Sector Banks, further recapitalization of Rs 20,000 crore has been proposed in 2021-22, the minister said.
The government, however, did not commit any capital for the PSBs in the Budget 2020-21, hoping that the lenders will raise funds from the market depending on the requirements.
In September 2020, Parliament approved Rs 20,000 crore capital infusion for PSBs as part of the first batch of Supplementary Demands for Grants for 2020-21.
Mr Chidambaram also ripped into the special infrastructure outlay for states where polls will be held this year.
"The FM paid special attention to election-bound states. She announced special outlays for Kerala, Tamil Nadu, Bengal and Assam," he said. "These announcements mean nothing as it will take a long time to happen and this is only to fool you," he told reporters.
Noting there has been no cut in the rates of the Goods and Services Tax, he said the measures announced in the budget will only benefit the rich.