Budget tops Mukherjee’s agenda at meeting with aides (Lead)

May 25th, 2009 - 6:00 pm ICT by IANS  

Manmohan Singh New Delhi, May 25 (IANS) Finance Minister Pranab Mukherjee Monday formally assumed charge of his portfolio and “immediately” convened a meeting with officials to discuss budget issues, which a ministry official said would be finalised before July-end.
“There was a closed room meeting with the officials of both the CBDT (Central Board of Direct Taxes) and the finance ministry,” the official said requesting anonymity.

“The finance ministry is planning to complete the budget proposal latest by second week of July,” he added.

During his brief interaction with the media soon after being named finance minister Saturday, Mukherjee had said he hoped to present the budget soon and promised immediate steps to pull the Indian economy out of its present woes.

“All economic issues will be addressed. My priority is to put the economy back on track. Various efforts will be made to insulate the Indian economy from the adverse impact of the financial meltdown,” said Mukherjee, who held the finance portfolio 25 years ago in the governments of Indira Gandhi and, then briefly, Rajiv Gandhi.

Buttressing this assertion, an official statement Monday said that “immediately after assuming charge”, Mukherjee had a series of meetings to review the status of various programmes, where “issues relating to forthcoming budget were also discussed”.

The official said during the meeting with Mukherjee, finance ministry officials proposed recapitalisation of 16 public sector banks. “They said about Rs.16,000 crore should be infused in the banks in the current financial year.”

The ministry is in talks with the World Bank for a $5-billion loan, out of which $3 billion will be earmarked for state-owned banks.

As per a finance ministry assessment, the risk-weighted asset of public sector banks will go up from Rs.25,00,000 crore as on March 31, 2009 to Rs.31,370,00 crore March 31, 2010, and Rs.39,00,000 crore March 31, 2011.

At the meeting with the minister, CBDT officials spoke against tax reduction or sops for the corporate sector.

“However no such proposal have been made for individuals,” the official said. At the same time, he underscored that these were recommendations that needed to be reviewed.

Mukherjee, who was given additional charge of finance in January as Prime Minister Manmohan Singh, who held the portfolio himself, had to undergo a heart surgery, had met Ashok Chawla and Arvind Virmani Sunday to discuss the major challenges facing his ministry.

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