Budget 2014: Looking for ways to monetize idle gold, says GS Sandhu

NEW DELHI: Stating that the government is very keen that the stagnation in economy should go, Financial Services Secretary G S Sandhu on Saturday said, "We are working on taxation and trade policy to improve situation." Finance Minister Arun Jaitley will present Prime Minister Narendra Modi-led NDA government's first budget on July 10.

Sandhu said that one should not expect all measures to be announced in the Budget 2014. "We need to think of ideas on how to monetize idle gold," he added. Interestingly, even State Bank of India has proposed that banks should be allowed to keep gold as part of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).

Earlier in the month, banks and financial institutions suggested that the government set up a National Asset Management Company that could act as a nodal agency to deal with the problem of bad loans.

In a pre-budget meeting with Jaitley, the lenders also suggested tax-free bonds for development of infrastructure sector and listing of the country's biggest insurer, Life Insurance Corporation of India.

The government assured the bankers that it would look into their various suggestions including revision of definition of priority sector lending, dilution of government stake in public sector banks and reduction in time limit and number of adjournments in case of Sarfaesi (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act for early resolution.

Jaitley told banks that slowdown of economic growth coupled with high inflationary pressure posed a challenge to the economic environment, the finance ministry said in a statement, adding that the government would look into the suggestions made by the financial sector representatives.

(With inputs from ET Bureau)