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Economic Situation
Key Objectives
Small Scale Industry
Science & Technology
External Sector
Capital Market
Expenditure Management
PSU Reform
Revised Estimates
Budget Estimates
Indirect Taxes
Custom Duties
Direct Taxes - A
Direct Taxes - B
Closing Statement

Budget 1998-99
Budget 1997-98
Budget 1996-97



Last year I had announced important decisions flowing from the Narasimham Committee Report on Banking Sector Reforms. Subsequently, the Reserve Bank of India has taken further follow up action. I propose to carry forward the reform process:
The high level of NPAs in our public sector banks continues to remain a cause of concern. The Debt Recovery Tribunals, which were set up for expeditious adjudication and recovery of debts due to banks and financial institutions, have started showing encouraging results. Government has decided to set up 5 more DRTs and 4 more Debt Recovery Appellate Tribunals. I also propose to introduce a Bill in the current session of Parliament to make certain amendments in the Recovery of Debts due to Banks and Financial Institutions Act to strengthen its provisions.
A Working Group has recently been set up by us to devise appropriate strategies for dealing with the problem of restructuring weak banks including their NPAs.
The inability of banks to enter into timely compromise settlements of chronic cases of overdue loans leads to locking up of banks’ funds and long drawn litigation in recovery suits. Public sector banks will be encouraged to set up Settlement Advisory Committees so that such chronic cases, specially those relating to the small sector, are settled in a timely and speedy manner. RBI will be issuing necessary guidelines to the banks in this regard.
Our banks are required to observe RBI norms for maintaining provisions against doubtful and non-performing assets. These norms have been strengthened in recent years. To assist banks to come up to international standards of prudential norms I shall be announcing certain changes in the tax deductibility of provisions made.


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