Fin Min says recapitalisation programme is essential to increase public spending on infrastructure.
New Delhi: Union Finance Minister Arun Jaitley on Tuesday announced unprecedented PSU banks recapitalisation program of Rs 2.11 lakh crore, out of which Rs. 1.35 lakh crore will come from recap bonds, and rest from markets and budgetary support.
"To improve the lending capacity of the banks, we have announced the recapitalization programme, which is essential to increase public spending on infrastructure, and that expenditure on infrastructure," said Finance Minister Arun Jaitley at a conference here.
Adding to this he said that there is a need to increase public investment for which bold steps by the government will be taken to recapitalise banks in the country.
However, speaking about the current economic situation, Jaitley said that India has remained as the world's fastest growing economy for the past three years, thus maintaining very strong economic fundamentals with progressive growth story.
There are strong macroeconomic fundamentals," Finance Minister Arun Jaitley said while addressing a media conference.
"We will report on the situation as they develop. A lot of internal meetings on the state of economy internally within the ministry were held. Discussions were also held with the prime minister. But India has remained one of the fastest growing economies in the world," said Jaitley.
"When results of the GDP of the first quarter came out then I had said that we will be ready for the response," said Jaitley while adding that there have been a lot of discussions and reviews of the economy in the past few weeks within the ministry.
Adding to this, Jaitley said that government has decided on the steps needed to sustain the growth momentum.