Public sector banks have been plagued by the highest stressed asset ratio since 2000 that's eroded capital buffers and curtailed lenders' ability to offer credit. Fitch Ratings estimates India's banks will need nearly $65 billion in bank capital by March 2019.The capital infusion announced by the government amounts to about half that. "The decision to recapitalise PSBs (public sector banks) with Rs 2.11 lakh crore will address the bank balance sheet problem and push growth forward. "The government has imparted a huge boost to bank recapitalisation with a proposed amount of Rs 2.11 lakh crore which is likely to kickstart the credit cycle and facilitate private investments," he said. "Jaitley said there was need to increase public investment and Rs 7 lakh crore for road expansion will generate employment opportunities.Apart from Bharatmala, the government is also focussing on providing 20 million houses under the 'housing for all' scheme.

Source: Economic Times October 24, 2017 11:47 UTC