The bad loans portfolio in the Public Sector Banks has crossed Rs. 6 lakh crore.  The Finance ministry is taking steps to review the situation and has been arranging frequest meetings with the PSU Bank teams.

Basic Income Proposals

Two novel and innovative proposals are being put forth, by the Economic Survey to deal with the bad loans which has reached an unabated level now: They are:

(a) Universal Basic Income (UBI) and
(b) Creation of bad bank

The Universal Basic Income proposal does not appear to be a feasible and acceptable one, due to the political limitations.

Hence the possibility of a bad bank proposal being accepted is on the fore front which is likely to come up shortly. All Non-performing assets of  banks, are to be transferred to the bad bank, allowing the rest of the banks to carry out their routine smoothly.

It was also suggested that the entire set of subsidies be substituted with the Universal Basic Income (UBI) and ensure that poverty line people are pulled out.

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