File photo: Union finance minister Nirmala Sitharaman

Union finance minister Nirmala Sitharaman on Sunday laid out the government’s vision for non-banking financial companies (NBFCs) under the Viksit Bharat framework, outlining clear targets for credit expansion and technology adoption as part of the Union Budget exercise.Speaking in the Lok Sabha during her Budget speech, Sitharaman said the “vision for NBFCs for Viksit Bharat has been outlined with clear targets for credit disbursement and technology adoption,” underlining the role of the sector in supporting India’s next phase of economic growth.

As part of efforts to improve scale and operational efficiency in public sector NBFCs, the finance minister announced that the government proposes to restructure key institutions. “In order to achieve scale and improve efficiency in the Public Sector NBFCs, as a first step, it is proposed to restructure the Power Finance Corporation and Rural Electrification Corporation,” she said.The proposals for NBFCs were outlined alongside broader measures for the banking and financial sector, including the decision to set up a ‘High Level Committee on Banking for Viksit Bharat’ to comprehensively review the sector and align it with India’s evolving growth needs. Sitharaman noted that the financial system is currently in a strong position, with banks characterised by healthy balance sheets, historic highs in profitability, improved asset quality and banking coverage exceeding 98 per cent of villages across the country.In addition, Sitharaman announced a comprehensive review of the Foreign Exchange Management (Non-debt Instruments) Rules to create a more contemporary and user-friendly framework for foreign investments, consistent with India’s changing economic priorities.The finance minister said the current strength of the financial sector provides an opportunity to futuristically evaluate reforms needed to sustain reform-led growth, with NBFCs expected to play a key role in expanding credit reach and supporting economic development under the Viksit Bharat vision.