Government to press ahead with reforms, says PM Modi
NEWDELHI: Prime Minister Narendra Modi on Wednesday reiterated his government’s resolve to press ahead with its reforms agenda, saying that reforms rolled out over the last three years had yielded an improvement in India’s ease of doing business ranking as well as a rise in foreign investments in various sectors of the economy.
Addressing industrialists at the annual general body meeting of the Federation of Indian Chambers of Commerce and Industry, Modi pointed out that the government had initiated 87 important reforms across 21 sectors.
“This government has brought in significant reforms across various sectors including defence, construction, financial services and food processing,” Modi said, saying that new economic data showed the government’s social and economic reforms were yielding results and generating jobs.
He cited India’s improvement in World Bank’s ease of doing business rankings to 100 and the sharp rise in foreign direct investment to support his argument. Modi urged industry to handhold small businesses as well as spread awareness about the goods and services tax regime to ensure a smooth transition to the new tax regime.
On the Financial Resolution and Deposit Insurance (FRDI) bill, Modi said, “the government is committed to protecting the interests of the depositors,” dismissing concerns expressed in some quarters as rumours.
Opposition parties and trade unions have been opposing some of the provisions of the bill, including a bail-in clause which suggests that depositor money could be used to bail out banks that are in trouble.
Continuing his attack against the previous Congress-led UPA government, Modi said the huge levels of non-performing loans were its legacy and his government was doing its best to resolve the resulting financial crisis. “NPAS in the banking system are the biggest liability given by the previous government to the current government. It was the biggest scam during the tenure of the previous government and the Commonwealth and 2G scams all pale in comparison.”
During the UPA tenure, many corporates were given loans after banks were pressurised, he said.
“This government is constantly taking steps to strengthen the banking system. Only when banks and customers are protected, only then nation is protected,” he said.
The Modi government has announced a slew of measures to bring down the level of bad loans in the banking system and amended the Insolvency and Bankruptcy act to make it more effective and bar wilful defaulters from regaining control of their companies
It has also announced a massive ₹2.11 lakh-crore bank recapitalisation plan for state-run banks to strengthen their balance sheets. Bad loans of state-run banks almost tripled to ₹7.3 lakh crore, as of June 2017, from ₹2.8 lakh crore in March 2015 after the Reserve Bank of India (RBI) initiated an asset quality review to recognise bad loans in banks’ books.
“It is undeniable that some energy has gone into reforms since the government took over. The total results of the initiatives still remains to be seen. Reforms seem to help corporates and established businesses rather than build a more competitive market. Private investment has also not been energised,” said Rajesh Chakrabarti, Professor and Vice Dean at the Jindal Global Business School.