GOVT TO EMPOWER BANKERS: JAITLEY
SAYS PREVENTION OF CORRUPTION ACT, WHICH WAS LAST AMENDED IN 1988, NEEDS TO BE UPGRADED TO MEET THE NEEDS OF A MODERN ECONOMIC SYSTEM
The government is determined to break the will of borrowers who game the banking system, thinking the lenders don’t have enough powers to strike back. Bankers are now armed with several strong laws and will soon operate without any fear of future harassment should a commercial decision go wrong, said Arun Jaitley, minister of finance, defence and corporate affairs, at the Business Standard Annual Awards for excellence in corporate and social sectors.
“Some people are exploiting the banking system’s inability to deal with consistent defaulters. And, I think that needs to be cracked,” said the finance minister, delivering his speech as the chief guest of the event in Mumbai on Saturday.
The government, the Reserve Bank of India (RBI) and banks had a series of meetings and the government has taken initiatives, while Parliament has framed tough laws, alongside circulars issued by the RBI on defaulter issues. Now, all the parties together will move to conclude the menace of unscrupulous borrowers.
“You will be hearing from us on a series of steps in order to negate that, which are now in the pipeline,” Jaitley said.
In fact, it is important that the hands of the bankers, and those who take commercial decisions, be strengthened. In this regard, the applicability of the Prevention of Corruption Act, which was last amended in 1988 before liberalisation, needs to be upgraded to meet the needs of a modern economic system.
“What subsequently appears to be an erroneous decision, with the wisdom of hindsight, is not necessarily a corrupt decision,” Jaitley said in his speech, adding, “that distinction between an erroneous decision and a corrupt decision is very thin in the 1988 law. And, therefore, it needs to be restructured.”
This will help public servants, bankers, and others dealing with commercial decisions in state instrumentalities. Besides, bureaucrats and politicians engaged in policy matters and defence purchases would be free to take decisions freely.
Amendments have been brought into Parliament.
“I believe once those amendments are made, bankers and public servants in position of decision making will be sufficiently empowered without fear of consequences, in relation to honest decisions they take in normal commercial matters,” the finance minister said.
Jaitley also sounded confident that the goods and services tax (GST) Bill would be operational from July itself. The present indirect tax system applicable at the Centre and the states comes to an end on September 15, and a new system has to be in place well before that.
He also said the fear of states losing revenue in the GST system has been addressed, and the GST Council will soon pass the requisite laws to make it applicable nationwide. And the process of formulating the GST has been truly democratic, even as the ruling party had enough strength in numbers to muster the 75 per cent voting to pass the rules. “In the last six-seven months, between the Centre and the states, the GST Council has been working. We had 12 meetings; typically, each lasts two days, 8-10 hours per day.”
“This is India’s first federal decision-making body (GST Council), where the Centre and the states both sit together and come to a conclusion. And this has been a truly exemplary exercise in a deliberative democracy,” Jaitley said.
“I wanted to establish a precedent and that precedent, perhaps, should apply for the future. Federalism being a very delicate subject, that none of the decisions gets taken by a vote. Therefore, we went round and round and discussed each issue for days together and finally reached a consensus on all critical issues and were able to avoid votes on each one,” the finance minister said.
The Council is now recommending, both to Parliament and the state legislatures, a set of six laws. Five of these are to be approved by Parliament and all have been unanimously approved by the Council. Therefore, there is an indication of an all-India consensus on these.
ARUN JAITLEY Finance minister
GST Council is India’s first federal decision-making body, where the Centre and states both sit together and come to a conclusion. And, this has been a truly exemplary exercise in deliberative democracy
“Hopefully, most of these legislations will be approved both by the Centre and the states, without any amendment, in the next two-three weeks. There are at least nine regulations. Four have been approved. Our officers are working overnight on the other five. So, hopefully, as the financial year ends we have the legislations in place and also the bylaws in the public domain.”
“Hopefully, in April and May, we should be able to complete the exercise over a two-three-day meeting. If all these fit into place, with the structure ready, the Council had decided that we really don’t need to wait for the beginning of the financial year. We can put it (GST) into operation from the first of July itself,” Jaitley said.