NDA’s ‘carrot and stick’ policy helped deliver goals of reforms: Jaitley

NEWDELHI: Finance minister Arun Jaitley on Thursday said a “carrot and stick” approach adopted by the National Democratic Alliance (NDA) government has helped deliver the goals of economic reforms and shape Indian society to be “ethical”.

Transparent reporting of bad debts, the new bankruptcy code, and laws banning parking of undisclosed assets abroad and dealing with fugitive economic offenders have all contributed to a shift in society, Jaitley told executives of state-run banks.

The minister said this was an imperative in India’s evolution into a developed economy.

“The last five years will go down in the history as a defining point in India’s evolution as an ethical society,” Jaitley said at the release of a performance index of state-run banks prepared by Boston Consulting Group (BCG) and Indian Banks’ Association (IBA).

The finance minister said the NDA has eliminated discretion in decision-making and adopted technology in a big way.

“It had to be a combination of both carrot and stick… We had to bring those who thought they could live in violation in perpetuity to some level of discipline. Now the message has gone home clearly,” Jaitley said, referring to the impact the bankruptcy code has had in forcing corporate defaulters to pay back loans.

The BCG-IBA report ranked Punjab National Bank as the best public sector bank in implementing the “reforms agenda”, followed by Bank of Baroda and State Bank of India (SBI). The ranking took into account parameters such as customer responsiveness, credit off-take, and digitalization.