"In the last one year, if you look at the reform agenda in the industry and start to check the boxes, we have got something like 80 per cent work done. This is a huge step forward and is a paradigm shift for the industry and we should take stock of that," said Minister of State for Finance Jayant Sinha at a conference organised by Indian Private Equity and Venture Capital Association (IVCA) on Wednesday.
“We have been able put through last year a very robust foundation for growth going forward. Despite the global volatility, India is a rare bright spot,” he said.
Sinha said India needs to develop soft assets like employability, skills and quality of institutions both public and private and innovative capacity.
The minister also addressed concerns on crony capitalism as the government has been marred with scandals over the past few weeks. He assured that the government was committed for its fight against crony capitalism. "We have shown that in encouraging institutional capitalism or improving ease of doing business, we have a policy driven state where there is minimum government and maximum governance," he said.
Sinha said the government has put in place a roadmap of reforms that will take the economy forward and now the focus has shifted to execution for the remaining three or four years. The minister said the government is focused on ensuring that India is a beacon of stability in an increasingly volatile world. “Whether ‘Grexit’ or instability or turmoil in the Middle East, we have layers of defence from macro perspective to ride through those troubled seas,” he said.
Sinha commended the efforts of the government and RBI for maintaining healthy foreign exchange reserves and fiscal deficit. “We have tried to ensure that we have macroeconomic stability to sustain 7-8 per cent growth,” he said.
As far as subsidies and driving exports are concerned, we have entered into a landmark agreement with RBI on monetary policy. “We are working hard and pushing public investments and in the Budget we have provided both gross budgetary support for railways and roads and also opened up number of innovative mechanism whether it is infrastructure bonds or what we are doing for national infrastructure fund,” he said.
The government is trying to implement GST and rationalise indirect tax structure while also ensuring that as far as banks are concerned there is a comprehensive package to really strengthen public sector banks (PSB).
While highlighting the problem of rising NPAs, the minister listed five aspects of a comprehensive package which the government will be releasing shortly.
First, ensuring changes in governance from restructuring role of chairman, board and the managing director.
Second, strengthening management in banks and transparency in process of selecting MD of PSBs.
Third, improving the operating performance of banks via technology and risk management.
Fourth, to define strategies and capital raising plans.
Fifth, to understand the capital requirement for next two to three years for banks and to support them and provide capital that they need.
“NPAs are only a symptom as far as underlying issues of banking are concerned and we are working on these issues,” the minister said.
In India making polices has never been a problem while execution has been and with the government caught in a storm of scandals it will have a difficult time getting some of the bills passed in the monsoon session of the Parliament. With investors fast losing confidence, the markets are looking at the government to show strength and restore the confidence to retain India as a bright spot in a volatile world.