Forbes India 15th Anniversary Special

Jaitley emphasizes government's commitment to reform agenda

Union Finance Minister promises banking reforms ahead of Budget

Shutapa Paul
Published: Feb 14, 2016 11:44:44 AM IST
Updated: Feb 14, 2016 03:28:49 PM IST
Jaitley emphasizes government's commitment to reform agenda
Image: Joshua Navalkar
Finance Minister Arun Jaitley speaks to Fareed Zakaria at the CNN Asia Business Forum 2016 held in Mumbai

Days ahead of the Union Budget, Finance Minister Arun Jaitley reiterated the BJP-led NDA government’s commitment to big bang reforms on Sunday.

While crediting former Prime Minister Manmohan Singh for kickstarting reforms in 1991, Jaitley said that it was only the current government that had heralded second generation reforms. “To be fair to former PM, he started as an FM and did a great job,” Jaitley said at the CNN Asia Business Forum 2016 held in Mumbai. “Second generation reforms have started less than two years ago that the government will continue.”

The government has consistently moved in one direction and the total of all steps taken is “much more than incremental”, he said.

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The finance minister repeated his intention of announcing major banking reforms in the upcoming Budget to alleviate the rising non-performing assets of public sector banks. The government is planning to reduce government equity in public sector banks by 51-51 percent while pushing for professionalised bank boards. This comes in line with Jaitley’s recent comments of further empowering banks to recover bad loans.

The government has already unveiled a plan titled ‘Indradhanush’ to infuse Rs 70,000 crore in PSBs over a period of four years, while the banks have to raise an additional Rs 1.1 lakh crore from the markets to meet their capital requirements to meet Basel III norms.

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