Frankfurt: Finance Minister Arun Jaitley on Wednesday said the government will take up the Insolvency and Bankruptcy Code for discussion and passage in the Lok Sabha immediately after his reply on the Finance Bill.
“One important bill from the point of view of the economy which has been cleared is MMRD Bill. Now we are going through Finance Bill. Tomorrow I have to reply to that. Immediately thereafter we will take up the bankruptcy code,” he told reporters here.
A 30-member Joint Committee of Parliament, constituted to scrutinise the bankruptcy code, has already submitted its report on April 28.
Enactment of the bankruptcy code is expected to improve India’s position in the World Bank ease of doing business ranking significantly.
Replying to queries on non-performing assets in banks, the minister said, “We have to empower” the banks so that they can take a commercially prudent decision.
“Nobody should create a panic like situation, where bank’s own decision making gets constrained. Because after all in a debtor-creditor relationship, commercially prudent decisions have to be taken. You can’t take commercially prudent decisions if the various organs of the same system start putting pressure on you,” he said.
On NPAs, Mr Jaitley further said, “Crisis would be an exaggerated phrase. We have a challenging situation. The challenging situation has arisen on account of 4-5 sectors of the economy.”
He, however, refused to comment on the Reserve Bank of India’s appeal in the Supreme Court to not reveal the names of the loan defaulters, saying the matter is in the Supreme Court.
He further said some loans may have been wrongly granted, but a large part of the NPAs are on account of business cycle of certain sectors.
Once those business cycles reverse, the NPAs will become performing assets and “you need a lot of patience to deal with economic issues”, he added.
On the provident fund controversy, Mr Jaitley said that Indian society as a whole has to realise that in the long run whether employees in the private sector post retirement need to have some social security or not.
“Ours was a very well-intentioned move that they must have some social security in terms of being pensioned post retirement,” the minister said.
When asked why the government has not been able to stand by its position on PF issue, he said: “It’s not pressure (from the middle class). After all, it is employees’ money. So you will have to respect their sentiment.”
To query on the demand for removal of excise duty on jewellers, Mr Jaitley said he had replied in the Lok Sabha.
“I could not find a single substantive argument why jewellery should not be taxed,” he said.
In regards to black money, the minister said in case of those who have not disclosed their assets, law will take its own course.
On the NDA government completing two years, Mr Jaitley said in both the years, “We were the fastest growing economy. It never happened in the past.”