Whilst substantive public allocations have been made in the infrastructure sector, this strategy is plateauing due to the fiscal deficit constraint, capacity limitation of statal implementing agencies, the declining ability of PSUs, and the precarious situation of the Railways' operating ratio. It is, thus, high time to get the policy compass to point at rejuvenating private sector investments in infrastructure, says Vinayak Chatterjee.
The 'bad bank' -- which will help banks clear their balance sheets by transferring the NPAs to special purpose vehicles -- has been one of the most debated ideas for stressed asset resolution.
Tax administration could be improved to reduce discretion and improve accountability
Central bank likely to keep tabs on large wilful defaulters; policy likely by month-end.
In a soon to be published book, 'Of Counsel: The Challenges of the Modi-Jaitley Economy,' former chief economic advisor Arvind Subramanian says though RBI has a good reputation, it does not mean it's always right, as for years, the RBI was unable to grasp the seriousness of the loan repayment problems or identify the prolonged frauds of Nirav Modi and the likes.
Rather, the existing ones should be implemented speedily to clean up the mess.
It is a national economic problem and one that requires a political solution hand in hand with a clear government commitment to stand behind core national assets, says Vinayak Chatterjee.
'For years, the RBI has been warning banks on probable frauds in bank guarantees and advised them to exercise due care.' 'PSB staffers feel their jobs are secured, hence there is no need to be vigilant and exercise financial prudence.'
The windfall from RBI may be used to trim borrowing, help fund Rs 3.3 lakh crore capex plan, capitalise banks and provide fiscal stimulus to some stressed sectors, experts and economists said.
Overall, the Survey warned that unless shifts in the vision of development were articulated and embraced, the Indian economy would lose the chance to move to a high-growth trajectory.
Of the seven surveys presented under Modi govt, predictions of three were quite close to the actual GDP growth rate, one saw the base year change in between, but the last three were way off the mark.
Banks might not have realised the exact implication of risky projects under PPP projects, which were getting implemented under high leverage
Rush to offload bad loans indicates a revival in asset-sale market
'Let's walk on two legs: Facilitate better resolution under the present system and set up PARA as well by transferring loans amounting to, say, Rs 1 lakh crore.'
Resolving the TBS challenge comprehensively would require 4 Rs: Recognition, recapitalisation, resolution and reform.
Land ordinance has done away with consent and social impact assessment.
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