Banks’ real picture hidden below carpet till 2015: Arun Jaitley

You can’t have an economy where the size of the shadow economy is much bigger than the apparent economy, says finance minister Arun Jaitley

By: ENS Economic Bureau | Mumbai | Updated: October 29, 2017 2:34 am
Demonetisation, note ban anniversary, anti black money day, arun jaitley, demonetisation anniversary, jaitley on demonetisation, November 8, GST, indian express, india news Union Finance Minister Arun Jaitley.

Finance Minister Arun Jaitley on Saturday said the banking system lent excessively and functioned in a non-transparent manner with the real picture “hidden below the carpet” till two years ago. “Our banks had lent excessively. While we were lending excessively, we were through various restructuring processes… I was reading those notes… till 2015 nobody knew what the real picture was. The real picture was hidden below the carpet,” Jaitley said at the ET Awards function. “No economy can really survive if the main source of finance was in such non-transparent position,” he said.

Referring to the huge stressed assets including bad loans of over Rs 9.50 lakh crore, the finance minister said, “this had to be addressed not by any kind of small induction or some band-aid solutions. You needed to have much larger impact as far as the banking structure was concerned and there could be a real impact. Therefore we announced programme for recapitalisation itself.”

Without mentioning demonetisation and GST, Jaitley said, “the whole idea of making the economy is a much cleaner economy. India aspires to be a developed economy… aspires fastest growing amongst the fastest economies in the world. You can’t have an economy where the size of the shadow economy is much bigger than the apparent economy.”

“Therefore a series of steps had been taken in order to discipline and give opportunities to people to come clean,” he said. Demonetisation of Rs 500 and Rs 1000 notes was announced on November 7, 2016.

Read | Bank cleanup roadmap: Capital infusion first, restructuring later

According to him, on the individual size, the tax base is substantially expanding. The number of digital transactions is expanding. Conceding that there will be some “noise and grievances” because of the implementation of tax reforms like GST, he said paying taxes is essential.

“Paying taxes is always a fundamental duty of every citizen. It’s a patriotic duty to be a part of that structure, rather than outside the structure. It is only then that the implementation will really show its larger, longer-term impacts,” he said.

On direct taxes side, he said government has reduced them in such a way where the lowest tax slab is 5 per cent, while on the indirect tax side, it is as low as 1 per cent.

He said the process of structural reforms has a long way to go and added that government has grabbed a lot of low hanging fruits, like increasing FDI caps in multiple sectors. Terming the introduction of the Insolvency and Bankruptcy Code as a “belated reform” he expected the measure to bear fruits going forward. Claiming that government is “extremely transparent” when it comes to banking matters, he said he wants a system which shows the true health of the system.

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  1. A
    Nov 19, 2017 at 5:55 pm
    Jaitley trying to hide his Govts inactions on Banks during the 3 year rule of BJP.Is he saying he was unaware till a year ago.Rajan had initiated cleaning up of Banks balance sheets.NPAs have gone up in last 3 years because jaitley didn't take any action.Banks kept on lending without due diligence and due to political compulsion.Only solution is to have professional heading Banks with no interference from politicians.Even FM shouldn't be able to influence lending decision.We would be dreaming to believe that.Even now govt willing to top up Banks without mending leaking holes.Lending practices have to be formalised,backed up by data,figures and signed off,so that responsibility can be pinned later and action taken.Main problem is cosy network of bank officials,politicians and beaureaucrat.Money is often diverted from stated use,project figures fudged.jaitley needs to reform bank practices before refilling.That is common sense.Jaitley unfit for FM post,lacks domain knowledge,blames past
    1. K
      Oct 29, 2017 at 11:17 am
      Jaitley is lucky he's cute ladies swoon over him. all b ers are forgiven thanks to his sx appeal.
      1. A
        Oct 29, 2017 at 9:00 am
        And you did nothing as FM for 3 years to expose this REAL-PICTURE, you talk of Mr. Jaitley? You always stated everything was going great under the BJP rule. You still deny the economy is in bad-shape, don't you? Why then do you need to crawl under the carpet to find dirt that you have been sweeping as part of 'Swachh Bharat Abhiyaan' there? The nation wants to know!
        1. R
          Roshan A
          Oct 29, 2017 at 8:52 am
          Bla-Bla-Bla Bla-Bla-Bla. There is absolutely nothing he is saying here except non sense jumlas that they have been saying over last 3 years. "Hidden below the carpet" what? Give us numbers what was hidden? What all is hidden in your agenda of messing up all the ins utions of this country, we will come to know after we throw you out next year. You did not do even a single thing good to this country, except help people like Jay Shah and Ambani, Adani, etc multiply their wealth tremondously. What did you do for the people of this country. Demonetization was done for 3 reasons - 1) for UP elections, 2) To crush all SMEs so the your corporate friends can take over the created void, and 3) To get cash into the banks which you can use to wave off NPAs of you rich friends. This kiddish blame game, this was hidden, that was there before, etc, suits only kids. Provide exact figures.
          1. Sankaran Krishnan
            Oct 29, 2017 at 7:57 am
            What else can be expected from the corrupt Congress party headed govt. at the Centre in the name of UPA and that too with Jugglery Expert at the helms of the Finance Ministry. Had I been in the place of Chidambaram I might have quit from Congress Party and as well from Politics accepting the wrongful decisions, apart from indulging in scams and loots and also allowed the family members to misuse the authority to amass the wealth in Foreign Countries wheres without any honesty and sincerity he is defending the decision of the corrupt UPA without any shame !!!
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