Finance Minister Arun Jaitley on Thursday blamed the successive governments’ inability to bring in reforms in the infrastructure and power sectors for the rising non-performing assets in the core segments. He said there are a number of sectors which have been impacted by the global slowdown, but some of these were hit more because of the absence of reforms.
“There are at least two sectors – infrastructure and power- where we can’t blame external factors. Our own inability to bring in reforms adequately in these sectors, I think, caused the difficulty (in banks books),” Jaitley told the BRICS Economic Forum in Thursday.
Elaborating further, the Union Minister said that in the infrastructure sector the key problem is the inability to adequately and quickly settle the disputes.
“We allowed them to pester for an indefinitely long period and now we have taken a number of steps, including amending laws, setting up faster courts, among others. I do hope we are able to get out of it,” the minister said.
While accepting that absence of reforms in state discom led to a stress in the power sector, Jaitley said, “I think the only silver lining is that the causes of the stress (in power sector) have been analysed quickly and correctly, and now we are addressing those problems.”
He said bringing reforms in the country has become more easier now than it was some years back.
“I think there is a lot of maturity, which has come into the country’s political system and this is noticed from the fact that reforming in India today is no longer as challenging as it used to be say 10 or 20 years ago,” he said.
It can be noted that most of the over Rs 8.5 trillion of dud loans of banks, a large chunk are their exposure to infra and power sectors.