The Government has expressed its determination to bring down the Non-Performing Assets (NPAs) of banks, particularly those relating to the power and road sectors, both of which have agreed to the setting up of dedicated Asset Reconstruction Companies (ARCs). "We are working on a model to address the stressed assets concerning the power and road sectors and hope to find a solution in these major areas," said Dr. G S Sandhu, Secretary, Financial Services, while addressing FICCI's National Executive Committee Meeting here today.
Dr. Sandhu told FICCI members that NPA management was being tightened and the Budget proposals outlined by the Finance Minister on Thursday reflect that resolve. He said NPAs of banks have risen considerably during the last three years mainly due to the weak performance of the economy. The 2014-15 Budget has proposed early resolution of the problem through Debt Recovery Tribunals (DRTs). Simultaneously, regulation is being tightened for faster recovery of debt for which the Finance Ministry would make changes in the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) and DRT Acts. He added that the ministry was also considering the feasibility of setting up of a National Asset Management Company (NAMCO), a detailed representation for which has been made by FICCI.
Responding to the several concerns expressed by Mr. Sidharth Birla, President of FICCI, Dr. Arvind Mayaram, Finance Secretary, said the budget proposals as growth-oriented with a clear focus on giving industry a fillip, strengthen the financial services sector, re-energise the infrastructure sector, stress on social equity schemes and other areas such as defence, heritage conservation, and management of municipal services.
He said,"This is just the beginning there will be more Budgets and the government is determined to take difficult decisions and walk that path."
Mr. Shaktikanta Das, Revenue Secretary, said that the thrust of the Budget was to revive growth. Overall thrust of taxation was on reviving manufacturing sector, tax rationalization, reducing litigation, reducing ambiguity, and creating jobs.
On continuation of GAAR beyond March 31, 2015, Mr. Das said that the new government still needs to take a view on it and will clarify its stand shortly.
Ms. J M S Sundharam, Chairperson, CBEC, said that the Finance Minister in his Budget Speech had mentioned that the manufacturing sector was under stress. By adopting various measures, providing clarifications on policies, reversing the inverted duty structure and amendments in taxation, the Budget has tried to address diverse tax related issues.
Mr. Sidharth Birla noted that the budget sets a positive tone by advocating fiscal prudence, shunning populism and pitching for bold reforms. Through this budget, the stage is being set for repair of the economy. There is mix of short and long term measures geared towards boosting confidence. One key priority was to see an effort to address Tax Adventurism, by assuring no retrospective application and setting direction for a stable, predictable taxation regime that will be investor friendly and spur growth. The Advance Ruling for domestic companies is a great move.
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