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24
March 2017
The
government will shortly announce measures to deal with the major problem of
banks' non-performing assets (NPAs), or bad loans, that it has drawn up in
consultation with the RBI, Finance Minister Arun Jaitley said on Thursday.
"In
the next few days, you will hear of some policy decisions taken between the RBI
and the government, in order to bring pressure to bear in resolving the NPAs
situation," Jaitley said at the CNBC awards event here. The Total Investment & Insurance Solutions
He
said that although the NPA amounts are large, the major ones are restricted to
a limited number of companies. The Total
Investment & Insurance Solutions
"Big
NPAs are confined to to 30..40..at best 50 companies," he said.
The
magnitude of the problem can be guaged from the NPA figures of state-run banks,
which at the end of the current fiscal's second quarter that ended in
September, rose to Rs 6.3 lakh crore, as compared to Rs 5.5 lakh crore at the
end of the first quarter.
Earlier,
this month Jaitley met with Reserve Bank of India Governor Urjit Patel and
other senior officials here to discuss the NPAs issue. The Total Investment & Insurance Solutions
The
meeting discussed the idea of a Private Asset Management Company (PAMC), as
well as a National Asset Management Company (NAMC), to tackle the bad loans
issue proposed recently by RBI Deputy Governor Viral Acharya. The Total Investment & Insurance Solutions
As
per the plan, the banking sector could be asked to restructure about 50 large
stressed assets in sectors like metals, construction, telecom and textiles, by
December 31, 2017.
According
to sources, the meeting also discussed the concept of a "bad bank"
that has been proposed by Chief Economic Advisor (CEA) Arvind Subramanian.
To
a query regarding the Universal Basic Income (UBI) scheme advocated by the CEA,
Jaitley spoke in praise of the idea and said that an interested state could
consider setting up a pilot project. The
Total Investment & Insurance Solutions
"Even
before he (Subramanian), floated the UBI idea, it had got reflected in the
budget of Jammu and Kashmir," Jaitley said. The Total Investment & Insurance Solutions
"I've
always considered it a very good idea. Any state government which is willing to
take the chance, can consider a pilot project," he added.
The
Economic Survey 2016-17, presented in January, advocated a UBI scheme as an
alternative poverty reduction mechanism in place of various ongoing social
welfare programmes.
The
Survey, authored by the Chief Economic Advisor, pitched for a scheme to
transfer a reasonable basic income to Indians below the poverty line.
"A
UBI that reduces poverty to 0.5 per cent would cost between 4-5 per cent of
GDP, assuming that those in the top 25 per cent income bracket do not
participate," the Survey said.
Elaborating
on the scheme, which has no precedents globally, Subramanian has earlier said
that it would entail making an unconditional cash transfer of about Rs
10,000-Rs 15,000 a year to every citizen, and could replace more than 1,000
schemes the government runs for poverty elimination.The Total Investment & Insurance Solutions
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