By TIOL News Service

PUNE, JAN 04, 2015: THE Union Finance Minister, Mr Arun Jaitley, yesterday said that the present Government has taken number of bold steps like Goods and services Tax (GST). He said that the new Land Acquisition Act that was passed by the previous regime had stalled development. He said that the present Government has taken necessary steps to change this Act so as to revive infrastructure growth.

The Union Finance Minister said that risks have to be taken. He said that the positives are that there is an element of decisiveness in the new government and there is large popular support for that. "We have taken steps to increase both FDI and the domestic investment to give the big push to manufacturing sector. Excise duties collection was diverted towards to highway Projects to meet their financing requirement. Banks have a major role to play in the financing of infrastructure. Growth in power and other infrastructure sectors needs to be revived, " he added.

Mr Jaitley was speaking at the two day “Retreat for Banks and Financial Institutions” called “ज्ञान संगम” “Gyan Sangam” at National Institute of Banking Management (NIBM), Pune, Maharashtra which was graced by the Prime Minister Mr Narendra Modi. Mr Jayant Sinha, Minister of State for Finance, Dr. Raghuram Rajan, Governor, Reserve Bank of India, Mr Rajiv Mehrishi, Finance Secretary, Dr. Hasmukh Adhia, Secretary, Department of Financial Services (DFS) and Dr. Arvind Subramanian, Chief Economic Adviser, Regulators, Officers of the Ministry of Finance, top management of all Public Sector Banks (PSBs), Insurance Companies and Financial Institutions (FIs) also attended among others.

The Finance Minister further stated that this was a gathering of important people in the banking industry who have assembled at a crucial stage of economy. "The actual situation is that we are trying to bring about transformation in the Indian economy. In the past the rights were being conferred on people one after the other for which we did not have the resources. The result was a slowdown. Risks have to be taken. The positives are that there is an element of decisiveness in the new government and there is large popular support for that. We have taken steps to increase both FDI and the domestic investment to give the big push to manufacturing sector. Excise duties collection was diverted towards to highway Projects to meet their financing requirement. Banks have a major role to play in the financing of infrastructure. Growth in power and other infrastructure sectors needs to be revived," he added.

The Finance Minister said that Financial Inclusion through PMJDY was taken up in a mission mode. Most of the inactive accounts will become operational with the introduction of Direct Benefit Transfer (DBT). These account holders will become symbol of the identity of the cashless system.

In the forenoon Session, Dr. Hasmukh Adhia welcomed the Finance Minister and apprised him of the proceedings of the retreat so far. He informed that the discussion groups have been asked to suggest the important action points for the short term (0 to 12 months) and medium term (13 to 36 months) separately for banks and policy makers. These six groups would then be combined into 3 presentations by the CMDs before the prime Minister.

Earlier Chief Economic Advisor Dr. Arvind Subramanian suggested ways by which the banking system can generate and efficiently allocate domestic savings to sustain the investment rate of 35% of GDP to achieve the growth of 8% in medium term. He proposed that the PSBs should be differentiated into weak, good and strong categories and accordingly consolidation and restructuring measures could be applied to them. There should be diversification both within and outside the banking system. There should be better bankruptcy procedures. The current overhang of stressed assets should be resolved by distribution of the pain between promoters, creditors and tax payers.