MeraNews Network, New Delhi: Finance Minister Arun Jaitley has criticized the Reserve Bank of India for failing to check indiscriminate lending during 2008 to 2014 that led to the current crisis of bad loan or NPA in the banking industry. Speaking at the India Leadership Summit organized by US-India Strategic Partnership Forum in New Delhi on Tuesday, the Finance Minister said, during 2008 after the global economic crisis till 2014, to keep the economy artificially going, banks were told to open the doors and lend indiscriminately.
He said the central bank looked the other way when there was indiscriminate lending. The Minister said, the government of the day, was pushing banks to lend which resulted in credit growth in a year shooting up to 31 percent from the normal average of 14 percent. Jaitley said reforms undertaken by the government have led to significant improvement in revenues. The Minister said, his own estimation is that from 2014 to 2019, India will be almost very close to double the tax base.
He said it has been possible because of formalization of the economy that demonetisation brought about, the new indirect tax structure (GST) and improvement in indirect tax structure without raising rates. He added that it gave the flexibility to take a departure from the past where there were only slogans. Jaitley said, demonetisation was a difficult step but helped Government to make to make it clear that formalization of the economy is the clear intent.
Recounting achievements of the government, Jaitley said all villages are close to being connected by roads, the target of houses for all is likely to be achieved by 2022 and all households will have electricity by year-end.
He said, the whole concept of governance has seen a sea change and now corporate leaders no longer visit corridors of power because approvals are available online and discretion in the allocation of natural resources like coal mines or spectrum has been eliminated. He added that it has eliminated corruption.