In the backdrop of the government's recent announcement of Rs 2.11 lakh-crore recapitalisation package for public sector banks (PSBs), former Reserve Bank of India (RBI) Governor Bimal Jalan on Saturday said the move was expected much earlier.
"Bank recapitalisation is a very positive move under the present circumstances. But why could not we as government get into it earlier than now," Jalan said at the 2017-18 mid-year review of the Indian economy, organised here by the National Council of Applied Economic Research (NCAER).
He said the move should have come in 2014 itself and added that it was delayed by three years.
However, he lauded the efforts taken to improve the health of PSBs, saying "whatever action we have taken is very positive".
Talking about the festering issue of non-performing assets (NPAs) or bad loans of public lenders, Jalan said the reason behind its rapid increase should be studied.
"As far as NPAs are concerned, as citizens of India what we have to figure out is why did it increase to 12 per cent. Normally NPAs are supposed to be 4-5 per cent," he added.
According to Jalan, since the country has a majority government at the Centre, long-term reforms, difficult reforms, political reforms, economic reforms, governance reforms and public sector reforms are quite feasible now.
"What we need is administrative reform as well as political reform of very basic nature.
Another issue is that of implementation which is undoubtedly the most important part. Do not only announce policy but also implement it," he stressed.
He further noted that if India wanted to realise its full potential in the future, there were certain basic issues like these that needed to be tackled for medium and long term.
"We have to ensure timely action and implementation. Political leadership can monitor the progress of bureaucratic and administrative reforms," Jalan said.
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