Assuring bank employees that legitimate business decisions and lending would not be questioned, Prime Minister Narendra Modi on Friday acknowledged that the public sector banking industry felt it was under pressure, but asserted the government would not let it down. He said a scrutiny mechanism where otherwise sound lending decisions might have turned into bad loans would be unveiled soon to protect bank employees and empower them to take lending decisions fearlessly.
He said the chairman of the World Bank had called him to congratulate him on the progress India had made on the Ease of Doing Business Index last year. “My government is doing the politics of performance, not the politics of promises. So while earlier, railway lines were announced and forgotten, loan waivers were promised but never revisited, and road projects were declared but soon vanished even from paper, my government is seeking to execute every promise,” he said.
In a speech that was markedly pro-equity, rather than pro-growth, Modi, who was speaking at The Hindustan Times Leadership Summit, said low-income groups must never feel the absence of government, and middle-income groups must never feel pressure of government. He highlighted the government’s special focus on 112 of India’s most backward districts that had “fallen off the map” because they were laggards on every parameter of development. To correct this, scores of bureaucrats were being deputed every week to these areas to evaluate and assess how to bring them on a par with the rest of India.
The affordable housing project, piped water to 150 million homes, and employment, especially via the tourism sector, were initiatives his government had taken. The cuts in personal taxes would free up income that would fuel both investment and manufacturing, which in turn would be aided by the cuts in corporation tax his government had announced recently, he said.
Changes in labour laws and rationalisation of obsolete laws will help both the employee and the employer. He said the government was moving fast on disinvestment.
On the banking sector, he said the government was moving on the recommendation “made by many of you in this room”, that India did not need more banks but stronger banks. Accordingly, the recapitalisation of banks was a project that his government was committed to, with special windows for the real estate sector.
He referred to the government’s plans to reorganise the bureaucracy in a way that bureaucrat committed to India’s progress were not held back by cadres and services.
Those bureaucrats who had charges against them had been asked to go. Digitisation and application of technology in tax collections had promoted facelessness in tax assessment and as a consequence, the transfer-posting industry that powerful tax officials spawned, was now a thing of the past. “Now there will be no games in tax assessment," he said.