Yashwant Sinha, chairman of the Parliamentary Standing Committee on Finance and senior Bharatiya Janata Party (BJP) leader today said that giving new banking licenses to corporate houses was a very bad idea.
"This was something where a clear separation took place decades ago for very good reason. Any relaxation in these norms is going to lead to unecessary conflict of interest and unecessary risk to financial sector," said Sinha. He was reacting to a recent report by International Monetary Fund (IMF) that said that India should not be hasty in giving banking licenses to corporates.
Speaking to reporters about the rise in cap on LPG cylinders, on the sidelines of an Indian Merchants Chamber (IMC) conference on reinsurance, Sinha said that the government was in habit of taking credit if whatever it does. "They took credit for reducing it to 6 and taking credit for increasing it to 9," he said.
Recently, in the performance audit of agricultural debt waiver and debt relief scheme, the office of the Comptroller and Auditor General (CAG) had observed that ineligible accounts of farmers were extended benefits under the scheme. Explaining his stand, Sinha said that this is a serious matter. He added that this scheme was made a part of the budget in 2008 as a last minute proposal. "Then, it has been shabbily implemented in the absence of strict guidelines by the government," he said further.
The CAG, according to Sinha, had pointed that 50% of loan remissions under the scheme was to wrong people. He said that the fault was not just with the bank employees, but with the government, finance minsitry and finance minister as well.
On the issue of General Anti Avoidance Rules (GAAR), he said that they had given our recommendations to government through the Parliament on Direct Taxes Code (DTC) Bill which contained a chapter on GAAR on 9 March last year. He added that government did not consider their proposals and was instead postponing its implementation by two years.
"GAAR should be included in DTC Bill, but with the amendments which the Standing Committee on Finance has suggested. Other nations have similar provisions and there is no reason to shy away from it," he said.
He said that if government discussed the increase of foreign direct investment (FDI) in insurance from 26% to 49%, Sinha said that a solution could be worked out with the opposition.
On fuel price increase, Sinha said that the oil marketing companies should be given the freedom to revise prices every fortnight, like they were allowed to do earlier. He further added that in principle, they were in favour of direct cash transfer scheme, but said that it has been politicised.
'RBI has to take a difficult call on rate cuts'
Yashwant Sinha, chairman of the Parliamentary Standing Committee on Finance and senior Bharatiya Janata Party (BJP) leader today said that the Reserve Bank of India (RBI) should not to submit to popular to government pressure on the interest rate issue.
Sinha explained that only thing with which the interest rate issue could was inflation. "If inflation remians stubborn, how does RBI find a space to reduce interest rate? The Governor has to take a call, a difficult call, but has to keep the economic principle in mind," he said.
