At the launch of his book, The Making of Hero, Munjal said that India is currently experiencing the “pain of transition” and the regulatory framework is getting strengthened.
“A lot of questions on IBC were raised but the way it is functioning, in the next 2-3 years, it will be a smoothly functioning system”, Munjal said.
According to Munjal, IBC, which was rolled out to address the NPA issue plaguing Indian banks, has been a key factor in improving the financial system in the country.
Previously, lenders and stakeholders had raised concerns as cases dragged on for months and years in the NCLT and NCLAT and some of the most important cases had to be eventually settled in the Supreme Court.
Industry officials felt although the confidence in IBC wasn’t shaken, lenders felt IBC is a time-consuming, lengthy and costly process. For example, sources suggested that legal cost for settlement of Binani Cement had crossed Rs 30 crore by the time the case entered the Supreme Court.
On RBI’s intervention in YES Bank and SBI's plan to pick up a 49 per cent stake in the beleaguered private lender, Munjal said, “It sends a very mixed signal. On one hand it proves that the regulatory bodies are awake but at the same time it has scared a lot of people who can’t access their deposits.”
Munjal said in the past 10 years India has been able to rationalise a significant part of its regulations and laws and that there is more is in the making.
Asked about the state of the economy, he said that it is expected that consumption may start picking up from the next 2-3 months but it will take 5-6 quarters for a full fledged recovery to step in.
“However, coronavirus may be a joker in the pack. I am concerned, but not worried. The negative impact of the virus should start receding by month-end, but it needs to be seen how it impacts”, he said.
Responding to a question about GST rationalisation, Munjal said that although the initial concept of GST was simple, but owing to a “lot of political compromises”, the GST is complex in its present form. Nevertheless, he expects that the complications around the latest tax structure should be addressed and GST will eventually evolve into a simpler form.