Make in India: FM Jaitley plans banking reforms, says government moving ahead with reforms

MUMBAI: Finance minister Arun Jaitley said he will shortly announce a “series of banking reforms” without elaborating. Public sector banks have been declaring poor results as the central bank has been pressurizing them to clean up their books by setting aside money against bad loans.

Jaitley, who will present the budget at the end of the month, also said the government is gradually moving in the direction of reforms and a market-oriented economy but will have to take into account all stakeholders. He was speaking at the Make in India week in Mumbai on Sunday.

The Narendra Modi government has sought to push ahead with economic reforms but investors have been worried about the slow pace of change in key policies such as the goods and services tax.

"If you look at the sum total of all measures... you will see the government has moved in one single direction. It has not erred in reversing that direction," said Jaitley.

The government is conscious of the fact that the tax regime “has to be predictable and stable,” Jaitley said. "Unreasonable taxation is not the best way to increase revenue."



On the delay in GST, he said the government cannot support any condition that was a “deal-breaker.”

Jaitley said India's public sector banks need to be “professionalised,” and the government wouldn’t interfere in the way they did business.

The finance minister believes the government's stakes in these banks should be lower.

In the months to come, the government will focus on rural demand. The windfall from the fall in crude oil prices will be diverted to the rural sector. He added that some of these gains have been used in areas of infrastructure already.