Finance Minister Arun Jaitley has once again listed the poor performance by private investors and banks to be a big challenge for the Indian economy. He said that even though India has emerged as most attractive investment destination for foreign investors, investment cycle of domestic industry is not at satisfactory level, mainly owing to banking sector performance.
Jaitley noted that increasing investment cycle of domestic industry still remains a big challenge when two other major challenges, the rollout of upcoming Goods and Services Tax (GST) from July 1and signs of positive trends in global growth have been overcome.
Finance minister had earlier said that the banks have to recover their bad loans to boost private investment, as domestic private investment needs to pick up. Efficiency has to be brought in so as to recover the money from defaulters. Further, he said that a number of steps will be taken to revitalise public sector banks, including those relating to sale of assets, closure of non-profitable branches and reduction of overheads when memorandums of understanding (MoUs) are signed with them for recapitalisation.
He further said that a defaulting litigant hurts the lending environment in India, adding that the ordinance promulgated by the government on bad loans will empower the Reserve Bank of India to issue directions to banks for resolution of stressed assets.