Depositors’ money in PSBs will be protected: Finance minister
Finance minister Arun Jaitley on Thursday said depositors’ money in PSBs will be protected and there is no need to create any fear psychosis, as he hit out at the previous UPA government for non-performing loans.
Replying to a debate on the second batch of supplementary demand in the Lok Sabha, Jaitley said 7-8% growth has become the new normal for the country and the recent decline in growth was due to the structural reforms by the government.
Lok Sabha passed the Rs 66,113-crore supplementary demand for grants with a voice vote.
The Financial Resolution and Deposit Insurance (FRDI) Bill, 2017, introduced in the Lok Sabha in August, has a ‘bail-in’ clause that some people fear reduces the level of protection for depositors. The bill is being reviewed by a joint committee of parliament.
“The government is committed to protecting every depositor in public sector banks and therefore we need not create any fear psychosis,” Jaitley said while promising to look into any issues once the bill comes up for discussion. “What do we do with that clause (bail-in)? The committee has wise people which will make some recommendations. We will consider that. We are open-minded. We are very clear and the level of protection the government would want would be much higher than the level which existed till today,” he said.
On the Opposition’s charge of the government being pro-corporate, Jaitley said it was this government that brought in the insolvency code and made companies stand in the queue of insolvents.
Jaitley also said the GST Council will take a decision on including petroleum goods in the goods and services tax (GST), as he dared Congress-ruled states to raise a demand for including petroleum products in the new indirect tax regime.
He said there was no “Gabbar Singh Tax” when the overall indirect tax rate was 31-31.5% on average before the introduction of the GST. “When you imposed 31.5% tax, including excise, VAT, CST and cascading effect, nobody remembered the Gabbar Singh Tax. Now tax rate is only 18%,” Jaitley said.
On the disinvestment of Air India, the finance minister said it was unfair to ask taxpayers to bear the burden of Rs 55,000-crore debt for running of the national carrier. “There is a right time to privatise. Otherwise nothing will be left to privatise.”
He said the country’s growth rate had declined because of structural reforms undertaken by the government, comparing the situation to the decline in growth after the 1991 reforms.