India to become fifth largest economy in 2018: Arun Jaitley

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NEW DELHI: India may probably become the fifth largest economy next year, asserted Minister for Finance and Corporate Affairs Arun Jaitley on Monday. Jaitley’s comments came while addressing the 71st Annual General Meeting of the Indian Banks Association, held in Mumbai today. He addressed the meeting through video conferencing.

Emphasizing the vital role of the banking industry, Jaitley said, “Given the kind of economic activity happening in India, industries role will be vital in strengthening the economy itself”.

He urged the industry to use the occasion of AGM to introspect and prepare a blueprint for the long-term.”The sector should do this by upholding professionalism, credibility and expansion,”Jaitley added.

Talking about the necessity of growth with fiscal prudence, the Finance Minister said,”The desire to have a high growth rate must be accompanied by strong macroeconomic fundamentals. He said that sacrificing the fundamentals for the temporary spurt in growth is not desirable.”

Jaitley further stated that the creation of the Insolvency and Bankruptcy Code has redefined the creditor-lender relationship in India and emphasized on the need to expedite the process. He also said, “Indiscriminate lending done in the past created funding of projects which were not able to service those debts. He observed that this was followed by the subsequent error of dressing up the bad loans. He noted that excessive fear of consequences in the old regime led to a situation where this problem could not be resolved.”

Talking about the amendment to Section 29A of Prevention of Corruption Act and how it would prevent defaulting promoters from bidding, he said, “A pre-liberalization Prevention of Corruption Act could not attract the penal provisions for corruption; the new law empowers civil servants, bankers and other decision makers.”