HIGHLIGHTS OF HIS SPEECH

MY COMMENTS

Government is working on a slew of sectoral reforms, including a new law on fast track arbitration, in a bid to address the stressed areas of the banking sector.

FM has spoken about ‘Exit Policy’ that is in final stages of preparation and the draft will be put out for deliberations early next month. He also said the proposed new Arbitration Law provides for Fast Track Arbitration with one member Arbitration Board, with a mandate to complete the entire process within six months.

Shri Jaitley also said the Dispute Resolution Tribunals (DRTs)’s working was being speeded up by moving most of the transactions online.  

Will that suffice?  How the government is going to ensure that these companies will fulfil their written commitments made at the time of their execution of an MOU with the respective governments (centre/state)?

What is the government planning to prevent huge pile up of NPAs in public sector banks?  Do they have any workable idea in this regard? 

The Government is aware of the challenges faced by the Public Sector Banks (PSBs) and measures were being taken to address each one of them.

He has not specified what type of challenges he refers to.  Going by the announcement/decision to dilute of government’s share-holding in IDBI, we may presume that NDA government wants to test the waters, so that they can implement the same strategy(?) in respect of other PSBs too.  Some mergers may also be on the cards.  Unless a clear cut road map is laid out before us, we cannot make any specific comments on this issue.

Sectors such as steel, power, highways and discoms were mainly responsible for the stress in Public Sector Banks (PSBs).

Yes, agreed. What about stressed assets in other sectors like Telecom, Infrastructure (other than Highways), Civil Aviation, Textiles etc.? What about the large scale scandals in CDRs, involving large companies from any sector?  What steps the government has taken to check the director/s of one defaulter company holding the post of director in other companies?  What is the role of Company Law Board vis-à-vis SEBI and Ministry of Corporate Affairs (read as political establishment)?  Has he ever examined these points in depth?

Very few States had carried-out power sector reforms and the situation would not improve, unless the users were made to pay for the electricity consumed.

I agree to some extent.  But, will he comment about the rolling out the red carpet by various states to private power producers, who express their intent to invest very huge amount running into hundreds/thousands of crores of Rupee?  Why do these states offer vast tracts of land at throw away prices (through land acquisition route many a time) to such investors?  Why shall they be offered tax holidays and exemptions/relaxations from the age old labour laws?  What is the amount of sacrifice made by these states over a period of time?  Will he bring out a ‘White Paper’ containing full details, company/investor wise?

Problems of the steel sector are on account of external factors, where cheap imports are hurting the domestic industry.

This is only one side of the truth.  Is he willing to openly discuss the stories of companies like Essar Steel, POSCO etc. who have their manufacturing bases in other countries too?  Are they not offered cheap land and coal for their factories and many other concessions by the states concerned?  

But do these companies start their commercial operations as per schedule?  Do these companies create more employment opportunities as promised by them?  Do they meet their export obligations without fail?