Finance minister P Chidambaram on Saturday said he was unsure of any one party winning solid majority in the 2014 Lok Sabha polls.
Speaking in a panel discussion at the 20th anniversary of the National Stock Exchange (NSE) in Mumbai, the FM said, “I am not sure that elections will throw up a government of solid majority in the Parliament. But if it does, then that could be a turning point to get over our weakness.”
His comment come after the ruling Congress suffered a major setback in the assembly polls of five states held recently. With the BJP emerging as the clear winner with major wins in Chhattisgarh, Madhya Pradesh and Rajasthan, the Congress certainly has reasons to worry.
Polls in Delhi ended up with a split result.
Chidambaram also talked about restricting the role of the RBI to formulate monetary policies and, regulate banks, and delegate its other functions to government or other regulators.
He noted that India’s banking regulator does more than her counterparts in other countries and said the Financial Sector Legislative Reforms Commission (FSLRC), headed by Justice BN Srikrishna, has made similar recommendations.
Blaming “tardy” state-run banks for high-level of non-performing assets (NPA), the FM said banks’ boards and not the government should be held responsible for the situation. “If the bank boards cannot perform their duty, blame should stop with the bank boards and not with the government,” he said at a panel.
Chidambaram also alluded to the fact that promoters preferred loans as opposed to (issuing) bonds, a fact that also meant that India’s corporate bond market is not developed.
The minister also said that the RBI and the government have taken serious note of the issue and asked banks to expedite recoveries aggressively. State Bank of India has set up a separate vertical to tackle NPAs, he noted.
Expressing concerns over the large volume of rupee market being played out in overseas market leading to high volatility, he asked market players to suggest ways to bring trading back to the country to boost the local market.