The fireworks began in the afternoon, soon after the outgoing Chief Economic Adviser Arvind Subramanian walked into a meeting of the Estimates Committee of Parliament hearing the mounting Non Performing Assets (NPAs) of government banks.
Subramanian was mildly sarcastic and drove home the point without ruffling the Treasury Benches. The CEA cast doubts about the government’s optimism that banks would be out of the morass within three years.
Subramanian wasn’t worried that the NPAs problem was insurmountable but that it was the manner in which the government was going about it.
Hinting at what clearly appears to be crony capitalism, Subramanian said the economy was booming between 2002 to 2010 and that the private sector was doing a lot of development work but with money that didn’t belong to it.
He hinted that often government policies were such that businesses failed and loans from PSBs turned bad.
However, the picture that was presented by public banks throughout the two-day meeting was that the government was doing everything to curb NPAs and put in place a series of checks and balances. Secretary Finance Hasmukh Adhia’s stand was in strong contrast to the views the CEA expressed. Subramanian had expressed a wish to retire to academics in the US and his tenure ends prematurely in August.
The committee headed by BJP veteran MM Joshi, on Tuesday, told finance ministry officials that NPAs were the collective responsibility of the government and not just one particular department.
The meetings of the committee is being closely watched by South bloc as Joshi, part of the BJP’s margdarshak mandal, has of late been writing about ‘raj dharma’ and the duty of a king. The veteran’s public accounts committee (PAC) report on the 2g scam had put the UPA government on the mat.
The banking sector is grappling with rising non-performing assets, which touched Rs 8.99 lakh crore or 10.11 per cent of total advances during December 2017. Of the gross NPAs, the public sector banks accounted for Rs 7.77 lakh crore. By India today
