opinion

Updated: Dec 09, 2017 12:43 IST

The signals were strong – the World Bank’s Ease of Doing Business index ranked India 30 places higher, a significant rise in the history of the index. Moody’s upgrade based on the reform process underway and Standard and Poor’s reaffirmation given the government’s sound external accounts position, management of fiscal deficit, and improved monetary credibility set the tone. The official announcement that GDP growth during Q2 stood at 6.3% was, therefore, expected.

Just a few hours prior to this announcement, Prime Minister Modi reiterated his government’s commitment towards building a corruption-free, citizen-centric, and development-friendly ecosystem for India. Policy measures undertaken over the past three years bear testament to this commitment. The latest growth numbers only show that these policies are being successfully implemented.

Demonetisation was the first step in eliminating corrosive crony capitalism, fostered and nurtured for decades. The data amassed through this exercise enables the identification of and bringing to book entities and individuals, who instead of being penalised for corrupt activities, were enjoying political patronage. The fight against corruption was further bolstered by the Insolvency and Bankruptcy Code (IBC) and the recent amendment. To better understand the implications of the bankruptcy law and the amendment, one must step back and understand the genesis of the non-performing assets (NPA) crisis.

All that any promoter looking to raise funds needed to do was to approach a public sector bank. Leveraging political connections, the promoter would get the loan approved with little or no intention of paying any interest on it, let alone paying back the principal amount. India’s NPA crisis is firmly anchored in this politician-industrialist-bureaucrat nexus where loans from PSUs were essentially largesse donated to corporations with the right connections. The IBC aims at reviving the banking sector and bolstering investment. The judicial system will appoint professionals tasked with selling off defaulting entities. The first round of this fire-sale will take on $40 billion in distressed assets of 12 corporations and complete the necessary procedures by March 2018.

The recent amendment addresses promoters who were part of the problem to begin with. Section 29A of the IBC, introduced by the President by way of an ordinance, bars defaulting promoters from bidding for their own company during the insolvency phase. The message is clear – if you can’t run a business, you have no business being in business. The amendment also busts the myth that certain promoters have sectoral expertise and are the only ones who can revive these corporations – should owners want to retain the control of their asset, the amendment allows for a one-year period to raise the requisite finances.

The first and foremost priority of this government is to have a citizen-centric approach to economic policy. From opening bank accounts for the poorest of the poor, to creating an e-market for farmers; from universal electrification to affordable insurance schemes; from easing public service delivery, to direct transfer of government benefits – this government is dedicated to improving the lives of each and every Indian.

It gives me great pride in reporting the performance of my own ministry, that of housing and urban affairs. Over the past three-and-a-half years, we have more than tripled total investments in our flagship urban missions against the total in the previous ten years. This is in line with similar unprecedented investments in a host of other areas like road construction, new railway lines, power sector, Bharatmala and Sagarmala, etc.

We are en route to achieving our target of 1.2 crore affordable homes by 2022 – 30.73 lakh houses have been sanctioned, 13.88 lakh houses have already been grounded, and 3.93 lakh have been completed and are currently occupied by their owners. In addition, the Real Estate Regulatory Agency (RERA) Act, has given the country a real estate regulator after 70 years of independence. Project delays, diversion of funds by builders, asymmetric buyer-builder contracts favouring the latter, and unfulfilled promises have cheated honest citizens who invest their hard earn money and life savings in purchasing homes. RERA in conjunction with several other steps taken will clear and revive the real estate sector.

The dawn of a New India has to be built by a responsible industrial class and a government in sync with the needs and demands of its citizens. This will define the essential characteristic of the prime minister’s new India 2022. In his words, these reforms are “irreversible” and “permanent” and their benefits will accrue to generations.

Hardeep S Puri is minister of state (independent charge) for housing and urban affairs

The views expressed are personal