Under Arun Jaitley’s supervision, Insolvency and Bankruptcy Code (IBC) saw the light of the day and India received a time-bound framework to deal with bankruptcies.
After Arun Jaitley opted out the new government citing health reasons, speculations are on over the former Finance Minister’s likley successor. The names of key cabinet ministers and top BJP brass are doing the rounds in the media. The name of the candidate is until officially confirmed, conjectures would rule the roost. For now, we would look at the 5-year term of the BJP’s prime ‘troubleshooter’ who in his maiden stint as Finance Minister under NDA-I came out with various big-ticket reforms. Here are the hits and misses:
Goods and Services Tax (GST)
Even though Goods and Services Tax (GST) was conceptualised under the previous governments, NDA-I government led by Prime Minister Modi ensured it became a reality in 2017. However, it all came after long standing deliberations between the States and the Centre. And, the BJP veteran is largely credited for the success.
Insolvency and Bankruptcy Code (IBC)
Under Arun Jaitley’s supervision, Insolvency and Bankruptcy Code (IBC) saw the light of the day and India received a time-bound framework to deal with bankruptcies. IBC 2016 is a bankruptcy law which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy.
Under his watch, GDP growth increased to 7 per cent in FY19 from 6.4 per cent in FY14. The fiscal deficit as a percentage of GDP was brought down to 3.4 per cent in FY19 from 4.5 per cent in FY14. The retail inflation eased to 2.92 per cent (April 2019) from 9.5 per cent in FY14.
Not only clean up of bad loans began under him, the consolidation of bank reforms also gained pace. Among the major lenders, Dena Bank and Vijaya Bank were merged with Bank of Baroda (BoB). The government also came out with bank recapitalisation plans to infuse capital into the 12 public sector banks (PSBs) to help them maintain regulatory capital requirements. He is also acknowledged for implementing Financial Sector Legislative Reforms Commission and recommendations by the Nayak Committee.
The controversial demonetisation exercise was introduced by the Modi government during his tenure as the Finance Minister in 2016. The noteban exercise is widely crticised for slowing down the Indian economy.
Tussle with RBI governors
Be it Raghuram Rajan or Urjit Patel, the Finance Ministry entered into regular run-ins with the RBI governors. Several episodes of tussle between the two parties, over a number of issues, were reported in the media during his tenure.
Not only did Arun Jaitley end his tenure with a slowdown hitting the economy, the NBFC crisis issue also remained largely unresolved.