There were attempts to sweep problems under the carpet before 2014: FM Arun Jaitley

Finance Minister Arun Jaitley once again on Tuesday said that the banking crisis was inherited from the previous government and there were attempts to sweep problems under the carpet.

Finance Minister Arun Jaitley once again on Tuesday said that the banking crisis was inherited from the previous government and there were attempts to sweep problems under the carpet. Speaking at the SBI Conclave, Arun Jaitley said that the Narendra Modi government has remained committed to fiscal discipline and that the market and the economy always reward fiscal prudence.

Stating that the government has managed to keep India’s macroeconomic fundamentals strong, Arun Jaitley ruled out having taken the path of “panic reaction” or “fiscal adventurism” to deal with challenges. He said that India’s domestic fundamentals are strong but the country does face two big challenges: crude oil price and trade war.

Hitting out at the oil cartel Organization of the Petroleum Exporting Countries (OPEC), Arun Jaitley said that there is an artificial scarcity of oil. However, since the pricing of the oil is about demand and supply, they can’t put a hold on supplies indefinitely. They also need revenues, Arun Jaitley said.

“We have the patience, we have the economic strength to deal with it; don’t call for a panic reaction and throw your fiscal disciple to waste,” he added. Earlier at the event, interim Finance Minister Piyush Goyal also spoke on a range of issues, including the bad loan crisis.

He said the government is open to discuss the issues that the Reserve Bank of India (RBI) had raised recently over the lack of powers in regulating state-run lenders. He ruled out ruled out government pairing its stake in public sector banks (PSBs), saying there is no proposal with the government to lower its ownership in state-run banks to under 51 per cent in 20 of them.

The statement comes amidst strong opposition from banking and LIC unions to the government plans to sell its
majority stake in the crippled IDBI Bank to LIC.

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