Published 19:03 IST, November 23rd 2019
'RCEP offer not as much as our aspirations,' says Finance Minister Nirmala Sitaraman
India took the call to not join the RCEP despite spending a considerable amount of time on the negotiating table, says Finance Minister Nirmala Sitaraman.
- Economy News
- 4 min read
India did not join the Regional Comprehensive Economic Partnership (RCEP) as the offer was not as much as our aspirations, Union Finance Minister Nirmala Sitharaman said on Saturday. The government was taking efforts to ensure more regulatory mechanism in the banking sector to benefit bank account-holders, she said in the context of the PMC Bank and IL&FS issues. India took the call not to the join RCEP despite spending considerable amount of time on the negotiating table, she said addressing the 6th G Ramachandran Memorial Lecture here.
"The offer was not as much as as our aspirations in particular sectors," she added. India's decision to not to join the mega deal was announced by Prime Minister Narendra Modi during his speech at the RCEP Summit in Bangkok early this month. The RCEP negotiations were launched by ASEAN leaders and six other countries during the 21st ASEAN Summit in Phnom Penh in November 2012.
The objective of launching RCEP negotiations was to achieve a modern, comprehensive, high-quality, and mutually beneficial economic partnership agreement among the ASEAN member-states and their FTA partners. On the PMC Bank scam, Sitharaman said the Reserve Bank of India (RBI) has started making sure there are steps taken within the institution which would strengthen the supervisory and regulatory roles. "And together with that any legislative changes or amendments that I have to make so that RBI gets a bit more empowered to its job -- it is something all of us are talking about as such measures are required to make sure the markets are better regulated, banks better regulated," she said.
Anamolies allowing the institutions to take "liberty" were all being corrected so that regulators can perform better and ensure the bank account-holders have a greater sense of what is happening, Sitharaman said. On non-performing assets (NPAs), she said they multiplied between 2007-08 and 2013 and had become a burden on the banks' books. However, banks had taken corrective action and most of them are out of it, she said.
"As a result banks are also going through a churn of how to assess their risk and how to rate property or asset. And in this we had even discussions with credit agencies on how to really rate assets," she said.
Sitharaman said she has met with few of these credit agencies to understand if the way in which they rate was consistent with what is happening in the economy. On the automobile sector, she said she was 'pilloried' earlier for making some remarks on vehicle sales, apparently referring to her statement on millenials using cab aggregator services as a reason for the slowdown. "Irrespective of that debate, a decision of the Supreme Court keeping in mind the climate change and pollution-level considerations, giving us a two-year window tells you to move from one level of emission standard to another," she said.
"And government in its wisdom calls saying we shall not move from (BS) IV to V which is a natural consequence but move from IV to VI given that we have two-year window given by the court," she said. People started "withdrawing" from BS IV purchases "well in advance" and probably were waiting for BS VI, she said. "I don't know what is the fact here. Several facts would have played, but it ended in the automobile sector having a huge inventory of BS IV. And that also became an issue which we had to address," she added.
The government had earlier announced that BS-IV vehicles purchased upto March 2020 will be operational for their entire duration of registration. The NDA government was "receptive" to issues faced by the Indian businesses, she said, and referred to the Centre announcing Corporate Tax cuts "between budgets" to buttress her claim. "We could work between two budgets in coming up with the majar structural refords, in reducing the corporate tax," she said. Such a measure was taken because Prime Minister Narendra Modi has said the government has to respond in time so that the country realises that there is a government which wants to carry reforms, she added.
Updated 19:39 IST, November 23rd 2019