Set up national AMC to handle stressed banks: CII Director-General to Centre

The Centre should focus on sprucing up infrastructure facilities across ports, roads and railways to bring down the cost of making in India and attract foreign investments in manufacturing, said Chandrajit Banerjee, Director-General of the Confederation of Indian Industry (CII).

It is encouraging that the Centre is investing in infrastructure and expects the private sector to follow suit, he said, adding that given the current stress on infrastructure, the private sector may take some time to piggy back on government investments.

Good and bad On banking reforms, Banerjee said it is important for the Centre to separate ‘good’ banks from the ‘bad’, and offer differential treatment. Credit to corporates has now slowed down as all the banks have turned cautious and tightened their lending, he pointed out.

“We have suggested that the government to form a national asset management company (AMC) to handle the stressed banks separately. It is a difficult task for the government to treat stressed banks differently, but they have to do it as they cannot let credit for corporates be hindered,” he said.

It is also important for the Centre to bring more people into the tax net and reduce tax rates, said Banerjee. It is a proven fact that whenever tax rates are reduced the collection improves and tax evasion is reduced, he said.

Predictable tax

The clarity that retrospective tax is a thing of past is a great relief and a move to ensure predictable tax is a welcome relief for the industry, he observed.