Divide and conquer approach to tackle NPAs: Jayant Sinha

MoS for Finance says while bad loans have been rising, they have gotten close to the peak as far as NPAs were concerned

The non-performing assets (NPAs) of banks could be tackled through various means, including divide and conquer, Minister of State for Finance Jayant Sinha here on Tuesday.

Speaking on the sidelines of an event organised by the Small Industries Develop-ment Bank of India on the lau- nch of “fund-of-funds, Sinha said while bad loans have been rising, they have gotten close to the peak as far as NPAs were concerned.

“We have many tools. We feel we'll be able to tackle it," he said.

Sinha was here for the launch of the India Aspiration Fund (IAF) by Finance Minister Arun Jaitley in Mumbai. IAF is a Fund-of-funds managed by Sidbi and is intended to play a vital role in this financial ecosystem. Life Insurance Corporation of India (LIC) will be a partner and co-investor in IAF.

Rating agency Moody's Investors Service has cautioned of further risks to growth from slow pace of reforms. Responding to its statement, Sinha said that the reforms don't begin one day and end another day.

"It is a continuous process of pushing in a host of other areas. We're going to push forward as long as reforms are concerned, as far as our efforts are concerned and that will sure show up in terms of growth, in terms of job creation and eventually the rating agencies will (also acknowledge it)," Sinha added.

Moody's scaled down its projections for India's economic growth for 2015-16 to 7% from an earlier estimate of 7.5% on deficient monsoon. Moody's also said that one main risk to their forecast is that the pace of reforms slows significantly as consensus behind the need for reform weakens once the least controversial aspects of the government's plan have been implemented.

In response to this and the impending Goods & Services Tax (GST) Bill passage, Sinha said, "I think that is the message you'll have to take to our colleagues from congress across the aisle. The rest of the country is just holding its breath and hoping for the Rajya Sabha to function so that we can get GST passed for the good of everyone."

He added that as far as GST is concerned, it is a decision of two people to obstruct parliament and delay passage of legislation which is important for country's growth.

The fund is aimed at giving a boost to the start-up ecosystem in the country. Jaitley said the fund is expected to catalyse tens of thousands of crores of equity investment in the start-up ecosystem and help create employment for lakhs over the next four-five years.