Economic Times ⁽²¹⁸⁾

The steps taken so far are not enough, in the longer run full modernisation of the banking sector will require further structural reforms, Panagariya says.Read full article The banking sector, a major engine of growth, has been greatly underperforming in India. This is an inherited problem for the present government. Experts in finance had known for some years that the vast majority of the “restructured” loans would eventually turn into non-performing assets (NPAs). But the finance ministry and Reserve Bank of India (RBI) were slow to move towards a solution. Luckily, both of them have moved to take the NPA bull by the horns during the last year. Armed with the Banking Regulation (Amendment) Act, 2017 and subsequent authorisation by the government, RBI has issued definitive directions to banks for time-bound resolution of stressed assets including through the Insolvency and Bankruptcy Code (IBC), 2016. An impressive 40% of NPAs are now under the IBC process. Three other important developments towards strengthening the banking system have taken place. First, the finance ministry has moved decisively to recapitalise the banks. This is already…

A new generation of babus seems to have now replaced its more enlightened predecessor. It is about to erect the wall of protection all over again, Panagariya said.Read full article When GoI raised custom duties on a number of products in December 2017, as an eternal optimist, I took the view that this had been done for revenue reasons. But increases in duties on a long list of products ranging from kites and footwear to cellular mobiles phones and motor vehicles in Budget 2018 have ended that optimism. Indeed, revenue secretary Hasmukh Adhia has explicitly stated that the duties have been levied, not to raise revenue, but to provide protection to micro, small and medium enterprises (MSMEs). Adhia adds, “We have a phased manufacturing programme in electronic manufacture industry for which increasingly we will be putting more duty on the final product, then on second level of spare part and third level of spare part.” The Great Wall of India The clear message from the revenue secretary: stay tuned, more tariff hikes are on the way. For those of us old…

The Economic Times February 5, 2018 Read full article As the Parliamentary Standing Committee deliberates the National Medical Commission (NMC) Bill, 2017, fog around it must be cleared. Vested interests have deliberately created some of this fog. Corruption, low quality and slow expansion have been the hallmarks of medical education under the current Medical Council of India (MCI) regime. With a small self-interested and self-perpetuating clique of doctors controlling the MCI for decades, the top scholars and practitioners of medicine have simply quit playing any role whatsoever in shaping medical education. Therefore, the NMC Bill makes a conscious effort to bring the best in the profession to the centre stage of regulation. The Bill proposes that a committee of unimpeachable integrity headed by the Cabinet Secretary select the members of the National Medical Commission and its four boards. One hopes that the guiding lights of the disciplines are ready to step up to the plate. The Bill proposes to place quality in medical education at the centre of the regulatory process. Under the MCI, regulation has focused solely on enforcing strict infrastructure and personnel norms, which…

January 15, 2018 The Economic Times Read full article Nothing explains India’s job creation challenge better than a comparison between Reliance Industries (RIL) and Shahi Exports. While RIL is a familiar name to nearly all, most readers would not have heard of Shahi Exports. If we are to solve our jobs problem, this needs to change. The RIL reports $110 billion in assets and 250,000 employees across its various ventures. Therefore, it employs five workers for each $2.2 million in assets. Shahi Exports, which is India’s largest apparel exporter, has assets worth $185 million and employs 106,000 workers in its apparel factories. Therefore, it employs 1,260 workers for every $2.2 million in assets. For the same investment, Shahi Exports creates 252 times the jobs that RIL does. Jobs that Shahi Exports creates are what India needs most today. Its factories can take someone with fifth-grade education and impart necessary training in just six weeks. On average, these workers earn Rs 15,000 a month. About 60% of Shahi Exports employees are women. If we could rapidly multiply what Shahi Exports does, we could begin expanding formal-sector jobs…

Parliament h​as a historic opportunity to not only save medical education from “total collapse” but also bring about a renaissance in the field. For the good of the nation, let us hope it successfully meets the challenge.Read full article When Prime Minister Narendra Modi appointed a committee under my chairmanship to draft a new regulatory bill to transform medical education in India, he was responding to a clarion call from Parliament. In March 2016, a report by the Rajya Sabha-led Parliamentary Standing Committee on Health and Family Welfare described in detail the rot that had set into medical education in India under the aegis of the Medical Council of India (MCI). It went on to call upon the government to bring about wholesale change in the way medical education is regulated. The concluding paragraph of the Standing Committee Report is worth recalling here: “To sum up, the Committee observes … that the need for major institutional changes in the regulatory oversight of the medical profession in the country is so urgent that it cannot be deferred any longer. The Committee…