The recent reshuffling of Cabinet Ministers reflects Government’s constant focus and commitment to work relentlessly towards overall development of the country.  The third reshuffle of the Council of Ministers since the NDA Government took over in 2014, has clearly set a tone of greater accountability and high standards of governance to give a fresh boost to the process of economic growth. With this exercise, it is evident that the performance of each ministry was being closely monitored under the supervision of the Prime Minister and the fresh allocation of the portfolio has been done on the basis of the competence and the administrative capabilities of the cabinet members.  I am sure, the detailed performance evaluations by the Prime Minister will be a key tool for the effective implementation of various reforms at the national level.

Undoubtedly, the alarming rise in NPAs has created unrest in the financial sector and the Government and the Reserve Bank of India (RBI) have undertaken various initiatives in the past 12-15 months for an effective control over it.  Looking at the current NPA situation in the banking industry, in order to reduce the overall level of stressed assets within India’s banking sector, a strong need for the industry consolidation was felt. After the merger of SBI and its subsidiaries, the Finance Ministry is actively considering more consolidation in the banking space and has given a go ahead to banks to come up with plans to consolidate the 21 entities to 10-12 in the medium term based on the needs of individual banks. A ministerial panel led by Finance Minister has been set up by the Government to analyse the proposals received from banks for in-principle approval and to put the banking sector consolidation drive on the fast track. The final scheme for the effective implementation of this significant step will be notified by the Central Government in consultation with the RBI, with an anticipation to bring in greater autonomy for banks and to achieve economies of scale, revenue enhancement and operational efficiency while managing their credit portfolio better, including stressed assets.

 

Another major reform was witnessed in the Real Estate sector with the introduction of The Real Estate (Regulation and Development) Act, 2016 (RERA), which will give India’s real estate sector its first regulator. The Act was passed by the Parliament in 2016 and the Union Ministry of Housing and Urban Poverty Alleviation had given time till 1st May, 2017 to Central and State Governments to formulate and notify rules for the functioning of the regulator RERA. The legislations made by the Government have brought in changes in the law related to the real estate industry, which will empower the home buyers, increase confidence in them by protecting their rights. This landmark Act, with its essence of transparency, accountability, financial discipline and compliance, will bring a paradigm change in the way the Indian real estate industry functions.

 

I am sure, IL&FS Group and IL&FS Financial Services will see a positive impact on its business in the long run with these various political, economic and industrial reforms facilitating more favourable directives/stipulations for fund raising to successfully drive the infrastructure development agenda of the government and bringing back the quality of the loan portfolio in good health by mitigating NPA and stressed asset level across the financial industry.

As we have celebrated 70th year of independence on August 15 this year, we get a sense of pride and accomplishment seeing multifaceted growth of the country in all the spheres. In these years, we have come a long way to perceive India as a fastest growing economy withstanding turbulent economic and political conditions and various other events at the global level that had a great impact on all the economies of the world.  At the helm of various reforms agenda undertaken by the Government since independence, India has always been poised to encounter all the challenges and to emerge with greater strength.

Sincerely yours,
Ramesh C Bawa
Managing Director & CEO
IL&FS Financial Services Ltd (IFIN)









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