Bihar polls out of way, PM Modi, FM Jaitley back to economic agenda

  

So, finally elections in eastern Indian state of Bihar, one of the most bitter polls , are over with exit pollsters giving victory to a coalition of national and regional parties ranged against PM Narendra Modi’s BJP.  While the counting of ballots will take place on Sunday, it looked as though Prime Minister and his ministers returned back to some serious economic agenda at the Centre.

The Union Cabinet approved a USD 65 billion (Rs 4.3 lakh crore ) package for the broke state owned power utilities . This rescue package will clean the balance sheets of these utilities with the respective states taking the load of the debt with the help from the Centre. The idea is to completely restore health of these utilities by 2019 and ensure that India gets 24X7 power supply, of course with market related user charges.

In yet another major reform in the power sector, which has been the trouble spot for the government owned banks with high exposure to the electricity firms, the government is working on a plan to allow the generating firms to   divert coal supply from state monopoly Coal India  to  efficient units.  This would help power generating companies  saving  of Rs 20,000 crore (about USD three billion ).

Finance Minister Arun Jaitley, who was also actively involved in Bihar polls, got back to work with top financial sector regulators including Governor of the Reserve Bank of India Raghuram Rajan, who has been giving his piece of mind to the fringe elements of the ruling party.

The meeting of the Financial Stability and Development Council (FSDC) under chairmanship of the Finance Minister  reviewed the state of Indian economy, noting high volatility in the financial markets is one of the most prominent risks confronting the Emerging Market Economies (EMEs). Though  India appears to be much better placed  on the back of improvement in its macro-economic fundamentals and large forex reserves, there was a need to in full preparedness for managing any external sector vulnerabilities.. 

The issue of rising bank NPAs and stress in the corporate sector balance sheet stress along with their impact on the bond market was also discussed.  

Whatever is outcome of Bihar polls, the economic decision making is going to get some speed in the coming days and weeks.

Pic: PIB