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
