Mr. Deputy-Speaker, Sir, as the hon. Finance Minister has said we understand Government’s motives in what they are trying to do here. Since the Government came into office we have been hearing about balance sheet problems, difficulties facing the Public Sector Banks and the balance sheets of corporate houses. We know that the companies borrowed a lot of money from the banks to invest in infrastructure and various businesses which had then slumped and as a result corporate profits hit lows; they could not repay their loans; their debts are rising and therefore they are cutting back on investment. So, the whole economy is affected. We understand the motivation behind all this.

It is affecting not only the profitability and the balance sheets of the banks but also credit availability in the corporate sector. This naturally has led to a decline in private investment. Mr. Deputy-Speaker, Sir, at the same time, the gross NPAs, the Non-Performing Assets in India, are at Rs. 7.33 lakh crore as on June, 2017 -- 10.2 per cent of the total loans are run by the Public Sector Banks and the stressed assets are another further 11 or 12 per cent of this. I must say this because I have heard the hon. Minister and his colleagues say that all their problems began with the UPA Government. If I can take two debts from their Government – in March 2015, NPAs were at Rs. 2.75 lakh crore and today they are at Rs. 7.33 lakh crore within their own tenure. This is, in fact, so disappointing because the bank credit growth in the last fiscal year was 5.1 per cent which is the lowest since 1951. It is actually a 66 year old loan and I think, for the Government to put the blame on the UPA is completely unreasonable. The fact shows that the worsening of these numbers is clearly taking place in the last three and a half years. We accept that re-capitalisation is necessary for these reasons.

We just do not wish to be blamed for it. The joke in this House is that the Indian economy grows at night when the Government is asleep because when the Government is awake it does not do anything. But right now we are in a position where the Government cannot afford to sleep. There is simply no question that re-capitalisation is necessary. We have international examples to show that it works. The US, for example, in 2008 had the TAR programme, the Troubled Asset Relief Programme, which basically involved a lot of re-capitalisation of banks. I am sure that we can gain similarly from this as well. This is a government that recently celebrated a finding of Moody’s. It seems that Modi’s intentions require Moody’s approval. So, this Moody’s study on this says that what Shri Jaitley has been proposing for the last couple years to re-capitalise will narrow the gap between the capital profiles of Indian Public and private sector banks and as a result there are a number of positives that they are talking about. With this re-capitalisation package, Moody’s report says that the Government is going to allocate this to the 21 Public Sector Banks and so they will all have Common Equity Tier-1 (CET –1) ratios which will be above the minimum BASEL 3 requirement, which is 8 per cent, by March, 2019. It will strengthen the capital base of the banks; it will help the banks to write off their bad loans; it will strengthen and increase our banks’ lending capacity; the CAPEX cycle will recover. Then to move away from Moody’s to Goldman Sachs, they say that this could increase credit growth in our country by 10 per cent. This is what all the positive news about the Government proposal for what market expects; what Moody’s expects and what we also expect. (f4/1820/ru-mm)

But I have a few questions, Mr. Chairman, Sir, to ask the hon. Finance Minister. As we know, he had announced Rs. 2.12 lakh crores to the roadmap to strengthen the PSBs. Earlier, in 2015, he introduced Indradhanush Road Map which involves infusion of Rs. 70,000 crores in State-owned banks over four years ending in March, 2019. Now he is talking of raising a further Rs. 1.1 lakh crore in the market to meet the capital requirements. My first question is, has the Indradhanush worked at all? It is because, presumably, if it had worked as Shri Jaitley has said in 2015, then this new infusion would not be necessary. Secondly, on the equity shares by banks, the banks were supposed to raise Rs. 1.1 lakh crore from the market through the issue of equity shares under the Indradhanush Scheme. But banks have only raised Rs. 21,000 crore until now. They are supposed to raise much more money. Can the banks raise funds from the market given the fact that they have raised only a fraction of the amount that was expected under the Indradhanush Scheme?

A related question to the Finance Minister is, some of the money that he is asking for today is to be used to reduce the amounts to be raised from the market because clearly, the banks are not able to raise money from the market that they are supposed to do. Against Rs. 58,000 crores, they have only Rs. 21,000 crores. My third question relates to the question of credit growth expectation. I mentioned about Goldman Sachs talking at ten per cent. Of course, there has to be a demand for credit because before there can be an increase in credit growth, that means, we have to stimulate the economy to seek that credit. So, there will be more investment in the domestic economy. On the other hand, this will also increase the banks’ appetite for risk. The hon. Finance Minister must note that with the banks record over the last few years, the need for adult supervision has never been greater. I think, the last three and a half y  Fifthly, recapitalisation that the hon. Finance Minister is asking money for is only a first step to address the rot in the banking sector. The fact is, it will ensure stability but we must now focus on performance. The Government has to follow it up with structural reforms to reduce its role in public sector banks to bring in more efficiency and accountability. There are a number of things that need to be done. You have to improve the quality of the management of the public sector banks. You have to strengthen the Boards of the public sector banks. Corporate governance has been a serious concern, and reforms in corporate governance are necessary.

There is a clear need for banking industry consolidation which you yourself have acknowledged. So, is there a roadmap which you can lay out for serious reforms of the public sector banking system? My sixth question is of course like this. The Government’s debt liability will be increased undoubtedly by giving more money. Shri Jaitley is taking Rs. 80,000 crore from us today. My understanding is, this is going to contribute to an increase in 0.8 per cent of the GDP in terms of the Government’s debt liability this fiscal year. Will this impact our Government’s or India’s sovereign credit rating or is the Finance Minister expecting that the credit rating will benefit from the better growth prospects that will follow from recapitalising the banks? Then there is the question of moral hazard. Are we rewarding banks for their irresponsible behaviour? Are we expecting the honest tax payers of India to bail out decisions made on wrong calculations,\perhaps, with corrupt motives and giving money to people who never had an intention to repay? How do we ensure that the moral hazard aspect is taken into account particularly in future? (g4/1825/rbn/mz)

The final question, Mr. Chairman, is, are we just keeping the wall down the road? Can we ensure that a few years from now, a future Finance Minister does not come back with the same problem again? What concrete steps can the Government take to ensure that it does not happen? Even during the last time when the Finance Minister came with the Supplementary Demands for Grants, many of us pointed out a number of vital areas that were missing from his request. He has come back with the new demands, but these are still missing. I want to just mention two examples. One is, the Mahatma Gandhi National Rural Employment Guarantee Scheme which, according to the States, requires Rs. 80,000 crore. But he has only got Rs. 48,000 crore in the Budget. We will urge him to ask for more money for that. The second is, the cyclone Ockhi, Mr. Chairman, as you know, your own State, Tamil Nadu has asked for Rs. 9,000 crore. We, in Kerala, have asked for Rs. 7,348 crore, but the Government has given each State only Rs. 133 crore. So, I would say that there is a real need for this. If he is going to give us the Supplementary Demands for Grants, it must reflect the real needs of the people of this country. Thank you.