ET NowIn a chat with ET Now, Montek Singh Ahluwalia, Former Deputy Chairman, Planning Commission says that the new bankruptcy code is very important in terms of giving solid support to the financial sector and it is going to depend on building the institutions and expertise to make it more effective. Edited excerpt:
ET Now: What is the internal decision making process for retrospective amendment?
Montek Singh Ahluwalia: I am not an investor. I am aware this is an issue but I cannot answer for what is internal decision making process. There is no doubt that the original retrospective amendment is very unfortunate. What the government intends to do about it, I have no idea.
ET Now: There is a certain school of thought that seems to believe that the government should have taken the plunge and perhaps made the retrospective law prospective in the two budgets. They still have not done that. They have their own limitations. Your take on that aspect.
Montek Singh Ahluwalia: No comment on that. The government has indicated what its position is and let them persuade investors that this is not as big as a problem as investors fear.
ET Now: How important do you think new bankruptcy code is in terms of giving solid support to the financial sector?
Montek Singh Ahluwalia: It is very important. When the companies act was amended and revised, our idea was to build the new bankruptcy code into it. I am pleased that we have got this law through. It is going to depend on building the institutions and expertise to make it more effective. I hope the rest of the stuff moves rapidly, because the code without all these institutions in place is not going to make much difference.
ET Now: Do you think the Indian economy needs an extension as far as RBI governor Raghuram Rajan's term is concerned?
Montek Singh Ahluwalia: I agree with what Governor Rajan has said on this issue and I am not going to add to that.
ET Now: What is the internal decision making process for retrospective amendment?
Montek Singh Ahluwalia: I am not an investor. I am aware this is an issue but I cannot answer for what is internal decision making process. There is no doubt that the original retrospective amendment is very unfortunate. What the government intends to do about it, I have no idea.
ET Now: There is a certain school of thought that seems to believe that the government should have taken the plunge and perhaps made the retrospective law prospective in the two budgets. They still have not done that. They have their own limitations. Your take on that aspect.
Montek Singh Ahluwalia: No comment on that. The government has indicated what its position is and let them persuade investors that this is not as big as a problem as investors fear.
ET Now: How important do you think new bankruptcy code is in terms of giving solid support to the financial sector?
Montek Singh Ahluwalia: It is very important. When the companies act was amended and revised, our idea was to build the new bankruptcy code into it. I am pleased that we have got this law through. It is going to depend on building the institutions and expertise to make it more effective. I hope the rest of the stuff moves rapidly, because the code without all these institutions in place is not going to make much difference.
ET Now: Do you think the Indian economy needs an extension as far as RBI governor Raghuram Rajan's term is concerned?
Montek Singh Ahluwalia: I agree with what Governor Rajan has said on this issue and I am not going to add to that.
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