The world of crony capitalism in India has come to an end with the introduction of Insolvency and Bankruptcy Code (IBC), Niti Aayog chief executive Amitabh Kant said here at a session organised by Indian Chamber of Commerce on Thursday.
Earlier, one could borrow from banks and not repay, but today if you don’t repay you will lose your business empire, he added. Hinting at a possibility of restructuring some of the old institutions such as Medical Council of India (MCI), All India Council for Technical Education (AICTE) and University Grants Commission (UGC), Kant said one of the key constraints for 9-10% GDP growth in India was some of the old “outdated” institutions which needed to be “radically restructured” or “done away with”.
He said huge non-performing assets (NPAs) were created by the banks earlier, adding: “The banks are going bust now because of the NPAs. One after another the businesses are losing everything and going to NCLT (National Company Law Tribunal). NCLT is later bailing them out. It is incumbent that you repay money to bank. Otherwise the government will not survive.
The government is held accountable. How can a government not react when a Nirav Modi incident happens? IBC will ensure that the world of crony capitalism comes to an end.” Cases like Nirav are perceived as a regulatory failure. So, the regulatory bodies are very strict and vigilant now, he added. Listing the challenges the country faces to record a 9-10% GDP growth, he said: “You cannot achieve growth till you restructure many of the institutions.
You cannot think of 21st century India with 19th century institutions. Many of our institutions like MCI are outdated bodies. It has not allowed us to create doctors. Many of the rural areas in Uttar Pradesh and Bihar do not have doctors. There is no doctor because you will find them in Kolkata, Lucknow and Patna. You need to create excess supply of doctors. The MCI has constrained the rise of doctors.
UGC, AICTE, MCI need to be radically restructured or done away with,” said the CEO of Niti Ayog. He also stressed on the need for higher exports. “It is not possible for India to grow at high rates till we push exports. Also, in India, MSMEs do not grow. We need to allow them to grow. We need to look at the size and scale, technology and so on. They need to reach an international market,” he added.
The strategy paper of India 2022 will be prepared by June by Niti Aayog and a chief ministers’ meeting is proposed in the same month. “The development agenda will be prepared by June and will be given to the CMs. A meeting of CMs will be held in June but date is not yet finalised,” he added.