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Raghuram Rajan hopeful for GST bill; assures American investors of good days

Raghuram Rajan hopeful for GST bill; assures American investors of good days

Reserve Bank of India governor Raghuram Rajan is optimistic about the passage of the GST bill, which is long pending in the parliament. Rajan has told American investors that continued focus on fiscal consolidation and inflation will ensure that they achieve their targets.

Rajan was interacting with American financial institutional investors in New York last week at an event which was organised by US India Business Council (USIBC). In the interaction, Rajan told the investors about another priority of the RBI, which is to clean up banks and their non-performing assets.

Rajan said that this step would be taken with the intention of giving banks more powers to allow for greater recovery of money and give relevant stakeholders an active role in the resolution process. He further stated that he is optimistic about the passage of GST and the opportunities for compromise that will help realise its goals, which are: a unified tax market, improvement in tax collection and broadening the tax base.

The discussion, which was led by USIBC chairman and president and CEO of MasterCard, Ajay Banga. focused on financial issues like inflation and fiscal deficit management, recent rate cuts and monetary policy, deepening capital markets, modernising India's capital markets to mobilise investment in Indian infrastructure and world-class companies. Industry's desire for reforms also included further development of a corporate debt market, improved infrastructure trusts and debt fund structures, long-term rupee-denominated government securities, and an updated external commercial borrowing regime, as per a statement from USIBC.

USIBC was all praises for the Indian government for the recent reform, which was introduced in private sector banking, permitting the total foreign holding in private banks to have a composite cap of 74% and eliminating existing sub-limits for FDI and FII capital, which earlier were at 49%.

USIBC statement said that this reform is a critical step that would support credit growth in the financial markets and the Indian economy, allowing banks and investors with greater flexibility to raise capital and to meet the stringent capital adequacy norms.

"As global commercial institutions and investors, we remain profoundly committed to India as we continue to provide a variety of long-term resources - including capital, technology, and know-how - which will help advance the Prime Minister's goals of financial stability, economic growth, digital access, and financial inclusion," Banga said.

Mukesh Aghi, the president of USIBC said that the Indian financial markets are an important driver for the economic growth of the country. "There needs to be a level playing field for global participants in India's financial markets with clear, nationality-neutral regulations across all asset classes," he said.


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