The Government and the Reserve Bank of India (RBI) will work together to ensure smooth implementation of the Supreme Court’s recent ruling on the RBI’s February 12, 2018, stressed assets circular, Chief Economic Advisor Krishnamurthy Subramanian said.
The apex court ruling in Dharani Sugars versus Union of India and others does not impact ongoing cases or resolutions or the credit culture in the country, he told reporters on the sidelines of the CII Annual Session 2019 in the Capital on Thursday.
Subramanian also said he does not see any change coming to the Insolvency and Bankruptcy Code (IBC) on account of the apex court ruling.“ I don’t think it (change to IBC) should be necessitated, but it’s too early to say,” he added.
Krishnamurthy’s remarks on the Supreme Court ruling on the RBI’s stressed assets circular came on a day when the RBI Governor Shaktikanta Das said that the central bank will issue a revised circular to deal with the stressed assets situation in the banking system.
While the Supreme Court has struck down the February 12 circular on resolution of stressed assets, the apex court had upheld the constitutional validity of Section 35AA of the Banking Regulation Act.
Meanwhile, addressing a session on ‘Navigating Volatility, Uncertainty, Complexity and Ambiguity (VUCA)’ at the CII Annual Session, Krishnamurthy said innovativeness is the key to surviving in the VUCA world.
Firms operating in the sectors which are subject to moderate competition are the ones which need to be most sensitive to innovation, he said.
Subramanian said globally, there has been a significant increase in uncertainty. Interestingly, though, in India, uncertainty has reduced over time despite spikes during events such as demonetisation and GST.
Thriving in a VUCA world, he said, requires ‘Aision, Understanding, Clarity and Agility’.
Borge Brende, President, Member of the Managing Board, World Economic Forum, said countries that excel in implementing new technologies such as Artificial Intelligence, Internet of Things, etc. will emerge as the most prosperous. “India has huge opportunity in this,” he said.
Some of the input factors are already in place: the largest exporter of ICT, second largest English-speaking population and young workforce. It was now up to the government and citizens to formulate an aggressive reform agenda involving investment in education, R&D and infrastructure. In addition, a reduction in red-tape is required, as also greater openness to inward investments and investing abroad.
“Innovativeness and entrepreneurship are key to leadership in Industry 4.0,” Brende said.