|In the first of our planned regular coverage of India’s parliamentary sessions, Mandira Kala provides a roundup of important commercial bills that were debated and passed during the recent session, and an assessment of their potential
In the past year, India’s parliament has witnessed the passage of key bills intended to spur economic reform. The constitution was amended and four bills were passed to enable the levy of a goods and services tax (GST) in the country. The GST subsumes several state and indirect central taxes into a uniform tax regime. It is expected to minimize cascading of taxes and create a common market for goods and services. Additionally, the Insolvency and Bankruptcy Code, which was passed in May 2016, enables a time-bound mechanism for banks to resolve the issue of bad loans.
The monsoon session of the parliament concluded on 11 August 2017 and saw the introduction and discussion of key legislation that affects the economy and ease of doing business in India. The status and main highlights of key bills are discussed below.
The Banking (Regulation) Amendment Bill, 2017
In the past few years, the banking industry has suffered from bad loans, with non-performing assets (NPAs, or loans on which repayment has been in arrears for at least 90 days) on the rise in the past decade. As of 2016, 7.5% of outstanding loans in India are categorized as NPAs. This is an increase from 2.5% in 2007. In addition, India has the second-highest amount of bad loans among BRICS countries (Brazil, Russia, India China and South Africa), after Russia.