Nitin Gadkari, Union Shipping and Ports minister, speaks during The Bloomberg Address in Mumbai (Photographer: Dhiraj Singh/Bloomberg) 

Chasing All Defaulters May Chill Economic Activity, Says Nitin Gadkari

Union Minister Nitin Gadkari today warned that taking action against every defaulting entrepreneur will chill economic activity and the country will be left with no people willing to take business risks.

There is a need to distinguish between bona fide and mala fide intentions which would have made an entrepreneur to default, the minister said, adding that there are extraneous factors like business cycles or global situations which need to be looked into.

If entrepreneurship is dead, where would capital investments come from? It will hurt the economy.
Nitin Gadkari, Union Minister

Action should not be taken against every loan defaulter, he said, adding genuine decisions should be supported for entrepreneurship to flourish.

"If we can't protect and encourage such people, we can't get people to take initiatives. If entrepreneurship is dead, where would capital investments come from? It will hurt the economy," Gadkari said at an event organised by the Buldhana Urban Cooperative Bank.

Speaking a few days after meeting top bankers to resolve some of the large stalled road projects here, the minister said there is a need to fund bona fide corporate even after their accounts turn NPAs.

One should not cast doubts on every action of bankers, too, Gadkari said in the remarks that come within weeks of the arrest of the entire top management of the state-run Bank of Maharashtra for alleged corrupt practices in extending loan to the scam-tainted developer DSK Group of Pune. "How can the economy go ahead if there are such actions?" the minister asked.

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One should also forgive if the mistake is bona fide, and act sternly if any mala fide intent is observed, he added.

There is a need for people in Delhi to understand the cooperative sector better and not look at it as a political charity or as fully corrupt institutions, he said.

The minister said it is very important for the judiciary to function "within limits" and avoid action for the democracy to flourish.

Rather than getting stuck as being either people- centric or farmer-centric, economic policy-making needs to be "justification centric", he said, making a reference to concerns on the farm sector.

Also read: RBI’s ‘One-Day Default’ Rule Causing Short-Term Disruptions, Say Bankers

Gadkari said in a democracy it is also essential to listen to the Opposition and take everybody's views on board for better benefit of all the people, and cited past Maharashtra chief ministers YB Chavan, Vasantrao Naik and Sharad Pawar as practitioners of such a policy.

Gadkari said times ahead are full of uncertainties and added that he says this despite being in the government.