New Delhi: The government has done a lot to improve governance in the banking sector which is beginning to contribute again, Niti Aayog Vice Chairman Rajiv Kumar said on Friday.
"We had inherited a banking sector which was kaput (broken) with Rs 10.5 lakh crore of non-performing assets (NPAs). We had to struggle a lot to overcome the crisis," he said.
Kumar said the banking sector will now go on a different footing as the country needs a few large banks which can compete globally.
However, the cost of capital remains high. "The banking sector remains fragmented which makes the cost of capital quite high. This makes it difficult for our companies to compete. The cost of capital in this country must be brought down."
Kumar said India's economy is on a solid foundation and the macro-economic situation is better than ever before. That is the basis of GDP growth rate of over 7 per cent. "The delivery of government is far better than before," he said.
The Niti Aayog Vice Chairman called for setting up a national debt office as announced in the 2014 Union Budget. It will be able to pay more attention and help the government in bringing down the cost of debt, he said.