Outgoing chief economic adviser Arvind Subramanian said the worst of the bad loans recognition was behind us and that the country was making progress on bad loan resolution albeit at a slower pace.
The recapitalisation plans of public sector banks cannot be divorced from newer reforms, he said, and added that the government has a long way to go in terms of PSU bank reforms.
Read the full text of outgoing CEA Arvind Subramanian's interview
Speaking about the non-performing assets of the power sector, he said these assets could not be liquidated at the moment as their valuations were too low to be acceptable.
Subramanian also added that current macroeconomic conditions had become riskier at the moment and that rising oil prices would stoke inflation. He, however, added that if the country could weather this volatility in oil prices, the economy would be in a good place by the next year.