Finance Minister Nirmala Sitharaman has geared up to battle an ongoing slowdown of the Indian economy. In the first step to achieve that, the minister held a credit growth review meeting with PSU bank chiefs on Monday, to review growth of credit in sectors like retail, housing, auto, quasi-banks and MSME loans.
The Financial Stability Report of the RBI in June had reported healthy double digit growth in banks' loan books, following the budget announcement to recapitalise public sector banks with funds infusion of Rs 70,000 crore. This had improved banks' ability to provide credit to consumers and to businesses.
In the Union budget, the government had also extended the MUDRA loan scheme for medium and small enterprises to small traders and shopkeepers with an annual turnover of upto Rs 1.5 crore. "The meeting was held with chairmen of banks to discuss progress under these various loan schemes," Sitharaman told reporters on Monday.
Banks have been asked to take special care in extending collateral-free loan benefits to the MSMEs sector, and aid them to boost export growth. "Global tradewinds are favourable for India and we must act now," she said, explaining the urgency for banks to lend to this sector.
Sitharaman said that the meeting with bank chiefs was the first of the many meetings she was going to conduct over the next few days. The finance minister would be holding meetings with representatives from the MSME sector, auto, housing, NBFC, housing finance company heads and other corporates over this week and the next, Sitharaman said during a media briefing.
According to finance ministry officials, the minister is also slated to hold separate meetings with revenue and expenditure ministry officials to keep a tab on the government's overall expenditure this year. This is also part of her efforts to hold inter-ministerial discussions to aid sectors like MSME and other larger industries like the auto sector, officials said.
Among other things, the government, in the budget, also announced a Rs 5000 crore stressed assets fund for MSMEs. Today's discussion with bank heads also included strategies to run the fund based on the Textile Upgradation Fund Scheme of the government. "This is part of the initiatives to reduce MSME sector-created NPAs," Sitharaman said.
In the coming days, the finance minister is expected to meet more sectoral heads to listen to their pain points and offer resolutions.
Asked about the Central Board of Direct Tazes (CBDT) decision to review the surcharge imposed on super rich, which unintentionally also hurt Foreign Portfolio, the finance minister said that she would be meeting FPIs very soon. "I am quite open to hear them out as to what they have to say," she said.
So far, in August alone, FPIs had pulled out Rs 2,881.90 crore from Indian debt and equity markets. FPIs had pulled out Rs 2985.88 cr in July, following the announcement on the surcharge on income tax during the Union budget in June.
"We will listen to their difficulties and offer solutions that they may have been overlooking so far," said Atanu Chakraborty, secretary at the department of economic affairs. Investments in Indian capital markets were also hit after a slump in rural consumption and irregular southwest monsoon rains this year, he said.
Published On : 05-08-2019
Source : The Week
