Liquidity no longer a major concern, FM Sitharaman assures India Inc

Banks to kick off new credit-outreach programme by October 15

Finance Minister Nirmala Sitharaman on Monday assured India Inc that liquidity is no longer a major concern for the economy. She said that from October 15 the government would kick-start a credit outreach programme.

The move is likely to give impetus to economic recovery during the festive season and also ensure availability of credit for sectors like export. The credit outreach programme is likely to be similar to the credit outreach programme launched in 2019, through which banks held loan melas across 400 districts and reportedly disbursed around Rs 4.9 trillion.

Addressing a select group of CII members at Chennai, the finance minister expressed satisfaction that “liquidity is no longer a major concern, and that the Bank-NBFC (Non-Banking Financial Company -MFI (Microfinance)channel has been de-clogged and from 15th October there would be a special drive to reach out credit to those who need it.” To tide over the pandemic and subsequent economic crisis, the Apex Bank had already pumped in liquidity through measures like open market operations over the last year. This has resulted in a higher average surplus of over Rs six trillion in the banking system.

Sitharaman added that the announced disinvestment plan was on track. The government is planning to raise Rs 1.75 trillion from stake sale in public sector companies and financial institutions during the current financial year. She said that the government is working on ramping up health infrastructure, including in the tier two and tier three cities, by supporting the private sector, while it is ramping up the vaccination drive. The country has so far provided at least one dose of vaccine to at least 74.38 crore people.

She further shared that the Development Finance Institution announced in the budget would be operational soon. Welcoming continuous feedback and inputs from industry, the Finance Minister said that the ongoing dialogues with industry has enabled the Government to take a series of actions, as the pandemic situation evolved.

Earlier while sharing CII’s perspective on the Indian economy, T V Narendran, President CII said that the first quarter GDP growth of 20.1 per cent firmly establishes the setting in of the recovery. He further elaborated that CII expects a GDP growth of at least 9.5 per cent for this fiscal, provided vaccination continues to gather pace and there are no further severe waves of the pandemic.

Narendran applauded government’s initiatives towards preparedness for the third wave and interventions aimed at catalysing private investments, such as the Production Linked Incentives and the National Monetisation Pipeline. He urged the Government to continue frontloading its committed capital expenditure to support the demand recovery and for the virtuous cycle of private investments to set in.

Industry leaders from companies like the Hinduja Group, Cavinkare, Daimler India Commercial Vehicle, Apollo Hospitals, 3M India, Star Health Insurance, Saint Gobain India, Tractors and Farm Equipment and Chettinad Group participated in the event.