New Delhi : India Inc Tuesday welcomed the government’s decisions to infuse Rs 2.11 lakh crore capital in PSU banks and approve Rs 7 lakh crore worth highway projects, including Bharatmala, saying these steps will boost economy and help revive private sector investment.
Announcement of recapitalisation of public sector banks (PSBs) along with a booster dose of expenditure will prove to be a mega turnaround point for Indian economy which was tackling issues out of the GST and demonetisation, Assocham Secretary General DS Rawat said. As for the Bharatmala, he said the infrastructure- related industries like cement, steel, would get a boost, besides, it would also generate jobs at informal levels of the economy and generate demand at the bottom of the pyramid. “The decision to invest in PSU bank recapitalisation should result in increased lending, especially to the MSMEs. We hope the RBI will pro-actively seek to boost investment and consumer demand through easing of the repo rate.
“Bank recapitalisation should also encourage banks to pass on the benefits of a lower rate of interest to investors and consumers,” Ficci President Pankaj Patel said. “The government has imparted a huge boost to bank recapitalisation with a proposed amount of Rs 2.11 lakh crore which is likely to kickstart the credit cycle and facilitate private investments,” CII Director General Chandrajit Banerjee said.
IMF, SBI hail decision Stressing that India will have to reform continuously to accelerate growth, the International Monetary Fund (IMF) Tuesday welcomed the government announcement to up the recapitalisation of state-run banks as a “positive”. Meanwhile, SBI chief Rajnish Kumar said capital infusion road map announced by the govt will trigger economic activities.
To review fiscal deficit in Dec
The government Tuesday said it would take a final call on its fiscal deficit target of 3.2% of GDP for 2017-18 (Apr-Mar) in December, even as it claimed that it was “reasonably confident” of meeting the target. “As of now, the government continues to work to maintain that the fiscal deficit is achieved this year. We will take a final view around December, but the government’s commitment is to continue on this glide path of maintaining fiscal deficit to low levels,” Economic Affairs Secretary Subhash Garg said.
Over lending by PSBs in UPA
Union Finance Minister Arun Jaitley on Tuesday said that the public sector banks, from 2008 to 2014, engaged in indiscriminate lending, in an apparent attack at the United Progressive Alliance (UPA). “At one stage, the public sector banks were involved in indiscriminate lending. The data from between 2008 to 2014, showcases lending in an indiscriminate manner,” Jaitley said.
