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22 September 2017
 |
| Finance Minister Arun Jaitley (The Total Investment & Insurance Solutions) |
As
the government mulls ways to shore up sagging growth, Finance Minister Arun
Jaitley on Friday said reviving private investments and strengthening the
banking sector are the biggest challenges in this process.
"The
reality is that there are two major challenges. One with regard to encouraging
private sector investment and second with regard to improving the capacity of
our banking system to support growth," Jaitley said, addressing IBA's
Annual General Meeting here.
The
Indian economy has the resilience and entrepreneurial vision, he said while
exuding confidence that there is a will in the government to carry out reforms.
It
has initiated sector-specific measures in the face of global slowdown in the
past, he added.
Jaitley
said however that global prospects are reviving and pointed out to these two
issues as the potential impediments in the process.
For
the last six quarters, India's GDP growth has been falling and it came down to
5.7 percent in the June quarter.
Private
investments are low and bankers often complain about there being no fresh
demand for greenfield projects. The system credit growth is struggling to
revive and continues to be in mid single digits.
Deteriorating
asset quality and the pressure on capital stemming from the high NPAs, coupled
with migration to newer capital guidelines, is the biggest stumbling block for
banking system.
The
government is mulling a stimulus package, which some reports peg at over Rs
40,000 crore, to revive the economy.
"As
a dynamic and progressive society, we have to look for the best solutions and
make sure that we are able to resolve these issues," Jaitley said.
According
to some experts, continuing slowdown is likely to increase pressure for
additional stimulus through a higher fiscal deficit, accommodative policy
stance and a competitive rupee, which unfortunately has limited scope.The Total Investment & Insurance
Solutions
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