- Thursday 17 Oct 2019
NITI Aayog for extraordinary steps to deal with economic slowdown
PTI, Aug 22, 2019, 5:18 PM IST
New Delhi: Government think tank Niti Aayog on Thursday made a case for extraordinary steps to deal with the unprecedented stress in the financial sector which has resulted in an economic slowdown in the country.
The government needs to take steps which eliminate apprehension from the minds of private sector players and encourage them to step up investments, Niti Aayog vice-chairman Rajiv Kumar said.
He also said private investments will drive India out of the middle-income trap.
Terming the stress in the financial sector as unprecedented, he said nobody had faced this sort of situation in the last 70 years where entire financial system was under threat.
“Nobody is trusting anybody else… within the private sector nobody is ready to lend, everyone is sitting on cash…you may have to take steps which are extraordinary,” he said at an event here.
Elaborating further, Kumar said some of the steps have already been announced in the Union Budget to address stress in the financial sector and give a push to economic growth which hit a 5-year low of 6.8 per cent in 2018-19.
Explaining how stress in the financial sector has led to a slowdown in the economy, the Niti Aayog vice-chairman said the entire episode started with indiscriminate lending during 2009-14 leading rise in non-performing assets (NPAs) post 2014.
Rising NPAs reduced the ability of banks to do fresh lending, he said, adding the space was occupied by the shadow banks with credit growth of 25 per cent.
The non-banking finance companies (NBFCs) could not manage this high loan growth leading to defaults by some of the large entities triggering slowdown in the economy eventually.
“The whole nature of the game has changed after demonetisation, the Goods and Services Tax and the Insolvency and Bankruptcy Code. The earlier period where you had 35 per cent cash sloshing around, it has become much less now. All of these put together it is a fairly complex situation. There is no easy answer,” he said.
On the issue of delay of payments by the government and its departments to private sector in lieu of goods and services availed from them, he said, it could be one of the reasons for the slowdown but the authorities are making all efforts to expedite the process.
“I have no hesitation in saying that there is no business of the government to hold back payments which are due to the private sector. At the moment, there is huge effort going on to try and get this sorted out,” he said.
New Delhi: ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), on Wednesday said it has made two new oil and gas discove....
Mumbai: The RBI on Tuesday issued guidelines on on tap' authorisation of payment systems, including minimum networth criteria for different players, w....
Mangaluru/New Delhi: Karnataka Bank on October 15 reported a 5.3 per cent fall in net profit at Rs 105.91 crore for the second quarter ended September....
Washington: It is important for India to keep fiscal deficit in check, even though its revenue projections look optimistic, Chief Economist of the Int....
New Delhi: Shares of Lakshmi Vilas Bank and Syndicate Bank fell by up to 5 per cent on Tuesday after the RBI imposed a monetary penalty on them for vi....
Los Angeles: Actor Jonah Hill is no longer in discussions for Warner Bros/DC film "The Batman". Hill, the star of films such as "Moneyball", "21 Ju....
Bhubaneswar: The Rashtriya Swayamsevak Sangh (RSS) has termed as "unfortunate" the "killing of people having faith in nationalistic ideology" in West ....
Kolkata: The BCCI president-elect Sourav Ganguly has made it clear that he would like to know the national selection committee's plans with regards to....
Mexico City: In a first, Mexico's migration authorities deported 311 Indians, including a woman, from various parts of the country amidst its stepped ....
Mangaluru: A criminal cases under IPC Section 420 against the people who had availed of BPL ration cards by furnishing false details, informed Distric....