Government, corporates need to invest more for recovery: SBI chairman Rajnish Kumar
MUMBAI: The go nment and corporates have to open up their wallets to invest, and their actions should go hand-in-hand for a quick economic recovery since the vital middle class remains cautious amid ongoing unlocking of the economy, said State Bank of India NSE 0.10 % chairman Rajnish Kumar. In particular, investment in infrastructure should be stepped up, he added.
The ongoing payments moratorium has achieved the limited purpose it was aimed at, and the Reserve Bank of India now has to look at providing restructuring relief to banks which would then determine who would qualify for loan recast, he said.
“It’s important that expenditure be stepped up by the go nment and corporates,” Kumar told ET in an interview ( Read full interview). “The money which is put in the system will give a fillip to consumption demand and infrastructure investment. The money put in the hands of people through direct benefit transfers is helping boost rural demand. The middle class also plays a pivotal role, and for that segment to spend, the fear of Covid-19 has to go away.”
As the lockdown continues for the fifth month in one form or the other, industry and bankers are looking to revive businesses that are cash-strapped. There is a growing consensus that the moratorium may not be needed, but there should be flexibility in loan repayments through restructuring and relaxing of provisioning norms for such rejig.
“We don’t need an across-the-board moratorium now. We (are) saying that the future course of action should be left to the bank and the borrower,” said Kumar. “What the RBI can do is if the bank is satisfied with the intent of the borrower and normalisation in cash flows, it can give some relief.”
Although economic activity could shrink for the full fiscal year with some economists forecasting as much as 10% contraction in GDP, Kumar said the situation is improving. “In June, there has been a fairly good recovery and we saw that many industries have come back to 75-80% of their capacity utilisation levels. But there has been continued supply chain disruption because of the local lockdowns,” said Kumar. “In many cases, it so happens that a unit may be sourcing parts from an area where there is a lockdown, and that is having an impact. Overall, I believe we are in a much better position than where we were in April and May.”
译文来源：三泰虎 http://www.santaihu.com/p/50498.html 译者：Jessica.Wu
A pick up in credit demand , particularly from middle class consumers, is going to be slack for the next couple of years. This would indirectly affect investment and production in consumer durables sector. Focus should be on how to turn this positive by incentivizing consumption and demand. Much easier said than done.
Govt needs to spend/invest as they have created the mess .Corporates need to invest as they are enjoying lower taxation and low interest rate.
Who has money to invest when every rupee is going to hospitals and health care.
Modiji needs to replace FM Sitaraman with K V Kamat immediately
Total should be Rs.15 lakhs tax free for middle class.money will flow in the market.
situation will become scary post this pandemic if proper stimulus not announced at the earliest.
Do whatever u want but only way is to revive demand and consumption. Unless social security and income for middle lower class guaranteed., economy will be sluggish.
the middle class is the backbone.
RBI will have to mandate banks & Nbfc for moratorium till Mar 21. Else there is going to be mayhem.
This world lockdown was the proverbial Straw that not only broke the camel's back but sank Noah's Ark!! Goodbye cruel old world economy! Long live the the new world order!!! Economies which can borrow on favourable terms and implements indemand projects are going to be the new Czars.
Restructure and Refinance is the need of the hour... whether it is MSME sector or the middle class everyone has a right to fight... not all people and companies are wilful defaulters.
Modi Govt loves to decrease interest rates and increase taxes and prices of essentials. It is catastrophic for middle class more so for senior citizens
forget the recovery..situation gone for bad to worse due to lockdown. from last year we have been saying this to address consumption side revival due to consumption slow down. but govt gave a hefty package to corporate tax cut. Now moratorium mess creating confusion on the retail loans. without creating enough jobs and addressing consumption side story recovery will not happen forever. We will be stuck in 4-6% growth forever due to policy mismanagement and corporate centric tax policies.
for decades they tasted looting in the name of taxes, they won't stop! proof, oil price and service tax such as stamp duties ...
aiyaah ! .... just declare tax holiday for the next 2 years for all citizens of India !
Loan restructuring is meaningless buzz. What can they do? Increase the loan duration? It will lead to debt trap as actual payables will become many times over the years
Sir, rather than asking corporates to invest, ask Govt to simplify, ease business environment, reduce red tapeism, crony capitalism, obstruction in everything every where culture. Simplify taxation
Increase interest for public deposits. You will be over flooded with public investment.
Let first Rajneesh Kumar and other banks reduce interest on over due payment in credit cards.