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Govt. strongly focussed on attracting FDI to push economic growth: BJP spokesman


Tuesday, April 30, 2019

New Delhi, 30th April 2019:
With India facing significant shortage of equity capital, the government is focussed on attracting foreign direct investment (FDI) to create capital in the domestic economy, said Mr Gopal Krishna Agarwal, national spokesperson of Bharatiya Janata Party (BJP) and independent director, Bank of Baroda at an ASSOCHAM event in New Delhi today.
“Merely debt capital will not help the economic growth, therefore we are focusing on attracting FDI, which is a major requirement that will create capital in the domestic economy,” said Mr Agarwal while addressing the delegates at an ASSOCHAM Industry Interactive Session on “New India’s Economic Agenda.”
He said that while India is witnessing rapid growth in terms of new job seekers, the government jobs cannot be given to such a large section of population, so the government’s main focus has been on promoting entrepreneurship or self-employment.
“We have been trying to put more focus on manufacturing, developing micro, small and medium enterprises (MSMEs) sector, entrepreneurship, self-employment and ultimately focussed approach on promoting ease of doing business,” he said.
Talking about the pertinent issues mentioned in BJP’s election manifesto for promoting growth of domestic industry and economy, Mr Agarwal said that NPA (non-performing asset) resolution will provide better liquidity to the banks to lend.
“Over last five years our government has focussed very strongly for institutional mechanism to resolve issue of NPAs and bad debts into financial institutions and implemented reforms like IBC (Insolvency and Bankruptcy Code), NCLT (National Company Law Tribunal) along with regulatory and legal changes,” he said.
He added that government is trying to further strengthen the regulatory mechanism. “Many of the large companies which were part of the NCLT process are now being resolved and those issues will bring down financial institutions’ exposure to bad loans and if this money is unlocked, the risk premium that banks charge itself will come down.”
While conceding that there was a slowdown in credit offtake during the initial period of the government, Mr Agarwal said that last year, because of government’s concerted efforts, the credit offtake for financial institutions grew14-15 per cent y-o-y.
“Around 11 banks were under PCA that number has now reduced to six and now government is trying to recapitalise those banks and also looking for merging weak banks into strong banks which will strengthen financial system,” he said.
He also talked about the need for structural changes to deposit component of financial institutions to move towards low interest rate economy. “India at present is having a high rate of interest, unless we reduce the real interest rate, our economy and industry cannot grow.”
Addressing the delegates at ASSOCHAM event which also saw participation of high-profile participants from several embassies and high-commissions, Mr Agarwal informed that government under the PRAGATI (Pro-Active Governance And Timely Implementation) platform was addressing various issues that had brought many projects to a standstill be it land related, inter-ministerial complexities etc.
In his address at the ASSOCHAM conference, Mr Vineet Agarwal said that there is a need to accelerate investment in infrastructure sector to ensure faster movement of goods across the country.
Mr Ajay Sharma, Assistant Secretary General, ASSOCHAM raised the issue of inter-linking rivers in the country in wake of deepening water crises to which Mr Gopal Krishna Agarwal said that government was focussed on inter-linking small rivers, tributaries and would gradually move on to inter-linking large rivers so as not to disturb bio-diversity.

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