Lauding government’s sincere efforts in tackling NPAs of public sector banks,Mr. Jajodia said, we are faced with a situation where banks, with loads of cash, are finding it hard to lend despite lowering of interest rates……Apparently, there are not many takers for credit.“The credit off-take from the corporate India, in any case, would be quite low as long as the entire issue of non-performing assets, cleaning up of the banks’ balance-sheets is not resolved with a pragmatic approach and strong political will”. He said a clear distinction should be made between the willful defaulters and those whose business ran into difficulty due to external economic factors like volatile commodity prices or even those whose commercial decision may appear to be wrong in the hindsight.
Here again, someone at the political leadership, has to bite the bullet since the top bank managements, despite the new RBI guidelines are wary of taking hard decisions in terms of debt restructuring for fear of coming under the investigative scanner.
“This is a bad vicious circle, we should not allow ourselves to slip into, as the stakes are quite high for creating a huge number of jobs which is possible only through a vibrant economy built on strong consumer demand, robust manufacturing, trade and services and modernizing the Indian agriculture, integrating it well into the manufacturing of food processing”, Mr. Jajodia pointed out.
Dealing with a large number of macro domestic and global issues, the new ASSOCHAM President said for now, the government should further speed up infrastructure projects being financed by public funding in roads, highways, railways, ports and airports. The Budget for 2017-18 has provided for a sizeable allocation of Rs. 3.96 lakh crore for entire infrastructure space which is a commendable feat by the Hon’bleFinance Minister Mr. Arun Jaitely. However, it must be ensured that the execution of the key infrastructure projects is done with speed and efficiency so that a positive spin-off effect is seen across different related industries like steel and cement.
While the investment has to be led by the public sector, the private sector which is reeling under high leverage must be hand–held and roped in with new and innovative business models so that the industry can revive to its previous peaks. The total investment of Rs 2.41 lakh crore, provided in the Budget for rail, road, shipping, should be front-loaded so that the follow up impact can be seen across different sectors.
Creation of jobs for the youth, who are getting added in large numbers every year, is one of the prime responsibilities both for the government and the corporate India. As many as 12 million youth are ready to join the workforce per year which needs to be given jobs. The aspiration and dreams of the youth should be nurtured
and adequate platform should be provided to them to perform. Initiatives like Startup India, Skill India are good initiatives but the implementation of these programmes must be linked to specific targets in terms of jobs.
Further incentives for investment into manufacturing, IT, infrastructure and other core industrial sectors would create more employment for the youth. A large manufacturing plant or a big infrastructure project creates lots of ancillary job opportunities which in turn give opportunity for start-ups by aspirational youth to unleash their entrepreneurial abilities” said Mr. Jajodia.
He said, the Industry is working closely with the Centre and the state governments on glide path for implementation of the Goods and Services Tax (GST), the biggest ever tax reform in the country. We hope that remaining areas of divergence among the centre and the states are resolved in the next meeting of the GST Council.