The corporate leaders said banks would be willing to transmit the benefit of the RBI’s repo rate cuts to borrowers meaningfully only when the government slashed the interest rates on deposits under small savings schemes.
India Inc on Thursday told the government that the economic slowdown was intense, and it must offer a stimulus package — apart from swiftly ensuring greater and smoother flow of credit at reasonable rates — to stir growth that crashed to a five-year low of 5.8% in the March quarter. In their meeting with finance minister Nirmala Sitharaman, the corporate titans also raised concerns about overzealous taxman and the new corporate social responsibility (CSR) rules that provide for a jail term up to three years for violation.
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JSW Group chairman Sajjan Jindal said the minister assured that no coercive penal action would be initiated for non-compliance of CSR rules and the government would move judiciously on this move. Assocham president BK Goenka sought a stimulus package of over Rs 1 lakh crore for the investment cycle to pick up.
More steps to get NBFCs back to health and improve their lending ability could be in the offing, with the participants telling the minister that the crisis in the shadow-banking space after the IL&FS default has hit consumption. Purchases in sectors like automobiles that are dependent on NBFC loans to a considerable extent have been adversely affected due to the lingering crisis.
Source: Financial Express
