Government Steps To Boost Consumption Showing Impact: Chief Economic Advisor

IANS

14 Dec 2019, 11:25 AM IST

"It's a good sign as foreigners are seeing India as a very important destination," the CEA said

The government on Friday presented its report card on the steps taken by it to tackle the slowdown, with Chief Economic Advisor Krishnamurthy Subramanian saying the measures taken by the government are showing impact and there has been a record FDI inflows of $35 billion in H1 of the current fiscal against $31 billion in the same period a year ago.

He said the Finance Ministry has sanctioned Rs 4.47 lakh crore, including Rs 1.29 lakh crore for pool-buy-outs of assets to NBFCs and HFCs to support retail lending.

"It's a good sign as foreigners are seeing India as a very important destination", he said at a press conference called by the Ministry to show the impact of steps taken to boost consumption in the economy so as to lift growth from over a six-year low.

Stating the government is focusing on increasing consumption to boost economic growth, he said the government and PSU dues were cleared in two stages; up to Rs 61,000 crore previously and dues of 32 CPSEs cleared by more than 60% in the last two months.

The advisor said 21 out of the 32 CPSEs have set up "Online Bill Tracking" system to reduce pendency in bill payment and reduce Accounts Payables of CPSEs.

On the partial credit guarantee scheme for NBFCs and HFCs, Cabinet approval has been granted for SMA-0 borrowers with asset pools rated BBB+ or better and within two days, 17 proposals amounting to Rs 7657 crore have been approved.

Proposals amounting to Rs 20,000 crore are to be approved over the next two weeks, the CEA said in his presentation.

Following RBI guidelines mandating banks to link their lending rates to external benchmarks, all PSBs have introduced Repo Rate linked loan products and Rs 8.18 lakh Repo linked loans (Rs 72,201 crore) have been sanctioned till Nov 27, 2019.

The MSME Bill Discounting has seen 5.06 lakh bills (Rs 12,698 crore) till November 15, 2019, the status report said.

According to the CEA, continuous liberalization has resulted in record FDI inflows: $35 billion in H1 2019-20 as against $31 billion in H1 2018-19. The cut in the corporate tax rates makes India more attractive than other countries, he said.

The government also said that credit expansion via PSBs has been decent and Rs 60,314 crore equity has been infused, while Rs 4.9 lakh crore disbursed -- Rs 2.2 lakh crore to corporates, Rs 72,985 crore to MSMEs and Rs 39,453 crore to retail borrowers.