Clearing PSU dues, making retail lending easier; how Modi govt is trying to fire up economy

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Updated: December 13, 2019 4:22:31 PM

Reviewing the host of reforms in the last few months, Chief Economic Advisor (CEA) Krishnamurthy Subramanian on Friday said that the mechanism set up by the government has helped to boost the economy.

Indian Economy: Moody's and DBS cuts India's GDP growth rate forecast here is the reasonKrishnamurthy Subramanian said that the government and PSU dues cleared in two stages immensely helped to prop up the economy.

Reviewing the host of reforms in the last few months, chief economic advisor (CEA) Krishnamurthy Subramanian on Friday said that the mechanism set up by the government has helped to increase the liquidity in the economy. The step to clear the PSU dues in two stages immensely helped to prop up the economy, Krishnamurthy Subramanian also said. The dues of 32 CPSEs were cleared by more than 60 per cent in the last two months. Adding, CEA said that support to the NBFCs and HFCs helped to pick up the retail lending. More than 8 lakh repo-linked loans amounting to Rs 70,000 crore sanctioned till November 27,  he said, adding that 66 per cent of budgeted capital expenditure of Rs 3.38 lakh crore has already been undertaken.

Krishnamurthy Subramanian also said that $35 billion of foreign direct investment (FDI) came in April-September this year as against $31 billion in the year-ago period.  The Modi government launched various economic measures to boost the sluggish economy which grew at a dismal rate of 4.5 per cent in the second quarter of the ongoing fiscal on account of both domestic and global concerns. Today’s press briefing comes ahead of Prime Minister Narendra Modi’s reported review of the state of the economy on December 21. Narendra Modi is expected to meet the union ministers and top finance ministry officials on the same issue.

Also read: GST rate hike may burn a hole in your pocket; basic goods likely to get expensive

Rs 33,000 crore worth income tax refunds have been issued till November 2019 as compared to Rs 36,000 crore in whole of last year, revenue secretary Ajay Bhushan Pandey said at the same event.  Meanwhile, on December 11, the union cabinet approved changes to a partial credit guarantee scheme to allow public banks to purchase lower-rates assets from NBFCs and HFCs. Following this, the government-run banks are now allowed to buy ‘BBB+’ rated assets of non-banking lenders against the earlier rule that only ‘AA’ rated assets will get the benefit of the partial credit guarantee being offered by the Modi government.

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