India Inc seeks Rs1 lakh cr stimulus package to beat slowdown

After a three-hour meeting, called by finance minister Nirmala Sitharaman to discuss ways to revive economic growth, industry leaders said the government  has assured them of action soon.

Business leaders meeting the finance minister included Uday Kotak, TV Narendran, Sandip Somani, BK Goenka, Sajan Jindal, Sunil Mathur, Anil khaitan, Sanjiv Puri, Rishab Premji, Sangeeta Reddy, Dilip Sanghvi and Ajay Piramal.

Assocham President B K Goenka said that the government is also aware of the need for quick-fix solutions amid the current slowdown in global and domestic market. 

“The economy requires a critical intervention by introducing a stimulus package. We have suggested for a package of over Rs one lakh crore,” he said. 

JSW Group chairman Sajjan Jindal said: “It was decided that the government is going to take action very soon to revive the industry and it is a matter of sentiments. We got positive feedback from the finance minister”. The minister in clear terms gave assurance that “very soon” solution would be found, he said, adding the industry is suffering from issues in sectors like steel, NBFC, and automobile.

Piramal Enterprises chairman Ajay Piramal said industry raised several matters such as reluctance of banks to lend to the industry. “It is not that there was a lack of liquidity in the banks, but lending was not taking place. There is stress on the economy as far as NBFC sector was concerned,” he told reporters after the meeting. He added that the NBFC issue is impacting sectors like auto, home loan, and MSME. “I am told that there will be action soon. So, we will wait for that,” he said.

The government is also reported to have assured industry that penal provisions concerning non-compliance with CSR spending norms under the Companies Law will not be pursued. Piramal said that the industry demanded that oversight on CSR spending should not result in any imprisonment.

Further vice president CII T V Narendran said the government sought views on ways to further stimulate the country’s economic growth. “Across the board, we discussed the key issues,” he said adding slowdown in the auto industry would have an implication on the steel sector.

Sandip Somany, president, FICCI, said transmission RBI’s interest rate reduction to consumers by banks is a big issue. “Banks must be encouraged to pass on the benefits of rate reduction to consumers and borrowers. We are hopeful of further rate cut. It is encouraging that the RBI has reduced rates by cumulative 110 basis points,” he said.

Earlier this week, finance minister Sitharaman met heads of PSU banks and major private sector banks to review credit growth in various sectors like MSMEs, retail, auto, NBFCs and HFCs.