New Delhi, Jul 28: Prime Minister Narendra Modi will meet heads of large banks and NBFCs on Wednesday to take stock of the economy that has been hit hard by the outbreak of coronavirus pandemic. According to an official statement, the prime minister will join stakeholders from banks and NBFCs on Wednesday to discuss and deliberate on vision and roadmap for the future. “The topics on agenda include credit products and efficient models for delivery, financial empowerment through technology, prudential practices for stability and sustainability of financial sector,” it said.
The banking sector plays an important role in economic growth through financing infrastructure, agriculture, local manufacturing including MSMEs. Financial inclusion can play a big role in financial empowerment through technology, it said. Senior officers from the government will also be a part of the interaction, it added. This is part of a series of meetings that the prime minister is holding for the last few weeks on various sectors of the economy, sources said.
Discussion is likely to be around reviving the economy which is expected to contract by 4.5 percent in the current fiscal, according to some estimates. Banks and other financial institutions are implementing the bulk of the measures announced under the Rs 20.97-lakh crore economic package to deal with the COVID crisis in May. The government announced one of the world’s biggest stimulus packages with a focus on the survival of the business and setting a roadmap for the revival of the economy.
The five-part stimulus package announced by Finance Minister Nirmala Sitharaman beginning May 13 comprised Rs 5.94 lakh crore in the first tranche that provided credit line to small businesses and support to shadow banks and electricity distribution companies. The second tranche included free foodgrain to stranded migrant workers for two months and credit to farmers, totaling Rs 3.10 lakh crore. Spending on Agri infrastructure and other measures for agriculture and allied sectors in the third tranche totaled to Rs 1.5 lakh crore.
The fourth and fifth tranches dealt mostly with structural reforms including relaxation of foreign direct investment (FDI) limit in defense, privatisation of six more airports, and fully opening up coal mining to the private sector. As a result of all these measures, green shoots are visible in the economy, a fact acknowledged by both the Prime Minister and the Finance Minister, the release noted.