New Delhi: The target is for a $10 trillion economy, we need to build an Atmanirbhar economy where we control our own destiny, says Jayant Sinha Hon’ble Member, Parliament & Chairperson, Parliamentary Standing Committee for Finance at an ASSOCHAM event.
Speaking at the ASSOCHAM 8th National E-Summit on ‘Non-Banking Finance Companies & Infrastructure Financing’, the Minister highlighted various initiatives taken by the parliamentary committee and by the government to transform the financial lending landscape and strengthen NBFCs and Infrastructure financing in the country.
“For $10 trillion economy, we need to have an economy that is, at the competitive frontier, as competitive and capable in its ability to deliver products and services both to domestic as well as export market. We need to improve the financial system that we have today, the nature of credit flow if we are to take $10 trillion or global competitiveness as the benchmark. Based on various operational parameters, the trajectory we are on right now is not one that will lead to a globally competitive $10 trillion economy. To be on the right trajectory, we must use technology. We have made giant strides in the last few years, and we need to build on that. Public platforms and private innovations with appropriate regulatory and policy interventions as required has enabled us to achieve incredibly terrific things such as the roll out of UPI. Aadhar is now the largest biometric based identification system. We’ve got digital identities and digital payments worked out. As we move forward, we have to do more in terms of public platforms”, said Jayant Sinha.
The commercial backbone of the country is rapidly becoming GSTN, with this backbone as the digital trail on which we can build more innovation than we can start to really leapfrog which will enable us to get to the $10 Trillion economy” he further added.
S.Ramann, CMD, Small Industries Development Bank Of India (SIDBI), addressing the gathering said, “We are only seeing the tip of the iceberg and the growth of NBFCs is yet to come. NBFCs have played a great role in retail finance & individual loans. They also straddle a wide segment in the financial sector. Of about 20 lakh crore credit given to the MSMEs, NBFCs have a share of about 10%. NBFCs credit to GDP is in the region of 12%. The direction of the government and regulators is very clear, lending has to be emphasised upon and the delivery of credit is critical.
The way technology is coming into the financial sector, we are looking at models that can help deliver credit to the vast majority of the country. The stated credit gap in the MSME sector for debt is calculated at about 25 lakh crores by 2025. The requirement to grow the sector from both regulatory perspective as well as the need for government to ensure credit delivery down to the final borrower is very strong. One of the biggest problem is that after 40 or 50 NBFCs that straddle the credit delivery we do not have rating ability. Larger NBFCs must come forward and play an enabling role in increasing the reach of the sector”.
Addressing the seminar Ramesh Iyer, Chairman, ASSOCHAM National Council for NBFCs & Infrastructure Financing said, “This is an important summit given the challenges that we face as an industry. NBFC model is developed fundamentally to serve the underserved customers who otherwise find it hard to access credit. It has helped customers in this segment to improve their lives and livelihood positively. NBFCs have deeper penetration in rural markets and have played a significant role in the financial inclusion agenda. NBFCs have bounced back from various challenges and disruptions in the past because of a strong business model that is built outside in. The government and regulators have always looked at NBFCs as systemically very important in the overall growth of the economy and NBFC have in turn responded favorably to the respect. As a growing industry, NBFCs look forward to more support that would strengthen the industry and overall growth”.
A knowledge report titled ‘Looking up – NBFC on revival path post pandemic blow’ was also released at the summit with CRISIL as the knowledge partner. The report focusses on the dynamics of the NBFC sector, challenges, prospects and the way forward.
