India Inc needs to think big and bold, push investments: Vivek Joshi, Ministry of Finance

MUMBAI: India needs a new cycle of private investment and banks may be required to reassess whether their growth should also include “handholding support” for project conceptualisation and structuring,” said Vivek Joshi, Secretary, Department of Financial Services, Ministry of Finance.

“The need of the hour is to think big and to think bold while ensuring that execution remains timely and robust. It is not easy but can be done and India is seeing this more frequently now,” Joshi said at a conclave organised by State Bank of India on Wednesday.

Highlighting the government’s focus on fostering capital expenditure and new investment in the economy, Joshi called for a pull in “one direction” from the three key players in capital expenditure and investment – private sector entrepreneurs, bankers, and the government.

“Banks delivered very good performance in FY23 as also in first half of FY24, strengthening capital and other key ratios, gearing up to attain scale to finance multiple large value projects/capex and ambitious transition to clean/green energy and mobility,” SBI‘s chairman Dinesh Khara said.

India’s GDP growth surprised on the upside in Jul-Sep, clocking in at 7.6% versus the Reserve Bank of India’s estimate of 6.5%. The robust growth, however, was driven by government spending and an uptick in manufacturing, while private investment was relatively subdued.

Underlining the key need for employment generation, Joshi, said that small-ticket loans must grow faster. He also called upon private sector banks to contribute more towards carrying out the government’s welfare schemes.

“Schemes such as PMJDY, PMSGY, PMJJBY, PM Vishwakarma etc, have contributed significantly. But these have been primarily carried out by the public sector banks. We certainly look forward to leadership and initiative from private banks in this direction as well,” he said.Amid growing incidents of cyber-frauds and ‘deepfakes’, Joshi said that Indian financial institutions, particularly banks, must move up a notch on cyber-security and improve stress-testing of cyber risks.

“Banks in Europe and Singapore have already initiated such steps in this direction and banks in India also need to take appropriate steps,” he said, pointing out that repeated instances of cyber frauds could erode customer confidence.

The senior Finance Ministry official also said that while convention lenders had been compelled to re-evaluate roles and collaborate with fintechs, there was scope for further improvement in banking, financial products and differentiated banking needs.

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