With unemployment levels at a 45-year high and GDP growth at a five-year low, Corporate India is hoping the new Finance Minister will immediately start addressing core issues troubling the economy. A consumption slowdown, liquidity crunch and high debt levels have hit the corporate sector hard, and it is banking on Nirmala Sitharaman for measures to overcome these.

“The major challenge for her would be to kickstart the economy. This would require a multi-pronged approach, but ensuring liquidity to NBFCs, a focus on MSME to create more jobs and tax reforms, which in turn will revive demand, will be key,” said Arindam Chanda, CEO, IIFL Securities Ltd. “Quick changes in the IBC processes and faster divestment can release capital. The government needs to bring in innovative schemes to revive investment. With a favourable image of the central leader, FDI flow should be the low-hanging fruit,” he added.

Sitharaman takes over at a time when sectoral headwinds have hit core areas, including infrastructure, telecom, auto, banking, steel and FMCG. According to ICRA, the revenue growth of the corporate sector slumped to a six-quarter low in Q4 FY19.

Rahul Arora, CEO, Institutional Equities, Nirmal Bang, said in the short run Sitharaman should focus on consumption-driven growth. “In the long run, a push on infrastructure and capital goods-driven growth is expected,” he said.

Anil Gupta, Sector Head & VP - Financial Sector Ratings, ICRA, said the steps to be taken in the near term would be improving foreign capital flows, increasing the GDP, ensuring sufficient funding and liquidity for NBFCs to facilitate continued last-mile credit delivery, enhancing consumer demand and improving investor confidence. “With large-scale capital infusion of ₹2.46-lakh crore in public sector banks during the previous NDA regime and strengthening of balance sheets, PSBs should be relatively better placed in the current NDA regime to support the credit demand of the economy,” said Gupta.

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