India Inc seeks steps to check slowdown, liquidity crunch

Our Bureau Mumbai | Updated on May 31, 2019 Published on May 31, 2019

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.

Published on May 31, 2019

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.