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Finance Minister Arun Jaitley on Saturday expressed optimism of a turnaround in the economy after recent structural changes that created a “transient hiatus”.
“We can see those green shoots already coming about,” he said at the 75th Foundation Day of UCO Bank.
Noting that India was the only country to have the courage to do structural reforms at a time when the world economy was slowing down, he said that these have created a temporary challenge.
His comments come a day after the first advance estimates pegged GDP growth at a four-year low of 6.5 per cent in 2017-18 as the lingering impact of demonetisation and the goods and services tax continues.
The Minister also urged banks to support growth through higher lending.
“Lending by banks impacts how growth will move. Credit growth has increased. With capital infusion, credit growth will further increase,” he said.
On NPA challenges
Stressing the government’s commitment to address the bad loan problem, he said that the proposed capital infusion plan of ₹ 2.11 lakh crore will be a huge step in this direction.
Jaitley also said that everyone including the government, Parliament, employees and management of banks must work together to restore the most important asset of a bank, which is its credibility.
“Banks must be conscious that to keep banks in good health is important for the economy,” he said, adding that the performance of banks will be under test in the next few years.
Meanwhile, Financial Services Secretary Rajeev Kumar urged UCO Bank to work on its bad loan problems after the Reserve Bank of India initiated prompt corrective action against it.
Ravi Kishan Takkar, Managing Director and CEO, UCO Bank also assured the government that the bank and its employees are working on the NPA challenges.
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