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Painting an optimistic picture for the economy in the next few years, Chairman of the Prime Minister’s Economic Advisory Council Bibek Debroy on Friday said the worst of crisis, whether it be of Covid-19 or that of economic activity is over, despite the current uncertainty surrounding the pandemic and exceptional circumstances.
“We can now look forward with optimism for the economy in general and fintech in particular. There is fairly robust economic revival story across the board, across various sectors except sectors characterised by human-to-human interface such as tourism, travel and civil aviation, which will continue to suffer for a while,” Debroy said in his virtual address at the Dun & Bradstreet BFSI & Fintech Summit 2021.
Infact, Debroy felt that the recent Budget has been “somewhat pessimistic” and “understated” the prospects of nominal GDP in 2021-22. “I suspect it (nominal GDP) will be marginally higher than what the Budget recently forecast and probably approach 15 per cent,” he said. For 2021-22, the recent Budget had pegged nominal GDP at 14.4 per cent.
Also read: GDP may return to pre-pandemic level by mid 2021: CEA
Debroy said that 2021-22 will be a good year for the economy because of low base of 2020-21 and also the fact corporate profitability is expected to be phenomenal at 22 per cent. “For FY22-23, we might a nominal GDP of 11 per cent and average corporate profitability of 17 per cent,” he said.
Debroy also highlighted that India will continue to have one of the fastest growing fintech markets in the world.
NCLT process
On the non-performing assets (NPAs) situation in the banking system, Debroy highlighted that there are stock and flow issues and both are linked. “For the existing stock of NPAs, several things are being done through Budget and economic survey. But It’s not just about existing NPAs, it is about prevention of future NPAs as well. There are improvements to be done in both IBC and NCLT process ( more the latter because resolution of NPAs requires efficient functioning of NCLT process),” he said.
Fintechs
Speaking at the summit, Krishnamurthy Subramanian, Chief Economic Advisor to the Finance Ministry, said that BFSI is extremely important for nation’s economic growth and the role of fintechs cannot be overemphasised. He highlighted that Indian financial sector has both quality and quantity problem and time is ripe for BFSI sector to embrace modern technologies like artificial intelligence, machine learning etc.
It is important for technology to be part of bank managements strategic thought process and the opportunity in use of fintechs is enormous, he added.
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