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While so far the capital expenditure has been led by government spending, what is needed now is a cycle of private investment fow which private sector players need to think ‘big and bold’, according to Vivek Joshi, Secretary of Department of Financial Services
“What is needed now is a new cycle of private investment. The need of the hour is to think big and bold while ensuring that execution remains timely and robust,” Joshi said at SBI’s Banking and Economic Conclave.
Private entrepreneurs, banks, and the government are the three key players in capital expenditure, and all of them need to come together to enable a joint, feasible, and practical approach, he said, adding that this may require banks and financial institutions to reassess whether their role should also include hand-holding support for “project conceptualisation and structuring.”
“The balance sheets of banks and corporates are the healthiest in a long time, and with the public investment push by the government, all these create favourable conditions for a sustainable revival in investment,” Joshi said.
SBI Chairman Dinesh Kumar Khara too said that private capex is picking up, and there is huge capex lined up for FY25, including from the banking sector, adding that this has also been supported by the huge investments in technology and digitisation.
He added that another critical facet of financing projects and Capex is that small-ticket loans should grow even faster for employment generation. “Furthering financial inclusion and unlocking the potential of citizens is a national priority and a moral imperative,” he said.
Joshi highlighted that the government’s focus on fostering capex and new investment has been “sharp and intense,” aided by major policy actions and the enhancement of the infrastructure pipeline.
Further, the reach and depth of financial intermediation by banks have been aided by technology and digitisation. However, banks and financial institutions need to become more cautious and include stress testing of cyber risks as part of their risk assessment, as this is “necessary to gauge the impact in case any cyber attacks happen on their systems.”
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