India is not the only country going through an economic slowdown; the rest of the world is also facing turbulence, pointed out Union Commerce & Industry and Textiles Minister Anand Sharma on Friday. “The pessimism and gloom as is being propounded by naysayers is totally misplaced. Besides, given the slew of reforms that has been initiated by the government, the country will soon turn the corner,” he added optimistically. Sharma made these observations in his keynote address at the second edition of The Sunday Standard Best Bankers’ Awards function at Taj Mahal Hotel in New Delhi.
“Our country witnessed consistent economic growth for more than seven successive years. We have the resources which can be used to benefit the industry. When recession struck, almost all the G20 countries were hit. But the Indian financial system didn’t suffer, interestingly, unlike its western counterparts. This was largely because we had no exposure to toxic assets,” Sharma said.
The minister observed that private and public sector deposits are the strength of the banking sector. “The Indian banking industry can emerge as the third largest in the world by 2025. We have inherent strengths and I see no reason why we can’t reach the target,” he said. With a room full of senior bankers sitting in front of him, Sharma asked banks to reach out to the unbanked geographies of the country. Be more inclusive and take as many people into the banking fold as possible, he exhorted. “The banking industry has not only an economic but also a social responsibility towards people and must ensure that access to quality banking services reaches all. Several thousand villages have no access to banking services at the moment,” he said, adding that India’s banking sector fundamentals are propelled by a healthy household savings rate.
Underscoring the role played by SMEs, Sharma said about 45 per cent of the country’s GDP comes from these enterprises and access to credit is essential. “When I say access, I mean to superior quality of capital and there’s a need for large capital reforms,” he explained.
“Today, our IIP numbers are in the negative; our manufacturing sector’s performance has fallen and everyone seems to think there’s a policy paralysis and an atmosphere of panic has been created. What people are not taking into account is the tremendous opportunity that we still have, owing to our huge domestic markets. This will keep us going.”