The country is in the midst of a slowdown and it is for the government, through the banks, to take some bold steps for the economy to make it soft land and get out of the dusty and bumpy road that it is in. These were broadly some of brush strokes with which an elite panel of bankers, bureaucrats, politicians painted the Indian economy at The Sunday Standard FINWIZ 2012 Best Bankers’ Awards here on Monday.
“The government has to be more accountable and the atmosphere for doing business has to be made more conducive,” Naveen Jindal, Parliamentarian and Chairman of Jindal Steel and Power said while suggesting a remedy for the ailing Indian economy. Jindal said the government and the banking systems need to be more innovative and they should concentrate more on the micro, small, medium enterprise that are true drivers of the Indian economy.
Economist Bibek Deb Roy was, however, not as charitable towards the government as he wanted to know why there was a complete breakdown of the decision taking by the government in the last four years.
He said the government will find it extremely difficult even to achieve the targeted and revised growth number of 6.5 per cent for the Indian economy.
“The steel frame of the Indian economy has completely broken down. No one is willing to take decisions, unless we ratify these issues the country will find it very difficult to grow at even modest rates,” Roy said.
FICCI Secretary General Rajiv Kumar, citing the example of China, suggested that the government should emulate the Chinese Model where the Chinese government has disinvested its stake from the public sector banks in that country.
“As long as the government does not disinvest and reduce its stake in these public sector banks they would not grow at the desired level,” he said adding that banks should have a risk appetite that should be well insulated.
Speaking on the occasion, Chief of the Competition Commission of India Ashok Chawla said banking systems should be more innovative and more inclusive. “We need to have banking as a more inclusive sector to widen the form and reach of the banking industry in the country,” Chawla said.
“A lot needs to be done,” Chawla said adding “The problem with growth is that the real sectors are not working and growing at the right pace.”
YES Bank Chairman Rana Kapoor said, “Policy and regulatory architecture has to help the Indian economy get out of the present slowdown.”
“There are supply-side constraints and that need to be addressed very effectively. We are facing headwinds of the global crisis. There have been ups and downs but it is a good report card despite the global slowdown,” Kapoor said, adding “The art of banking is the management of risk.”
He said there is a lot of potential if the government helps the agriculture sector get out of red that it is in. “India could not facilitate storage of even half of the agriculture and horticulture produce that it grew leading to wastage worth `55,000 crore every year while small countries like Korea were able to utilize as much as 78 per cent of agriculture and horticulture produce.”
Cold chains and proper storage facility will help India do quantum jump in its GDP if agriculture sector is given the attention that it deserves.
SBI Chief Financial Officer Diwakar Gupta said, “We have underperformed. We need to perform better. We are an emerging economy and greater congruence between political economy and financial economy will lead to better growth.”