Economic growth in India will be back on track after the revival of investments in various sectors, claimed Finance Minister P. Chidambaram.
Chidambaram said this while speaking to reporters after meeting chiefs of the nationalized banks in New Delhi.
"The aim is to quicken investment, industries and business houses which have business plans must bring forward their investment plans rather than defer it by six months or a year. Once we get the investment cycle going, once we get the investment engine started I think many of our problems can be resolved," said Chidambaram.
He also reviewed the performance of the public sector banks in light of the economic slowdown and discussed methods that need to be taken to upgrade banking services.
"We had a very substantial agenda, matters including agricultural credit, lending to minorities, education loans, financial inclusion plans and then of course the state of health of the banking sector in terms of mobilization, resources, extension of credit, return on assets, profit after tax and also about greater use of technology to quicken the services of banks and make it more efficient. I have reviewed this after about four years. I am very happy that the health of the banking sector is extremely good," said Chidambaram.
He added that banks have been advised to start cash deposit facilities in automated teller machines (ATMs) and increase doorstep banking services, which would mobilize savings.
"Now banks have been advised to quickly upgrade their ATMs into not only cash-dispersing machines but also cash-accepting machines. Work has already started; all banks have been told that ATMS should not only be cash-dispersing machines but also cash-accepting machines. Banks would now also intensify doorstep banking in bazaars, in markets to collect their daily collection of shops in order to mobilize the savings of the people," Chidambaram concurred Saturday.
He also said the Indian banking system is sound and there had been a minor increase in non-performing assets (NPAs) which was not upsetting.
India's economic growth has lost momentum due to global headwinds, sluggish policymaking and more lately worries about a drought in parts of the country. Fearful of a popular backlash, the government has failed to cut expenditure or liberalise the economy to attract investment.
Economists suggest the government is moving towards a deficit in 2012-13 of around 6 percent of GDP and credit default swap markets already price the country at junk, or non-investment grade.
Global agencies Fitch Ratings and Standard and Poor's Ratings Services this year warned that India may become the first of the BRICS group of large emerging markets to lose its investment grade rating if it did not control the fiscal and current account deficits.
India's current account, the broadest measure of its trade in goods and services with the rest of the world, ballooned to a record deficit of $21.7 billion or 4.5 percent of GDP in the March quarter. (ANI)