Analysis Of Sansad TV Discussion: Financing For Growth and Aspirational Economy
”GS 3: Fiscal Policy, Banking Sector & NBFCs, Monetary Policy, Government Budgeting”
Recently the Ministry of Finance organised a Post-Budget Webinar on the theme of ‘Financing for growth and aspirational economy’.
In the Union Budget 2022-23 Government announced to set up 75 Digital Banking Units (DBUs) in 75 Districts of the country with a purpose to reduce dependency and to do away with paperwork like cheques, pay-in slips, demand drafts and carry-out these works digitally, as another step towards financial inclusion.
Why Indian Economy Need a Strong Mechanism For Financing?
- Indian economy is once again picking up momentum after a once-in-a-century pandemic and this is a reflection of our economic decisions and the strong foundation of the economy.
- India can emerge among the top 3 countries in the sectors like constructions, startups, recently opened up sectors like drones, space and geo-spatial data.
- The expansion of entrepreneurship, innovation and search for new markets among the startups will happen only when there is a deep understanding of these ideas of future among those who finance them.
- For this, it is imperative that our industry and start-up get full support of the financial sector.
Steps Taken By GOI
- The government has taken many steps to maintain the momentum of high growth in this budget.
- By encouraging foreign capital flows, reducing tax on infrastructure investment, creating institutions like NIIF, Gift City, new DFIs, it tried to accelerate financial and economic growth.
- The country’s commitment to the widespread use of digital technology in finance is now reaching the next level. Be it 75 Digital Banking Units or Central Bank Digital Currency (CBDCs) in 75 districts.
- Substantial leeway has been provided to sectors such as Climate Action, Deep-Tech, Digital Economy, Pharma and Agri-Tec with the announcement of the Government’s decision to promote thematic funds for blended finance.
- The Government of India and RBI had taken a number of steps to increase the flow of credit to MSMEs.
- Steps to improve the availability of long-term financing:
- Infrastructure Debt Funds (IDFs)
- Credit Enhancement Scheme
- Infrastructure Investment Trust (InvIT
- Relaxation of ECB policy
The Union Budget On Financing
Budget aptly supports the next phase of growth and aspirational economy through:
- Building modern infrastructure funded by massive public investment.
- Encouraging private investment in areas with high employment potential.
- Expanding banking and finance.
- Climate and sustainable finance and financing sunrise sectors.
- Our Financing Sector will have to consider innovative financing and sustainable risk management of new futuristic ideas and initiatives.
- India’s growth will take off when firms of all sizes can better access financial resources for daily operations and investments that will aid their individual growth trajectories.
- There is a need to come out with new mechanisms and improve on current provisions to encourage long term financing.
- A concerted effort to create and expand new platforms for business finance ought to be a top priority for policymakers.