New Delhi: Getting into action mode to avert a further slowdown in key sectors, Finance Minister Nirmala Sitharaman Monday said the government will meet representatives from various sectors of the economy facing the heat of sluggish demand and consumption for preparing a policy response incorporating their inputs.
Finance Secretary Rajeev Kumar said that the government will hold a series of meetings with stake-holders from various sectors to get into causes of the problems and as part of this, the Minister will meet MSME representatives on Tuesday, representatives of the auto sector on Wednesday, and those from industry on Thursday.
Sitharaman will meet financial sector representatives on Friday and realty sector representatives and home buyers on Sunday.
In line with this objective and to review public sector banks and also the overall banking sector, the Finance Minister on Monday met bank chiefs and the meeting focussed on banking sector’s credit growth to support growth. The meeting also discussed credit needs of NBFCs, the auto sector and MSMEs, Kumar said.
The meeting also discussed transmission benefits of rate cuts to borrowers and industry to revive demand. The overall credit growth of the banking sector continues to be in double digits at 12 per cent.
The slowdown in various sectors is seeping into the economy. Auto parts makers have been hit hard by automobile companies cutting production to trim inventories, amid weak demand.
Recently, auto-makers such as Maruti Suzuki Ltd, Tata Motors Ltd, Mahindra & Mahindra Ltd (M&M), Ashok Leyland Ltd and Honda Motorcycle & Scooter India Ltd announced temporarily closure of their plants. July figures suggest that passenger car sales have slipped by over 29 per cent, making it the worst month in the past two decades.
Economy has come to a near standstill with the growth of 8 core sectors slowing to 0.2 per cent in June. The government has also revised downwards the growth rate of these eight sectors for May to 4.3 per cent from the earlier estimate of 5.1 per cent.
The Finance Minister also touched the three current issues that have spooked the market — FPI tax, sovereign bonds and the raising of minimum shareholding in listed companies to 35 per cent from the current 25 per cent. All the three were Budget announcements and the market has tanked heavily because of these.