Let enough credit flow to productive sectors: Sharma
Mumbai: Commerce and Industry Minister Anand Sharma today said policymaking should prop up investment cycle to create jobs rather than unduly squeezing capital flows to the productive sectors.
He also called for drawing a balance between growth and fiscal discipline to support economic activity.
"Whatever, we do must not in any respect deter investors and job creation…it's easy to say we will restrict lending and flow of capital to address the issue of inflation …But, if we have a situation, where jobs are lost and no new jobs are created, then it will have other serious problems," Sharma said addressing a banking award ceremony held here.
Stating that fiscal discipline should not come in the way of investments, he we have to "find a balance between growth and fiscal discipline…how to bring down both current account and fiscal deficits, and also the trade deficit."
Pointing out that the 2008-09 slowdown was different from the one we are facing today, he said the economy then recovered quickly on the back of concerted stimulus package, which propped up investment.
"Recovery now is difficult than in 2009.. at that time, all countries had the resources to intervene…we had three packages, accounting to 3 per cent of GDP…banks were able to lend more, interest subvention across the board had been given..," the Minister said.
Terming growth as an imperative for the domestic economy, Sharma pointed out the higher import duty on gold impacting the gems and jewellery industry and said there has to be some balance to support growth of this crucial segment.
He emphasised on increasing the national savings rate, which has slipped to 30.8 per cent in FY12 and national investment rate, for the growth of the economy.
Sharma added that the government has already approved many proposals under the National Manufacturing Policy.
Addressing the gathering, Maharashtra Chief Minister Prithviraj Chavan said infrastructure projects worth USD 1 billion will be kicked off in Mumbai this year.
He said the state has received five bids from international consortia for the Mumbai TransHarbour Link, the result of which would be announced soon.