Predictable support essential for GDP expansion: Sitharaman
Domestic consumption is sustaining the growth momentum in the economy, and predictable policy support is essential to ensure that the pace of GDP expansion continues, Union Finance Minister Nirmala Sitharaman said on Friday.
Speaking at an event organised by SBI, Sitharaman also said that a committee of bankers is looking into the issue of whether to allow exclusive distribution tie-ups for selling third-party products by banks or adopt an open architecture approach. She also urged banks to focus on the physical contact with customers as they go global and digital.
The minister further said that the disinvestment process of IDBI Bank will continue going ahead.
“...Consumption emerging out of its domestic market itself is able to sustain our growth, which is the fastest even now in the world,” she said.
“...Unless our domestic manufacturing, agricultural growth, tourism, IT and related services sector are given that constant support, predictable support, India’s growth story will be difficult to keep up,” she added.
Stating that exports are also important, Sitharaman appreciated the work of exporters in the last few months amid the setbacks like the US tariffs.
Replying to a question on policy support to the affected sectors because of the current Middle East crisis, she said the Government will see what it can best do and added that things are very dynamic at present, with talks between the US and Iran being on. To a question on the asset quality impact at banks because of the Middle East crisis, Sitharaman said that there is no need to be concerned, as the non-performing assets are at a multi-decade low.
“The IBA chairman with the IBA will be talking to banks to understand how best to go about it, what are the vulnerabilities by keeping one (entity), by keeping several ...all these are going to be worked upon,” she said.
Amid the huge changes in the tech landscape being brought about by Anthropic’s AI model Mythos, the FM said a meeting with banks was held in New Delhi on Thursday, and all the lenders have been asked to work together on it under the leadership of SBI chairman CS Setty, who also chairs IBA.
“In the coming weeks, there will be a lot of interaction within the banks, understanding where more investments will have to be made, what kind of technologies can come in, how AI itself can be used for countering this AI challenge,” Sitharaman said.
She was speaking at an event where SBI inaugurated a new local head office, which will serve the bulk of Maharashtra except the Mumbai metropolitan area and the Konkan region, which will continue to be served by the LHO in Mumbai. Terming this as a strategic move for SBI, Setty said the State is very important as Maharashtra delivers sizeable business for the country’s largest lender.
