New Delhi [India], Jan 3 : Terming the steps announced by Prime Minister Narendra Modi in his address to the nation on New Year's Eve as 'extremely positive for the Indian economy,' apex industry body ASSOCHAM on Tuesday said that the focus should now be on effective implementation of these schemes to drive economic growth.
"The initiatives like 60-day interest waiver for farmers who have taken loans from district co-operative banks and primary societies together with additional fund of 20,000 crore given to NABARD to give loans to farmers would help in alleviating pains of farmers and rural class," said ASSOCHAM President, Sunil Kanoria.
He also said that schemes like interest subsidy on loans for low cost housing together with impetus to affordable housing will provide much needed help to vulnerable sections of society and revive consumer confidence amid largest, but poorest socio-economic group.
Further, the push towards low cost housing is also good news for retail portfolio of banks and non-banking financial companies (NBFCs) that have been struggling to boost their business amid economic slowdown.
"The credit guarantee for SME and MSME has been increased to Rs. 2 crore. This will provide support to these sectors. The focus should now be on effective implementation of the credit insurance programme so that banks and NBFCs get their money in case of defaults faster than what it has happened in the past," added the ASSOCHAM chief.
"The government should also complement these actions with substantial reduction in both individual and corporate tax rates, more so as private sector investments are yet to kick-start and lower tax rates will certainly push private investments and drive economic growth," he added.
"Considering that post-demonetisation there has been a substantial surge in deposits, resultantly banks have started reducing interest rates and further rate cuts will only revive consumption demand and reinvigorate the investment cycle," added Kanoria.