Govt needs to give positive signals: FM
13 Jun 2012 8:40 AM GMT
Expressing disappointment over dismal 0.1 per cent industrial growth rate in April, finance minister Pranab Mukherjee on Tuesday said the government would take steps to give positive signals to the industry.
‘I am disappointed. Industry has not yet picked up. Negative sentiments are there... We have to take steps to give positive signals (to the industry)’, he said.
Industrial production growth rate slowed down sharply to 0.1 per cent in April from 5.3 per cent a year ago, due to contraction in capital goods and dip in manufacturing output, reflecting the sluggish state of the economy.
The IIP was negative in March, which declined to 3.2 per cent.
Mukherjee said the government cannot take comfort from the fact the industrial output turned positive in April from negative a month ago.
The performance of the capital goods sector was disappointing, the minister said, adding that only 12 out of 22 major industrial groups showed positive growth.
The capital goods output, according to the data, declined by 16.3 per cent as against a growth of 6.6 per cent in the same month last year.
Mining output also contracted by 3.1 per cent in April, as against growth of 1.6 per cent in the same month a year ago.
The slowdown in industrial production is likely to put pressure on the Reserve Bank to cut lending rates at its mid-quarterly review on June 18. SBI chairman Pratip Chaudhuri said he expected the RBI to cut Cash Reserve Ratio by 1 per cent, the portion of deposits that banks are required to keep with the central bank, to ease liquidity situation.
PRANAB ASKS BANKS TO REDUCE NPAs
Finance Minister Pranab Mukherjee on Tuesday asked banks to bring down their non-performing assets (NPAs) for sound financial health of the Indian banking system.
Due to record recovery against prudential write-off in the January-March quarter of 2011-12, public sector banks managed to reduce their NPAs to 3.1 per cent from 3.18 per cent in the previous quarter.
‘I am happy that banks have taken up the challenge to reduce NPAs... This momentum now has to be kept up and timely action in this direction would ensure sound financial health of the banking sector,’ he said in his address to the CEOs of public sector banks and financial institutions here. He expressed happiness as the banks were ‘very proactively’ responding to the problems so that NPAs are avoided.
He said recent decisions on restructuring of loans in the textile sector and discoms of the power sector are good examples of NPA management.
‘I urge you to deploy various tools at your command for containing and rolling back NPAs in accordance with the guidelines of the Reserve Bank of India,’ he added.
About Rs 1.30 lakh crore loan of different banks to power distribution companies (discoms) and Rs 35,000 crore to the textiles sector are under stress and process is underway to restructure these loans so that these segments could get fresh loans.
‘I am disappointed. Industry has not yet picked up. Negative sentiments are there... We have to take steps to give positive signals (to the industry)’, he said.
Industrial production growth rate slowed down sharply to 0.1 per cent in April from 5.3 per cent a year ago, due to contraction in capital goods and dip in manufacturing output, reflecting the sluggish state of the economy.
The IIP was negative in March, which declined to 3.2 per cent.
Mukherjee said the government cannot take comfort from the fact the industrial output turned positive in April from negative a month ago.
The performance of the capital goods sector was disappointing, the minister said, adding that only 12 out of 22 major industrial groups showed positive growth.
The capital goods output, according to the data, declined by 16.3 per cent as against a growth of 6.6 per cent in the same month last year.
Mining output also contracted by 3.1 per cent in April, as against growth of 1.6 per cent in the same month a year ago.
The slowdown in industrial production is likely to put pressure on the Reserve Bank to cut lending rates at its mid-quarterly review on June 18. SBI chairman Pratip Chaudhuri said he expected the RBI to cut Cash Reserve Ratio by 1 per cent, the portion of deposits that banks are required to keep with the central bank, to ease liquidity situation.
PRANAB ASKS BANKS TO REDUCE NPAs
Finance Minister Pranab Mukherjee on Tuesday asked banks to bring down their non-performing assets (NPAs) for sound financial health of the Indian banking system.
Due to record recovery against prudential write-off in the January-March quarter of 2011-12, public sector banks managed to reduce their NPAs to 3.1 per cent from 3.18 per cent in the previous quarter.
‘I am happy that banks have taken up the challenge to reduce NPAs... This momentum now has to be kept up and timely action in this direction would ensure sound financial health of the banking sector,’ he said in his address to the CEOs of public sector banks and financial institutions here. He expressed happiness as the banks were ‘very proactively’ responding to the problems so that NPAs are avoided.
He said recent decisions on restructuring of loans in the textile sector and discoms of the power sector are good examples of NPA management.
‘I urge you to deploy various tools at your command for containing and rolling back NPAs in accordance with the guidelines of the Reserve Bank of India,’ he added.
About Rs 1.30 lakh crore loan of different banks to power distribution companies (discoms) and Rs 35,000 crore to the textiles sector are under stress and process is underway to restructure these loans so that these segments could get fresh loans.
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