Investment Cycle Vital for India's Economy

Mumbai, Sep 18 (PTI) Financial Services Secretary M Nagaraju on Thursday said a fresh investment cycle is "vital" for the economy at this stage, and urged India Inc to step up their investments.

In comments that come amid widespread concerns over sluggish private capital expenditure, Nagaraju said corporates are better placed for investments, pointing out that they are "enjoying strongest balance sheets" and added that the financial sector should also support them.

"The government has done the 'heavy lifting', starting with heavy spending and also policy reforms, he added in the remarks made at NaBFID's annual conclave on infrastructure investing.

"Gently nurture a fresh cycle of investments that stands vital for the economy's progress at this stage," he said, adding that this act of investments will help in growing together and also instill confidence.

Nagaraju said there is "remarkable resilience" in the Indian economy and even with the uncertainties, the economy has posted a five-quarter GDP growth of 7.8 per cent for the April-June period and is on the way to be the third largest in the "near future".

He also stated the Department of Financial Services' expectations from NaBFID, pointing out that the entity should step up as a transaction advisor to make projects more bankable.

It should also focus on introducing newer innovative instruments of financing which will help banks rebalance their portfolios every 3-5 years, the DFS secretary said.

Given the increased urbanisation, focus on water and sewage management is also essential, he said, adding that NaBFID should also look at building human resource capacities within.

Speaking at the same event, Pension Fund Regulatory and Development Authority (PFRDA) Chairman Sivasubramanian Ramann pointed out that political and execution risks are among the factors which are discouraging long-term investors from committing money for infrastructure projects.

The DFS Secretary also chaired a meeting on empowering micro, small and medium enterprises after the speech at NaBFID.