homeeconomy NewsChief Economic Adviser believes banks' exposure to big conglomerates unlikely to derail financial cycle
Chief Economic Adviser believes banks' exposure to big conglomerates unlikely to derail financial cycle
Budget 2023 | Speaking to CNBC-TV18, Chief Economic Advisor V. Anantha Nageswaran said almost all the risks to India's growth scenario come from external factors.
Speaking about the exposure of large conglomerates to the Indian banking sector after the Union Budget, Chief Economic Adviser (CEA) V Anantha Nageswaran said that at this point it doesn't look like it has the potential to derail the beginning of a new financial cycle.
The CEA's comments come in the wake of the rout in the stock market led by the fall of Adani group stocks which brought down the value of banking stocks by between 6-15 percent in the last week after a scathing report by short-seller Hindenburg alleged manipulation and accounting fraud in Adani group companies, a charge strongly denied by the conglomerate.
Speaking to CNBC-TV18, Chief Economic Advisor (CEA) V Anantha Nageswaran said almost all the risks to India's growth scenario come from external factors. He felt that a slowing global growth rate is exactly what India needs to boost its economic growth.
Whatever happens in the Chinese economy, it will have a global impact, he said, adding: "Slowing global growth is what doctor would order for India."
There was a jump in budget outlays for agriculture, energy transition, affordable housing and urban infrastructure; and a special emphasis on health and education with plans to establish nursing centres and skilling programmes to create job opportunities for the youth.
In a boost to the economy and taxpayers, the Union Budget 2023 focused on inclusive growth, fiscal consolidation, infrastructure spending, green growth, youth empowerment and a strong financial sector.
The Budget proposed a record high 33 percent increase in capital expenditure amounting to Rs 10 lakh crore, which is 3.3 percent of India’s GDP. The increase in capex is aimed at improving the country’s road, rail, port and airport infrastructure and making India a more attractive investment destination.
Despite higher capex and increased outlays, the finance minister has maintained the path of fiscal prudence with an aim to reduce the fiscal deficit target to 5.9 percent. The goal is to reach a deficit below 4.5 percent by 2025-2026.
According to Ajay Seth, Secretary of Economic Affairs, the government’s goal is to keep India's economic growth closer to 7 percent this year, and then go beyond that as the global headwinds subside. However, he emphasised that the government's objective is to reach below 4.5 percent fiscal deficit by FY26.
Tuhin Kanta Pandey, Secretary, the Department of Investment and Public Asset Management (DIPAM), highlighted the need to calibrate India's divestment strategy. According to him, asset monetisation is a crucial part of the capital expenditure cycle. He also said there is currently no plan in the works for bank privatisation.
(Edited by : Shoma Bhattacharjee)
First Published: Feb 2, 2023 8:40 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Exclusive | Full text of the PM interview: Modi's agenda for the next 5 years
Apr 29, 2024 10:28 PM
PM Modi says he’s going forward with a positive attitude as a response to personal attacks
Apr 29, 2024 10:08 PM