Davos 2023 | SBI Chairman Dinesh Kumar Khara wants tax relief on interest income in Budget

As recession fears loom — with a global recession set to hurt the world and Indian economy badly — the RBI has been pushing banks to maintain higher savings. It has raised repo interest rates by 225 points or 2.25 percent, which — was also to contain inflation and — has resulted in banks increasing interest rates on savings and deposits significantly.

Khara also opined that support for SMEs was important. “I would expect that if at all, the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) kind of a guarantee can be improved upon, that will also go a long way in giving confidence to the banking system for supporting SMEs,” he said.

In an earlier interview with CNBC-TV18, the SBI Chairman said that he is seeing very clear visible signs of private capex picking up. He said that 70 percent of the new investment is coming from the private sector.

He added, “I would say that the trend we are seeing is almost synonymous with what we saw last year. So almost about 70 percent of the new investment which has been committed is coming from the private sector. So if I may add in terms of the future opportunities, which will emerge, both in terms of infrastructure creation, as well as into the green energy initiatives, I think there is a decent interest being shown by the private sector investors.”

He added, “In terms of percentage, I would say that the private investment was as high as about 70 percent and till November, whatever term we have seen, it is as high as about 67 percent So I think that is a very, very promising number which we will get to see.”

Sanjiv Bajaj, President of the Confederation of Indian Industry (CII) and Chairman and Managing Director of Bajaj Finserv, believes that the base effect, coupled with lower GDP growth in the first two quarters, is likely to impact the economy. However, he also sees positive signs in the growth of rural areas and private sector investments in key sectors.

"Rural growth is looking good. Urban growth is a little choppy," Bajaj said. He said, “It's encouraging that the government continues with the government capex. I think that's provided tremendous wind beneath the wings for the consumer because he earns he or she earns, and they end up spending as well.”