 "Nirmala Sitharaman, Nirmala, Sitharaman, Finance Minister")
Union Finance Minister Nirmala Sitharaman (Photo: PTI)
Union Finance Minister Nirmala Sitharaman on Saturday said that India’s garment and knitted fabric sectors are facing a “bit of uncertainty” around their investments in the neighbouring nation.
“I have held discussions on our textile garment investments in Bangladesh, many of which are from Tamil Nadu. The investments went there in good faith and they did well having gone there; exports from Bangladesh had also increased,” said Sitharaman while addressing the post-budget press meet with the Reserve Bank of India (RBI) Governor in New Delhi.
Particularly, she said, the garment and knitted fabric sector is seeing a bit of uncertainty because of the crisis in the neighbouring country.
“I hope that the investments are all safe… it’s too early for me to see what kind of an impact this situation in Bangladesh will have on our economy. I hope that the interim government will settle things sooner rather than later so that both the people of Bangladesh and India can get back to normalcy,” she said.
However, Sitharaman distanced the government from the Economic Survey’s idea of excluding food from inflation targeting.
“The survey is free to pitch ideas,” the finance minister responded to questions about using core inflation as a benchmark for monetary policy review.
She also urged banks to devise innovative and appealing schemes to boost deposit mobilisation. Speaking after the Reserve Bank of India’s board meeting, she said that deposits and lending are like two wheels of a cart, with deposits currently lagging behind.
Sitharaman voiced her concerns about the sluggish growth in deposit collections, observing that small investors are turning to alternatives like the stock market. She urged banks to enhance the appeal of deposit accounts and bridge the gap between deposits and loans. Additionally, she emphasised the need for banks to concentrate on core activities, including mobilising deposits and providing credit to those who require financial support.
However, RBI Governor Shaktikanta Das said that interest rates are deregulated and often banks raise deposit rates to attract funds. “Banks are free to decide on interest rates,” Das added.
RBI Governor Shaktikanta Das, while unveiling the bi-monthly monetary policy earlier in the week, had also expressed concern about the deposit-lending mismatch in the banking sector.
First Published: Aug 10 2024 | 4:34 PM IST
