August 2019 \ Business & Investment \ BUSINESS AND GOVERNANCE

India Inc wants Rs 1 lakh crore stimulus package

India Inc has sought a stimulus package ...

After the three-hour meeting, India Inc also said the Government has assured them that it would take action soon to revive the industry and push economic growth, he said. JSW Group Chairman Sajjan Jindal said: “It was decided that the government is going to take action very soon to revive the industry and it is a matter of sentiments. We got positive feedback from the finance minister”. The industry is suffering from issues in sectors like steel, NBFC, and automobile.

Piramal Enterprises Chairman Ajay Piramal said that the industry raised several matters such as reluctance of banks to lend to the industry. “It is not that there was a lack of liquidity in the banks, but lending is not taking place. There is stress on the economy as far as NBFC sector was concerned,” he told reporters after the meeting.

RBI’S RECORD TRANSFER TO GOVERNMENT

The Reserve Bank of India's (RBI) sharp increase in income led it to transfer a record high surplus of Rs 1.76 trillion (lakh crore) to the Government in August, Kotak Securities has said. According to the Kotak report, RBI's income was driven by higher interest income due to open market operations (OMOs), accounting change in recording foreign exchange (FX) gains, and writing back of excess risk provisions. It said that with liquidity already in surplus, the Rs 1.5 lakh crore outflow may prompt the RBI to mop up liquidity and lead to lower than estimated OMO purchases, which is a negative for bonds. According to Kotak, higher income and no provisions had led to the higher surplus. "RBI's income more than doubled to Rs 1.9 trillion in 2019 (July 1, 2018-June 30, 2019) led by a 30 per cent higher domestic income at Rs 632 billion from a larger portfolio of rupee securities (OMOs) and Liquidity Adjustment Facility (LAF)/Marginal Standing Facility (MSF) operations, 173.6 per cent higher foreign income at Rs 750 billion largely driven by Rs 214 billion due to accounting change (weighted average cost of holdings) of FX gains/losses, and Rs 526 billion of write back of excess risk provision from contingency fund (CF) following the Jalan Committee recommendations.”