Finance Minister Nirmala Sitharaman (Photo: PTI)
Finance Minister Nirmala Sitharaman on Saturday said India’s garment and knitwear sector is facing “some uncertainty” around its investments in the neighbouring country.
“I have had discussions about our textile and garment investments in Bangladesh, a lot of which are from Tamil Nadu. The investments went there in good faith and they did well when they went there; exports from Bangladesh had also increased,” Sitharaman said while addressing the post-Budget press conference with the Governor of the Reserve Bank of India (RBI) in New Delhi.
She said the clothing and knitwear sector in particular is facing some uncertainty due to the crisis in the neighbouring country.
“I hope the investments are all safe… it is too early to see what impact this situation in Bangladesh will have on our economy. I hope the interim government will sort things out as soon as possible so that both the people of Bangladesh and India can return to normal life,” she said.
Sitharaman, however, distanced the government from the Economic Survey’s idea of excluding food from inflation targeting.
“It is free to submit ideas for the survey,” the finance minister replied when asked about the use of core inflation as a benchmark for evaluating monetary policy.
She also urged banks to come up with innovative and attractive schemes to boost deposit mobilisation. Speaking after the Reserve Bank of India board meeting, she said deposits and lending are like two wheels of a cart, with deposits currently lagging behind.
Sitharaman expressed concern over the slow growth of deposit collections, noting that retail investors are turning to alternatives such as the stock market. She urged banks to increase the attractiveness of deposit accounts and bridge the gap between deposits and loans. She also stressed the need for banks to focus on core activities, including mobilising deposits and extending credit to those in need of financial support.
However, RBI Governor Shaktikanta Das said interest rates have been deregulated and banks often hike deposit rates to attract funds. “Banks are free to decide on interest rates,” Das added.
RBI Governor Shaktikanta Das, while presenting the bi-monthly monetary policy earlier this week, also raised concerns over the deposit-credit mismatch in the banking sector.
First publication: Aug 10, 2024 | 4:34 PM IST