Enough cash, decision on NPAs vital for growth: Assocham

New Delhi, Feb 22 (IANS) Sufficient cash in both rural areas and cities, along with some bold and pragmatic decisions on issues like bank’ non-performing assets (NPAs) will be key drivers for reverting to eight per cent growth of the Indian economy, a leading industry lobby said here on Wednesday.

Welcoming various steps taken by the government to curb black money and corruption, Assocham President Sandeep Jajodia said people should be encouraged to start spending again.

“However, it must be ensured that there is no tax terrorism and fear psychosis among the consumers, especially of high-value products and services; and trade channels must be avoided,” Jajodia, who recently took over as Assocham President, said in a statement.

“Besides, government officials at all levels should be made accountable for their actions.”

On the government’s efforts in tackling non-performing assets (NPAs) of public sector banks, Jajodia said: “We are faced with a situation where banks, with loads of cash, are finding it hard to lend despite lowering interest rates. Apparently, there are not many takers for credit.”

“The credit off-take from corporate India, in any case, will be quite low as long as the entire issue of non-performing assets and cleaning up of the banks’ balance sheets is not resolved with a pragmatic approach and strong political will.”

Jajodia recommended that a clear distinction should be made between wilful defaulters and those whose business ran into difficulty due to external economic factors like volatile commodity prices, or even those whose commercial decision may appear to be wrong in hindsight.

Referring to a large number of domestic and global macro issues, the Assocham President said the government should further speed up infrastructure projects of roads, highways, railways, ports and airports financed through public funding.

“Creation of jobs for the youth, who are getting added in large numbers every year, is one of the prime responsibilities both for the government and for corporate India,” Jajodia pointed out.

“Further incentives for investment into manufacturing, information technology, infrastructure and other core industrial sectors will create more employment for the youth,” he said.