India Inc seeks Rs 1 lakh crore stimulus

New Delhi: India Inc on Thursday demanded a stimulus package of over Rs 1 lakh crore to kick-start investment cycle and revive the economy which is showing signs of a slowdown.

Industry leaders also said that the government has assured them to take action soon to boost the economic growth.

In a meeting with top industry leaders, called by Finance Minister Nirmala Sitharaman to discuss ways to revive the growth, Assocham President B K Goenka said that amid the current slowdown in global and domestic market, there is a need to have quick-fix solutions.

"The economy requires a critical intervention by introducing a stimulus package. We have suggested for a package of over Rs one lakh crore," he said.

After the three-hour long meeting, India Inc also said the government has assured to take action soon to revive the industry and push economic growth.

Sitharaman and ministry officials met captains of the industry to deliberate upon the issues about the economy and sagging industrial growth.

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 Minister in clear terms gave assurance that "very soon" solution would be found, he said, adding 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 was not taking place. There is stress on the economy as far as NBFC sector was concerned," he told reporters after the meeting.

He added that the NBFC issue is impacting sectors like auto, home loan, and MSME. "I am told that there will be action soon. So, we will wait for that," he said.

It was also assured by the government in the meeting that punitive penal provisions concerning non-compliance with CSR spending norms under the companies' law would not be pursued.

Piramal said that the industry demanded that oversight on CSR spending should not result in any imprisonment. Further Vice-President CII T V Narendran said that the government sought views on ways to further stimulate the country's economic growth.

"Across the board, we discussed the key issues," he said adding slowdown in the auto industry would have an implication on the steel sector. Sandip Somany, president, FICCI, said transmission of cut in interest rate to consumers by banks is a big issue.

"Banks must be encouraged to pass on the benefits of rate reduction to consumers and borrowers. We are hopeful of further rate cut. It is encouraging that the RBI has reduced rates by cumulative 110 basis points," he said.