Amid liquidity slowdown in India, NITI Aayog calls for extraordinary steps to tackle unprecedented situation in financial sectors

New Delhi, August 23: Waking ahead staunch in the ongoing unprecedented financial situation in the country, Vice Chairman of NITI Aayog Rajiv Kumar has called on for the extraordinary steps to tackle it.

 

“This is an unprecedented situation for the government. In the last 70 years, we have not faced this sort of liquidity situation where the entire financial sector is in a churn and nobody is trusting anybody else”, he said.

 

 

“Within the private sector, nobody wants to lend to anybody else. Everyone is sitting on cash”, he said while speaking at the Midmine Sunmit, the flagship event of the Hero Group, further adding that government must do whatever it can to remove apprehensions of the private sector.

 

“The whole nature of the game has changed in the past four years after demonetisation, GST and IBC. In the earlier period, you had 10, 20, 30, 35 per cent of cash sloshing around which used to help people. That has become much less now”, he said.

Noting that the government has taken steps to address concerns of the stressed non-banking finance company (NBFC) sector, Kumar said the government does acknowledge NBFCs as a growth driver and has prevented many of them from collapsing.

 

"This is an unprecedented situation and we are still grappling to find the right modality to get a fix. The government must take steps that eliminate apprehension from the minds of private sector players and encourage them to step up investments," he said.

 

Focusing on the issue of delay in payments by the government to the private sector in lieu of goods and services availed from them, Kumar slated this to be one of the reasons for the slowdown with the authorities making all efforts to expedite the process.