Finance Minister Sitharaman brushes aside fears of liquidity crisis

dressing a press conference after her meeting with officials of private sector banks and public institutions on Thursday, Union Finance Minister Nirmala Sitharaman asserted that she h t got any feedback about possibility of a liquidity crisis. She furr ded that only wholesale financing was affected to a certain extent. Sitharaman also revealed that small finance banks seemed to be on a smooth path. According to her, re was positive growth in rural areas where demand for loans was higher. 

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'Passenger vehicle sales are driven by sentiment'

Finance Minister contended that she received favourable feedback about affordable housing scheme launched by government. She opined that drop in commercial vehicle sales was viewed as a "cyclical problem".

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"So, largely one of  opinion that prevailed is that affordable housing scheme which government has launched, has really taken off well. commercial vehicle related problem is seen as a cyclical problem. It is seen as a problem which is t new. It happened sometime in 2010 or so. So, private bankers and NBFCs which are specializing in lending for commercial vehicles feel that it is a problem which will be gotten over in next 1 or 2 quarters. In passenger vehicle segment, it is largely driven by sentiment. If re was a problem in liquidity, it was in wholesale financing and t in retail,"  Sitharaman observed.

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A slew of reforms

In last few weeks, Centre has rolled out various measures to boost ecomy in pursuit of $5 trillion ecomy target. Initially, reforms like  promise to initiate scrapp policy, lifting ban on government departments to purchase new vehicles, extending operational period of BS-IV vehicles, cheaper loans and a centralized system for Income Tax tices were introduced. This was followed by easing of Foreign Direct Investment (FDI) rms in coal mining, contract manufacturing, single-brand retail and digital media. reafter, Finance Minister anunced merger of major Public Sector Banks and governance reforms for banks. Subsequently, export, housing and real estate sector also benefited from Centre's measures. latest development came in form of government slashing corporate tax rate to 25.17% inclusive of all cess and surcharges for domestic firms.

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