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Informist, Tuesday, Sept. 2, 2025

 

--Sitharaman: Call all bks to fund infra development, MSMEs to boost growth 

--CONTEXT: Finance Minister Sitharaman speaking at City Union Bank event 

 

NEW DELHI – Finance Minister Nirmala Sitharaman Tuesday called upon all banks to participate in India's growth story by expanding credit to infrastructure projects and micro, small and medium enterprises especially as the economy is heading into next-generation reforms. "Prime Minister has announced creation of taskforce for next-generation reforms with a clear mandate to simplify regulations, lower compliance costs, and build a more enabling ecosystem for start-ups, MSMEs and entrepreneurs," Sitharaman said at City Union Bank's 120th Foundation Day event in Chennai.

 

"Private sector banks are a very vital partner to India's national buidling efforts," she said, adding that scheduled commercial banks have recorded a "massive improvement in their asset quality" which will help provide cheaper and steadier credit to households, MSMEs and infrastructure projects. "It will also lead to lower systemic risks and sustained confidence in India's financial system," she said. 

 

Speaking about the next gen reforms, the finance minister said that the immediate reform--changes to goods and services tax structure--scheduled to be discussed in the GST Council meeting on Wed-Thu will set the economy "absolutely open and transparent" in the coming months. "...with further reduction in compliance burden, making it easy for small businesses," she said.  

 

The upcoming GST Council meeting assumes significance after Prime Minister Narendra Modi's announcement from the ramparts of the Red Fort on Independence Day about the government's "Diwali Gift" in the form of lower GST burden. The Centre has initiated an overhaul of the indirect tax structure which will include rationalisation of the number GST rates slabs from four to two. 

 

The government's thrust on next-generation reforms and support to small businesses come amid exogenous risks to economic activity from the US tariff-related uncertainty. The Indian economy, particularly exports and capital formation, faces risks from the imposition of tariffs by the US. The 25% tariff by the US on imports from India increased to 50% on Wednesday last week, making India one of the countries impacted the most by Washington's duties. If sustained, the 50% tariff could hurt India's growth by nearly half a percentage point.

 

According to Sitharaman, the Indian economy has showed sustained growth with Apr-Jun GDP print of 7.8% reflecting "overall good momentum across various sectors". India's GDP growth rose quicker than expected to a five-quarter high of 7.8% in Apr-Jun, led by higher growth in services and manufacturing sectors, data released by the statistics ministry Friday showed. The Indian economy had grown 7.4% in the March quarter and 6.5% in the year-ago quarter.  End

 

Reported by Priyasmita Dutta

Edited by Akul Nishant Akhoury

 

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