Working with RBI on need for loan restructuring: FM Nirmala Sitharaman

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The government is working with the Reserve Bank of India (RBI) on restructuring of loans or an extension of moratorium as requested by the industry, finance minister Nirmala Sitharaman said on Friday.

“The focus is on restructuring. Finance ministry is actively engaged with RBI on this. In principle, the idea that there may be a restructuring required, is well taken,” she told members of industry body Ficci at its National Ex-ecutive Committee Meeting. “I fully understand the requirements of the hospitality sector on extension of the moratorium, or restructuring. We are working with RBI on this,” she added. Industry had sought continued support from government, particularly in boosting market demand, even as ‘green shoots’ of recovery are visible.

“Sustaining the improvement in operational parameters of businesses requires government support,” said Ficci president Dr Sangita Reddy.

On trade deals, the FM said reciprocity was important. “Reciprocal arrangements are being asked with the countries with which we have opened up our markets. Reciprocity is a very critical point in our trade negotiations.” India and the United States are in talks for a limited trade deal.

On the issue of reducing the Goods and Services Tax (GST) rates on healthcare and other products, Sitharaman said the decision will be taken by the GST Council. She also said banks cannot refuse credit to micro, small and medium enterprises under the Emergency Credit Guarantee Scheme. “If refused, such instances must be reported. I will look into it,” she said.
The government is also working on setting up a Development Finance Institution, a suggestion by Ficci to handle emerging credit requirements of the industry. “What shape it will take, we will know shortly,” she said.

Defending its reform measures, Sitharaman said each step was taken after exhaustive consultations with stakeholders and those within the government, “to make sure that no step is going to be a failure because we did not make necessary collateral changes.”

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Tagged coronavirus, COVID-19, Finance Ministry, gst, loan restructuring, Nirmala Sitharaman,

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