ET Awards 2018: Don’t throttle growth by squeezing liquidity, says FM Arun Jaitley

Updated:  Nov 18, 2018, 09:35 AM

Arun Jaitley Lok Sabha Elections 2019
Arun Jaitley extolled the virtues of prudence — from the pricing of and diesel and petrol to regulatory and fiscal policies — as the nation is paying the price for seeking shortcuts to development after the global financial crisis. Arun Jaitley also highlighted the need for adequate credit to industry and sufficient liquidity for higher growth, setting the stage for discussions at the upcoming RBI board meeting on Monday. 
 
“If we have to improve on this (development) we need a certain level of credit flow as far as entrepreneurs are concerned... see that liquidity is maintained,” said Arun Jaitley, guest of honour at the Deloitte Economic Times Awards for Corporate Excellence in Mumbai on Saturday, addressing an audience that included the cream of India’s business world along with top government colleagues. “As a reaction to the sins of 2008-14 that were collectively committed… it will have to be done in a manner to restore the discipline as far as the banking system is concerned.” This does not mean throttling development by squeezing on credit and liquidity, he said. 
 
The government has been pushing RBI to do more to ease spur and liquidity credit offtake in to bolster growth and encourage job creation. The Centre is looking for easier capital norms relaxations in the prompt corrective action framework. 
 
“Banking being a domestic issue, it has an impact,” said ArunJaitley. “It is very important to realise what is the problem. It can be explained in language that is simpler to understand. We witnessed a situation after Lehman Brothers.  There was a tendency to keep development moving on the basis of bank loans. From 2008 to 2014 is a chapter in the lives of public sector banks... We cannot wish it away, we have to learn from this so it never happens again.” 
 


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