Commerce and Industry Minister Suresh Prabhu said treating exports under the priority sector lending will help India achieve the target of becoming a USD 10 trillion economy by 2035 amid the current operating environment.
Mumbai: Commerce and Industry Minister Suresh Prabhu has said his ministry wants to include the export segment under the priority sector lending category and it has taken up the issue with the Reserve Bank of India. “Exports is a strategic issue which promotes India’s interest and therefore its a strategic priority for India (but) not a priority sector lending for banking sector. This is a complete paradox,” he said.
Prabhu, who is also the Civil Aviation Minister, was speaking at the 44th India Gem & Jewellery Awards organised by Gem and Jewellery Export Promotion Council (GJEPC) here late evening.
This is not a commercial banking problem, but the one related to the regulator, he said adding, “I have already told the RBI governor that you must treat exports as priority sector lending.”
“Banking is a very important issue and we must address it and we will continue to work on it and make sure that the genuine credit requirements of the sector are met,” the minister added.
Treating exports under the priority sector lending will help India achieve the target of becoming a USD 10 trillion economy by 2035 amid the current operating environment, Prabhu said.
With joint efforts of the government, industry and other stakeholders, India will definitely be able to become a 5-trillion dollar economy within 7-8 years, he said adding, “India will become a 10 trillion dollar economy by 2035.”
“We want to grow at a rate which is closer to 8-9 per cent, and it can’t be done without global trade…this is the first time that world trade itself is facing fundamental challenges…the entire edifice of WTO has been challenged, and that the future of the institution is in crisis.
“This raises the need for us to chart a path forward, based upon international trade as a key driver,” Prabhu said. He said India’s exports in last fiscal were the highest in the last six years and have been growing at a higher rate in the last few months.
“I think we are now growing at over 20 per cent. If we continue this, India may be be able to again register record growth in exports this fiscal as well,” he added. Stating that the jewellery industry has immense potential, the minister said, “There are black sheep every where.
And there are possibilities of system failure which can lead to default. But that does not mean we have to throw the baby in the hot water. “We have to find out a way of how the industry will be supported by getting the genuine financial needs met.”
“Sometimes, there are system failures too but that doesn’t mean banks would stop lending. We must develop a protocol for both the industry and banks to follow and must start lending to genuine players,” the minister said.
He was apparently referring to the Rs 13,400-crore crore fraud allegedly committed by fugitive diamond trader Nirav Modi and his uncle Mehul Choksi on PNB. Both diamond traders are facing multiple-agency probe in connection with the scam, which came to light in February this year.
The minister also announced that a Domestic Council is being set up to improve domestic support for the industry. He said the council will work towards industry development, employment generation, building of regional clusters and strengthening of value chains.
Prabhu said the government is planning to set up export promotion offices globally in order to push overseas shipment of goods in a targeted fashion. Prabhu said the GJEPC and the government are working together to formulate a strategy for the same, which he said, will be unveiled soon.
“A coordination committee will be set up consisting of senior officials of the ministry and the gem and jewellery industry, who will meet monthly, to ensure that industry concerns are addressed on priority,” he added.