Page 64 - BFSI CHRONICLE 10 th Issue (2nd Annual Issue ) 23062 COPY.indd

BFSI Chronicle, 2 Annual Issue, 10 Edition July 2022
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Despite the poor offtake of credit by the managed inflation despite fiscal pressures
Corporate Sector, the government enterprises due to the ever-increasing domestic demand.
have kept the banks busy through enhanced The partial availability of oil from Russia and
borrowings. The agriculture segment, housing Iran in the Indian rupee saved the devaluation
loans, and MSME sector have also absorbed pressure.
fresh credit, improving lenders' top and bottom
The public debt-to-GDP ratio remains
lines. RBI press release rightly commended,
“Notwithstanding a highly transmissible third satisfactory. The central and state government
wave driven by the Omicron variant, India deficits have declined. According to OECD
estimates, public sector borrowing needs have
is charting a different recovery course from
the rest of the world. India is poised to grow risen close to 8% of GDP, putting pressure
on smaller companies’ borrowing costs.
at the fastest pace year-on-year among major
economies, according to projections made Implementation of fundamental financial
by the International Monetary Fund (IMF). reforms has boosted incomes and wellbeing.
The Goods and Services Tax (GST) has
This recovery is supported by large-scale
vaccination and sustained fiscal and monetary reduced domestic trade barriers and input
costs. The cuts in corporate taxes have spurred
support”. Once again, banks have admirably
risen to the call of duty as frontline warriors for investment and productivity. Streamlining GST
economic recovery. exemptions and reducing the number of rates
have promoted tax compliance.
FY 2020-21 turned out to be the better in
recent years for banks. The pandemic-hit Reforms in the real estate sector have increased
transparency and governance to protect
banks recorded a “discernible increase”
in profitability. The expenditure declined, homebuyers. The Insolvency and Bankruptcy
and total income remained stable, despite Code has reduced non-performing loans. The
sizeable recoveries through the NCLT route
a low credit offtake and interest rates—
the increase in income from investments have speeded up the reallocation of resources
from low productivity firms and sectors to
compensated for reduced interest income on
loans. Revenue from trading also went up as more promising ones. The creation of quality
banks booked profits on G-Sec investments. jobs, under-employment and income inequality
remain challenges. The employment rate has
The expenditure moderated as interest on
deposits and borrowing declined because of a declined and is low, especially for women. A lot
remains to be Donne on the labor front.
decline in interest rates and contraction in total
borrowings. The performance is likely to be Rationalization has boosted tax collections,
repeated this year. leaving extra funds in the government kitty
for defense and development. $ 400 billion in
The Ukraine war resulted in a re-alignment of
trading partners with Europe and the Americas, exports have given the additional impetuous.
shunning the Russian oil. The step proved The Indian economy has entered a self-
actualization phase and is on track to cross the
a blessing in disguise for India as a cornered
Russia offered cheaper oil to our country. India coveted $ 5.0 trillion GDP in five years.

The Institute Of Cost Accountants Of India

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