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earnings | IST

Aatmanirbhar Bharat 3 well-focussed on employment generation, says SBI Chairman

“Overall, this are very relaxed norms which have been given for ECGLS. So I am sure there would be many beneficiaries and the ceilings have been removed, that will go a long way in terms of covering more and more entities into this relief package,” Dinesh Kumar Khara, Chairman at State Bank of India (SBI) told CNBC-TV18.

Finance Minister Nirmala Sitharaman has announced twelve new measures to stimulate the economy, including expanding the emergency credit guarantee scheme to include companies with dues up to Rs 500 crore from Rs 50 crore earlier and doing away with the turnover cap.
“Overall, this are very relaxed norms which have been given for ECGLS. So I am sure there would be many beneficiaries and the ceilings have been removed, that will go a long way in terms of covering more and more entities into this relief package,” Dinesh Kumar Khara, Chairman at State Bank of India (SBI) told CNBC-TV18.
Khara is of the view that the overall theme of the package was employment generation with a focus on construction and infrastructure creation, as the sector is a huge employment generator.
“With the revival and the unlock happening and with these measures - these are stop-gap arrangements – helping industry players to tide over the gap which is there between full health, great health and in the normal situation as they would have been. I am sure they would be in a position to come back to their normal health once the unlock happens and once the economic activity revival is there,” Khara mentioned.
On high inflation, the SBI Chairman that it was on account of the supply side gap and believes it to calm down once the output gap got bridged.
About loan growth Khara said that there were two components in the loan growth - working capital and investment.
“As far as working capital is concerned, it is a function of what is the capacity utilisation and with the increasing capacity utilisation it will certainly improve. Once the demand situation starts improving, the working capital utilisation will also start improving,” he said.
Meanwhile, with the recent measures undertaken, Khara said he was sure that would raise investment demand but there could be some kind of a time lag.
“I am sure there will be an improvement as far as the loan growth is concerned from what we have seen now and what we will be in a position to probably come to the market in the last quarter of this current financial year, I am sure there would be definite improvement in the loan growth,” he said.