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Cut SLR to Boost India's Manufacturing Jobs
11 Oct
Summary
- Reducing SLR can lower business credit costs.
- Adequate credit is crucial for startup growth.
- Easier land acquisition and power are vital.
Former NITI Aayog CEO Amitabh Kant has called for a reduction in India's statutory liquidity ratio (SLR) to bolster job-intensive manufacturing. He believes that lowering the SLR, which mandates banks to hold government securities, would decrease the cost of credit for businesses.
Kant emphasized that while production-linked incentives offer short-term support, long-term growth hinges on reducing the overall cost of doing business. He highlighted that startups in sectors like geospatial technology require adequate credit availability to scale into disruptive companies.
Furthermore, Kant pointed to the need for streamlined land acquisition processes and consistent power availability. He noted that manufacturing enterprises in India sometimes face higher power costs than residential consumers, hindering competitiveness. He also drew parallels with countries like China, Vietnam, and Mexico in their support for manufacturing through favorable policies.
