India Inc’s capex set to fuel growth: RBI

Mumbai: Fresh round of capital expenditure (capex) by the corporate sector is likely to fuel the next leg of growth, said RBI’s latest Bulletin, stressing that stable and low inflation at four per cent provides the bedrock for sustaining GDP expansion. The likelihood of the global economy exhibiting stronger-than-expected growth in 2024 has brightened in recent months, with risks broadly balanced, said the article on ‘State of the Economy’ published in the Reserve Bank’s February Bulletin. The Indian economy continues to sustain the momentum achieved in the first half of 2023-24, going by high frequency indicators, it said.

“Expectations of a fresh round of capex by the corporate sector is likely to fuel the next leg of growth,” said the article authored by a team led by RBI Deputy Governor Michael Debabrata Patra.

Overall, investment intentions of the private corporate sector have been positive this year so far. Total cost of projects, for which loans were sanctioned by major banks/all-India financial institutions (FIs) stood at Rs2.4 lakh crore during April-December 2023, which was 23 per cent higher than that in the corresponding period last year. Funds raised through external commercial borrowings (ECBs) for capex and initial public offerings (IPOs) remained robust during the second and third quarters of the current financial year, though their levels were lower than such resources raised during Q1 2023-24.

FM to meet leaders of fintech firms

Amid the ongoing problem faced by leading fintech player Paytm, Finance Minister Nirmala Sitharaman has decided to meet heads of financial technology companies next week to persuade them to strictly follow regulatory norms. Paytm Payments Bank Ltd, an entity promoted by One97 Communications Ltd, faced regulatory actions by the Reserve Bank for failure to comply with host of regulatory norms, including Know Your Customer (KYC) guidelines.

According to sources, Sitharaman will be meeting CEOs of fintech companies next week to hear their concerns and problems. However, sources said, she will impress upon them the need to abide by regulatory norms as they are dealing with money of individuals.