We are not in recession, but only facing slowdown, says Chidambaram

SOUNDING A POSITiVE NOTE: Union Home Minister P. Chidambaram speaking at the launch of BYST Growth Fund in Chennai on Saturday.

SOUNDING A POSITiVE NOTE: Union Home Minister P. Chidambaram speaking at the launch of BYST Growth Fund in Chennai on Saturday.   | Photo Credit: — Photo: A. Muralitharan

Special Correspondent

BYST Growth Fund launched to help socially disadvantaged entrepreneurs

CHENNAI: The country is not in recession and is only facing a slowdown, Union Home Minister P.Chidambaram said here on Saturday.

He was speaking after launching BYST (Bharatiya Yuva Shakti Trust) Growth Fund, formed with support from International Finance Corporation of the World Bank Group and VenturEast, a private equity fund manager to help socially disadvantaged entrepreneurs.

“I read this morning that United Kingdom had officially declared that it was in recession. We are not in recession, but only facing a slowdown,” Mr. Chidambaram said.

Onus on banks

In the absence of flow of overseas credit to India and non-availability of non-bank credit, the entire burden of giving credit had fallen on banks, a large portion of them public sector banks. Since the policies of the public sector banks were strong and sound, they continued to lend money to the industry, particularly small businesses.

Mr. Chidambaram said the Reserve Bank of India and the government could work together to ensure that there were stimulus packages to increase the aggregate domestic demand in the wake of the ongoing economic slowdown.

The Minister said the present situation posed challenges and was also interesting. “If all were well and economy growing at 9 per cent a year, there would be no need for a government. Some of us would lose our jobs,” he remarked.

He said young men and women in the country were bubbling with ideas. About 15 years ago, when they could not find avenues to translate ideas into reality, they left the country and wherever they went, did very well. Young Indians were extremely innovative and willing to sacrifice.

Referring to an instance of making slum dwellers in New Delhi open a bank account, Mr. Chidambaram dispelled the notion that certain products and business possibilities were limited to a few sections of society.

Speaking about Micro, Medium and Small Enterprises (MSMEs) Mr. Chidambaram said 40 per cent of all goods in the country came from this sector. MSMEs also employed the largest number of people in India. Admitting there were certain failures in this sector, he added that they had to be ignored when success flourished.

“It is not that only MSMEs fail, even big businesses do. We have been seeing that since September 15,” Mr. Chidambaram said.

Cheque handed over

He said that for the past five years, a number of steps were taken to promote MSMEs. Now, banks were obliged to lend Rs.5 lakh without any collateral. Describing the launch of the Growth Fund as a novel attempt by BYST and VenturEast, Mr. Chidambaram handed over a cheque to C.Raja, a 28-year-old entrepreneur from Chennai, who owns Rexmiller, a brand of garments.

Anil Sinha, General Manager, International Finance Corporation Advisory Services, said BYST Growth Fund was established as a response to the need to provide support to disadvantaged young entrepreneurs, help them identify independent fund managers and facilitate the growth of existing BYST enterprises and create new ones.

Sarath Naru, Managing Partner, VenturEast, gave an overview about the objectives of BYST Growth Fund. R.M.Malla, Chairman, Small Industries Development Bank of India and T.L.Viswanathan, National Head, BYST’s Mentorship Programme, spoke.

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