Former NITI Aayog chief Amitabh Kant proposes statutory liquidity ratio cut
What happened
Former NITI Aayog CEO Amitabh Kant has suggested lowering the statutory liquidity ratio (SLR) to reduce credit costs and support the manufacturing sector. Kant stated that while production-linked incentive schemes provide necessary short-term relief, reducing the overall cost of doing business is essential for long-term growth.
Why it matters
Reducing the SLR could lower borrowing costs for manufacturers, directly impacting operational expenditures. By easing financing constraints, this measure aims to improve capital availability for industrial producers seeking to fund ongoing operations and capacity expansion.
Bigger picture
The proposal highlights a shift in focus from targeted fiscal incentives toward broader structural financial reforms. It underscores a debate over whether specific output-based subsidies or systemic banking adjustments better support long-term industrial competitiveness.
Watch next
Monitor for any formal responses from the Reserve Bank of India or government finance officials regarding potential SLR adjustments.