Gurugram: Finance Minister Arun Jaitley today said public and foreign investment remains intact, but private sector expansion is needed in a big way to let the economy start firing on all cylinders.
Observing that domestic investment continues to be a challenge, Jaitley called upon the banking sector to support corporates to propel growth.
"Indian private sector needs to expand in a big way. It needs to invest and that's when all engines of economy (will) start firing," Jaitley said while addressing a seminar on debt recovery here.
The minister spoke of liberalisation of FDI policies because of which India has emerged as a preferred destination of foreign investment.
"Foreign investors are getting far greater returns on their investment here than in any other country," he asserted.
"Public investment and foreign capital on which the economy is firing are intact... Domestic investment is still a challenge."
The minister further said there is a "silver lining" visible with festive purchases, indicating upturn in rural and urban demand, but domestic investment will have to pick up in a big way for which banks need to do their bit by supporting corporates and thus boosting growth.
The banks, Jaitley said, need to ensure flow of credit and support the private sector to expand their investment. He termed the role of the banks in this regard as "extremely significant".
"Their credit has to pick up, their investments have to pick up and we find that in India in the last few years, the banks have been themselves caught in a difficult and challenging situation."
Referring to unusual delays in settlement of debt recovery cases, the minister pointed to the need for increasing efficiency in such matters that are adjudicated by judicial or quasi-judicial bodies.
Stressing that debt recovery is of prime importance to the Indian economy, Jaitley explained that delays in settlement of such cases hurt larger investment environment of the country as the funds blocked by defaulters could have been utilised by other borrowers for productive purposes.
"It is not a usual judicial or quasi-judicial procedure when endless opportunities have to be granted to people to defend cases... If natural justice is carried on to unnatural extent, the litigation
will become unending and therefore efficiency has to be introduced into the recovery procedure as far as the defaulting parties are concerned," the minister added.