Category: Business

State Bank of India (SBI) is aiming to become the first Indian financial firm to cross a milestone of Rs 1 lakh crore net profit in the next 3-5 years, chairman of the country’s largest lender C S Setty has said.

SBI recorded a standalone net profit of Rs 61,077 crore in FY24, registering a growth of 21.59 per cent.

“We have potential. Definitely, we would like to be the first company in India to reach that milestone,” Setty said when asked if it is possible to cross Rs 1 lakh crore in the next 3-5 years.

However, he said, “while profits, market capitalization etc are extremely important elements for our organization, we give equal thrust on customer-centricity and it acts as a fundamental aspect of our operations.”

With regard to corporate loan demand, Setty said, the bank has already got a Rs 4 lakh crore strong credit pipeline from India Inc and capital expenditure by the private sector is expected to pick up in the second half of the fiscal year.

We see a good amount of interest in private capital expenditure. The infrastructure financing, of course, is mainly coming from the roads, renewable energy, and some of the refineries,” he told PTI in an interview.

As far as public spending is concerned, Finance Minister Nirmala Sitharaman in the Budget proposed to raise the capital expenditure target by 11.1 per cent to record Rs 11.11 lakh crore for 2024-25. This is 3.4 per cent of the country’s GDP.

Setty said some of the corporates had undertaken brownfield expansion for which the capital expenditure was funded by their own cash accruals and cash balances that they had.

However, he said, “We now see some of the corporates drawing the term loans for brownfield expansion too.”

“We have a pipeline, both in terms of sanctioned but not disbursed and a pipeline of proposals that are under process. This amounts to almost Rs 4 lakh crore, indicating that the corporate pipeline is strong,” he said.

Stressing that the private capital expenditure will definitely pick up during the year, he said, there is renewed government expenditure after the first quarter slowdown due to general elections.

“We see in the second quarter, as well as in the second half of the current financial year, both capital expenditure will be spurred by the government expenditure as well as private expenditure,” he said.

(This story has not been edited by digihunt staff and is published from a syndicated news agency feed – PTI)

Investments from China into India are governed by the existing foreign direct investment (FDI) policy and as of now, there is no change in that, a top government official said on Wednesday. FDI applications from countries sharing land border with India like China have to mandatorily seek government approval for all sectors. This policy was issued in April 2020.

“The policy with regard to investments (from China) is laid down in the press note 3, so we continue with that policy. As of now, there is no change in that policy. In case if any change comes in, we will let you know,” Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Amardeep Singh Bhatia told reporters here.

He was replying to a question about Chinese investments into India in terms of promoting Make in India.

Bhatia also said the sentiments among foreign investors for India is positive.

“Investors are very enthusiastic about investing in India,” he added.

In 2020, the government made its approval mandatory for FDI from countries that share landed border with India.

Countries that share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.

On July 30, Commerce and Industry Minister Piyush Goyal has said there is no rethinking in the government to support foreign direct investments (FDI) from China.

These remarks assume significance as the pre-Budget Economic Survey on July 22 had suggested that instead of importing goods, focusing on FDI from China seems more promising.

China stands at the 22nd position with only 0.37 per cent share (USD 2.5 billion) in the total FDI equity inflow reported in India from April 2000 to March 2024.

The ties between the two countries nosedived significantly following the fierce clash in the Galwan Valley in June 2020 that marked the most serious military conflict between the two sides in decades.

The Indian and Chinese militaries have been locked in a stand-off since May 2020, and a full resolution of the border row has not yet been achieved, though the two sides have disengaged from several friction points.

India has been maintaining that its ties with China cannot be normal unless there is peace in the border areas.

Following these tensions, India has banned over 200 Chinese mobile apps like TikTok, WeChat, and Alibaba’s UC browser. The country has also rejected a major investment proposal from electric vehicle maker BYD.

Though India has received minimal FDI from China, the bilateral trade between the two nations has grown multi-fold.

China has emerged as the largest trading partner of India with USD 118.4 billion two-way commerce in 2023-24, edging past the US. India’s exports to China rose 8.7 per cent to USD 16.67 billion in the last fiscal year.

Imports from the neighbouring country increased 3.24 per cent to USD 101.7 billion. The trade deficit widened to USD 85 billion in the last fiscal year from USD 83.2 billion in 2022-23.

The commerce and industry ministry said the production-linked incentive (PLI) schemes introduced in 2020 have resulted in Rs 1.32 lakh crore (USD 16 billion) in investments and a significant boost in manufacturing output of Rs 10.90 lakh crore (USD 130 billion) as of June 2024.

(This story has not been edited by digihunt staff and is published from a syndicated news agency feed – PTI)