‘Farm loan waivers really impact private sector’

Abhimanyu Munjal, JMD-cum-CEO of Hero FinCorp Ltd, was elected as the CII northern region chairman last month. He shares his views with TOI’s Sanjeev Verma on adverse impact of

farm loan waiver

and reservation of jobs in

private sector

for residents of a particular state, and says CII can complement the Covid vaccination drive.
The main hurdle in implementing direct benefit transfer scheme in Punjab to disburse payment of wheat and paddy MSP to farmers is that they are dependent on arhtiyas for quick and paperless loans anytime. Why can’t the Non-Banking Financial Companies (NBFCs) tap these new to credit customers so that farmers get the price of their produce without any middlemen?
It is a very good point and we will focus on that. The agri credit is growing as we have also seen in the last quarter. It is also a good business for the NBFCs as well and it can ensure a sustainable

agriculture

. I am also there on the CII national committee of NBFC. One of the main issues which come in the agri credit is when there are farm loan waivers. At CII we do not want

farm loan waivers

because it really impacts the private sector. So the reason why people (financial institutions) stay away is the doubt that there may be an announcement of farm loan waiver after they lend the money to farmers which has happened in multiple states as recently as last fiscal.

How do you see the recent decision by the Haryana government of reserving 75% jobs in the private sector for state residents?
CII’s view is that this decision should be reversed. We are talking about one country, one tax and I think such a decision goes against that spirit. We believe that geography is now history and we can’t just start creating geographical biases. We need to be more forward thinking and work on the larger good of the country rather than on a small sub section.

We have taken up the matter with the Haryana chief minister, the deputy chief minister and the chief secretary and have had several rounds of meetings. CII has taken a stand that this is a regressive move. The Haryana government is now in the process of formulating rules wherein we are again chipping in to ask the government to reconsider it.

Since CII northern region also covers UTs of Jammu and Kashmir and Ladakh, how do you propose to ensure more industrial investment in these areas? What worries are there in investors’ minds?
We opened a CII office in Ladakh last year and are expanding our membership. Of course we will encourage investment and CII being there is a very positive indication. We will partner with the governments and do various conferences as we could not do it in the past due to Covid. Of course the big worry is the political and civil upheaval but the CII is trying its best to encourage investment there.

Which areas do you think is Punjab lagging behind in terms of providing a healthy atmosphere for industrial investment? In the past few years nearly half of the MoUs signed with private companies have not materialised on ground in Punjab.
Punjab is very progressive for industrial development and I would not say that they are lagging behind. The only focus this year from my side would be on agri and the environmental causes. We have seen a number of industries coming up in Punjab in the last few years. Punjab is doing fairly well in terms of grounding the MoUs as compared to other states. But it works both ways. Many companies come to sign MoUs but then they get scared of putting CapEx. I think the investment climate has also not been very good in the country as after the IL&FS (Infrastructure Leasing and Financial Services) crises, there was a subdued kind of GDP (Gross Domestic Product) and then the Covid pandemic. Also, the private companies have to come with the animal spirit that we will definitely invest after signing MoUs.

As you have roots in Punjab, what solution would you like to offer to end the stalemate between the central government and the protesting farmers against the contentious farm laws since the protests have also had an adverse impact on

industry

?
I don’t have a comment on this. I think there has to be a solution which must come at the earliest as it is impacting a lot of stuff. The way it is going today during Covid times is very very scary.

Has the CII offered some suggestions to state governments to save the industry amid Covid pandemic?
CII has represented to the state governments that there should not be a lockdown and wherever possible industries should encourage work from home, ensure hygiene in industries and follow Covid protocols. CII can complement the vaccination drive in India as some of our member companies have already organised medical camps for their employees and their families. Our member companies would have employees and their family members contributing 5-6% of the population of the country. Vaccination should be open to all age groups and should be made available for longer times. We have also written to the state governments that we can supply oxygen etc.

What are your priorities as chairman of the CII northern region?
Our first priority would be employment generation in the northern region by focusing on industries like manufacturing, hospitality, food and agriculture, infrastructure and tourism. Our focus would be on investment, policy advocacy, ease of doing business so that we can get more companies to invest in the region. The CII northern region has seven states and three UTs. Besides this, we will focus on environmental sustainability, competitiveness of micro, small and medium enterprises, promoting research and development spending; promoting technologies, startups and future businesses besides governance and digitisation, and rural-urban connect.