<p>RBI Deputy Governor K C Chakrabarty on Saturday said subsidies killed innovation and interest of people even as leaders of various industrial sectors demanded sops to nurse their companies back to health.<br /><br /></p>.<p>In an interaction with a group of industrialists, representing textile, engineering and manufacturing sectors, Chakrabarty slammed subsidies stating that it was not serving any useful purpose.<br /><br />“Subsidy kills innovation and interest of people. It makes the system uncompetitive, and result in lack of transparency and sometimes even leads to scams,” he said, adding that: “Nowhere in the world, business is done on subsidies”.<br /><br />Stating that governments also do not have enough resources to support such handouts now, he said all the governments (across the world) did not have money to give subsidies.<br />Referring to NPAs, he said that they were not a wrong thing and it should be identified quickly and treated properly and both borrowers and lenders should take steps well in advance to tackle them.<br /><br />M Senthilkumar, Deputy Chairman, Southern India Mills Association, appealed the RBI to recommend to bring the textile sector under priority sector category and announce a liberal credit policy for the textile sector.<br /><br />He also sought a Cotton Stabilisation Fund Scheme, consisting of working capital loan for purchasing cotton during December-March at seven per cent interest rate, reducing the margin money from 25 per cent to 10 per cent and increasing the credit limit from three months to nine months.<br /><br />In a memorandum, Tirupur Exporters’ Association reiterated its demand for a separate chapter for export sector in monetary policy.</p>
<p>RBI Deputy Governor K C Chakrabarty on Saturday said subsidies killed innovation and interest of people even as leaders of various industrial sectors demanded sops to nurse their companies back to health.<br /><br /></p>.<p>In an interaction with a group of industrialists, representing textile, engineering and manufacturing sectors, Chakrabarty slammed subsidies stating that it was not serving any useful purpose.<br /><br />“Subsidy kills innovation and interest of people. It makes the system uncompetitive, and result in lack of transparency and sometimes even leads to scams,” he said, adding that: “Nowhere in the world, business is done on subsidies”.<br /><br />Stating that governments also do not have enough resources to support such handouts now, he said all the governments (across the world) did not have money to give subsidies.<br />Referring to NPAs, he said that they were not a wrong thing and it should be identified quickly and treated properly and both borrowers and lenders should take steps well in advance to tackle them.<br /><br />M Senthilkumar, Deputy Chairman, Southern India Mills Association, appealed the RBI to recommend to bring the textile sector under priority sector category and announce a liberal credit policy for the textile sector.<br /><br />He also sought a Cotton Stabilisation Fund Scheme, consisting of working capital loan for purchasing cotton during December-March at seven per cent interest rate, reducing the margin money from 25 per cent to 10 per cent and increasing the credit limit from three months to nine months.<br /><br />In a memorandum, Tirupur Exporters’ Association reiterated its demand for a separate chapter for export sector in monetary policy.</p>