The PHD Chamber of Commerce and Industry (PHDCCI) has presented a comprehensive set of recommendations for the Banking, Financial Services, and Insurance (BFSI) sector ahead of the upcoming Union Budget. The industry body is pushing for transformative measures, including the establishment of a dedicated Green Bank and significant reforms to boost credit flow to Micro, Small, and Medium Enterprises (MSMEs).
Core Recommendations for Financial Sector Revamp
In its detailed pre-budget memorandum, the PHDCCI has identified several priority areas requiring government intervention. A central proposal is the creation of a Green Bank or a Green Window within existing financial institutions. This entity would be tasked with mobilising and directing capital specifically towards sustainable projects, renewable energy initiatives, and climate-resilient infrastructure. The chamber believes such a move is critical for India to meet its ambitious environmental goals and attract global green finance.
Simultaneously, the chamber has turned its focus to the vital MSME sector. The recommendations call for streamlining and reforming credit mechanisms to ensure easier and faster access to capital for small businesses. This includes leveraging technology for smoother credit appraisal, reducing collateral requirements for trustworthy borrowers, and enhancing the effectiveness of existing government guarantee schemes. The PHDCCI argues that empowering MSMEs with robust financial support is essential for job creation and economic growth.
Enhancing Stability and Digital Infrastructure
Beyond green finance and MSME credit, the PHDCCI's agenda encompasses broader financial stability and innovation. The chamber has advocated for strengthening the asset reconstruction ecosystem to help banks manage and offload non-performing assets (NPAs) more efficiently. A healthier balance sheet for banks, the memo suggests, would free up more resources for productive lending.
The recommendations also emphasise the need to fortify India's digital financial infrastructure. This involves continued support for and refinement of platforms like the Unified Payments Interface (UPI), along with a strong focus on enhancing cybersecurity protocols across the BFSI landscape. As digital transactions soar, protecting consumer data and financial systems from threats is deemed paramount.
Strategic Implications for Budget 2025
The PHDCCI's pre-budget submission is strategically timed to influence the government's fiscal planning. By highlighting green finance, MSME credit reforms, and digital security, the chamber is aligning its proposals with national priorities like sustainable development, Aatmanirbhar Bharat (self-reliant India), and digital India. The industry body contends that implementing these measures will not only strengthen the financial sector's resilience but also provide a significant boost to India's overall economic competitiveness.
The ball is now in the government's court to consider these proposals as it drafts the Union Budget for the 2025 fiscal year. The BFSI sector and the wider business community will be watching closely to see which of the PHDCCI's recommendations find favour and translate into concrete policy announcements.
