Industry association The Confederation of Indian Industry (CII) has made a case for including emerging and high-impact sectors such as digital infrastructure, green initiatives, and healthcare in the priority sector lending (PSL) framework and has asked for more development finance institutions.
Under the PSL framework, 40% of lenders’ credit must be compulsorily loaned to specific sectors.
“Sectors like agriculture have reduced contribution to GDP from 30% in 1990s to about 14% now. Hence, it is time that Priority Sector Lending (PSL) framework be reviewed every 3-4 years to align based on emerging priorities and PS allocations should be in line with GDP contributions and sectoral growth potential,” noted CII director general Chandrajit Banerjee in a statement.
“We could look at inclusion of emerging and high-impact sectors, including digital infrastructure, green initiatives, healthcare, and innovative manufacturing,” he added.
In its statement, the association stated that they have further suggested the setting up of a high-level committee to look at the revision of Priority Sector Lending norms and also explore the need for any new DFIs to cater to some of the new and emerging sectors.
This recalibration is essential to ensure that the financial resources are optimally distributed, in harmony with our vision of Viksit Bharat 2047, it said in a statement.