Important role of Peer to Peer Lending in “Make in India”

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Make in India initiative received a warm response from the global fraternity. As per Department of Industrial Policy and Promotion, for the entire 2015-16 fiscal ended March 31, the inflow grew by 29% to $40 billion compared to $ 30.93 billion in 2014-15. As per estimates, India’s foreign direct investment is likely to cross $ 60 billion even though FDI flows globally are set to witness a decline as a result of favourable policy environment. Towards further enhancing effectiveness, government in its recent budget has allocated Rs. 1804 crore towards the scheme for investment promotion and Amended Technology Upgradation Fund.

In addition, several policies towards further enhancing its effectiveness have been framed.Intellectual Policy Rights Policy, a critical policy that recognises abundance of creative and innovative energies potential in the country, got approved by the union cabinet recently laying the future roadmap for intellectual property in India. Towards reducing dependency on natural resource, “Pradhan Mantri Ujjwala Yojana“ scheme has been introduced for providing free LPG connections to women from Below Poverty Line (BPL) households. Under the scheme, Rs. 8,000 Crore has been earmarked for providing five crore LPG connections to BPL households. To facilitate start-up to innovate, generate employment and become stakeholders in MII programme, govern ment has proposed 100% deduction of profits for three out of five years for start-ups during April 2016 to March 2019. Customs and Excise Duty rates on certain inputs, raw materials, intermediariescomponents and other goods were reduced while several procedures were simplified to curtail costs and facilitate competitive enhancement of the domestic industry in sectors like Information Technology hardware, capital goods, defence production, textiles, mineral fuels and mineral oils, chemical and petrochemicals, paper, paperboard and newsprint along with maintenance repair and overhauling of aircraft and ship repair. India’s growth rate has been pegged at 7.6% in 2016-17 with moderate growth of 7.7% in 2017-18 by World Bank. In order to sustain growth, India needs robust infrastructure support towards managing uninterrupted productivity.

Power and electricity plays a critical role in this regards and government of India recognises its importance towards building a progressive nation. It has initiated plans towards alternative power solution through solar and wind energy. India’s plan to ramp up solar power generation to 100 GW by 2022 is among the largest in the world.Although India is the third-largest producer and consumer of electricity in the world after the US and China, an estimated 27% of the energy generated in India gets lost during transmission or is stolen. Peak supply falls short of 9%, and power outages last for an average of 10 hours in states such as Meghalaya, Andhra Pradesh, UP, J&K, Andaman and Nicobar, Bihar and Tamil Nadu. This has led to augmented adoption of gensets, which are used to solve power outages in the country.

The next resource that needs to be conserved is human resource. In order to sustain robust manpower, a nation must have healthy individuals. A fast-paced life style has become the norm amongst Indians today. The practice of consuming excess food or junk food at odd hours has resulted in protein deficiency making individuals prone to healthrelated problems.Hence, healthy nutrient products and supplements have found acceptance amongst country’s masses. As per estimates, Indian market alone is currently pegged at around Rs 4205 crores and is likely to be double in revenue by 2020. With increasing population, maintaining balance with nature has become difficult for city planners. Demand for commercial and residential space has led to a spurt in property prices in cities like Mumbai, Pune, Bangalore, Delhi and Hyderabad. In such a scenario, providing affordable housing for lower middle incomemiddle income group becomes a challenging task. Urban problems namely land encroachment, unauthorised construction and slum become a daunted scenario for the citizens. Government has initiated Skilled India campaign for upgrading technical knowledge of marginal labour. Even though skills can be upgraded, it becomes ineffective if the individual has to worry about buying a house in the city. To resolve this issue, government can explore the possibility of providing temporary ecofriendly portable cabins on rental basis for a fixed period supporting economically weaker section. This will tackle the problems of unauthorised constructionencroachment and destruction of environment due to unplanned construction.

Funding requirement is a necessity for all development activities. A financial inclusion programme that caters to all segment of stakeholders in a development system becomes the need of the time. Taking a clue, government has initiated several policy measures towards attracting FDI in key sectors. For illustration, government has allowed 100% FDI in aviation sector for scheduled carriers, 100% in defence, 74% in pharmaceuticals, 100% in teleports, DTH and cable networks with government approval required above 49% investment and 100% in e-commerce sector.

In addition, the Micro Finance Institution Sector has been recognised as a financial institution, for example Micro Finance Bandhan becoming a scheduled commercial bank in FY 16, 7 NBFC-MFI and one core investment company having a NBFC-MFI as subsidiary are likely to transform into SFBs by March 2017. Further, government through RBI has recognised another mode to funding individuals through initiating process towards regularising peer-to-peer (P2P) lending. It shall cater to the needs of individual’s fund requirement who despite of credit worth profile, get excluded due to small amount size or no credit history or paperwork.

‘Make in India’ can only be sustained through the support of various critical sectors.To achieve this, the government has been focussing on critical segments simultaneously.

Courtesy: Times Of India

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