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Saturday, 14 June 2014

Suggestions to PMO 5: Ease bank loan to service sector

Micro-finance from Banks
HDFC Bank In Andhra Pradesh
We know that India is moving towards developed nation and is in the third phase of economic development.. Gradually thrust of our economy has been shifting from agriculture sector to industrial sector to service sector. Service sector has lion's share in today's economy. It is true for India as well as other developed nation.

We also know that service sectors, in most of the cases need more working capital than to infrastructure. Our banks and financial institutes have been traditionally sanctioning loan to industrial sector mainly for machinery and building etc. They normally do not lend to service sector where they require money as working capital. 

Everybody knows that business organizations in service sector, such as Infotech companies do not require much money for infrastructure and machinery. They do not even need raw materials as in the case of industrial (Manufacturing) sector. Many times manufacturing sector companies pledge their goods to banks and financial institutions to get finance. As service sector companies have almost no raw materials there are nothing to pledge. 

Normally, banks and financial companies do not finance these companies without collateral  securities. This is the biggest hindrance for start ups who face difficulties in managing finance. Large numbers of young, educated, trained, skilled and enthusiastic entrepreneurs can not continue failing to arrange finance to run their companies. 

We know that a business needs many other things. A young and enthusiastic entrepreneur has to face difficulties in various fronts. Managing finance is a herculean task for him or her. Banks and finance companies do not want to take risk as most of the assets in service setor are virtual. They don't want to lend without pledging physical assets. 

We urge the PMO, India and our Prime Minister Sri Narendra Modi to look into this problem and come out with a solution. Given opportunity our young entrepreneurs can do miracle. The government has to show belief on these young and start up businesses. Even a small amount can change their destiny.   

It will be better if the government declares scheme for service sector enterprises. There may be some NPA for banks while lending them but we have to come forward for overall economic development and job creations. The NPA cost will be negligible in comparison to development of the country. 

We believe that the present government under the able leadership of Narendra Modi will look into it and do something in national interest. 

Suggestions to PMO 8: My Gov: 10 measures to make India the hub for Spiritual Tourism

NB: Please comment on this blogpost so that I can know your views and send that to PMO. Narendra Modi, PM of India is open to any suggestions from any persons. Pl follow the blog for latest updates. 

Photo Curtsy:
1. By Jaimoen87 (Own work) [CC BY-SA 3.0 (], via Wikimedia Commons
2. Jay.Here at English Wikipedia [CC BY-SA 3.0 ( or GFDL (], via Wikimedia Commons

Jyoti Kothari
Convener, Jaipur division
Prabhari, West Bengal,
Narendra Modi Vichar Manch


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