Business · Economy · 1 day ago
Amitabh Kant urges India to cut bank liquidity ratio to boost manufacturing
Amitabh Kant, a former head of India’s NITI Aayog, says the country should make it easier and cheaper for manufacturers to operate.
He argues that the statutory liquidity ratio, or SLR, should be reduced from its current 18%.
The SLR requires banks to hold a share of their deposits in government securities.
Kant says lowering it could free up more credit for businesses and reduce borrowing costs.
He describes production-linked incentives as a short-term measure, while saying manufacturing needs long-term support because it creates jobs.
He also points to land acquisition and the cost and availability of electricity as issues that need attention, including by state governments.
Kant did not name a target SLR level or outline a specific next step.
Former NITI Aayog chief executive Amitabh Kant called for India to lower its statutory liquidity ratio to support job-intensive manufacturing.
He said the SLR, at 18%, was too high and that reducing it could lower credit costs and increase lending to manufacturers.
Kant described production-linked incentives as a short-term measure and said India should also address the broader cost of doing business.
He pointed to land acquisition and the cost and availability of power as issues affecting manufacturing.
He said manufacturing-related activities such as servers, racks and electrical equipment account for 45% of data centre costs and could generate jobs.
- Who
- Amitabh Kant, former NITI Aayog chief executive.
- What
- He urged India to cut the statutory liquidity ratio to support manufacturing and reduce credit costs.
- When
- October 11, 2026.
- Where
- India; the Economic Times report datelined Mumbai.
- Why
- Kant said lower credit costs and greater credit availability would help manufacturing and job creation.
This story does not have two clearly opposing sides.
Statutory liquidity ratio at 18% is too high for India ... I am a great believer in bringing it down because flow of credit to manufacturing sectors will be the key in the long run,
we need to reduce the cost of doing business through measures like cutting the SLR, which can reduce the cost of credit
So, you treat manufacturing as a second-grade subject,
The SLR was reduced to 18%.
The SLR has remained at 18%.
Kant called for a lower SLR and other measures to support manufacturing.
- SLR
- 18%
- Speaker
- Amitabh Kant
- Former role
- NITI Aayog chief executive
- Alternative short-term measure
- Production-linked incentive (PLI)
- Data centre costs
- Servers, racks and electrical equipment account for 45% of costs
Sources
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