INSUBCONTINENT EXCLUSIVE:
Mumbai: Financials have emerged as India's biggest wealth creators over a period of 2014-2019 for the third consecutive year, led by private
banks and NBFCs (non-banking finance companies), but sustaining this leadership may be difficult for the sector.
These are the findings of
the annual wealth creation study published by Motilal Oswal Securities
Raamdeo Agrawal, Joint Managing Director, has been publishing this study every year for the last 24 years.
"Sustaining its No
1 position will be a challenge for the financial sector," the study added.
The report pointed out that in FY20, the financials sector
witnessed a major crisis, triggered by the default of IL-FS, and several leading banks and NBFCs have seen a sharp rise in non-performing
assets and provisions for the same.
"Overall, with Indian economy in a tailspin, the financials sector will find it challenging to lead
wealth creation during the next study period -- FY15-20," the study said.
In terms of share of the wealth created, IT sector was the biggest
loser over the last five years, while oil - gas sector was the biggest gainer.
During this five-year period, the top five sectors accounted
for 85 per cent of the total wealth created.
PSUs' (public sector undertakings) wealth creation performance on the other hand was weak in
the same period.
Only nine PSUs -- IOC, HPCL, BPCL, Power Grid Corporation, Petronet LNG, Indraprastha Gas, LIC Housing, Bharat Electronics
and NBCC -- created wealth
"Privatisation is the only solution
It’s more than evident that the bureaucratic culture and lack of entrepreneurship in PSUs prevent them from effectively competing with
their private sector counterparts," the study said.
