Union Finance Minister P Chidambaram on Friday said he had directed public sector banks to extend loans to those engaged in small businesses like artisans at low interest rate to raise their economic status.

Speaking at a function organised by the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), he said the loans should be extended to artisans, cobblers, barbers, goldsmiths, blacksmiths, fishermen, shepherds and potters.

“At a meeting of chairpersons of public sector banks I have issued directions that each of the 70,000 branches of various public sector banks should provide loans to those in small businesses. The finance ministry will closely monitor whether the directions are being implemented”, he said.

“When you can write off Rs 12,000 crore owed by the steel industry, is it not possible to extend a loan of Rs 5,000 at four percent interest to poor artisans,” he asked.

Chidambaram said the loans will help in sustaining the village economy. The contribution of this section of the society should not be underestimated or undervalued, he added. He rubbished apprehensions that this section might default on their repayments.

Chidambaram, who is on his first visit to the state after presenting Karnataka budget in parliament, said populist schemes like Ashraya and mid-day meals were launched by the government headed by S M Krishna.
He said the state had first become revenue surplus in 2004-05 and should continue the trend.