Pranab wants infra projects fast tracked

Pranab wants infra projects fast tracked

Inflation is still at uncomfortable level

Pranab wants infra projects fast tracked

The finance minister held a review meeting of West Zone states and also chiefs of PSU banks as part of continuing the economic excise and discussed wide ranging issues pertaining to credit off take and flow of funds to the farm sector.

Briefing reporters, he said over 140 big projects have been held up due to regulatory approvals, even though PSU banks have sanctioned loans of Rs 100 crore or more.  “Delay in implementation of projects, particularly infrastructure and manufacturing projects, deprive the economy of their benefits,” he added. 

He said delays also affects downstream investments and resultant employment generation while making the projects vulnerable to time and cost overrun thereby impacting their viability altogether. 

Systemic improvement
Mukherjee said he would request chief ministers of respective states to pay personal attention to this aspect and review the status of approvals of large projects.  “There is an urgent need for systematic improvement in dealing with such approvals,” Mukherjee said adding he has advised the CMDs of PSU banks to approach the state governments for expediting the approval in projects financed by them.

Further, the minister said the Centre has fixed the target for agricultural credit flow at Rs 4,75,000 crore, of which Rs 1,12,731 crores has already been extended.  He asked the states to create awareness about the 4 per cent short term crop loans being extended to farmers, who repay their loans on time. “It must be ensured that no eligible farmer is left out” he added.

Mukherjee sought cooperation of all state governments in popularizing e-payment saying as most PSU Banks have now moved to core banking, the states should introduce mandatory e-payment for its various transactions, such as payments to its employees and contractors.

Saying that inflation is too uncomfortable to be left unattended, Mukherjee said, “RBI hiked the rates because it considers, and rightly so, that inflation is to be contained.”

“It is true that for the past 15 months the crucial rates have been adjusted and though inflationary pressures have come down, particularly the food inflation — from 22 per cent in February 2010 to little less than 10 per cent in the last fortnight, it is still very high and at unacceptable levels... (and so is core inflation which stood) at 9.8 per cent in August.

“Therefore, inflation is to be contained. And if RBI considers it is necessary to adjust the crucial rates, they have done exactly so,” Mukherjee said.

The industry and even a section in the finance ministry, led by Chief Economic Adviser Kaushik Basu, were of the view that RBI ank should desist from hiking rates yet again as the slowdown is more serious than previously visualised.