FM lauds credit delivery record of southern states

Union Finance Minister P Chidambaram said on Tuesday that the southern states are doing very well in ensuring credit delivery, expansion of banking network and financial inclusion.

Briefing reporters after a meeting with chief ministers of the southern states, Chidambaram said that in terms of credit flow to specific sectors such as agriculture, education loans to students, housing, weaker sections and minorities, among others, southern states are doing far better than their northern counterparts. Chidambaram said that this is an anomaly which the Centre is trying to correct. “In the southern states, comparatively under these heads, they are showing good performance,” he added.

The Tuesday conclave with the chief ministers and chief executive officers of public sector banks and financial institutions, he said, was the second in the series, following a similar meeting with north zone chief ministers a few days ago to take stock of credit flows in various targeted sectors and thrash out necessary corrective measures.

“They (southern states) are doing very well in financial inclusion,” the Finance Minister said, adding that the idea is to further accelerate flow of credit to tackle the current slowdown in the economy.

The meeting also appraised the various participants on the proposed electronic benefit transfer (EBT) system set to be rolled out in 51 districts across 16 states in the country starting January 2012. All cash and subsidies are proposed to be transferred to beneficiaries under the EBT with Aadhaar as the necessary electronic conduit.
Incidentally, three districts in Karnataka, two in Kerala, one in Puducherry and five in Andhra Pradesh will be covered under the rollout, he added.

Under the EBT scheme, all central government cash transfers and subsidies and other payments will be made by banks straight into the accounts of the beneficiaries. The scheme will be implemented in Tamil Nadu during the second phase of the scheme in 2013. “State governments can also make use of the scheme to transfer cash directly into accounts of beneficiaries of their welfare schemes as banks and administrations in the 51 districts which have been directed to gear up to implement it from January 1,” Chidambaram said.

According to Chidambaram, Kerala Finance Minister K M Mani has stressed the need to push forward the GST regime, which his respective counterparts have fully endorsed. However, he said that the GST issue is currently being deliberated by the two panels set up by the Empowered Group of Finance Ministers and one would have to await their decision.

‘Share reforms pain’

He strongly defended the recent steps taken by the Centre to bring in economic reforms, including capping the number of LPG domestic cylinders to six a year, saying, “Certain measures are painful and the pain must be shared by everybody in the interest of the economy.”

Though he further said the rich must share the pain and the poor should be protected, he did not reveal whether the Centre would remove the controversial capping on LPG cylinder supply.

Addressing State Congress leaders at KPCC office, he assured that the steps taken by the government would help tide over the economic crisis. “I am very confident we will get back to 9 per cent growth cycle in two years. There is no need to despair,” he assured.

“The economic slowdown has hit across the globe. Even advanced economies like the US, Europe and Japan have been posting meagre 1.2 per cent growth. India is among five countries -- China, Indonesia, Brazil and South Africa being others -- to post decent growth,” he stated.