Chidambaram urges Orissa banks to lend more

Union finance minister P Chidambaram yesterday urged all the banks - public sector, private and cooperative - operating in Orissa to increase lending for improvement in the investment scenario in the state.

Addressing a meet of the controlling heads of banks at Bhubaneswar, Chidambaram said, credit intervention is one of the means for attaining higher economic growth.

He said, though Orissa is rich in mineral resources and held lot of potential, due to vagaries of natural calamities, high percentage of scheduled caste and scheduled tribe population and poor policy, poor governance and poor implementation, the state is ranked one of the poorest in the country.

Chidambaram is here on a two-day visit to the state to review credit flow in the agriculture and education sectors. He visited eight rural branches of different commercial banks on Monday.

Stating that the growth should be investment led and not sops led, the finance minister said, the Union government is committed to flow of credit to the worthy people in different sectors like trade, industry and agriculture. In fact, the non-food sector has already shown a credit growth of 28 to 29 per cent this year compared to last year.

Ruing the fact after 57 years of independence, only four crore out of 10 crore agricultural families in the country have access to institutional credit, he said, the government has targeted to link another fifty lakh families to institutional credit during the current year.

Similarly, the government also aims to increase the volume of farm credit from 80,000 crore last year to 1,05,000 crore this year. Towards this objective, the commercial banks have already achieved 40 per cent of their target.

Chidambaram stressed on diversification of agricultural credit portfolio to include allied sectors like poultry, dairy, horticulture, fruit, vegetable and cash crop cultivation and irrigation etc.

He exhorted the top brass of all the banks to visit at least one rural branch of their respective banks on a non-working day in a month to establish direct contact with the clients.

The finance minister also called upon the bankers to increase educational lending and credit to the self help group in the state.

Earlier yesterday Chidambaram had called on chief minister Naveen Patnaik at his residence. During the meeting chief minister urged Chidambaram to expedite release of Rs 300 crore grant from DFID for implementing the structural fiscal reform programme in the state.

World Bank has recently sanctioned about Rs 650 crore budgetary support assistance to the state. This along with the DFID grant will go a long way in improving the state's fiscal health, the chief minister said.

The chief minister also requested the finance minister to increase the open market borrowing limit of Orissa from Rs 500 crore this year to at least last year's level of Rs 1400 crore.

During the meeting Patnaik raised the issue of the memorandum submitted by the state government for special economic package for Orissa. Chidambaram assured that the state's demand for more financial assistance will be considered by the Centre.

Chdambaram addressed the office-bearers of the pradesh Congress committee where he said the Centre will be able to contain inflation. The international price of crude oil had registered a steep rise leading to the high inflation rate, he said, adding the Centre is slowly bringing the situation under control.