The liquidity crunch notwithstanding, bank credit to the real sector has grown by over 26 per cent this year, Minister of State for Finance P K Bansal told the Rajya Sabha today.
"There is no evidence to indicate that credit flows to the real sector have been adversely affected during the current year," he said in a written reply to a question in the Upper House.
According to a Reserve Bank data, he said, the total credit of scheduled commercial banks stood at Rs 26,30,000 crore, registering a growth of 26.4 per cent, against 22.1 per cent expansion in credit during the same period last year.
To a separate query he said, for reviving the economy, the government is taking various steps to boost the infrastructure spending.
"Numerous steps have been announced to speed up infrastructure spending. Recently, the government has announced various measures for stimulating the economy on December 7, 2008," he said.
Among other things, he said, the government has authorised the India Infrastructure Finance Company (IIFCL) to raise Rs 10,000 crore through tax-free bonds by March 31, 2009. These funds will be used by the IIFCL to re-finance bank lending of longer maturity to eligible infrastructure projects, he added.
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In the stimulus package, the government also reduced the excise duty by 4 per cent across the board, which is likely to translate into lower prices of products.
As to whether the government will take more measures to tackle the financial crisis, Bansal said, "The government is keeping a close watch on the evolving economic situation and will take such steps as may be needed to maintain the pace of economic activity."