'Banks must fund irrigation' projects: Kharge

Banks must focus on lending opportunities in other sectors and also look at irrigation projects to ease the burden on the government, said M Mallikarjuna Kharge, minister for water resources, minor irrigation and transport, government of Karnataka.

Kharge was speaking at Vijaya Bank's 73rd Founders' Day celebrations in Bangalore on Saturday. According to him, the government needs nearly Rs 25,000 crore to implement some of the ongoing irrigation projects and the annual funds needed are close to Rs 8,000 crore. "Banks could help us by adopting one or two projects," he said.

Kharge felt that bank finance at competitive rates would lead to accelerated implementation of the irrigation projects and will also ensure that project costs do not escalate. Currently, the annual interest outgo for funds raised in financing irrigation projects is about Rs 600 crore, Kharge said.

He noted, Andhra Pradesh planned to spend around Rs 46,000 crore on irrigation projects. Kharge recalled the nationalisation of banks in 1969 and said, "When nationalisation was mooted, it did not find favour with bank managements and the owners though the benefits are there for all to see," he said.

Agriculture minister K Srinivasa Gowda, who was also present, campaigned for farm loans at lower interest and said that there was a huge disparity in the lending rates.

"There is no reason why agri-loans cannot be made available cheap if home loans could be provided at 6-6.5 per cent. Private banks should provide loans to agriculture sector for 6-6.5 per cent," Gowda noted.