FM sees growth above 6.9%

Denies proposal of separating Mumbai from Maharashtra in view of recent floods.

Finance Minister P Chidambaram today said the growth rate for the economy in the April-June quarter of 2005-06 would be higher than the annualised growth rate of 6.9 per cent in 2004-05.

He also denied any proposal to separate the city of Mumbai from Maharashtra in view of the recent flooding.

Replying to a debate on the supplementary demands for grants for 2005-06 in the Lok Sabha, Chidambaram said, "All indicators are positive. Negativities are in our minds."

Rejecting criticism on tax collection, he said during end June, there was a 21.2 per cent growth in tax collections.

The Lok Sabha later passed the demands for grants entailing a gross additional expenditure of Rs 14,661.36 crore. The Lower House also cleared the excess grants for the year 2002-03.

The finance minister stated that funds would not be a constraint for rebuilding work in Mumbai as soon as the Maharashtra government submitted a scheme.

He said there was a need to improve the administration of the city which was the commercial capital of the country.

On the issue of credit, he said a meeting of state representatives would be convened later this month or in September to discuss the recommendations of the Vaidyanathan committee.

The Central government had accepted the recommendations of a task force constituted under A Vaidyanathan to study revamping of the short-term cooperative credit structure.

The task force has now been assigned the responsibility to study long-term cooperative credit structure and suggest and recommend measures for its revitalisation.

Dispelling criticism of slow progress in the National Highways Development Project, Chidambaram said the prime minister's office, the ministry of finance and the Planning Commission were closely monitoring progress on the project.

Month-wise targets were being set, he added while stating that there was no way the government could have met the December 2005 deadline for the first phase after only 48 per cent of the programme was completed in May 2004 when the UPA government came to power.

"There is no intention of scuttling it or slowing it down," he noted.

On funding of the Bharat Nirman programme for rural areas, he said Rs 16,659 crore have been provided for under six heads for the current year.

An additional Rs 3,418 crore was required which he said was "slightly difficult" but not very difficult.

He said even for 2006-07 the programme would be fully funded for an outlay of Rs 20,000 crore.

The finance minister also stated that coal royalty was under review and a policy paper was under the consideration.

FM SPEAK

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• The Lok Sabha passed the demands for grants entailing a gross additional expenditure of Rs 14,661.36 crore
• The finance minister stated that funds would not be a constraint for rebuilding work in Mumbai as soon as the Maharashtra government submitted a scheme
• The Central government had accepted the recommendations of a task force constituted under A Vaidyanathan to study revamping of the short-term cooperative credit structure