Worried over the persistent recessionary trends, the government is finalising a public investment programme targeted at rural India.
To attack the immediate problem of low credit offtake, it has called an urgent meeting of public sector banks and financial institutions next week to chalk out a full-fledged revival strategy.
To give a boost to rural income and kick-off demand in the rural sector, Prime Minister Atal Bihari Vajpayee has asked the rural development and finance ministries to concretise the modalities of the Rs 60,000-crore Pradhan Mantri Gram Sadak Yojana. The announcement is likely to be made by the Prime Minister himself.
Before leaving for Mumbai, Vajpayee heard a presentation on the subject by the concerned ministers, and North Block has already held meetings this week to find resources for the Rs 60,000 crore programme.
Vajpayee was apparently told that while the cess on diesel will fetch about Rs 2,500 crore per year, the programme will need to be supplemented by issue of bonds by IDBI and ICICI.
The government hopes that the income generated in rural India by this kind of pump priming over the next couple of years will also give a big push to the fortunes of the National Democratic Alliance.
The meeting of finance secretary Ajit Kumar with bank and FI heads early next week is a follow up to the meeting corporate honchos had with finance minister Yashwant Sinha last month.
Corporate chieftains from the automobiles, cement and construction industry had asked Sinha to take steps for reviving rural demand.
With banks parking a bulk of their deposits in government securities, the meeting with the bankers assumes significance as Ajit Kumar is expected to point to the alarming decline in credit offtake and take immediate steps to rectify it.
As on May 18, banks
