Finance Minister Yashwant Sinha yesterday said good monsoon this year was the basis for his optimism that the economy would turn around by mid-September.
Launching the first Kisan Credit Card in the country _ promised in his June budget speech and promoted by Andhra Bank _ Sinha said agricultural production in India was directly linked to industrial output. "The demand-led recovery in the economy will start from here. Good agriculture will trigger the turnaround," he said.
He said Punjab estimates its paddy output this year will be 12.5 million tonnes against 10 million tonnes last year. And Andhra Pradesh Chief Minister N Chandrababu Naidu had assured him of higher production of not only paddy but also groundnut and other crops, he added.
"The feeling of crisis is giving way to confidence and I am sure this sense of confidence will increase in days to come and the economy will gain momentum and put up a better performance," Sinha said. He said political instability was only affecting the sentiment and was not the reason behind the economic slowdown. Economists say a slowdown in exports, lacklustre capital markets, a fragile rupee and shaky investor confidence have affected growth.
Commenting on the behaviour of the capital markets, which have been sliding in the past few months, Sinha said, "Some sentiments may result in depression in capital markets. It is a strange animal." Sinha said the impact of the economic sanctions was easing. "We have already forgotten the word sanctions. There is also a rethinking in the US on the issue since various studies have shown that America will suffer more if sanctions are imposed," he said.
Complimenting Andhra Bank for launching the Kisan Card, Sinha said while formulating the proposal in his budget he had in mind farmers who had committed suicide this year due to crop failure. He said the credit card culture was fast picking up in the country and fewer people wanted to carry cash. Andhra Bank chairman T J A Ganiga explained the salient features of the Kisan Card, the Pattabhi Agricard named after the founder of the bank, Pattabhi Sitaramayya.
He said it would cover individual farmers who are owner-cultivators. The card will be valid for three years and will have a minimum limit of Rs 5,000. A revolving credit limit will be fixed based on the credit requirement and the scale of finance of individual farmers. Ganiga said the Pattabhi Agricard enables the holder to draw cash from any branch of Andhra Bank within his district for purchase of farm inputs. The holder also gets accident insurance benefit of Rs 1 lakh.
