No reduction of govt equity in PSBs: FM

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New Delhi, Nov 27: Finance Minister P Chidambaram today assured the Rajya Sabha that there is no proposal to reduce Government's equity in public sector banks below 51 per cent.

Replying to a supplementary by Dr M M Joshi of BJP during question hour, Mr Chidambaram said there was no uncontrolled flow of funds in banks as the same was strictly regulated by the norms set by the Reserve Bank of India and the norms were being followed by the banks.

In reply to another question, he said the inflow of funds in other sectors did not in any way affect the banking sector.

To a question by D Raja of CPI, the Minister said there was no proposal to increase the Government's equity in banks to 74 per cent as it had to fund many other sectors also and could not spare for enhancing the equity. The FM said the flow of capital in the country was from several sources including export earnings, FDI, FIIs and remittance of workers from abroad.

The Minister, however, made it clear that there was no restriction on flow of funds in the foreign banks as they use that money to keep their functions running.

In reply to another question on the huge disparity of income between urban and rural areas, as indicated by the Arjun Sengupta Report, Mr Chidambaram said, ''the answer to this is following economic policies which provide for inclusive growth.'' He said the government had floated a number of flagship programmes like the National Rural Employment Guarantee Programme, Rashtriya Swasthya Bima Yojana, Bharat Nirman, Sarv Shiksha Abhiyaan, Mid-day Meal Scheme, National Rural Health Mission and ICDS.

The Minister said these programmes will help fill the gap between rural and urban areas.

Noting that agriculture formed the main occupation of people in rural areas, he said, ''a large number of people in rural areas are engaged in agriculture. The income of these people cannot increase unless agriculture growth rises by at least four per cent.'' He said this was also necessary to check the widespread migration of people from rural to urban areas.

''The main reason for disparity in income is large-scale movement of people from rural to urban areas owing to shrinking land holdings which results in inadequate income to support an entire family,'' he added.

Replying to a question, Minister of State for Urban Development Ajay Maken said Cabinet Advisory Committee on Culture, set up in 2006 by the Centre to decide on a National Cultural Policy, had decided that there was no need for a National Cultural Policy as already a Cabinet Advisory Board on Culture was in place.

Mr Maken said this was also the general consensus within the Government.

''In a multi-cultural society like India, binding all by a uniform policy is not possible,'' the Minister said.


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