FM tells RBI to provide adequate liquidty for growth
New Delhi, Mar 4: Finance Minister P Chidambaram today ( Mar 4, 2006) suggested to the Reserve Bank of India to provide adequate liquidity so that no curbs are placed in the way of the high growth trajectory that India has entered into.
"I told the RBI Board that there needs to be enough liquidity to fund the growth story that is unfolding," Mr Chidambaram told newspersons.
The Finance Minister was briefing the Press about the proceedings of the customary Central Board meeting of the RBI held after the Budget.
The meeting was also chaired by RBI Governor Y V Reddy.
Mr Chidambaram was particularly concerned that enough money was provided for the two fast growing sectors-- manufacturing and services.
Mr Chidambaram said the Central Bank was appreciative of the fact the rate of interest to the farm sector had been slashed to seven per cent from nine per cent and said displayed commitment to implement the enhanced commitment to hike institutional credit.
"We had an extensive discussion on the liquidity situation", Mr Chidambaram said adding that he explained to the RBI top brass the philosophy relating to the Budget.
He said the government's move towards achieving fiscal prudence came in for appreciation and said he highlighted how he plans to comply with the targets of FRMB Act.
"The government is on the path of fiscal correction and tax to GDP ratio will be raised to 11 per cent", Mr Chidambaram said.
The meeting was attended by Finance Secretary Adarash Kishore, Secretary(Economic Affairs) A K Jha, RBI Deputy Governors-- Rakesh Mohan, V Leeladahar, S Gopinath, and Usha Thraot.
The RBI officials who attended the meeting included-- Mr V S Das(Executive Director), Mr V K Sharma(ED), Mr C Krishnan, Mr Anand Sinha (ED) and R B Burman(ED).
The experts who are members of the RBI Board, attending the meeting included Dr Mahir Rakshit(economist); Mr H P Ranina( tax expert); Ms Amrita Patel, Chairperson NDDB; Mr V H Malegam (Chartered Accountant); Mr V S Vyas, Former Director IIM; Mr A S Ganguly (Chairman,ICICI One Source Limited; Mr K Madhava Rao, Former State Election Commissioner.