Finance minister harps on higher growth rate

Mumbai, July 20 (UNI) Union Finance Minister P Chidambaram today said the targetted four per cent growth in the Agriculture sector from the current 2,7 per cent was necessary to attain sustainable growth in the economy.

''Low growth rate in real GDP from agricultural and allied activities continue to be a major concern for the economy'', Mr Chidambaram said.

The Stagnation in foodgrain production at about 208 MT, despite a steady growth in population is also to be addressed urgently, he said adding ''No large country can depend on imports in the long term and it is, therefore, imperative that we must attain self-sufficiency in foodgrains and related products''.

Speaking at the silver jubilee celebrations of National Bank for Agriculture and Rural Development (NABARD), he said compulsion of ongoing fiscal management policies and financial reforms has resulted in withdrawal of many funding avenues for NABARD.

''I am aware that NABARD requires more resources, especially, low cost finances, to expand its activities. Increasing dependence of NABARD on market borrowings has led to declining margins for it'', the minister said.

''Government is also concerned on lesser levels of financial inclusion in rural sectors. While nearly 51 percent of the farmer's households don't have access to debts, only 27 percent of the cultivator households have been identified receiving Institutional credits''. he said.

A recent bill introduced in Parliament, which has set its goal as development and regulation of microfinance institutions, will give a central role to NABARD to gear itself to take microfinance movement to the farming and non-farming sectors of rural economy.

He said Government is keen to take immediate steps on the implementation of the Vaidynathan Committee recommendations in cooperative sector and also to chalk out a clear demarcation between roles of directors and executives in policy implementation.

Government has also laid out plans to strengthen Regional Rural Banks (RRBs), while NABARD will also have role in assisting RRBs in capacity building, technological initiatives and in engaging in credit plus activities, he added.

NABARD has sanctioned around Rs 60,000 crore to state governments to invest in rural infrastructure and has also delivered 6.7 credit cards, which has helped cultivators to avail credit.

UNI