Kochi (Kerala), Feb.2 : Launching the 'Janasree,' a sustainable development mission here formally today, Union Finance Minister P. Chidambaram said that the benefit of growth should reach the poor: Stating that the Indian economy has moved to a higher growth trajectory like "never before" under the Congress-led UPA Government, Chidambaram said a performance like this had no meaning if the benefits did not reach the poorest of the poor.
The Finance Minister said the UPA Government was "concerned" that a large section of the people were not part of the financial system, and described as alrming that over 50 percent of the people in the country had no bank accounts and do not deposit money or borrow from the banks.
"The heart of an economy is a financial system and heart beat of the economy is the banking system," he said, adding the self help groups (SHG) and NGOs have a great role to play in this regard.
India had the largest number of SHGs numbering about 30 lakh and banks had given credit to the tune of Rs 80,000 crore. In Kerala, 1,19,182 SHGs were there and about Rs 800 crore credit had been disbursed, he said.
He said the Micro Financial Development and Regulating Bill, seeking to regulate not-for-profit organisations, was pending before Parliament. It tends to regulate such organisations "very lightly" and once the bill was passed, movements like Janasree would gain legitimacy, he added.
Chidambaram said there were only 50,000 bank branches in the country. And with 110 crore population, all were not covered by banks, he added.
The Reserve Bank of India has already permitted SHGs, NGOs, post offices and other organisations to act as intermediaries for financial and other services. This approach would mean that preliminary activities like receiving of loans can be done by the SHGs and NGOs. This would help multiplying the reach of the banks, he said.
Presently there were over 30 lakh SHGs and 90 percent of them for women. Average bank loans given were Rs 61,000 and repayments were to the extent of 95 percent. In some states, it was even 95-98 percent, he said.
Referring to the controversy that Janasree was being launched as a rival organisation to the Kerala's Government's Kudumbashree Project for poor women; he said such criticisms were baseless.
Kudumbashree was being supported by successive governments and did not belong to any party or front.
Chidambaram said that banks would be advised to quickly establish credit links to all the 30,000 sangams in the Janasree.
There was no reason to think that banks will not support the mission, he said. (ANI with inputs)