FM for steps to improve loan recovery

NEW DELHI, July 18: Finance minister Yashwant Sinha has stressed the need for developing appropriate marketing infrastructure to facilita...

NEW DELHI, July 18: Finance minister Yashwant Sinha has stressed the need for developing appropriate marketing infrastructure to facilitate exports of produces from rural areas. Sinha who was addressing the meeting of the high level committee on credit support for integrated rural development programme (IRDP) in the Capital on Saturday said that the success of all rural development programmes depended upon adequate marketing. He also called upon commercial banks to work out ways to establish "micro-banking" to provide easy credit to artisans and other self-help enterprises in the rural areas. The concept of self help groups should be worked out in more details in consultations with bankers. Thereafter, the scheme should be encouraged by Nabard.

Sinha warned that public money should not be used to build up non-performing assets (NPAs) in any form. Stringent measures would be taken to improve the loan recovery in rural areas which was currently at 30 per cent of the total lendings. Beneficiaries will not beallowed to misuse the money and seek for waiving of loan. In the context of rural development, Sinha said that all rural development programmes would be consolidated under two separate schemes namely the self-employment scheme and wage employment scheme following the South Korean example. The policy makers and planners should identify the requirements of these two schemes.

He said that it was high time that the lacunae in rural schemes be rectified through proper interaction. The rural schemes should be equally effective for the scheduled castes and tribes and for the backward regions.

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Speaking on the occasion, the governor of the Reserve Bank of India, Bimal Jalan, said that the commercial banks should be given more flexibility and responsibility in designing credit structure for the targetted group. This would make the banks more accountable for rural development.

He said that the self-help scheme is better as it is linked to productivity. For better recovery of rural loan, credit should be extendedmore to the self-help groups (SHGs). The gram sabhas should rise above politics and promote rural development and alleviation of the weaker sections. Rural development should not be viewed as an agenda of any political party. More of government subsidy should be diverted towards creation of SHGs.

The member-secretary of the Planning Commission, Hashim suggestedcreation of group action teams in clusters for specific programme and self-help groups. He also called for merger of multiple programmes into comprehensive programme for action.

Speaking on the occasion, the Union minister of state for rural areas and employment, Babagouda Patil called for an integrated approach for improving the performance of IRDP. He assured that IRDP would be restructured.

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Several new initiatives such as family credit plan, cash disbursement scheme and group loaning have been taken up by the government, he said. The minister also stressed on the need for development of local markets.

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