Sinha mum over tax steps for quake relief

He had, earlier in the week, termed media reports on likely tax imposition to raise resources for relief measures in quake-hit Gujarat as speculative. He also declined to comment on any possible cut in the bank rate following the Fed rate cut in the US. Earlier, delivering the keynote address at the Asia Pacific Region Micro-credit Summit in New Delhi, Sinha said that the report of a task force set up by Nabard was being considered by the government and the Reserve Bank of India (RBI).

The RBI has completely deregulated the interest on loans given by banks to intermediate microfinance institutions, he said. The task force had estimated that the micro-credit business alone was of the size of Rs 30,000 crore. As more and more members accessed this micro-credit, many would graduate to a higher level of enterprise with increased credit needs.

Sinha said that women have proved to be better at repayment than men. Therefore, credit programmes which target women are expected to have better performance records than those aimed at men. He has encouraged Nabard and bankers to increase the linkage of self-help groups (SHGs) with banks. It took almost seven years to increase the financing of SHGs from a modest 225 in 1992-93 to about 33,000 by March 1999. “In a situation where a number of banks are reporting high rates of NPAs of above 20 per cent, these micro-loans have a repayment performance of almost 100 per cent,†he observed.

Sinha said that the Bangladesh experiment with Gramin Banks and microcredit served as a successfull model not only for India, but for other developing countries too. A growing number of programmes on micro-credit had targeted low-income group women. The success of these programmes proved that women living in poverty were not only credit-worthy but were also engaged in a variety of economic activities critical to the livelihood of their families.

Meanwhile, the government on Friday set up a seven-member co-ordination committee headed by cabinet secretary TR Prasad to coordinate Gujarat earthquake relief work undertaken by the industry. The decision was taken after union home minister LK Advani met a high-level industry delegation comprising presidents of Confederation of Indian Industry, Federation of Indian Chambers of Commerce and Industry and Associate Chambers of Commerce & Industry. The members of the committee include CII president Arun Bharat Ram and its director general Tarun Das, Ficci president Chirayu Amin and its seceretary general Amit Mitra, Assocham president Shekhar Bajaj and its secretary general Jayant Bhuyan.