Andhra Pradesh - Visakhapatnam   

Budget will spur growth, say AU economists

By Our Staff Reporter

VISAKHAPATNAM, JULY 14. A meeting at the School of Economics in Andhra University on Wednesday called for improving the credit delivery mechanism for realising the objectives of the Union Budget-2004.

Discussing the budget, a university panel of economists found the Finance Minister, P. Chidambaram, to be efficiently handling fiscal and political constraints to draft a budget that defined a new direction to achieving seven to eight per cent economic growth rate.

The meeting described the thrust given to agricultural sector as a `giant step', which was bound to give fillip to the overall economic growth.

Professor of economics, M. Jagadeeswara Rao, said the Finance Minister had not only balanced the multiple objectives of the Common Minimum Programme of the Government, but given a financial form to the CMP. He said most budgets in the past had largely ignored agriculture, but Mr. Chidambaram had now brought it into sharp focus.

Pointing out that banks preferred investing in rural infrastructure development than direct lending to farmers for the higher interest rates the former fetched, he said agriculture constituted only 0.5 per cent of the non-performing assets (NPAs) of banks. He called for revamping the credit delivery system to ensure that the funds reached the targeted groups.

Welcoming the decision to revive water bodies in the rural areas, Prof. Jagadeeswara Rao said maintenance of tanks should be institutionalised by involving the local farmers in regular desilting operations and using the silt for farms and brick-making.

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