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Kerala - Thiruvananthapuram Printer Friendly Page   Send this Article to a Friend

Isaac assails Bill on micro-finance

Staff Reporter

Says it infringes on the powers of the State


  • 'Bring Bill to intervene creatively in the sector'
  • Says talks should be held with the State before finalising Bill

    THIRUVANANTHAPURAM: Finance Minister Thomas Isaac has criticised the Micro Financial Sector (Development and Regulation) Bill 2007 introduced recently by the Union Government in Parliament.

    Inaugurating a seminar organised here on Wednesday as part of the ninth anniversary celebrations of the micro-finance-based `Kudumbasree' poverty eradication mission of the State Government, the Finance Minister described the new legislation, which had been referred to the Standing Committee of Parliament, as a blatant infringement on the powers of the State Government.

    Dr. Isaac said the new Bill, if implemented, would decimate the unique `Kudumbasree' initiative going on in Kerala and the State Government would oppose it. "We would even launch an intense agitation against the Centre if it persists on the implementation of the Bill," he said.

    The Minister said the State Government agreed that there was a need to introduce legislation to regulate the micro-finance sector. But the Centre should have introduced a legislation that would have enabled the State Governments to bring in new bills to intervene creatively in the micro-finance sector in accordance with the challenges being faced by each State in this sector, he said.

    Pointing out that the Kudumbasree network had been built up in Kerala based on the rules formulated by the State Government, Dr. Isaac said they had been envisaged as powerful components of the decentralised governance system being tried out in the State. Taking loans from banks, disbursing them to the people and collecting thrift savings are only few of the functions of the Kudumbasree Groups. The Neighbourhood Groups (NHGs) of the Kudumbasree network were actually supposed to make active intervention in the affairs of the local bodies, and in these respects, the Kudumbasree NHGs were drastically different from the Self-Help Groups (SHGs) working in other States and in different countries.

    He said the new Central legislation seeks to deny permission to the groups such as the Kudumbasree units to borrow from the banks. Instead, they would have to depend on the special micro-finance institutions to be constituted predominantly by the Non-Governmental Organisations (NGOs). The new Bill is part of the World Bank designs to bring in the micro-finance institutions under the ambit of the NGOs and deprive them of any role in the local governance system, Dr. Isaac alleged.

    He said the Bill denied any role to the State Government in the affairs of the NHGs. As per the structure envisaged in the Bill, there would be a national level micro-finance council and the next structure would be at the district level. Neither the State Government nor the local bodies found mention in the structure.

    The Finance Minister said the Parliament Standing Committee should hold consultations with the State Government before finalising its views on the Bill.

    VS' appeal

    Earlier, Chief Minister V.S. Achuthanandan inaugurated the anniversary celebrations with a call that the Kudumbasree units should make more effective interventions in the agricultural sector. He said this was particularly important because of the slackening interest of the younger generation in agriculture and allied activities.

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