The Hindu : Business : FM confident of achieving 9 p.c. growth

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Tuesday, Jan 01, 2008
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FM confident of achieving 9 p.c. growth

Special Correspondent

Asks banks to extend loans to urban poor

Inaugurates 1500th branch of
Indian Bank
Bank plans three more micro-finance branches

FINANCING THE POOR: Union Finance Minister P. Chidmabaram (centre), inaugurating the 1500th branch of Indian Bank. A. Subramanian, (left), Executive Director, and M. S. Sundara Rajan, Chairman and Managing Director of the bank, look on. - PHOTO: R. V. MOORTHY

NEW DELHI: Finance Minister P. Chidambaram on Monday advised banks to extend loans to the country’s urban poor as their condition was far worse than their counterparts in the rural areas.

Speaking after inaugurating Indian Bank’s 1500th branch specialised in microfinance with core banking solutions here, Mr Chidambaram said: “Urban poor are worse off than the rural poor. They may have slightly larger income, but on the parameters of space, sanitation, drinking water [and] air, their conditions are much worse than the rural poor.”

The Finance Minister urged banks to be more liberal with the urban poor, especially when extending loans for education, housing, consumer goods and medical needs, as their repayment record was much better than other categories of borrowers.

Indian Bank, having already financed 2.37 lakh self-help groups, including 35 lakh women, is now planning to open three more micro-finance branches in Bangalore, Pune, and Bhubaneswar.

Later, talking to newspersons, Mr. Chidambaram reiterated that his forecast for economic growth this fiscal remained unchanged at close to nine per cent. “I am not changing my growth forecast for 2007-08. My growth forecast continues to be close to nine per cent... For the next year, I am confident that with more investment taking place, we can aim to grow at nine per cent,” he said.

At the same time, he pointed out that achievement of high growth would be possible only through hard work by workers, farmers, businessmen, service providers and above all, the Centre and State governments.

The outlays on programmes for next year, Mr. Chidambaram said, would continue to be large but they must translate into outcomes. In effect, the people responsible for executing the programmes must execute them efficiently and in time, he said.

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