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RBI expects higher farm growth

NEW DELHI, JULY 20. The Reserve Bank of India Deputy Governor, Mr. Vepa Kamesam, said today that agriculture growth would be better than the 0.2 per cent growth during 2000-01 and the growth in bank credit to the priority sector would also be higher.

``We are getting positive feedbacks. The monsoons are good so far. I think, it (growth in agriculture sector) will be good this fiscal," Mr. Kamesam told PTI on the sidelines of a seminar on cooperative banks.

Growth in the agriculture sector is expected to be crucial to the overall growth in the economy, which slumped to 5.2 per cent last fiscal as against the targeted 6 per cent. Agricultural output grew by 0.2 per cent last fiscal, which was lower than 0.7 per cent in the previous year.

The manufacturing sector is still showing recessionary trends. The sector grew by 5.6 per cent last fiscal as against 6.8 per cent in the previous year. Mr. Kamesam declined to comment on the overall growth but the RBI Governor, Mr. Bimal Jalan, earlier projected about 6 per cent growth this fiscal.

With better monsoon and expected higher agriculture growth, the RBI Deputy Governor said he expected bank credit to the sector to grow at a higher rate this fiscal. ``It (bank credit to priority sector) should be good," Mr. Kamesam said.

The growth rate of credit extended by the scheduled commercial banks declined to 15.6 per cent to Rs. 524,900 crores last fiscal from 23.1 per cent registered in the previous fiscal. Total credit by banks were Rs. 454,100 crores during 1999-2000. Last fiscal, food credit to agriculture sector was about Rs. 40,000 crores.

Industrial slowdown took a heavy toll on the non-food credit growth which slumped to 13.1 per cent last fiscal as compared to 21.9 per cent in 1999-2000. Non-food credit, extended mostly to industry, stood at Rs. 485,200 crores in 2000-01 as against Rs. 429,100 crores in the previous fiscal.

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