Mukherjee concerned over delays in grant of clearances for projects in southern region

Bangalore, Dec 18 (ANI): Expressing concern over the delays in the grant of various clearances for large infrastructure projects worth Rs 39,424 crore in the southern region,inance Minister Pranab Mukherjee on Sunday request the chief ministers to pay personal attention to this aspect and review the status of approvals in large projects in their states.

In his address in the meeting with Chief Ministers of South Zone States/UTs and CEOs of PSBs/Fis here, Mukherjee said: "It has come to my notice that in the Southern Region, fourteen projects with a total investment of Rs.39,424 crore are pending for want of various approvals. I would request the Chief Ministers to pay personal attention to this aspect and review the status of approvals in large projects in their States. CMDs of the PSBs have been advised to approach the State Governments for expediting the approvals in projects financed by them."

Mukherjee said the banking sector, in general, and the public sector banks, in particular have sanctioned significant amount of loans for large projects.

"In a number of projects, the implementation is held up because of approvals pending at the Central/ State levels. Inordinate delay in grant of approvals results in cost and time overrun and thereby endangering the viability of the project itself. The risk of the loans sanctioned/ disbursed by the Banks turning into Non-Performing Assets is also significantly enhanced. I have, on October 18, 2011 and November 18, 2011 reviewed the status of pending approvals with the concerned Ministers with a view to expedite such approvals," he added.

Mukherjee said the State Governments and the bankers are working in close coordination to tap the potential of each State/Union Territory and promoting credit flow into various growth areas.

"States with a high level of co-operation with Banks have done well in availing their banking services. It will, indeed, be a great learning process to share each other's experience and formulate appropriate strategy to approach state specific problems. Nonetheless, I would like to highlight a few issues relating to flow of credit and some other related issues," he added.

Asserting that the target of agriculture credit flow is an important item on the government's agenda, Mukherjee said: " This is a critical item reviewed in the SLBCs, as well. For the current financial year, the target for agriculture credit flow has been fixed at Rs. 4,75,000 crore against which the banking system has already extended credit of Rs. 2,23,380 crore as on September 30, 2011. Kisan Credit Cards are the prime vehicle for the flow of agricultural credit."

Requesting the State Governments to take this task on a campaign basis so that Kisan Credit Cards are issued to all eligible farmers, Mukherjee said: " During the year 2011-12, short term crop loans is available at an attractive interest rate of 4 per cent per annum for prompt repaying farmers. It must be ensured that no eligible farmer is left out from availing this facility. States should make efforts to generate awareness regarding the Scheme so that the farmers can avail credit at cheaper rates."

Mukherjee said Micro and Small Enterprises (MSE) is next only to agriculture in terms of employment generation.

" This sector also plays a crucial role in furthering the objective of equitable and inclusive growth. Overall flow of credit to MSE sector has been satisfying. The outstanding MSE credit from PSBs by the end of March 2011 increased by 36.3 per cent as against the target of 20 percent growth. I am happy to note that all the States under review, except Andhra Pradesh, have attained the target of 20 per cent credit to MSEs," said Mukherjee.

"As regards, the target of 50 per cent credit flow to micro enterprises within the MSE Sector, all the States under review have achieved the stipulated target except for the states of Andhra Pradesh and Tamil Nadu. I would like to advise the State Governments to devise suitable schemes in cluster/ location specific industry groups for improved credit flow," he added.

Mukherjee further said the public sector banks have played a pivotal role in extending education loans to the needy students.

"The total outstanding amount of educational loans of public sector banks has more than tripled during the period from March, 2007 to March, 2011 in the country as well as in South Zone. Similarly, the number of accounts outstanding has more than doubled in the country. Performance of South Zone has kept pace with the all India growth, though the state of Andhra Pradesh, Karnataka and Kerala need to put extra effort," said Mukhrejee.

"State Governments need to popularise Model Educational Loan Scheme of Indian Banks' Association, which has recently been revised. Similarly, the banks should also ensure time bound disposal of the applications," he added.

The Finance Minister said the government has taken up an ambitious plan 'Swabhiman' for Financial Inclusion.

He also informed that the government has introduced a co-contributory voluntary pension scheme - "Swavalamban" with effect from September 2010, for the benefit of poorer section of the society, under which Central Government contributes Rs. 1000 per account per annum for an annual minimum saving of Rs. 1000 and up to Rs, 12000 per annum. (ANI)