Credit flow far better in southern states: Chidambaram

Last Updated: Tue, Nov 20, 2012 12:50 hrs

Bangalore, Nov 20 (IANS) Credit delivery to the priority sector, including farmers, students, weaker sections, minorities and others is far better in the southern states, said Finance Minister P. Chidambaram here Tuesday.

"The southern states are doing very well in credit flow for greater financial inclusion. Loans to farmers, students' education, weaker sections, housing, minority communities and for implementing welfare schemes are far better in the southern states," Chidambaram told reporters after chairing a meeting of the chief ministers and finance ministers of the respective states.

The five southern states are Andhra Pradesh, Karnataka, Kerala, Puducherry and Tamil Nadu.

Andhra Pradesh was represented by its chief minister N. Kiran Kumar Reddy, Karnataka by chief minister Jagadish Shettar, Puducherry by its chief minister N. Rangaswamy, while Kerala was represented by its finance minister K.M. Mani and Tamil Nadu by its finance minister O. Panneerselvam.

Chief executives of state−run banks and financial institutions also attended the meeting, which is the second of its kind after a similar meeting of the northern states in New Delhi Nov 16.

"Unlike in the northern states, where there are some deficiencies in credit delivery and implementation of various welfare schemes, the southern states have even surpassed targets in specific sectors," Chidambaram said but did not elaborate on which sectors states in north zone were lagging behind their counterparts in south zone.

The three−hour−long meeting discussed the status of credit flow to the micro and small enterprises (MSEs), status of financial inclusion under the state−run 'Swabhimaan campaign', which is aimed at ensuring each family has at least one bank account and the Electronic Benefit Transfer (EBT) scheme to intended beneficiaries for state−run welfare schemes.

Under the EBT scheme, all central government cash transfers and subsidies and other payments will be made by banks straight into bank accounts of beneficiaries.

"We also reviewed the status of key pending projects, progress of centrally sponsored schemes in each state revival package fro short−term cooperative credit structure, implementation of 'Aam Aadmi Bima Yojna' and implementation of co−contributory pension scheme by the states for unorganised sectors under the 'Swavalamban pension scheme of the central government," Chidambaram pointed out.

The finance minister said the EBT scheme would be rolled out from January 1, 2013 in 51 districts across 16 states in the first phase that will include five districts in Andhra Pradesh, three districts in Karnataka, two districts in Kerala and one district in Puducherry. The scheme will be implemented in Tamil Nadu during its second phase in 2013.

"State governments can also make use of the EBT scheme to transfer cash directly into bank accounts of beneficiaries of their welfare schemes as banks and administration in all the 51 districts have been directed to gear up to implement it from January 1," Chidambaram asserted.

Union Minister of State for Finance Namo Narayan Meena and officials of the Union finance ministry also participated in the meeting.

Chidmbaram, however, declined to take questions on national issues such as the Supreme Court's observations on the recent auction of 2G spectrum, inflation rate, fiscal deficit and various bills due to come up in the winter session of Parliament from Nov 22 saying they were "beyond the scope and agenda' of the meeting, which was convened to bring chief ministers and finance ministers of the southern states face to face with chief executives of state−run banks and financial institutions.

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