Stating that economic inequalities are continuing nearly seven decades after Independence owing to insignificant progress on the financial inclusion front, Finance Minister Yanamala Ramakrishnudu exhorted banks to ensure that common people, who need institutional credit most, got it.
“Both the government and the banks are pumping in money, but there has not been much alleviation of poverty. The rural masses, particularly farmers and weaker sections, remain relatively untouched by banks. As a consequence private lending is going on unchecked,” he said. Participating as chief guest in the Platinum Jubilee celebrations of State Bank of Hyderabad (SBH) here on Friday, Mr. Ramakrishnudu said A.P’s per capita income was impressive mainly because of the contribution of corporate and other sectors. “Under the existing methodology, even the Rs. 1,00,000 crore of Reliance Industries is factored in the calculation of per capita income. As a consequence, inclusive growth is not taking place,” he observed.
Banks have to do their best to wean away small borrowers from private money-lenders, while the government made its effort for foolproof implementation of the cash transfers scheme, which has so far yielded the desired result. Mr. Ramakrishnudu said in spite of having Rs. 1 lakh crore–plus budget, the government has its own constraints like the outgo of nearly 74 per cent of its tax revenue towards salaries.
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Banks should strictly show diligence before extending loans as non-performing assets have become a matter of concern. They should have a mechanism for checking whether the funding by them served the purposes for which they were meant, Mr. Ramakrishnudu observed.