|
The Agriculture Minister Shri Sharad Pawar has said that timely and hassle free flow of credit at affordable rate of interest to the farmers is a big challenge that has to be met. Shri Sharad Pawar was speaking at the Interactive Session with State Governments on The Report of the Task Force on Revival of Rural Cooperative Credit Institutions (Vaidyanathan Committee), here today. To achieve a higher growth rate in agriculture, more resource-intensive and technology led agriculture practices are key issues to be supported by intensified credit coverage, he said. Credit will also be required for providing improved post-harvest facilities and processing facilities at farm gate to derive greater benefits from commodity production, he said.
Speaking on the occasion, the credit delivery mechanism in the country, comprising of the commercial banks, Regional Rural Banks and Co-operative Banks will have to be strengthened to meet these requirements. Their strength lies in their vast organizational hierarchy, extending from village to the state and the national level. However, due to inherent structural and financial weaknesses, these institutions have not been able to perform efficiently, he added. In today’s world, functional efficiency has to be benchmarked not only at institutional or national level but also at the global level, he said. Referring to the Vaidyanathan Committee report Shri Pawar said that the Finance Minister has already introduced the major features of the Report, as also the Government's stand in this regard. Shri Pawar said that the recommendations of the Report should not merely be seen as an exercise in "financial re-engineering", but in terms of its impact on agricultural growth.
The Minister said that the re-capitalization formula that is a mix of grant from the Government of India and soft loan support in case of need, to the State Governments for the co-operative credit system, significantly minimizes the need for the States to immediately find the budgetary resources to meet their obligations. The mechanism suggested ascribes all losses arising out of agricultural lending to the Government of India and significantly shifts the burden from the States to the Centre. In such a scenario, the Minister believed that a conducive environment stands created by the Committee for pro-active acceptance of reforms, subject to State specific difficulties. He said that such flexibilities have been explicitly recognized and incorporated in the Report.
The Minister also supported the recommendations made by the Committee that the revival strategy must be based on "institutional reform" and "financial re-structuring". It is worthy to note that the framework proposed by the Committee relates to all tiers in the system with re-capitalization initiatives addressing primaries to State Co-operative Banks, for creation of a strong base for the co-operative structure, he said. The meeting was chaired by the Prime Minister Dr. Manmohan Singh. The Finance Minister, Shri P. Chidambaram, Planning Commission Deputy Chairman Dr. Montek Singh Ahluwalia also spoke in the meeting.
RC: Credit: 0900905
|
