Montek Singh Ahluwalia reassures banks on farm loan waiver

March 22nd, 2008 - 5:34 am ICT by admin  

Mumbai, March 22 (IANS) Planning Commission Deputy Chairman Montek Singh Ahluwalia has reassured the country’s banking sector on the Rs.600 billion ($15 billion) farm loan waiver. “There is no need for the banking sector to panic as meticulous financial correctives are on, to offset the huge burden that will come on the banking sector,” he said while talking to the media Friday at IMC Ramkrishna Bajaj Awards 2007 function.

“The growth graph of the banking sector would not be affected,” he added.

“The Finance Minister is still working out modalities on how to forestall the financial thrombosis that may possibly strike the country’s banking sector following the Rs 600 billion farmers loan waiver,” Ahluwalia said.

On the issue of the proposed merging of the banks, the Planning Commission’s deputy chairman said, “The merger would help in the creation of big banks and it is good. However, it will take time.”

Referring to the ongoing global financial crisis arising out of sub-prime lending, Ahluwalia said, “These factors are bound to have impact in our country but then we are looking at a five-year timeline to correct the economic abnormalities. We don’t look at one quarter or two quarter like the way everybody looks at the issue. Our developmental perspectives are time bound,” adding, “This also applies to the growth rate,” he added.

Ahluwalia said that the slow down in the growth rate was one of the off shoots of the international economic processes. “Indian economy is on a solid growth path and in the time line of coming five years we can expect nine percent growth rate notwithstanding what news on the markets tell the world,” he added.

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