Union Finance Minister P Chidambaram Saturday said the government will launch the ambitious scheme of transferring cash subsidy directly to beneficiaries through Aadhaar in 51 districts of the country from January 1, and cover the whole country by the end of 2013.
Prime Minister Manmohan Singh will hold a cash transfer committee meeting on Monday.
He was addressing the annual banking function BANCON here.
In another function, he stressed the need for FDI in retail and said, “FDI is not an option, it is imperative. Unlike FII (Foreign Institutional Investors) and ECB (External Commercial Borrowing), it is money that comes and stays without an element of debt. We need to tap into the savings of another country.”
He also said that for robust foreign investment, the country needs to open up more sectors, reform tax and visa policies, improve connectivity and infrastructure and make customs rules friendlier.
On the current account deficit, which is currently $70 billion, he said, boosting foreign investment is the best bet. Chidambaram also said there is a need of at least 2-3 world class banks in India that are on par with global banks. He said for that, consolidation of the banking system is a must.
Even though the government does not have a roadmap for consolidation, it has to be done by the boards of banks. He urged banks to have independent growth models depending on their strengths and weaknesses instead of being clones of a single bank. On growth, Chidambaram said, India cannot ‘afford’ a growth of anything less than 8 per cent.
“India has to anchor growth mainly on domestic demand and find resources to get back to the high growth path. India cannot afford to anything less than 8 per cent. It is not an aspiration but an imperative. In the first quarter, India had grown 5.5 per cent.
“We have to overcome this by finding ways to increase production of goods and services,” he said.
Terming banks as the heart of the economy, Chidambaram said innovation in banking is essential to the revival of the economy.