Minority lending corpus likely to get Rs 350 cr extra

Written by Mukesh Ranjan | New Delhi, Oct 2 | Updated: Oct 3 2007, 04:49am hrs
With an eye on the hustings, the government has started making moves on social welfare in no uncertain manneraimed as they are at groundswell. To gain confidence of minorities, government scheme are aimed to increase the corpus of National Minorities Development and Finance Corporation (NMDFC) from Rs 650 crore to Rs 1,000 crore.

The government also plans to restructure contributions being made to the NMDFC corpus by the Centre and states.

Pitching in with the National Common Minimum Programme commitments and also the Prime Ministers 15-point agenda for minority uplift, the ministry of minority affairs in a proposal to the Cabinet (FE has a copy of the proposal) argued it would not be possible for the government to provide an estimated total credit of Rs 5,000 crore to cover 10 lakh minority beneficiaries during the 11 th Plan unless the NMDFCs authorised share capital was increased to Rs.1, 000 crore a year from the current fiscal.

Given the steady increase in central aid to the corpus and a decrease in states contribution since NMFDCs inception in 1994, the ministry has proposed that the government contribute Rs 650 crore. For states and other entities, it has suggested Rs 260 crore and Rs 90 crore, respectively.

On the basis of the recommendations of an experts committee, the ministry has also suggested that NMDFC switch from being an entity catering for minority beneficiaries to one that will ensure minority partnership in the development process. The ministry has also suggested that the body be renamed as National Minorities Development Corporation.

The expert committee also felt that a newly formed NMDC could include a Wakf Development Agency.

The ministry proposes that NMDC will function as the apex body for institutional credit to the minorities and as a holding company, will have three institutional set-ups: minorities partnership, the existing NMDFC as a subsidiary and a National Wakf Development Agency.

According to the new proposal, the entire paid-up equity of the existing NMDFC will first be transferred to NMDC, which will also receive all further equity contribution from the Centre, states and others, and then be redistributed. The NMDC, however, will function only as an advisory and will lay down policy guidelines and co-ordinate activities of its subsidiaries