Finance minister Pranab Mukherjee on Tuesday said various regulatory bodies like the RBI, Sebi and Irda would enjoy total autonomy and the government will not interfere in their functioning. The finance minister said in the event of a conflict between the two regulators in cases of hybrid products, a joint mechanism will be put in place through an ordinance to decide which regulator has the jurisdiction. ? Except this, there will be no interference by the government,? Mukherjee told reporters in Hyderabad after a meeting with the Southern chief ministers and heads of public sector banks.
Turning his attention to other macro-economic issues, Mukherjee said food inflation may come down after the harvest season. Up to April-May, it was mainly food substances which contributed substantially to inflation which reached as high as 20% in December. Gradually, it has been coming down to the current level of 14-15%. Recently, fuel and other ingredients of the inflationary basket have picked up, he said.
Since there is a perpetual deficit of edible oil and pulses, the government is working on a mission more to improve supply. There is a shortfall of 5 million tonnes of pulses and 3-4 million tonne shortfall of edible oil. To improve the deficit, the government has dedicated around 60,000 villages for pulse and edible oil production, he added. ?We are committed to ensure the availability of food to all. We are waiting for the Planning Commission to come out with census on the below poverty line population so as to extend the 25 kg of wheat or rice at Rs 3 per kg scheme. But as the population goes up efforts need to to be taken to step up production too,? he said.
He also asked the banks to increase their focus on advances to the MSME sector. While interacting with the heads of the banks in Hyderabad on Tuesday, the FM said that share of total SME advances being given by the banks to the micro, small and medium enterprises (MSME) sector should reach 60% by March, 2012. The FM instructed the banks to increase the share of their advances must reach to 50% by the end of the current financial year and to 55% by March, 2012.
The FM reiterated that the financial inclusion programme , the roadmap for which has already been created by them, must be completed by all the banks by March, 2012. Thus, the FM said that the credit flow to the MSME sector must be ensured by the banks. Apart from it, the FM also asked the banks to ensure smooth credit flow to sectors like housing finance, education loan and the advances to weaker and minority sections.
Some of the heads of the banks that were present during the meeting include AC Mahajan (Canara Bank), Basant Seth (Syndicate Bank) and RS Reddy (Andhra Bank). The FM suggested the banks for improving their credit flows to the small and marginal farmers. While it was the CMDs of the state-owned banks , that area acting as convernors of state level bankers committees (SLBC) that attended the meeting, other banks were represented by their executive director level officers. Talking to FE over phone, RS Reddy, CMD, Andhra Bank, said that the credit-deposit ratio was as high as 109% in the southern part of the country and the incremental C-D ratio was as high as 149% in those places for past one year.