Poor should benefit from India's growing wealth: FM

The economy has moved to a higher growth trajectory like 'never before' under the Congress-led UPA Government, but such a performance would have no meaning if the benefits did not reach those at the 'bottom of the pyramid', Union Finance Minister P Chidambaram said on Saturday.

During the last three years of the UPA Government, the economy had moved to a high growth trajectory as the average growth touched 8.5 per cent. During the period, the economy had grown from 7.5 per cent to 9.4 per cent to 9.6 per cent, he said.

'This growth will have no meaning if it does not benefit a large number of people', he said in his inaugural address at the formal launch of 'Janasree', a sustainable development mission of the Congress and micro credit summit in Kochi. The UPA Government was 'concerned' that a large section of the people were not part of the financial system. Over 50 per cent of the people in the country have no bank accounts and do not deposit money or borrow from the banks, he said.

'The heart of an economy is a financial system and heart beat of the economy is the banking system,' he said adding the self-help groups and NGOs have a great role to play in this regard. India had the largest number of SHGs numbering about 300,000 and banks had given credit to the tune of Rs 80,000 crore (Rs 800 billion).

In Kerala, 1,19,182 SHGs were there and credit worth about Rs 800 crore (Rs 80 billion) had been disbursed, he said.

He said the Micro Financial Development and Regulating Bill, seeking to regulate not-for-profit organisations, was pending before Parliament. It tends to regulate 'very lightly' the organisations and once the bill was passed, movements like Janasree would gain legitimacy, he added.

Chidambaram said there were only 50,000 bank branches in the country and with 700, 000 villages and 110 crore (1.1 billion) population all were not covered by banks. The Reserve Bank of India has already permitted SHGs, NGOs, Post offices and other organisations to act as intermediaries for financial and other services. This approach would mean that preliminary activities like receiving applications, identifying beneficiaries and monitoring of loans can be done by the SHGs and NGOs. This would help in multiplying the reach of the banks, he said.

Presently there were over 300,000 SHGs and 90 per cent of them for women. Average bank loans given were Rs 61,000 and repayments were to the extent of 95 per cent. In some states it was 95-98 per cent even, he said.

Referring to the controversy that Janasree was being launched as a rival organisation to the Kerala Government's Kudumbashree Project for poor women, he said such criticisms were baseless. Kudumbashree was being supported by successive governments and did not belong to any party or front.

Banks would be advised to quickly credit link all the 30,000 sangams in the Janasree. There was no reason to think that banks will not support Janasree, he said. On the suggestions by leader of the Congress opposition in the state Assembly Oommen Chandy and KPCC President, Ramesh Chennithala to include some welfare measures for Gulf Keralites in the budget and to ensure revival of FACT and KMML, he said he would keep their suggestions in mind while presenting the budget.