Union Minister for Finance P Chidambaram on Saturday said the various measures taken by the Centre would enable the economy to recover from the stress it is undergoing.
Inaugurating 101 branches of State Bank of Mysore, Chidambaram said curbing import of gold, which contributed to the stress on rupee had shown results.
“Gold imports touched 335 tonnes during the first quarter (April, May and June) of this fiscal. The import of gold has come down to 65 tonnes at the end of second quarter (July, August and September),’’ he said.
Expressing confidence of succeeding in reducing the current account deficit (CAD), the minister said participants in TV talk shows predicted the central government would not be able to reduce the CAD.
“We proved them wrong by succeeding in reducing the CAD from $886 billion to $706 billion. We, with the help of a group of financial experts and intellectuals, are mulling on how to reduce the CAD further,’’ he said.
Declaring that the Indian economy was “stronger than any economy in the world”, he said not a single Indian bank had gone bankrupt. “Many banks collapsed in the US, but not a single bank in our country. The other positive factor is Indians are known for saving money. Even in 2006-07, the percentage of savings was 36 per cent. If the banks channelize the savings to manufacturing segment, the production of goods would increase thus helping Indian economy to grow,’’ he said.
Advising the banks not to become clones of other banks, he said that each bank has to retain its own identity and has separate business model.
“The committee constituted by the Reserve Bank of India to issue licence for opening banks is set to allow seven banks to commence business operations in the country. I expect each of the banks to cater to the needs of people who had no access to banking facilities. Each of the banks should be different from other,’’ he said.
“Poor and middle-class customers are better than rich people as far as repayment of loans is concerned. Among the loans disbursed to self-help groups, the rate of non-performing asset (NPA) is only two per cent. Sense of honour drives them to repay bank loans,’’ he said.
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