Finance Minister P Chidambaram said there would not be any rise in bank lending rates. He announced this at the two-day annual Economic Editor's Conference which began in New Delhi on Tuesday.
"I have asked the public sector banks to balance their portfolios by mobilising the deficit. It was necessary because lending in the housing and credit sectors was brisk. To cater to the needs of the poor sections of the society, the Reserve Bank of India has asked the banks to open new accounts -- no frills -- in which the minimum balance could be either zero or five rupees," he said in response to a question from the scribe who raised the issue of maintaining Rs 300 or Rs 700 in bank accounts when many people cannot afford it.
Chidambaram patted his back and lauded the United Progressive Alliance government for achieving an impressive growth rate.
"We have sustained a growth rate of 8.9 per cent as against 5.4 per cent between 1998 and 2004," Chidambaram said. He complimented the service, industrial and manufacturing sectors for their contribution in the growth rate.
He admitted that the wheat and pulses had to be imported to meet the demands at home but denied that the Australian farmers were paid more than the farmers in Punjab or Haryana while importing wheat as alleged by the Shirmani Akali Dal Chief Prakash Singh Badal and the Bhartiya Janata Party.
"The imported wheat landed on the southern ports and had to be transported to the Food Corporation of India godowns. The first two consignments were cheaper but the last one was a bit expansive. It is like comparing apples with oranges," he smiled.
Chidambaram said sugar was available in the country in abundance this year and there was no cause to worry. Pulses, especially Indian kind, are grown only in Myanmar besides India. As Myanmar had a bad crop, their prices went up.
"We have now fixed the MSP for wheat at Rs 750 and I am confident the governments of Punjab, Haryana and Uttar Pradesh would help in achieving the procurement targets. We would have a system in place in the next few months as the procurement begins in March 2007," he said.
He admitted that farmers continue to commit suicide in Vidharbha. "If even a single farmer commits suicide, it is a blot on the government. The package announced by the prime minister is at the implimentation stage. I am confident that the suicide rate would come down soon," he said.
According to him, the income tax compliance has risen substantially because of low taxation rates.
"People have realised that honesty is the best policy and have smiles on their faces like you have one on yours," Chidambaram quipped.
He said if the ministries and departments spend money within limits and according to the money sanctioned to them by the finance ministry, he could achieve greater balance between plans and expenditures.
"I have asked my Cabinet colleagues not to announce the new scheme in the middle of the year and ask for the money unless it is absolutely must," he added.
