The Hindu : Antony assails banks' 'negative attitude'

Online edition of India's National Newspaper
Monday, Oct 21, 2002

Southern States

Southern States - Kerala

Antony assails banks' 'negative attitude'

By Our Special Correspondent

THIRUVANANTHAPURAM Oct. 20. The Kerala Chief Minister, A.K. Antony, today lashed out at nationalised banks in the State for their negative attitude towards the Government and the State's development needs.

Addressing a press conference here today soon after his arrival from New Delhi after attending a Chief Ministers' conference, Mr. Antony did not hide his frustration at the attitude of the nationalised banks in the State.

``The functioning of the nationalised banks, which mobilised huge deposits from Kerala, was neither beneficial to the State Government nor to the development of the State. What is the use of such banks which mobilised deposits only to lend it elsewhere. Their attitude is totally against their basic objectives,'' he said.

Mr. Antony said that he had registered his Government's unhappiness at the Chief Ministers' conference and it had evoked favourable response from the Prime Minister and the Finance Minister in their concluding remarks.

He said that he did not subscribe to the view that there were no bankable projects in Kerala. Tourism, he said, was one area which had thrown up a large number of projects, much above expectations.

He himself had convened two conferences to seek out ways to turn around the adverse credit-deposit ratio and there was no basis to the charge that his Government had nothing about it.

Mr. Antony said even though the banks were quick to promise financial assistance for various projects which would figure in the prestigious Global Investors' Meet, the response was far from satisfactory.

``The banks were not willing to even help the Government during times of crisis in spite of its providing sufficient guarantees,'' he said.

Mr. Antony said that even though no decision was taken at the Chief Ministers' conference, he was looking forward to positive responses on several issues that were discussed at the conference.

He expected the Centre to take a favourable decision on reducing interest rates for Central advances from the present high of 14-15 per cent to 7-10 per cent.

The State was also hoping for clearance to mobilise Rs. 500 crores through market borrowings or the announcement of a special package.

The State Government had demanded that the Centre cover the shortfall in tax revenues when the Value-Added Tax (VAT) regime is implemented from April 1, 2003, at least till the Twelfth Finance Commission comes up with its recommendations. He said that the State had agreed to the VAT subject to this condition.

The Chief Minister said the Government was against imposing a freeze on dearness allowance and bonus for Government employees.

``We have told them that we would continue to pay the periodic DA instalments as and when the Government's finances improve. We would take the employees into confidence and try to convince them,'' he said.

The State Government had made it clear that it was willing to cooperate with the Centre's fiscal reforms provided a package was implemented addressed to the common man and weaker sections of society.

The State was finding it difficult to mobilise revenues to fund its development activities. It was difficult to sustain economic reforms unless such basic issues were addressed.

The Chief Minister said the State had also asked for a Rs. 25-crore assistance to meet its additional commitment on flood relief.

He said that he had also met the Union Food and Civil Supplies Minister, Shantakumar, and demanded release of 25,000 tonnes of food grains for distribution among the tribals and the plantation labour.

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