Date:12/08/2005 URL: http://www.thehindubusinessline.com/2005/08/12/stories/2005081202661900.htm

Back More bank support sought for rural development schemes in TN

Our Bureau

Ms Jayalalithaa

Chennai , Aug. 11

THE Tamil Nadu Chief Minister, Ms J. Jayalalithaa, has sought greater support from bankers for the Government's rural development schemes and increased flow of credit to on-farm and non-farm activities.

In her speech at a special meeting of bankers at the Secretariat on Thursday , the Chief Minister said that with the farmers taking up `samba' cultivation in a big way, the annual credit plan outlay of Rs 22,036 crore with Rs 12,345 crore for the farm sector has to be stepped up to ensure an increase of at least 30 per cent over the credit disbursement achieved in 2004-05.

The banking sector should ensure credit support to the Government's initiative in crop diversification, she said.

The micro credit scheme has contributed to the growth of the Self Help Group (SHG) movement in the State. Over 34 lakh women in two lakh SHGs have a savings of about Rs 720 crore. Their repayment performance has exceeded 98 per cent and the banks themselves have benefited from the programme that they have supported. Therefore, there is a strong case for the banks to increase credit outlay to the SHGs, she said.

Also, a number of SHGs have not been able to access credit for entrepreneurial activities. Expanding the SHG movement holds the key to augmenting the income of the poor. Therefore, some of the rigid restrictions on supporting the SHGs need to be relaxed and the range of activities that can be financed should increased, Ms Jayalalithaa said.

At present, the subsidy to credit ratio for SHG lending is 1:1.6 and this could be improved to 1:3. Over Rs 1,216 crore has been extended as credit and an additional Rs 1,000 crore has to be made in the current year.

A World Bank-assisted project, Puthuvazhvu, plans to build on the SHG movement to support over 3.5 lakh poor families in 70 blocks. The project outlay is Rs 717 crore to be implemented over six years. The bankers should extend support to the programme, she said.

Under the New Anna Marumalarchi Thittam for promoting agro-based industries over 482 units with a total project cost of Rs 301.95 crore have been sanctioned. The sanction for 171 more units pending under the scheme should be expedited, she said.

Ms Jayalalithaa also urged the bankers to support the land purchase scheme being implemented by the Tamil Nadu Adi Dravidar Housing and Development Corporation Ltd to benefit the women of the scheduled caste and tribes.