Finance minister P Chidambaram on Monday admitted his government had been "at fault" for not clearing business projects quickly but was confident the problem would be solved when it "returned" to power next year.
Finance minister P Chidambaram speaks to industrialists and businessmen at a programme at Ahmedabad. (PTI Photo)
"Ignore me, ignore the government. Industries' business, industries' dharma is to invest and make the country grow, irrespective of who is in the government and who is not in the government," he said in Ahmedabad.
"A large number of bottlenecks came up, but since the last year I have candidly said we must get over these bottlenecks...," he said while asserting that the UPA government is industry friendly.
"When we return next year, we will be more friendly," he said.
Chidambaram assured the industry that their credit needs would be met by banks. Observing that there is enough money in the system, he said banks are not getting big ticket demands.
"Industry must come to banks and make big demands for credit. I want you to talk about big industries and where you would come and demand credit of Rs 300-400 crore. That's not coming. If it comes, banks have assured me that enough credit will be provided," Chidambaram added.
Stating that he did not expect any hike in interest rates by the commercial banks, the minister said they had enough funds to meet credit demands and that the onus of coming up with large investment projects rests with the industry.
"All over the world, the thinking in changing. The mandate of a central bank must not only be price stability. The mandate of central bank must be seen as part of larger mandate which includes price stability, growth and maximising employment," he said.
Chidambaram's statement comes on the eve of Reserve Bank's first quarter monetary review in which the central bank is expected to address the several conflicting concerns including volatile exchange rate, liquidity crunch and slowing growth.
RBI governor D Subbarao had last week met Prime Minister Manmohan Singh and Chidambaram and is believed to have discussed the current macro-economic situation.
"Tomorrow, the RBI governor will make a quarterly review policy statement. So let us wait for the statement which will throw more clarity on the subject," Chidambaram said.
The minister, however, sounded confident that interest rates of commercial banks would remain stable.
"I do not expect these (RBI) liquidity measures to result in an increase in the bank lending rates. In fact bank rates have been stable and all chairperson of banks have told me that they have no plans to increase lending rates.
"So the current interest rates will remain. I can't say whether they will come down. But I am almost certain they will not go up, " the finance minister said.