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Be inclusive for higher growth: FM

FM P Chidambaram says economy can grow by over 10 pc if the benefits of growth reaches the whole population, reports G Choudhury.

business Updated: Apr 01, 2008 00:19 IST
Gaurav Choudhury

Finance minister P Chidambaram on Monday underlined the need for more inclusive growth and said India’s economy can grow by over 10 per cent if the benefits of growth reached the whole population.

“India's economy is driven by one half of the population. The other half is mute witness to what is happening in India. If other half also becomes part of the driving forces of growth, India's economy will grow not by 8-9 per cent, it will easily grow between 10-11 per cent,” Chidambaram said function of Oriental Bank of Commerce (OBC) here.

Chidambaram said among other things it was important to spread the banking system far and wide to achieve inclusive growth.

“What is more important is to give them advantages of vibrant banking system,” Chidambaram said.

A committee headed by Prime Minister’s Economic Advisory Council C Rangarajan has recommended the creation of national mission for financial inclusion (NMFI) to provide better access to institutional funds to the low income group.

The committee has also called for setting up of a financial inclusion promotion and development fund and financial inclusion technology fund with the National Bank for Agriculture and Rural Development (Nabard) with an initial corpus of Rs 500 crore.

The recommendations were submitted to finance minister P Chidambaram earlier this year.

Chidambaram on Monday asked banks to use technology to achieve financial inclusion.

“I think we underestimate the people of India. The people of India, take to technology very easily. Just imagine how mobile telephones have spread throughout India. I do not think that banks should worry about whether the people of India will accept the new technologies," Chidambaram said.