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FM to meet top bankers today in bid to boost core sector lending

He is expected to meet officials from select banks including State Bank of India (SBI) and Bank of Baroda (BoB), among others, according to sources. Besides, they added,  Chidambaram is likely  to meet investors and impress upon them that India is safe and attractive destination for investment.

The Finance Minister is likely to ask the banks to increase lending to productive sectors and also try to address the concerns of the banks. Deteriorating asset quality of banks is expected to come up for discussions at the meeting. India's GDP growth hit a decade low of 4.5 per cent in the third quarter of 2012-13 fiscal.

Gross NPAs of PSU banks have risen from Rs 71,080 crore as on March 2011, to Rs 1.55 lakh crore as on December 2012, of which corporate accounts constitute 53.68 per cent. Of that, about 172 corporate accounts had NPAs of more than Rs 100 crore at the end of December. The amount involved in such cases is about Rs 37,194 crore.

At a meeting on 18 March with bank chiefs, Chidambaram had expressed concerns about stalled projects, leading to slowdown of the economy. Despite several steps being taken by the government to promote investments, as many as 109 private sector projects, each worth Rs 1,000 crore or more, are awaiting clearance from different ministries.

Terming stalled projects as worrying, Chidambaram had said steps are being taken to ensure that impediments are removed and credit flow takes place.

As many as 215 projects with an investment of Rs 7 lakh crore are stalled and banks have already disbursed about Rs 54,000 crore loan towards them, Chidambaram had said.

Besides, there are 126 new projects for which the outlay is Rs 3.55 lakh crore and amount sanctioned by banks against these was Rs 43,000 crore.

'The main reasons (for delays) are coal linkage, environment clearances, land acquisition,' the Finance Minister had said, adding that there is now a greater degree of confidence than was there 6 months ago.

 
STATE FMS’ PANEL WILL MEET ON 10 MAY TO DESIGN GST


The Empowered Committee (EC) of state finance ministers will meet next month to decide on the reports for a model legislation and design of the proposed Goods and Services Tax (GST).

‘The Empowered Committee will meet in Mussoorie, Uttarkhand on 10-11 May to ponder over the progress made by two committees constituted during the Bhubaneswar meet in January,’ said a senior official at the Finance Ministry.

The committee would also try to get a clarity from the Centre on when would the dues of states be cleared to make up for the losses on account of reduction in Central Sales Tax rate so as to clear the way for the implementation of the new indirect taxes regime the official added.

The Centre has agreed to give compensation of Rs 34,000 crore to states for lowering CST rates.

In November, the government had set up two sub-committees to resolve the issues of compensation to states for revenue loss on account of a reduction in central sales tax and the final design of GST.

These sub-committees, comprising officials from both the Centre and states, had met yesterday in Patna, to thrash out the contentious issues and are likely to submit their reports by the third week of April.

The implementation of GST, which seeks to remove the cascading impact of indirect taxes, has been delayed by three years due to a lack of consensus on several issues between the Centre and the states Recently, Chairman of Empowered Committee of State Finance Ministers and Bihar Deputy Chief Minister Sushil Modi had said that 80 per cent of contentious issues related to GST have been resolved. Besides, states had also reached a broad consensus on the design of GST under which states will be free to decide on the time of its introduction.
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