Pranab to press banks to lower lending rates

27 May 2009

Reviving the growth momentum of the economy which has been affected by the global financial crisis is the top most priority of the government, finance minister Pranab Mukerjee told a press conference today.

While government will have to keep in mind fiscal prudence when stepping up public expenditure and speeding up reforms, he said, he will seek lowering of lending rats by banks to stimulate economic growth. 

''Industry and business have been hurt by the cost of finance and its easy availability. While much has been done in the last 8 months and international capital flows have resumed, the cost and the speed with which finance can be accessed remains a matter of concern. One of the first steps I propose to take is to meet bankers and get them committed to a more benign plan of action,'' he said.

He said the government will seek to bring down the cost of funds for business and boost credit availability in order to revive growth.

"One of the first steps I propose to take is to meet bankers and get them committed to a more benign plan of action," Mukherjee said.

''The government will have to focus on implementing and strengthening its infrastructure investments. These concerns will be addressed with a view to impart further momentum for an early return to the high growth path of recent years,'' he said, adding, ''The pipeline of infrastructure projects will be re-appraised and made more robust. Where necessary, policy and procedures will be calibrated to give a boost to infrastructure spending.''