RAJYA SABHA
_________
*SYNOPSIS OF DEBATES
_________
(Proceedings other than Questions and Answers)
_________
Thursday, August 23, 2007/ Bhadrapada 1, 1929 (Saka)
_________
MATTERS RAISED WITH PERMISSION OF THE CHAIR
I. Killing of Hindi speaking people in Assam by terrorists
SHRI SANTOSH BAGRODIA: The problem of ULFA in Assam is there less or more for more than two decades. Recently, in Karbi Anglong District, 36 people were killed in one week and all of them were Hindi speaking. Many local people were also killed during these years. I am very happy that these days, many young Assamese boys and girls are going to all parts of the country, even to Goa and remote areas in South India and they are doing good work. The problem is due to the terrorists' activities. What I am trying to say is that the country should not be divided by these terrorists' activities. The economic development of Assam is essential and only then the terrorist activities will go down. I strongly recommend that officers from the Central Government should be asked to visit the different North East States personally. Recently the Assam Government has planned to deploy general force to fight ULFA. I request the Assam Government to do it very fast. The NDA had a hand in encouraging the ULFA. I request the NDA friends not to assist this kind of activity.
SHRI RAM DEO BHANDARY: With a sense of great pain, grief and anguish, I stand here to criticize the massacre being committed by ULFA terrorists in Assam and the way the Biharies are being aimed at in it. 175 people have been killed since January till day. For the last many years Biharies have been constantly aimed at. They are several states in our country for the prosperity of which the Bihari people have given their contribution. At present they have assumed that Assam is their own state. If in such a situation there are attacks, atrocities on them are committed, they are killed then it becomes our liability that the life and properties of those people should be saved. The Government certainly needs to take a very strict action in this matter. I would also request the Central Government to support the State Government in the matter and it should be considered as to how the massacre taking place there should be stopped. They may be given maximum compensation, their houses should be constructed and arrangement for their livelihood and employment should be made. I request the House that the entire house should criticize this incident and the whole house should request the Government that a complete arrangement for security of Biharies and the Hindi speaking people be made.
(Shri Rajniti Prasad associated.)
SHRI KALRAJ MISHRA: First of all, I will make it clear that this is certainly a shocked incident, the murders are constantly taking place. But this is not because of the reason of Assamese and none-Assamese point. Assamese speaking people and other language speaking people are cordially living there together. Carbi Anglong district is a sugarcane growing district and the people from Bihar and East Uttar Pradesh grow sugarcane crop here. Having noticed this thing the terrorists are aggrieved. Carbi Libraton terrorist group through the conspiracy of ISI is trying to kill the Hindi speaking people after separating them. There are two or aims behind it and those aims are that first of all drive them away after beating them and then to settle the Bangladeshi infiltrators at these places. The second reason is to destroy the economy there.
A request had been made to establish a police post in Lohang Guang but it has not yet been established. With a geographical point of view this is a very big area having a population of 8 lakhs and there are only 6 police posts existing here. How will you manage to prevent extremism here with only these 6 police posts? There is no security arrangement there. I want to identify those places so that a complete security arrangement may be made keeping those places in view. I also request that full compensation should be given for the Hindi speaking people killed there and a sense of trust in the minds of the Assamese living at different places should be created that the extremists will not be allowed to enter these places.
II. ILL TREATMENT WITH INDIANS IN GERMANY
SHRIMATI SUSHMA SWARAJ: With an internal anguish I am putting my point before the House. Each and every Indian was in a rage to see the scene on TV and after reading about the incident in newspapers two days back when the Indian people in Germany were made to run and badly beaten. India and Germany are having very deep trade relations. But the way the Indians are trapped there today and almost 50 Germans attacked Indians and the people standing there went on shouting the slogans "foreigners go away" shows that a new fascism is growing in Germany. Having noticed the seriousness of such a big incident, the expected reaction from Government side has not been received. Through you I want to request the Government, the Minister of Parliamentary Affairs is sitting here, to convey our present feelings to the Minister of External Affairs. The Government should call the German Ambassador and should lodge its protest and the Prime Minister should have a talk with the Chancellor of Germany. The Government of India should make full arrangements for the security of the people living in Germany.
III. THE ISSUE OF PRICING OF GAS
SHRI AMAR SINGH: I want to speak on a very important subject of gas pricing. The reliance has signed the production sharing contract with Krishna-Godawari Block in April 2000. The Ministry of Petroleum raised the pricing of gas from rupees ten thousand crores to rupees thirty six crores within a short period. I propose that the report of the Cabinet Secretary and the report of the Prime Minster Economic Advisory Council which reveals this big scam and the Hon'ble Chief Minster of Andhra Pradesh who is from Congress party itself and who has written dozens of letters to have this scam in cognizance, should be taken notice of by the empowered group of Ministers in their analysis.
I also demand that the report of the Cabinet Secretary and the report of the Prime Minister Economic Advisory Council should be placed in the House. I am having this report I am ready to place it on the table of the House after authentication so that the country may be saved from the biggest scam.
The Ministry of Petroleum is much more concerned in the interest of reliance as compared to the interest of the Chief Minister of Andhra Pradesh, report of the Cabinet Secretary, Hon'ble Prime Minister's Economic Advisory Council and the NPTC of the Ministry of Energy. I request that this scam should be got investigated by CBI and CAG.
SHRI TAPAN KUMAR SEN: The issue of gas pricing is a serious one. It is our natural resource, and it should be used in the national interest, and not to ensure windfall profit of the contractors, exploiting that natural resource. The Petroleum Ministry's Committee in the matter of pricing mechanism have said that in the absence of market determined price through transparent weeding process, where valuation has to be done by the Government, it may be done, based on most recent competitively determined price. Now, the debate and the dispute is that the most recent price is discovered through international competitive bidding and arranged by NTPC and the lowest quote was by the RIL-NIKKO.
The contracting company is demanding 85 per cent hike from the Government for the KG Basin gas prices. Fixing the price of natural gas @ 4.33 dollars is baseless.
IV. Decision by Government of U.A.E. and other gulf countries to send back Indians
SHRI RAVULA CHANDRA SEKAR REDDY: About two lakhs of people, most of them from Andhra Pradesh are now stranded in the UAE and other gulf countries. The authorities in the UAE and other gulf countries have decided to send the labourers back and they have directed them to leave the country by September, 2007. These poor helpless unemployed labourers are facing a lot of difficulties there and are unable to return to India. I urge upon the Government of India to talk to the Government of UAE and other gulf countries to extend the date of their Visas. I also demand that after returning from abroad they should be provided suitable employment with in the country.
THE MINSTER OF OVERSEAS INDIAN AFFAIRS (SHRI VAYALAR RAVI): This is really a matter of concern for the Government. Amnesty has been declared by the UAE and thereafter by Kuwait and other countries also. A large number of persons among them are from Andhra Pradesh and knew only Telugu language. The MEA has arranged translators for them and relief camps have been opened for them. So far, 25,000 passports have been issued. Frequency of Air India flights to these countries has been increased to bring these labourers back to India. The main thing is that the amnesty flights have to reduce the fare. If there is any problem, we will look into it definitely. I will talk to the Ambassador and voluntary organizations.
V. Non-issuance of passport to dependants of certain persons
SHRI ABU ASIM AZMI: Human Rights are being violated at a large scale due to wrong policies of the Government. People of Muslims community are facing great difficulties in getting passport. They are being harassed by the police and the passport office deliberately. Issuance of passport should not be denied on the pretext that any member of the family of an applicant has ever been interrogated by the police.
_________
GOVERNMENT BILL-INTRODUCED
The Indira Gandhi National Tribal University Bill, 2007
_________
THE STATE BANK OF INDIA (AMENDMENT) BILL,2007
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PAWAN KUMAR BANSAL),moving the motion for consideration of the Bill, said: The Narasimham Committee on Banking Sector Reforms, had observed that it was consistent with the principles of the sector’s supervision that you regulated even in the interim period, namely the Reserve Bank, is also an owner of a bank. RBI should not own the institution it regulates. This required RBI to divest its holdings in banks and financial institutions. RBI should not continue with its ownership functions in both commercial banking and refinance of development finance segments. The ownership of financing institutions could ideally be delinked from RBI through the transfer of such ownership to the Government.
RBI decided to accept the recommendations for transfer of its shareholding in SBI to the Central Government. In February, 2007, the Government approved the proposal for transfer of ownership of shareholding of RBI, in the SBI, to the Central Government. The transaction involved transfer of the entire equity held by the RBI in the SBI. It was decided to complete the transaction before 30th June, 2007 i.e., the date of closure of the annual account of the RBI. Hence, it became necessary to carry out the required amendments urgently in the SBI Act, 1955.
As both the Houses of Parliament were not in session then, the State Bank of India (Amendment) Ordinance 2007 was promulgated on 21st June, 2007 which came into force on 29th June, 2007. This Bill seeks to replace the said Ordinance. Lok Sabha has already passed this amending Bill on 20th August, 2007. I commend this august House to consider the Bill.
SHRI SURENDRA LATH: I simply want to say that the Standing Committee on Parliament on this Bill is likely to give its report in this regard in 2-3 days. I object on the issuance of Ordinance in this regard. It is contrary to the Parliamentary practice.
I am not opposing the Bill and I approve the decision of the Government. I want to know the other recommendations of the Narasimham Committee. I also want to know the present value and the rates of these shares the Government are purchasing from RBI.
We know that the State Bank of India is trying to increase his base, particularly the State Bank expectant Management fund is investing in mutual fund in the International Market and also in the insurance sector. I would like to know from the Government, what is the credibility of those foreign companies to which the Government is going for partnership. I hope the Government will certainly tell the house in this regard. Certainly, we have to compete with the foreign banks.
The Banking business is increasing at international level and we have to compete with the foreign banks. Today HSBC Bank owns three times more property of all the banks property of our country. The State Bank of India is one of the largest bank of our country. Today, it is in the 84th place. So we have to improve our Banking Business, working system, and we have to improve their efficiency also. So it is necessary to merge all these banks with the large banks so that we may be able to compete with the big banks in the world.
Now I want to draw your kind attention towards the SBI. SBI is the largest Public Sector Bank. But the serious matter is that it's profit is declining continuously. The reducing of profit and deposits of SBI is a matter of great concern although 474 new branches have been opened. It shows that we have been failed to achieve our targets and as well as in the matter of improvement of bank. Many domestic private banks are earning profit by increasing their business in the rural areas. The State Bank of India is one of the largest Nationalised Bank of the country and being the largest bank the social responsibility of bank is also more.
The Government have taken many steps to control the price rise in these days and under this the interest rates have been increased on loans, particularly in the Housing Sector. It is a serious matter. I don't want to say more but in the coming days the Indian banks, particularly the State Bank of India have to improve their efficiency. I would like to say that SBI should perform his social liabilities and provide his significance contribution for the progress of country. The State Bank of India should improve his working system as well as his policies also. The bank as well as the country will be benefited. I support the Bill with thanks.
DR. E. M. SUDARSANA NATCHIAPPAN : I support this Bill. I would like to take the opportunity to discuss about the banking system which is now developing in India. The Imperial Bank, which started in the 19th Century, that is, 200 years before, was nationlised in 1955 as State Bank of India. In 1969, the nationalisation of the 14 banks started by late Shrimati Indira Gandhi has revolutionised the banking system in India. That was the achievement made by Shrimati Indira Gandhi's effort.
Nationalised banking is now giving more facilities. In 1969 only 64,000 people were getting one branch facility. Now, we are having a very excellent Minister, Shri Pawan Kumar Bansal, as the Minister of State. He is very dynamic. After taking over the banking branch, has done great things in many fields. I belong to a constituency wherefrom hails our Minister of Finance, that is, the Cabinet Minister. He had also started a scheme, namely, Indira Gandhi Niwas Yojna. Under the Scheme, loan of Rs.35,000 to Rs.50,000 was given earlier. I can't accept this scheme because ordinary dalit community people, Scheduled Castes and Scheduled Tribes, can't bear the burden of Rs.15,000.
If he gets Rs.15,000 as loan for constructing a small house, then, afterwards, he can't be creditworthy for any other loan. Therefore, I request that the Government should rethink about it. Now, we are burdening even the students. I am afraid, after five years there may be instances of suicidal deaths of students just as our agriculturists are going for suicides. I am saying this because we are burdening them with loans. They have to bear the burden of loan alongwith the burden of studies and the burden of whether he is going to get a job or not. This is the condition of young Indians today. But we are now thinking in terms of commercialisation in everything. But the scheme should not prove to be a burden for the students. Immediately, banks should not send a notice asking for payment of interest and also the principal amount. Their families will be completely burdened. Around 44 million people belong to the higher income group. These 44 million people who are using this banking system for all purposes. They are the topmost borrowers and they are the creators of these Non-Performing Assets.
I would like to know whether we have made any effort to seize the properties of the people of this higher income group by enforcing this Act properly and whether these people who are really creating these NPAs and paying back the money. I think that can be answered only by the banking system. At the same time, we are pressurising the ordinary people who have borrowed only an amount of Rs.10,000 and after adding all the interest this loan amount has become Rs.1 lakh. Therefore, I feel that it is high time the Government thought about these matters. I feel the credit system regarding the retail credit is also to be taken into consideration. Therefore, the retail banking is the best banking system wherein the rate of interest should be reduced and, the ordinary persons who are ready to come forward for trading and for other commercial enterprise, should be benefited by this. Finally, I would like to conclude by saying that barely two years back, the housing loan in India was very famous.
People were praising our Government for making the housing loan available at a minimum interest rate of just nine per cent. But now what happens? The price of cement bags nowadays is skyrocketing, but no effort is made by the Finance Ministry or the Commerce Ministry to control the rising prices of cement. But by raising the interest rate from 9 per cent to 14-18 per cent. What has happened? With their fixed monthly income, how are they going to pay the EMIs? So, now the ordinary middle class people have started cursing us. They are saying that on the one hand, the Government propagated them to go in the housing loan, and on the other hand, they raised the interest rate.
I conclude my speech by requesting the Hon'ble Minister to come out with more programmes for ordinary people so that the products and services available in the banking sector reach the ordinary people and the aam admi is benefited.
SHRI TAPAN KUMAR SEN: While participating in the deliberations on this Bill, I would like to seek certain clarifications. I would also like to convey some of the concerns about the functioning.
At the outset, I would like to understand as to what was the urgency of getting the whole process done through and Ordinance. BASAL norms have also been referred to while justifying the urgency, I don't think that BASAL authorities have issued a circular that by this date you have to certify otherwise you would lose. The Government of India has not got any responsibility in bringing through this Bill when another comprehensive Bill on the subject is pending. The general policy approach of the Government in the matter of ownership of major financial institutions in the country raises so many doubts. In a recent Press Conference, the Chairman of the SBI mentioned the plan of raising resources of around Rs. 15000 crores through debt and equity route from the market. It may open a way to further going for divestment and further dilute the equity.
The second point is regarding functional autonomy. It is being argued that RBI is a regulator and it cannot be a service provider. For all this theory, an international standard or an international practice is being cited. There are cases in many advanced countries where the institutions like RBI as a service regulator also provide service. At the same time, all international standards need not be followed into toto. There is a room for improvision depending upon the country-specific situation. So far as financial sector' autonomy in our country is concerned, I don't support be the 'let free' approach i.e. they can do anything they like because the financial sector affects the whole country's economy. So, there must be regulation and there must be certain guidance. But I say functional autonomy is important for the efficiency of an institution. The Government intervention is important in the policy matter and it has much role to play for the rural poor and for the small-scale industries.
A close watch is required so that the policy is put to effect and properly implemented at the ground level by a functional autonomous management.
Now I come to the State Bank of India functioning. The State Bank is the most important Bank. In the matter of all other functional aspects, it has improved a lot. But, there are certain areas of concern also. The return on asset is declining. Number two, a serious situation is being created by increasing outsourcing. Basically, outsourcing is done where in-house capability is not available. But, in reality, in the name of outsourcing, they are going beyond the area for which outsourcing was agreed upon. It is crossing boundaries to an alarming level and which has got reflected in erosion of manpower. This is becoming a very serious issue that needs close attention.
SHRI C. RAMACHANDRAIAH: I stand to support this Bill. I don’t understand the line of demarcation between the RBI and the Government. In fact, the Minister needs to explain as to what exactly is the line of demarcation between the Government and the RBI. Whatever surplus is there with the RBI, it seems, it automatically belongs to the Government of India. The recommendations made by the Narasimhan Committee suggest that a regulator cannot be an owner. Because RBI happens to be a regulator, RBI should not own it. Again, I would say that there is no difference between the RBI and the Government, which itself is the biggest regulator in this country.
I have been observing the performance of the banks for the past two decades. The regulator is very effective. Very good control is being extended on the banking system. Though the stipulations to the various sector of allocations have not been achieved, overall, the people’s money, the Government’s money is safe. And, as far as the RBI is concerned, I should congratulate that they have been ensuring this since long time.
With regard to the Independent Directors, I have to say that the guise of experts, agriculture experts or commerce experts, the Government have been appointing all political people to provide them employment. That is not good. The Government should maintain autonomy. It is people’s money that is there and it has to be protected.
My second point, is with regard to rate of interest. There are three factors which decide the rate of interest, namely, cost of raising funds, NPAs and transaction cost. The NPAs can be reduced in many ways. You can write off the amount; you can collect the amount; you can make a provision. So, this country has to know how much amount has to be written off in the books without collecting the amount from big industrial groups.
There is one more point I want to raise and it is CRR. Whenever the inflation rate goes up, the blame lies with the RBI that it asks to increase the CRR. Instead of addressing the short supply of goods, very frequently Government have been resorting to increasing the CRR. Since the lending resources at the bank are limited, so they will raise the rate of interest.
On outsourcing, very recently in Hyderabad one person was beaten by the agency people with whom this collection has been entrusted. So I request the Government to kindly instruct the banks to engage look into this aspect too.
My last point is that day by day the rural banks are coming down, whereas the population is on the increase.
The rural banks have to be opened. You are in the process of restructuring the Grameen Banks.
SHRI EKANATH K. THAKUR: I stand here to support the Bill. The SBI was created under the Reserve Bank of India Act, 1934 in the year 1935. The Rural Credit Survey Committee wanted that the rule of money lenders should go. Pandit Jawahar Lal Nehru also wanted that the menace of money lenders should be controlled. India’s freedom was also seen by our leaders as economic freedom and they wanted rescue from the clutches of money lenders. As I stand to speak on this Bill, I read a report of the Reserve Bank of India which goes contrary to the vision of Pandit Jawahar Lal Nehru. Our RBI has moved from alienation of money lenders to institutionalization of money lenders. That is why farmers are committing suicides. They are not getting adequate credit. The State Bnak of India was created to annihilate the money lenders. This was the recommendation of the Rural Credit Survey Committee. The next major step after 1955 when the State Bank of India was created by converting the Imperial Bank of India into the State Bank of India was, of course, nationalization.
Nobody has served the banking industry more than late Shrimati Indira Gandhi. She nationalized the banks on 19th July 1969. She again nationalized 6 more banks in April 1980. I am from the Opposition. But, whatever is good, is good, and please see the vision of late Shrimati Indira Gandhi in creating regional rural banks. The Reserve Bank of India has to explain when it was the vision of the Rural Credit Survey Committee and what was that vision? Generally, a middle class person has more than one accounts, a savings bank account, a recurring account. A businessman has a current account and a savings bank account or a fixed deposit account. The State Bank of India was doing 28 per cent of nation’s banking business. Today, it is doing 15 to 16 per cent of nation’s banking business. In 1976, why was the State Bank of India Act amended? It was amended to remove the Chairman of the State Bank of India.
Mr. R.K. Talwar showed the courage to say that he would not carry out instructions of the Government of India in the matter of Laghu Udyog. He was victimized in broad-day light by getting the Parliament to amend the Act. I recall victimization of Shri R.K. Talwar and appeal to the Hon’ble Minister to name the national issue of bank management after Mr. R.K. Talwar. After nationalization, from our 9,000 branches, we have gone to 66,000 branches is the country. Now, my prayer to the Government of India is that you should form a panel of important people to appoint as independent Directors. I would request the Hon’ble Minister to create a proper mechanism for the purpose.
SHRI D. RAJA: I would like to say that my party supports this Bill. As a matter of principle, we are opposed to ordinances. The Government would have come before the Parliament on all these crucial issues through a Bill earlier. Banks are really constituting the central nerve system of our economy. I am one of those whose strongly believe that our public sector is the strength of our economy. In the name of finance sector liberalization, the Government should not liquidate its equity and should not make the public sector banks vulnerable. When we talk of banks that banks have got certain social objectives, certain national objectives. If banks have to fulfil these objectives, they must have proper policy perception. It is not the ordinary people or farmers or small and medium level industry owners or enterpreneurers who cheat the banks. It is the corporate houses, it is the big business houses which cheat the banks. What is the amount of NPAs collected by the banks. I do not know what is the Government’s response because the Government has become very immune to these NPAs.
If some ordinary farmer does not pay back the loan on time, all his belongings are confiscated. I tried to understand the meaning of accredited loan providers. I do not know what is the concept of accredited loan providers. I must say the Government will have to change the credit policy. One of the reasons for suicides by farmers is the problem of indebtedness. The Government should really go into the depth of this problem as to why the farmers’ distress continues, why the farmers’ suicides continues?
The banks must become more people-friendly. And here comes the question of how the management functions. The banks should have autonomy, but it cannot be absolute. We should talk about the new management culture as well. The Banks’ Organisations have called for a countrywide strike on 12th September. That will be a major strike by the bank employees. When we talk of accredited loan providers, there is one more issue relating to deposit collectors. Otherwise, you will have to go in for outsourcing of these services. I tried to point out only the urgent issues. The Government will have to change the credit policy. These deposit collectors really need the support of the Government.
When there is strike, Government will have to intervene and it will have to somehow see to it that talks are held meaningfully. But this Ordinance route must be avoided. Parliament is there to decide all these things. Anyway, my party conveys its support to this Bill.
REPLYING TO THE DEBATE, THE HON'BLE MINISTER SAID: A doubt has been raised by some of the Hon'ble Members about this amendment in the State Bank of India Act through the Ordinance and then approaching the Parliament for passing the Bill. It was during the Budget, that the Hon'ble Finance Minister had made an announcement about the Government's decision to acquire all the shares of the RBI in the SBI which was based on the recommendations of the Narsimham Committee and RBI itself. It was duly reflected in the Appropriation Bill that we would require an amount, approximately Rs.40,000 crores, for the purpose without disturbing the normal regular borrowing systems and without upsetting the market from which the borrowings have to be made.
The Ordinance was brought on 26.6.2007 and on 29.6.2007 the shares were transferred to the Government strictly in accordance with the guidelines of SEBI relating to the transfer of shares and against the approximate amount of Rs.40,000 crores. Had there been the delay between the purchase of the shares and the transfer of the annual surplus amount to the Government, the Government would have had to pay much more interest thereon.
The Hon'ble Members passed that Budget and the Appropriation Bill. That took the form of the Act, namely, the Appropriation Act. Deriving that power from the Appropriation Act, the further subsequent proceedings have been taken. Presume that the Appropriation Act had not been passed, or, we had not introduced it in the Budget, then, we could not have come today without the Supplementary Demands for Grants to tune of Rs.40,000 crores or Rs.35,000 crores. We had to take this route to avoid extending that period to one year.
There is no denying the fact that the banking system in the country has gained strength over the period. There was reference to the need to amalgamate banks, to consolidate banks. The Government would like not to thrust any decision upon the banks, but to act as a facilitator.
With reference to the priority sector, there are guidelines by the RBI making it imperative upon the banks to lend to the extent of 40 per cent to the priority sector. Almost all the banks have come up to that mark. The overall performance is 40 per cent. But, if a bank lags behind, then there is a sort of penal provision.
A point was made that it is the weaker sections which suffer and that the weaker sections do not get it. The Prime Minister has repeatedly emphasised that financial exclusion leads to social exclusion and, therefore, the banks must endeavour to ensure that every household in the country has a no-frills-banking-account. They will be entitled, without any hassles, to a loan to the extent of Rs.25,000-50,000 under the Kisan Credit Card, the General Credit Card, as also under the Swa-rozgar Credit Card. The target fixed for the financial inclusion is that 50 per cent of the country has to be covered by the year of 2012 and 100 per cent, the entire country, has to be covered by 2017. When we took over three years back, it was announced by this Government that in a period of three years, we would double the credit to agriculture and we doubled this in almost two years. For this year we fixed it 2,25,000 crores of rupees. There is another target which we have set for ourselves, that is, every year 50 lakh new farmers will be covered and 50 lakh new farmers means 50 lakh new accounts.
Some Hon'ble Members have rightly expect from the Government that the banks should extend education loans at a reasonable rate to those unfortunate people who are unable to afford the high cost of higher education. When we took over the number of students obtained education loans was 3,19,337. By the end of March, 2007, the number of students risen to 9,37,379. There is three-fold increase. The amount then was Rs.4,00,550 crores and the amount now by the end of March, 2007, is Rs.14,00,214 crores. The banks set up their temporary counters in the educational institutions an offer the students opportunities to avail the loan then and there.
I would, again, like to revert to financial inclusion through the self-help groups. The number of self-help groups functioning in the country, at the end of June 2007, is 29,25,698. It is about four crores of people who have benefited thereby. We want to extend them loans and they come up well in life and they come up well in life and they improve the condition of life and their standard of life is improved.
The net NPAs today has been reduced to 1.04 or 1.05 per cent. All public sector banks put together have written off debts amounting to Rs. 8,300 crores in 2005-06 and Rs. 9010 crores in the year 2006-07 respectively. This includes the amount written off in compromise settlements. We stand for safeguarding the public sector character of the banks. Therefore, the Government equity in the banks will not come down below 51 per cent. I can say it with full sense of satisfaction that the Boards of the public sector banks are doing a commendable job.
As regards outsourcing, it is the Reserve Bank as the regulator which, from time to time, issues various guidelines for the banks to follow and there have been guidelines issued by the Reserve Bank about outsourcing also. The activities, may be, outsourced are like collection of application forms, documents, valuations, marketing of products and other ancillary functions like transfer of cash, security office maintenance, etc. However, banks are not committed to outsource core functions. The total number of SBI branches are 9143. Out of these, in rural areas, there are 3913 branches and in semi-urban areas there are 2480 branches.
The banks submit their annual branch expansion plans to the Reserve Bank of India. The Reserve Bank of India after ensuring that they plan to open adequate number of branches in the rural and semi-urban areas grants them the permission. The Micro Financial Sector Regulation and Development Bill, which is introduced in the Parliament, provides for effective supervision and even development of the micro finance sector and the Government is committed to it. As regards the benefit to artisans, out of that 40 per cent of the priority sector, 18 per cent is for the agriculture, 10 per cent for the weaker section and 12 per cent for all other categories including housing.
As regards Micro-Finance Bill, this Bill is now before the Standing Committee and the recommendations of the Standing Committee would be given due respect by the Government. The deposits in the Self Help Groups attract the rate of interest of 6 per cent by the banks on their different term deposits and that rate of interest on the savings bank is 3.5 per cent at the moment. Banks are lending to the self-help groups at a rate of interest ranging between 10-12 per cent. The banks are not permitted to outsource core functions. These are management functions, planning, investment decisions, credit appraisals, etc. No bank can outsource any of these functions.
As regards incidents of suicides by farmers in Vidharbha region, it is not the banks which are responsible. I t is the usurious loans which the people have raised from private moneylenders. The Government is making all-out effort, to waive that. The Prime Minister's package for 31 districts is for everybody who has been impacted because of loan. As regards giving job on compassionate grounds, in view of a decision of the Supreme Court of India, the banks had to discontinue the old practice of giving jobs on compassionate grounds. Now, in lieu of it, the banks are giving ex-gratia compensation to the dependent people. As regards legitimizing the institution of moneylenders, there is never any intention of the Government to legitimize any act which does not fulfil the social objectives.
The motion for consideration of the Bill was adopted.
The Clauses etc were adopted.
The Bill was returned.
_________
Short Duration Discussion
Situation arising out of the heavy floods in various parts of the country and relief measures undertaken by Government-Contd.
SHRI MOINUL HASSAN: The Government have submitted a report that ten states were flooded. But, at present, we can see that nearly fourteen states are flooded. These floods have taken a heavy toll of life and property. Affected people have been rendered homeless, jobless and sheltless. The situation is particularly grim in Kerala, Bihar, Bangal and Assam. For instance, in Kerala the estimated loss was to the tune of Rs. 1500 crores approximately. In Bihar, people are living on the embankments. Women and children are suffering a lot. Madhubani district is the worst affected district. It is a famous place for Madhubani paintings. When our team went there it was actually ‘engulfed’ by water. People are forced to do paintings, because there is no other means of livelihood. So, I request the Government to take into account the situation and face the natural calamity and provide relief to these flood affected fourteen states of the country at the earliest.
Our party and our delegation submitted a memorandum to the Hon’ble Prime Minster. Wherein, we have demanded-foodgrains to the affected people for four months. To build a flood centre for the river area so that when flood comes, people can get shelter in that particular area. To meet the huge shortage of kerosene oil in flood affected areas. To construct roads and to build houses on priority basis. To settle insurance claims quickly. To provide quality seeds to the farmers as early as possible so that they can take next cultivation. These are short term measures.
My next point is that flood control measures should be reviewed. Maintenance of embankment should be done. Dredging or desiltation of major north Indian rivers like Ganga is required.
As far as relief work is concerned Late Prime Minster Shri Rajiv Gandhi had accepted in a meeting that only 15 paise reaches the ultimate person out of one rupee provided by the Government in the name of relief work. This is also reflected in the recent CAG report.
Although the National Disaster Management Authority has been formed but resource allocation has not been decided so far. People are suffering from various natural calamities and we as a representative of lakhs of people should do something, at least, to save our beloved countrymen.
SHRI C. PERUMAL: Floods cause annual destruction and also generate annual discussion in Parliament. Our river valleys, the cradles of civilization have become graves of civilization and after 60 years of Independent India, our persistent failure to considerably minimize the damage due to floods are serious blots on our national pride.
Floods are different from earthquakes and Tsunami because floods come with proper notice which can be avoided. It is a national shame and clear indication that we are under developed yet we claim to become super power in another dozen of years.
To control the floods we do some routine exercises and we are yet to develop a long term policy for substantially minimizing the loss of lives, crops and property.
Central Government provides assistance or relief in a biased manner. Opposition ruled states are ignored while granting relief assistance. This is a condemnable attitude. More objectivity is required in the assessment of damage and provision of relief. It must be guided by certain parameters. Local administrative machinery should be strengthened at grass root level. Their assessment should be taken as final and state Governments must have the power to divert unspent funds from other heads to provide quick relief to the suffering people. This cost may be shared as 20:80 basis by the States and the Centre. For this purpose, it should be mandatory for all states and the centres to reserve five percent of the budget for meeting such costs.
Then, network of canals may be put in place to diversity the flood water. Make rainwater harvesting structures compulsory for both rural as well as urban planners. Dedicated village guard force must be raised under the National rural employment programme. Make shift arrangements be made during those particular months. Flood-prone areas must have necessary physical infrastructure like boats, life saving vests etc. to save people from drowning. We should aim to prepare long term plans to control floods.
Discussion not concluded.
* * * *
* * * *
YOGENDRA NARAIN,
Secretary-General.
_______________________________________________
**** Supplement covering rest of the proceedings is being issued separately.
ERRATA TO THE SYNOPSIS OF DEBATES,
DATED 22ND AUGUST, 2007
|
Page 68 |
Line 14 from top, for the word 'in' read 'is'. |
|
Page 68 |
Line 3 from bottom, for the word 'She represents' read 'She simply does not represent'. |
|
Page 71 |
Line 11 from top, for the word 'taking' read 'keeping'. |
|
Page 75 |
Line 3 from top, for the word 'set up.' read 'set up for their training.'. |
|
Page 77 |
Line 1 from top, for the word 'section' read 'sector'. |
|
Page 80 |
Line 3 from top, for the word 'Bill was' read 'Bill, as amended, was'. |