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The Finance Minister said the Government was on course to achieve the target for rural credit disbursement

New Delhi , Sept. 9

THE Finance Minister, Mr P. Chidambaram, today expressed confidence that the Centre and the States would arrive at a consensus by October on the modalities for implementing the nearly Rs 15,000-crore financial package that would help revitalise the co-operative credit system in the country.

"I am delighted that in a matter of three-and-half hours we have reached a near consensus and agreed to make it a true consensus in 3-6 weeks," Mr Chidambaram said, after an interactive meeting with State Chief Ministers here today.

The main purpose of the daylong meeting was to achieve consensus on the implementation of the report of the Task Force on Revival of Rural Cooperative Credit Institutions (Vaidyanathan Committee).

The Finance Minister said that the Centre and the States would soon finalise the package for revamping the co-operative credit institution including the formula for sharing the burden of the package.

"Minutes of the meeting will be drawn up. We have invited Finance Ministers of 6-8 States to finalise a draft, take the responses of States and finalise the package," Mr Chidambaram told mediapersons.

Besides asking Nabard to find ways of increasing refinance to cooperatives and cutting interest rates, Mr Chidambaram felt that the Reserve Bank of India should also play a "leading role" in overseeing the financial health of cooperatives.

Even as the Vaidyanathan Panel had recommended that the Centre should contribute about 53 per cent of the Rs 15,000 crore financial package, most of the States preferred a higher Central contribution towards the financial package.

In his address at the conference, Mr Chidambaram also said that the Government was on course to achieve the target for rural credit disbursement even as he highlighted that the weak link has been the co-operative credit system.

Calling upon the States to seize the opportunity to revamp co-operatives, the Finance Minister said that the 12th Finance Commission was generous to States for free flow of funds and time has now come that the State Governments must play their part to achieve the consensus on the implementation of the recommendation of the task force on revival of rural co-operative credit institutions.

The Finance Minister also assured the State Governments that the Centre would make the necessary amendments to Banking Regulation Act after proper consultation with the State Governments for the revival of rural credit structure.

However, he made it clear that the State Governments have to make necessary amendments in their respective Co-operative Societies Act to improve the situation.

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