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Chidambaram for consensus on financial reforms

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The Finance Minister, Mr P.Chidambaram, releasing the book `India's Financial Sector: Recent Reforms, Future Challenges' in the Capital on Monday. Also seen are the World Bank Country Director, India, Mr Michael Carter, and the editor of the book, Ms Priya Basu. Kamal Narang
The Finance Minister, Mr P.Chidambaram, releasing the book `India's Financial Sector: Recent Reforms, Future Challenges' in the Capital on Monday. Also seen are the World Bank Country Director, India, Mr Michael Carter, and the editor of the book, Ms Priya Basu. Kamal Narang

Our Bureau

New Delhi, Sept 12

THE Finance Minister, Mr P. Chidambaram, on Monday said that the Government would push through the next round of financial sector reforms only after political consensus is evolved over the various pending measures.

"We need to accelerate the pace of what we are doing. But, we also need to build a popular consensus on the measures we propose to take. One has to negotiate ones way through the political system," Mr Chidambaram said at a book release function here on Monday

Mr Chidambaram released the book India's Financial Sector: Recent reforms, future challenges edited by Ms Priya Basu, Lead Financial Economist, World Bank. Mr Chidambaram said that the administered interest rates are, perhaps, keeping people away from saving in financial assets. Thus, he pointed out, banks are facing problems of deposit mobilisation as result of which incremental credit-deposit ratio is above 100 per cent in some banks.

The Finance Minister said that there was a strong need for increasing the country's overall savings in financial assets. "Savings in financial assets have important consequences for the financial sector especially the banking system," he said. He added that if more savings come in form of financial assets it would help banks in increasing their credit disbursal.

(This article was published in the Business Line print edition dated September 13, 2005)
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