FM asks southern states CM to be quick in giving clearance for projects

MUMBAI: The finance ministry, P Chidambaram, has asked chief ministers of southern states to hasten the process of giving clearance to projects in order to improve flow of investments.

He indicated this in his opening remarks at a meeting held at Bangalore with the chiefs of public sector banks based in south and chief ministers of southern states. He said that this is required for the economy to achieve reasonable growth.

Very often, a project is unable to achieve financial closure or tie-up funds due to delay in receiving various state and central government approvals. This leads to cost overrun and at times the project becomes unviable. Banks also resist from giving loans until it approvals are in place.

Meanwhile, CM of different states urged banks to be more proactive in implementing the state sponsored schemes. Most CMs were of the view that banks have failed to achieve the credit-deposit targets in their states wherein most banks are raising more deposits from the southern states while loans is not given in the same proportion.

The meeting was also attended by RBI's deputy governor K C Chakrabarty, senior officials from Nabard and Sidbi, chiefs of Andhra Bank, Indian Bank, Vijaya Bank, Indian Overseas Bank and Syndicate Bank.