Financial inclusion to farmer suicide : Key takeaways from Modi's speech at RBI

In the speech rendered at the 80th anniversary celebrations of the Reserve Bank of India, the prime minister also sounded concerned about the farming community

FP Editors April 03, 2015 12:50:37 IST
Financial inclusion to farmer suicide : Key takeaways from Modi's speech at RBI

Prime Minister Narendra Modi has sought a 20-year roadmap from the Reserve Bank of India (RBI) on Thursday to spread the banking services further to the unbanked segments of the country.

In the speech rendered at the 80th anniversary celebrations of the Reserve Bank of India, the prime minister also sounded concerned about the farming community of the country and said banks need to lend more to the agriculture sector.

Here are the five takeaways from the speech widely reported in the media:

Financial inclusion to farmer suicide  Key takeaways from Modis speech at RBI

Modi set various milestones for the central bank to achieve wider financial inclusion. PTI

1) The task of achieving financial inclusion still far from completion: Modi set various milestones for the central bank to achieve wider financial inclusion. "RBI will be completing 100 years in 2035...it will be appropriate for the central bank to work on the theme of financial inclusion and prepare a road map for achieving it," he said. On the way, there are other mini-milestones such as 150th birth anniversary of Mahatma Gandhi in 2019, 75th year of Independence in 2022 and 90th anniversary of RBI in 2025. But given the scorching pace at which the public sector banks are opening accounts under the Prime Minister's Jan Dhan Yojana, the financial inclusion programme launched by Modi, all these milestones are likely to be rendered redundant.

2) Modi sounded much concerned about farmers: "Our farmers commit suicide. The pain of this should not only be restricted to newspapers and TV screens. When farmer dies, does it shake the heart of banking sector? Because of taking loan from money lender, he has to face death," Modi has been quoted as saying. This, for sure, means Modi's heart bleeds for the farming community. Do not mind the criticism that some of the government's measures, such as moderate rise in minumum support price and Land Acquisition Bill Amendment, go against the interest of the farming community.

3) Banks are not doing as much as they should: "As the RBI celebrates 80 years, can we think within ourselves that we will expand our banking sector so much that farmers would not have to commit suicide because of huge debt burden. Can we not dream of this?... I do not believe by helping poor a bank will become insolvent," he continued. He seems to be putting the responsibility of farmer suicides and distress squarely on banks. This is unfair, as this Firstpost article argues, for the simple reason that banks have been lending to the farming community as the political class has always forced them to. More damning for the banks has been the slew of loan waivers that has killed the credit culture and increased the NPAs from the agriculture sector.

4) Make in India always, everywhere: "Mahatma Gandhi fought for Swadeshi. Does it behove us to print his photograph on imported paper? Does India not have the entrepreneurs to make the paper in India?" Modi asked the RBI. This definitely is push for his own Make in India programme with a dash of swadeshi-ism.

5) RBI, govt on same page: "There is lot of similarity between the thinking of the RBI and government... This is absolutely essential. As a representative of the government, I express my satisfaction. RBI is performing its role and I congratulate Raghuram ji and his team," Modi said. It is another thing that he did not touch up on the issues they are speculated to be at loggerheads.

Updated Date:

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