Ravi Ruia, promoter of Essar Group
- Oil prices were also boosted by China's decision to boost money supply in a bid to spur lending and economic growth.
Finance Minister Pranab Mukherjee said it is the subsidy leakage that makes him lose his "sleep", and not the quantum of subsidy itself.
"I lose my sleep not when I look at the volume of quantum of subsidy, but because it is not reaching to the poor and needy and targetted group," Mukherjee said, while talking about subsidy leakages.
Speaking at an event organised by Oriental Bank of Commerce, Mukherjee said that various financial inclusion programmes for extending banking facility to rural population and the Aadhaar project (of providing an unique ID to all citizens) would help in tackling the problem of leakage in the government subsidy for the poor section.
"Banks can play a major role through inclusive programmes like Swabhimaan, and by extending banking facility to a large number of rural population," he said.
"If these subsidies are provided through the banking network, institutional financial networks, the leakage will be reduced substantially," he added.
Earlier this month, Mukherjee had said he was "losing sleep" over mounting subsidy bill, but clarified a few days later that his remarks were made in a lighter vein and Indian economy has the "resilience" to meet any challenge.
"As Finance Minister when I think of the enormity of the subsidies to be provided, I lose my sleep. There is no doubt," he had said at a conference in New Delhi on February 8.
The government had earlier said that its subsidy bill is likely to increase by over Rs 1 lakh crore, over and above the original estimate of Rs 1.34 lakh crore, mainly on account of higher outlay towards fertiliser, food and oil.
"The government is in the process of implementing an e-payment system for direct credit of dues from the central government to the beneficiaries," Mukherjee said at the inauguration of OBC's corporate office.
"I had announced in my Budget Speech last year that this system will bring transparency and expedite direct payments for subsidies from central paying units to the targeted beneficiaries of fertiliser, kerosene and cooking gas.
"All Banks have to gear themselves for this path breaking governance reform and I hope OBC (Oriental Bank of Commerce) will be second to none in this process," he added.
The Finance Minister urged the banks to focus on growth through financial inclusion, product innovation, technology up-gradation, diversification and so on while complying with domestic regulations and adopting best global practices.
"While designing suitable financial products, you need to keep in mind the capital requirements of a diverse spectrum of borrowers such as large Indian MNCs, mid-size corporates, small and micro enterprises, exporters and priority sectors.
"Our endeavour should be to ensure that every segment of the poor and marginalised population has access to basic banking facilities at the earliest," he said.
Mukherjee asked banks to be customer-friendly and customer-centric in its process and practices.
"Customer care is based on the principles of reasonableness in pricing, confidentiality and effective grievance redressal machinery. There is a constant scope for improving efficiency, reduction in transaction cost, offering advisory services, etc.
"Technology should be leveraged more to offer customers better facilities. Indian Banks should aim at attaining the highest operational standards, to compete with the best in the world in providing customer service. I look forward to the time when Indian Banks would be among the top global players in the world," he said.
Noting that Indian banking space faces numerous challenges, Mukherjee said that an effective and efficient banking system was the backbone of a growing economy.
"Though our nationalised banks have so far been done well in facilitating the development of our country, the major challenges lie in sustaining this performance in an increasingly competitive environment and making this process more inclusive," he said.