New Delhi: Cautioning that a high economic growth bereft of benefits to the poor would not achieve the national goal, government today asked banks to focus on the weaker section of the society, reports PTI.
Speaking at a function here, finance minister Pranab Mukherjee said banks should expand their reach and contribute to inclusive growth as high gross domestic product (GDP) numbers without benefiting the poor remain just a statistical number.
He said one should not be complacent at 8.5% growth expected this fiscal, and that the country must overcome the hurdles for double-digit growth.
"We cannot remain satisfied with this growth (8.5% expected this fiscal). We shall have to cross the barrier of double digit growth," Mr Mukherjee told at a Canara Bank function.
He said even though the International Monetary Fund (IMF) has projected Indian economy to grow by over 9.7% this year, he would stick to the growth projection of 8.5% this fiscal.
IMF uses a slightly different methodology for calculating GDP by including indirect taxes while Indian government measures the economic growth excluding indirect taxes.
Besides, the IMF measures the growth for the calendar year, which Indian government calculates it for the fiscal year.
Indian economic growth bounced back to 8.8% for the first quarter of this fiscal after shrinking considerably following the impact of the global economic crisis in 2008.
The finance minister asked banks to expand their reach and contribute to inclusive growth as high GDP numbers without benefiting the poor remain just a statistical number.
Mr Mukherjee said there would be an estimated gap of 30% for the $1 trillion investment pegged for infrastructure during the 12th Five Year Plan (2012-17).
"We have to breach that gap," the finance minister said.
In order to have better coordination among regulators, Mr Mukherjee said, "The ministry has decided to establish the Financial Stability and Development Council (FSDC)."
A discussion paper has been circulated in coordination with the RBI.
Referring to another set of reforms, Mr Mukherjee said, "Another important legislation which we are going to have for which we have set up a committee that is Financial Legislative Reforms Commission (FLRC)."
The objective is to update various financial sector related legislation, so that it can be in tune with prevailing condition, he said.
The Indian market was in sync with its Asian peers for a major portion of the trading session today. However, while the former ended mixed, the local bourses saw a major correction on institutional sell-off in the late session causing the market to close sharply lower.
The domestic market started in the green taking support from the global market. Swaying to the tune of the volatile Asian markets, it slipped into the red soon after the opening bell on worries that Chinese policymakers might hike interest rates to rein in prices. Selling by institutional investors was seen in morning trade, which took the indices to the day's lows. However, the noon session witnessed some recovery where the market almost touched the neutral line but it slipped marginally to trade in a narrow range. Another bout of selling towards the end of the session ensured that the indices closed near the day's lows.
The Sensex settled 345.20 points (1.73%) lower at 19,585. The index touched a high-low of 19,982 and a low of 19,505. The Nifty shed 108.50 points (1.81%) to close at 5,890. The benchmark touched an intraday high of 6,013 and a low of 5,864.
The market breadth was negative today. The Sensex closed with 26 losers and four gainers while the Nifty had the support of five advancing stocks against 45 decliners. Among the broader indices, the BSE Mid-cap index tanked 1.99% and the BSE Small-cap index tumbled 2.08%.
The Sensex gainers were Hero Honda (up 1.72%), Bharti Airtel (up 1.22%), Larsen & Toubro (up 0.35%) and Hindustan Unilever (up 0.08%). The laggards were Reliance Infrastructure (down 5.25%), Hindalco Industries (down 4.27%), Wipro (down 4.01%), Reliance Communications (down 3.57%) and DLF (down 3.53%).
There were no green ticks in the sectoral space today. The sectoral losers were led by BSE Realty (down 3.84%), BSE Oil & Gas (down 2.59%), BSE Metal (down 2.55%), BSE Consumer Durables (down 2.47%) and BSE Power (down 2.08%).
The Asian pack, which had a positive opening this morning, witnessed a volatile session, but ended mixed setting aside fears about China's proposed policy-tightening initiatives. Easing of worries about the Irish debt crisis was also welcomed by investors in the region.
The Shanghai Composite gained 0.81%, the Jakarta Composite surged 1.28%, the KLSE Composite advanced 0.63%, the Nikkei 225 added 0.09%, the Seoul Composite was up 0.68% and the Taiwan Weighted rose 0.27%. On the other hand, the Hang Seng was down 0.13% and the Straits Times lost 0.56% in trade today.
The US market closed higher overnight as concerns about the Irish debt crisis eased and on reports that China's policy-tightening measures would not be as harsh as expected. Besides, the Labor Department's data showed applications for unemployment insurance payments rose by 2,000 to 439,000 in the week ended 13th November, falling to the lowest in two years. The Fed Bank of Philadelphia's general economic index jumped to 22.5, higher than analysts' forecast. Another report showed the index of US leading indicators rose for the fourth time in a row in October.
The Dow surged 173.35 points (1.57%) to 11,181. The S&P 500 gained 18.10 points (1.54%) to 1,196. The Nasdaq rose 38.39 points (1.55%) to 2,514.
Foreign institutional investors were net sellers of stocks worth Rs452 crore on Thursday while domestic institutional investors were net buyers of Rs118 crore in the equities segment on the same day.
Some telecom stocks, which are in the news on account of alleged irregularities in the 2G spectrum allocation, were down today. Reliance Communications lost 3.57%, Unitech, which has interests in mobile telecom services firm Uninor, tumbled 4.56% and Videocon Industries plunged 8.60% on the BSE today.
Meanwhile, SKS Microfinance, which clarified that the banks have not withdrawn support to the company despite restrictions by the Andhra Pradesh government on the sector's collection norms, saw its stock gaining 5.47% at the end of trade.
Auto major Hindustan Motors Ltd said that it aims to double the sales of its Ambassador car to 24,000 units per annum in the next 15-18 months through launch of new variants.
The company plans to launch six new variants in both passenger and commercial vehicle segments in the next 12-15 months, starting the first quarter of 2011. Among the six variants, four would be of Ambassador.
The Ambassador is one of oldest passenger car model in the country and is manufactured at the company's Uttarpara facility in West Bengal. The company also makes auto components at its Uttarpara plant in West Bengal.
Hindustan Motors has a technical tie-up with Mitsubishi Motors and the company's facility in Chennai manufactures Mitsubishi's Lancer and Pajero vehicles. The Tamil Nadu plant assembles Mitsubishi's Outlander sport utility vehicle.
The company will raise the monthly output of its small truck-Winner-to 1,000 at its Indore facility which is manufacturing only commercial vehicles. Hindustan Motors, however, has not provided any time-frame for this.
On Friday, Hindustan Motors gained 2.29% to Rs26.75 on the Bombay Stock Exchange, while the benchmark Sensex closed 1.73% down at 19,585.