Expressing concern over high costs and limited reach of banking services,finance minister Pranab Mukherjee on Sunday said that the government was working in collaboration with the RBI to address these issues. The cost of banking intermediaries in India is high and bank penetration is limited to only a few customer segments and geographies,he said. We are trying to address this in collaboration with the RBI and with the active participation of the banking and non-banking financial entities, he added. Mukherjee,who was in the city to attend a couple of functions,also said that the government has formally started the process of seeking the supports of other political parties in Parliament to push through several financial sector legislative proposals,including Insurance Amendment Bill. We are currently talking to other parties for necessary support so that we can pass Insurance Amendment Bill in Parliament, he said. On finalisation of the licencing norms for new private sector banks,the finance minister said that the RBI has prepared the draft norms and ministry of finance (MoF) is examining them. However,he denied any rift between MoF and RBI over the issue of permissible foreign direct investment (FDI) in the new banks. Replying to queries at an interactive session with India Inc,Mukherjee said any raise in the tax for certain industries has been done to facilitate the implementation of Goods & Services Tax (GST). If I reduce taxes in certain segments,no state government will support me to implement GST. I need their support to implement GST. I appeal to different chambers of the industries to create awareness on convergence of views on GST which is good for the economy and am sure industries want it, said Mukherjee. He was speaking at Sir Sorabji Pochkhanawala Memorial Lecture 2011 as part of the centenary celebrations of Central Bank of India. In his opening remarks at a post-Budget conference organised by industry chamber Assocham,Mukherjee sought higher investments from companies in return for boosting their business margins through Budget proposals like sparing any hike in excise duty rates. He also sought help from the corporate India in pushing further the governments economic growth and reforms agenda. Just as I have to meet up to your expectations to get you to scale new heights of productivity and growth,you also have to meet my hopes,in the process strengthening my hands, he said. He also said that if the sovereign debt crisis in some of the Eurozone economies is not contained,the global economy may fall into another crisis. I hope the crisis in a small part of the Eurozone,where high sovereign debt is affecting their economies,will not further expand to the greater part and be confined to those four countries. If it happens then there will be another crisis and another downward chain,when the recovery is still very fragile, he said.
