India can lift the world economy, says Railway Minister Suresh Prabhu

Reposing faith in Indian economy and the initiatives of Prime Minister Narendra Modi aimed at the financial inclusion of the marginalised sections, Railway Minister Suresh Prabhu said on Monday: "Today is very good, tomorrow will be better." Speaking at the MAIL TODAY Financial Inclusion Conclave, the minister said: "This effort is commendable."

"It always eluded us that all families in India have a bank account. The PM made that happen in the time it takes to go from Red Fort to Raj Path," he said, referring to the PM declaring the Jan Dhan Yojana on August 15 and setting the target for January 26. The minister said it was a mission to include the masses in the banking system and bring them to the financial mainstream. He lauded the Jan Dhan Yojana and said the success encouraged the PM to launch the second wave of this inclusive policy.

"The PM launched the second wave of financial products in the form of insurance. It was earlier said there was tension but no pension," he said. Socially desirable Financial Inclusion is socially desirable, Prabhu said. "In 1969 banks were nationalised ostensibly for this very purpose, to take banking to the masses. But we could not achieve what we wanted to. If we can get people to participate in the financial mainstream, many a benefit will accrue to them."

Prabhu also emphasised that financial inclusion via the banking sector has and would further deal a death blow to the institution of black money.

"With financial inclusion, through the institution of banks, a host of possibilities will open up. The root cause of black money was the absence of banking. Once we enter the financial mainstream, the need to deal with cash disappears," he explained.

Focus on tech

He also drew attention to the centrality of technology. "We are also trying to hike the tax to GDP ratio by introducing such measures as part of the goods and services tax (GST)," he said.

"If we are financially strong only then will we be able to initiate more welfare schemes," he added.

"Once a person enters the banking system, the bank knows it's customer in so far as it generates an identity. This identity then leads to such benefits as worthiness for credit," he pointed out. Prabhu also suggested that banks should lend to the masses as the common people who borrow small sums have proved themselves to be more creditworthy.

"The small borrowers are very concerned about their credit worthiness. So if the banks want to lend, retail lending is far better than lending to large corporations. The risk element is less," he said. Prabhu, who is headed for Singapore on Tuesday to hardsell India as an investigation destination, also said that India was crucial to salvaging the world economy.

"India can lift the world economy. Making investments in the Indian infrastructure will have global effects. The Indian infrastructure story is not confined to India alone. It will create services across several sectors that will have global push."

(In association with Mail Today Bureau)