The customary post-budget meeting of the Central Board of the Reserve Bank of India with the Finance Minister was held at New Delhi today. The meeting was also attended by Dr Adarsh Kishore, Secretary, Expenditure and Finance.

Besides Dr. Y. V. Reddy, Governor of the Reserve Bank, Shri A K Jha, Secretary, Economic Affairs, Ministry of Finance, Government of India, Dr. Rakesh Mohan, Shri V.Leeladhar, Smt. Shyamala Gopinath and Smt. Usha Thorat, Deputy Governors of the Reserve Bank attended the meeting. The other Directors of the Central Board of the Reserve Bank of India present at the meeting included Dr. A.S. Ganguly, Chairman, ICICI OneSource Ltd., Shri Y. H. Malegam, Chartered Accountant, Prof. Mihir Rakshit, Director, Monetary Research Project, ICRA, Shri H. P. Ranina, Advocate, Supreme Court of India, Shri K. Madhava Rao, State Election Commissioner, Andhra Pradesh, Dr Amrita Patel, Chairperson, National Diary Development Board, and Prof. V. S. Vyas, Former Director, IIM, Ahmedabad.

The Governor welcomed the Finance Minister and the Finance Secretary, Dr. Adarsh Kishore.

In his address to the Reserve Bank Board, the Finance Minister explained that the philosophy underlying the Budget was stability in tax policy with emphasis on better tax administration, lending a helping hand to agriculture, push to infrastructure development, addressing issues relating to certain specific industries and economic growth in general.

The Finance Minister stated that it was imperative to make agricultural crop loans available at lower rates and added that in the case of cooperatives and RRBs, the Government has, in the Budget, agreed to provide a subvention in a transparent manner for NABARD. The Government would also work with the Indian Banks’ Association and banks to address this issue.

The Finance Minister pointed out that a large segment of the rural population still did not have access to institutional credit and the Government had, therefore, decided to appoint a Committee on Financial Inclusion which had been announced in the Budget. Referring to the 8 per cent growth in GDP likely to be registered during the year 2005-06, the Finance Minister stressed the need to keep up the momentum of growth. He stressed the importance of the issue of liquidity in the context of growing demand of investment credit.

The Directors appreciated the Union Budget and also articulated their views on a range of issues covered by it.

The Governor, while thanking the Finance Minister for addressing the Board, appreciated the progress made by the Government in fiscal consolidation and said that the Reserve Bank would make available liquidity so that the growth momentum is maintained, consistent with interest rate regime.