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Plans afoot to ease loan repayment norms for corporates

The finance ministry is considering to relax group approach in lending to corporate houses.

The ministry is considering to change the norms under which financial institutions currently stop loan disbursement to corporate houses if any one of the companies run by the group or house defaults on loans.

Efforsts are also being made to liberalise non-performing asset norms in areas where industry is stagnating. This implies that corporates in industry sectors which are not doing well will be given more leeway in repaying loans.

The extent of private equity in the insurance sector is under the consideration of the government. The questions were being looked into by the group of ministers on insurance.

Finance ministry sources said no budgetary proposals will be withdrawn or rolled back.

The sources expressed confidence that the shadow of sanctions will fade away soon though the United States was bound by its law. There was nothing to suggest that the US would strictly implement the sanctions imposed.

The ministry is hopeful of containing the fiscal deficit at the targetted level of 5.6 per cent despite the withdrawal of budgetary proposals to hike the price of petrol and urea. The fiscal deficit had shot up last year only because of a tremendous shortfall on revenue receipts. Hence, the government was taking steps to ensure that it would not lose out on the revenue front this time.

The Swadeshi Jagran Manch has demanded that some members of the Economic and Trade Advisory Councils set up by Prime Minister Atal Bihari Vajpayee be dropped on the ground that they are anti-swadeshi.

The organisation, which has top RSS leaders like K S Sudarshan, Dattopant Thengdi and Madan Das as its patrons, has expressed concern over ''retention promotion and recongnition'' of bureaucrats identified with liberalisation.

Sources said the Bharatiya Janata Party was in constant dialogue with the SJM and the two were trying to understand each other's position.

Finance ministry sources are optimistic that the economy will pick up in the second half of the fiscal. They base their projections on the fact that public expenditure is back-loaded.

Expenditure on major infrastructure projects will imply a revival of demand for basic products such as steel, coal and cement. This in turn will have the effect of an induced demand on other commodities.

UNI