Low CDR worries UP

Uttar Pradesh, which is seeking private investment to the tune of over Rs 1,00,000 crore across sectors to prop up its economy is worried at the low credit deposit ratio (CDR) of the state standing at around 47 per cent.

Against the national average of around 70 per cent, the lower CDR of UP indicates low industrial and commercial activity, especially in the eastern region.

This also shows the flight of domestic savings of UP to other states to spur development activities elsewhere.

During Chief Economic Advisor in the finance ministry Kaushik Basu’s recent visit to Lucknow, UP principal secretary (planning) J N Chamber had raised this issue with him informally.

Chamber had urged Basu that the Centre should intervene to increase the CDR of backward states like UP and public sector banks be asked to prop up credit off-take.

According to official statistics, UP stands a poor 13 th out of 15 major states on the CD ratio parameter. Tamil Nadu has the highest CDR of over 100 per cent, followed by Maharashtra and Andhra Pradesh with over 90 per cent.

Meanwhile, the public sector banks operating in UP have been mandated towards improving the CDR, Bank of Baroda (BoB) GM S C Ahuja told Business Standard. BoB is the convener of State Level Bankers’ Committee (SLBC) in UP.

“We have formed a sub-committee headed by Union Bank of India to prepare a report on the UP districts,” he added.