Sikkim hosted RBI's Board meet in state after 12 years

Gangtok: Sikkim on Wednesday hosted the Reserve Bank of India (RBI)'s board of directors meet after a gap of 12 years.

"We are here after a long gap of 12 years," RBI Governor D. Subba Rao quipped at a press meet. Elaborating further, he said that out of the seven meetings of the Board of Directors, four are annually held in the metros, and the other three taking place at the state capital by rotation.

It has been Sikkim's turn to host the RBI's board of Directors meeting this year under the rotation, Rao said while referring to the sylvan landscape of the hill state.

The Reserve Bank of India (RBI) advised the Sikkim government to raise revenues from internal sources to bridge the huge fiscal deficit in the state. Sikkim has had high fiscal deficit despite having revenue surplus, which means the state has excess receipts than expenditure on non-capital account. However, the surplus revenue has been channelised into capital expenditure, RBI Governor D Subbarao, who presided over a meeting of the bank regulator's board of directors here, said.

Rao, who had earlier in the day called on Sikkim Chief Minister P K Chamling at his Mintokgang residence, said that he advised the latter that Sikkim or other north eastern states cannot take for granted the generous allocation of the Central grants in future as well.

Sikkim alongwith other seven north eastern states get more per capita central grants than other states, who "make noise about it" with the finance commission, he said. Sikkim and other north eastern states should be prepared to raise more revenues from its own sources to tide over fiscal deficit and meet their expenses, the RBI Governor said.

Meanwhile, the Sikkim Chief Minister assured him (Rao) that the state government has explored various avenues, including tapping its hydro-power resources, to generate revenues of its own to meet various expenditure in future, he said.

The RBI Governor described Sikkim as an important financial
destinations in the country with tremendous potential in terms of penetrations by the banks as compared to other states.

Rao said that it has also been decided to set up 10 more branches of various banks across the states and four more currency chests in addition to three such currency chests already functioning in Gangtok.

The RBI Governor said that the apex bank has also taken note of the Chief Minister's observations of delay in the transfer of the central grants in the accounts of the state government and said that the banks have been directed to keep sufficient liquidity to make available the central funds to the state at the earliest.

The Reserve Bank said that banks would open additional currency chests in Sikkim in the next nine months to cover all the district headquarters in the State.

"Banks will open additional currency chests in the State of Sikkim within the next nine months so as to cover all the district headquarters in the State," RBI said in a release.

It further said that banks and the State administration will also work in close coordination to enhance credit flow in the state.