inance Minister P. Chidambaram has said that subsidies being given are within borrowing limits. Speaking to media-persons outside Parliament, Mr. Chidambaram said that the amount of subsidy for petroleum, Air-India and other sectors is small and the government can accommodate it in present borrowing limits.

The Finance Minister P Chidambaram has suggested creation of National Investment Board for speedy clearance of mega projects. He said the board headed by the Prime Minister Dr. Manmohan Singh may take a investment proposals above 1000 crore rupees in the infrastructure sector. He said, the gross budgetary support during the plan period has been estimated at 35.68 lakh crore rupees which translates into 5.23 per cent of GDP over the five year period. Mr Chidambaram said direct cash transfer of subsidies in food, fertilisers and petroleum will help in the reduction of non-plan expenditure. He was speaking at the 12th plan panel meet on Saturday.

 President Pranab Mukherjee has said if subsidies are not contained below 2 per cent of the GDP, it may pose a
serious problem for the economy.
The President said this while addressing a felicitation event by CII in New Delhi yesterday, Highlighting that the current account deficit (CAD) of around 4 per cent is a matter of concern, Mr Mukherjee said, the economic growth has been very slow, particularly since the global financial crisis .
The President added that even when exports have slowed down, the diversification of export destinations is yielding some positive results.
Mr Mukherjee, however, expressed confidence that the country would be able to overcome the present crisis through collective efforts of different segments of the economy.
The major subsidies given by the Centre are for food, fertilisers and petroleum products.

The Reserve Bank today said banks were resilient enough to weather the pressure on farm loans caused by drought like situation because of deficient monsoon.

RBI Deputy Governor KC Chakrabarty told reporters in New Delhi that banks have sufficient rehabilitation measures to weather it out. He said the Indian banking system would be able to face the stress.

Finance Minister P Chidambaram had said the Government would converge the Mahatma Gandhi National Rural Employment

Guarantee Act and other schemes to meet the challenges of drought-like situation in several states and enhance imports of commodities in short-supply to control price rise.

He said the contingency plans were in place to help farmers replant alternate crops as well as supply drinking water and fodder.

Monsoon is the life-line of the agriculture sector as only 40 per cent of the cultivable area is irrigated. Rain has been 20 per cent lower during June-July, affecting kharif crops mainly coarse cereals and pulses.

Karnataka, Gujarat, Maharashtra and Rajasthan are facing drought-like situation.

Last week, Empowered Group of Ministers (EGoM) on drought had approved diesel subsidy of 50 per cent to farmers for saving standing crops, and a 2,000 crore rupee package for states affected by drought-like situation.