shri vepa kamesam : roll - out strategy for rtgs implementation inaugural address by shri vepa kamesam, deputy governor of the reserve bank of india, at a meeting with cmds of banks, mumbai, 21 july 2003. * * * i welcome you all to this meeting. i am glad to share with you that the implementation of the rtgs project has progressed significantly and is now critically poised. even when i am speaking to you, the demonstration of the demo rtgs system to a group of bank officials is in progress in our bankers ’ training college. the rtgs system is scheduled to be delivered by the end of october, 2003, followed by installation, testing and commencement of parallel run before the year - end. therefore, we have to now prepare ourselves for the roll - out of the rtgs system. incidentally, my colleagues have been regularly meeting with your nodal officers for the project and other officials to assess your preparedness for participation in the rtgs system. friends, there will be a single rtgs system for the country and all of us have to make co - ordinated and concerted efforts to ensure that the entire nation optimally benefits from the introduction of the rtgs system. i take this opportunity to update you on the recent developments in the payment systems area. one of the primary objectives of every central bank is to put in a place a modern, robust, secure and integrated payment and settlement system to enable the common man to make payments to anyone he likes in the most efficient and cost effective manner. the ultimate beneficiary of the payment system has to be the ordinary bank customer. in fact, our vision has been “ anyone can make payments to whomsoever one likes, whenever one likes, in whatever type of currency one likes, at the cost of a few cents per transaction. there are no settlement delays or mountains of paperwork and value is received instantaneously. there are no distinctions in costs or delays between a domestic and a foreign currency transaction. interest is computed real - time rather than on a “ settlement day ”, a relic from the ancient times, when accounting was done manually. finally, privacy and security are guaranteed. ” the rtgs system will facilitate large value inter - bank payment and settlement in real time online mode on a transaction by transaction basis. it will enhance systemic efficiency and minimise the existing settlement risks. in fact, the rtgs system the world over has come to be regarded as the sin

prices ) over past five - six years has been higher for livestocks, fishing and aquaculture as compared to crops3. allied activities contribute approximately 40 % to agricultural output, whereas only 6 - 7 % of agricultural credit flows towards allied activities4. one important characteristic of indian agriculture is that it is mainly small holders ’ farming with an average landholding size of 1. 08 hectares5. the small and marginal farmers account for 86 per cent of all holdings and 47 percent of the operated area6. they contribute more than 50 % of the total agricultural and allied output. in smallholder farming, it remains a challenge to raise agricultural productivity and farmers ’ incomes. it requires appropriate solutions starting with easy access to modern inputs and then selling the produce in most remunerative markets. institutional credit at reasonable cost all along the value chain is one such catalytic instrument that can facilitate the process by converting many subsistence farmers into vibrant commercial farmers. they can then diversify their agricultural operations in growing high value crops like fruits and vegetables, and engage in allied activities, like dairy, poultry, fishery, honey, beekeeping, etc. allied has huge potential, which can be capitalised by improving credit flow towards it and by encouraging farmers to move towards allied activities. 7. from time to time, government has given various policy thrusts, as a result of which, the indian agriculture sector has not only become self - sufficient but has emerged as a net exporter of several commodities like rice, marine products, cotton, etc. some of the important initiatives taken by the government include the implementation of interest subvention scheme ( iss ) for providing credit for crop production at reduced interest rate, soil health cards ( shc ) for improving agricultural productivity, pradhan mantri krishi sinchai yojana ( pmksy ) to ensure irrigation facilities, pradhan mantri fasal bima yojana ( pmfby ), for providing a safety net against natural calamities and national agriculture market scheme ( e - nam ) for providing better price discovery through transparent auction process. there is also a renewed focus on allied activities to aid income of farmers. 8. despite these initiatives, there are several challenges confronting indian agriculture such as diminishing and degrading natural resources, rapidly growing demand for food ( not just for quantity but also for quality ), stagnating farm incomes, fragmented land holdings and unprecedented climate change, which need to be tackled for long term sustainability and viability of indian agriculture.