Wednesday, July 1, 2015

Slashing Centrally Sponsored Schemes

Different states have different poverty levels. Prudence and diligence in spending on social sector schemes would emerge with the centre taking minimum share and allowing states to carve out their budgets in a manner that their poorer citizens require. 

One thing that baffles me is the enormity of social expenditure budgets by states like Andhra Pradesh and Telangana with the percentage of poor in total population in the range of 10-12 percent spending more than 50 percent of their budget on populist schemes. They are not focusing even at that expenditure levels on giving free education to the poor by improving infrastructure in all the government schools on a mission mode and providing health care at the door step by improving the primary health care centres in villages.

Small, marginal farmers and lease holders should get protection from the wild market fluctuations through price buffering, beyond the horticulture crops.

Tuesday, June 30, 2015

Growth of the economy at 8%?

250mn poor of India are being ruled by over 500 crorepatis in the Parliament and thousands of such legislators in states. Arvind Panagariya, Vice Chairman NITI AAYOG would like to believe that the growth of the economy would hit 8% by the end of this year.

AGriculture with its 13.7% share in GDP providing sustenance to about 50% of population still is posing risks to growth. So is the MSME sector, not still the darling of credit agencies. Exports did not rise significantly during the first quarter.

One consolation is that on the external front we seem to be doing fine.Watch this in the backdrop of one week's closure of Greece Banking and Stock Markets.

 In fact, while one would very much like to be optimistic, the dreams of make in India being still in the dark, uncertainties on the farm front, manufacturing yet to gain, the buoyancy of tax collections still to surface, the sovereign debt continuing to rise, and the hidden inflation at embarrassing level, the hope of 8% for 2015-16 that too from the Aayog Vice Chairman is really fond. Adding fuel to fire is the current Greek Debt Crisis impacting on our engineering exports and rising exports is the hope of Arvind Panagariya.

Wednesday, June 17, 2015

Still too many go hungry

Despite the high growth years, malnourishment stalks the countryside. This calls for a small-farmer led focus
At a time when India’s GDP growth is hopefully pitched at 7.5 per cent this fiscal, touted to be higher than China’s, three global reports of significance also grabbed the headlines: The Global Findex Data Base 2014The Global Food Policy Report of the UN and the State of Food Insecurity in the World, 2014.
Ahead of all these, the IMF and the World Economic Forum reported that 25 per cent of India’s population still remains poor.
The Global Findex Data measured the financial inclusion around the world. The other two reports dealt with the food insecurity and the measures to tackle them.
It must be remembered that the data is mostly up to March 2014. The findings are of great import to this government for designing policies tackling financial inclusion, hunger and malnutrition.
The government would like to measure the poor by the JAM method — Jan Dhan account, Aadhaar, and the mobile. It has been acknowledged universally that there were no deaths due to hunger. But the farmers who produced food committed suicide were burdened by excessive debt.
The undernourished poor, like the Jan Dhan accounts, showed an impressive decline in the reports and these are counted once every three years.
A range of indicators can be used to measure a nation’s food security. These include average dietary energy and protein supply, access in terms of road and rail line density, domestic food price index, prevalence of under-nourishment, stability measured in terms of cereal import dependence ratio, political stability as well as absence of violence and terrorism, undernourished children below five years, anaemia among pregnant women, and vitamin A and iodine deficiency in the population.
Measuring insecurity

Malnutrition is redefined to include obesity and overweight. In India, child stunting (under five years) is 47.5 per cent while undernourishment is 15.2 per cent; whereas overweight population is 11 per cent. The country witnessed an average GDP growth of 8.7 per cent in 2003-08, 6.7 per cent in 2008-09, followed by 8.6 per cent and 9.3 per cent in the next two years.
When the growth of GDP was high and food inflation was also high, there was a decline in the percentage of under-nourished population.

Sunday, June 14, 2015

Health insurance

Whose health are we insuring? · The new health savings plan appears more advantageous to insurers and agents than consumers
My comments as posted in the article:
Insurance industry in this country is just evolving. Neither the operators nor regulators nor the insured know the intricacies in full. Not that I also know something great. All I know is the risks attached to insurance are far different and have varying dimensions across ages and sex. Premium as the insurance companies say is measured by the risk associated. So as one ages, the risks become larger and therefore, the premium is charged higher equivalent to an ageing automobile. Women become more vulnerable to certain health problems far different from after a particular age - say 40-45years. Both men and women while they are earning more could be charged higher premium for insuring risks to cover those that become larger when they age or when they retire and for women after 45 years. The moment one says he is insured in a corporate hospital, the list of tests become longer; charges become hefty to take the maximum in the insurance pie. This exploitation should be stopped by IRDA.

Tuesday, June 9, 2015

Can Gold Monetisation Scheme succeed?

Gold Monetisation Scheme:

Some Suggestions:
I used to have my batch mate in the SBI, retired as MD of an Associate Bank, who used to buy Rs.100 worth of gold every month during his first ten years of service. Later, he may have increased it to Rs.500 or even Rs.1000 a month. Such is the urge for having gold in domestic vaults in India. South India or people from the South in the North invariably have gold in the shape of jewelery. Every village household, how so ever small it may be, has at least 500-1000gms of gold in the shape of jewelery. There are certain traditionally rich families where every day in a week has certain set of jewelery to wear for the house wife inherited from the mother in law. Such ornaments are at least 20-30kgs. These are invariably kept in the lockers and taken out for the festivals. This is a huge idle gold reserve in jewelry.

Thursday, May 7, 2015

Time for Governments to deliver

The year of coronation of the NDA Government is close on the heals of completion. People have seen lots of promises in the air. Corruption continues; delay in delivery of the benefits also continues; expectations of the people on various fronts are unfulfilled. Transparency is yet to be seen. What is the remedy?


Whenever a scheme is introduced by either the State or Central Government, it should also announce the mode of delivery: The department and officer concerned with contact number and email address; any legitimate charges for availing the benefits of the same, the window for payment - on line or physically at the department counter and the time that would be taken for delivering the announced benefit should also figure in the announcement. 

Grievance Redress:
In case of difficulty which authority should be approached, again with the email and telephone/mobile number details should also be announced. This is the only way in which correction could be minimised.

Wednesday, May 6, 2015

Bank Employees and Social Banking

Bank Employees and Social Banking

Bank employees and unions will have to recharge themselves to a new set of objectives that would enhance the business of banks on one side and help the society on the other.

May Day is usually the day to recall the assertion of their rights. For a change, the All India Bank Employees Association (AIBEA) during this 70th year thought of taking the initiative of enjoining social responsibility. Gone are the hard days of militant agitations as means to achieve fair compensation, safety, security and comfort in work places. Workmen and officer representatives are today part of the governance and management of banks. Machines dictate the employees’ ways of working. Discretion has less relevance now than in the past. Technology dictates the employees’ ways of working and management processes. But are the customers, a happier lot? The response is discouraging.

Ever since the introduction of banking reforms following the recommendations of Narasimham Committee 1 and 2 and the alignment with the global regulatory architecture through BASEL I, 2 and 3, technology and capital adequacy have become the prime drivers of growth in banking sector.

Mobile banking and micro finance institutions (MFIs) moved into the space left by the RRBs, weakened cooperatives, and rural branches of commercial banks. Banking correspondents and customer service points, White ATMs surfaced.  Who should we blame for providing this space excepting the lack of commitment and motivation of staff to align with the objectives of the nationalisation of banks?

Friday, May 1, 2015

Farmers Hurt

Farmer Hurt and Farming Needs Innovative Push
Priority Sector Credit Policy to Synchronise

The Scenario:

Agriculture, India’s largest employer is undoubtedly the engine of India’s economic growth. Agriculture is constitutionally a State subject, but, in practice, all policy decisions in its activity chain like Agriculture Credit, Procurement, MSP, fertilizer allocation and subsidy, and relief measures, etc., are in the domain of the Central Government. Indian farmer and the entire value chain in the farming sector, as a consequence, is strangulated by regulations of over twelve ministries of GOI and at least six ministries of the State Government.

While the priorities should be on improving soil health, conserving water and improving markets for assuring reasonable prices for the farmer, the present Government misplaced its priorities to introduce Land Acquisition Bill that now got into the second ordinance faced with stiff opposition on the floor of the house and in the streets of North India.