An Open Letter to Modi

Prime Minister designate Narendra Modi inherits bad governance; almost empty treasury as the UPA-FM has drawn in advance all the dividends of the PSUs six months in advance (2014-15 first half) to arrive at the magic figure of fiscal deficit of 4.5 percent promised by him; inflationary economy contributed by more the supply side factors; lowest growth of manufacturing sector continuing for the preceding two quarters; the burden of Food Security Act and the MNREGS to which the BJP is also a party; chaotic primary education to higher education; scamsters sitting right in front of him in the Parliament benches; election promises of the NDA partners hitting the roof and unnerving agriculture sector. At the moment, on the external front, the issues do not pose urgency.

Manifesto for Agricultural Sector: Agenda for Future

Manifesto for Agricultural Sector: Agenda for Future

‘If farming fails nothing else succeeds in this country.’ Economic growth of this predominantly agrarian country depends on agricultural growth.

Target 6% growth of farm sector for an assured double digit sustainable growth of the economy.

Allocate Budget – at least 10% of the outlay should be devoted for agricultural sector.

Present Agricultural Budget in all the predominantly agricultural States preceded by Agricultural Survey.

The Myth of Poverty Alleviation

The Myth of Poverty Alleviation

When the General Elections to clearly the biggest democracy in the world are on cards with the participation of over 83million voters all eyes will be on the agenda of the contesting political parties. One item, for sure, is poverty alleviation. The UPA during its decade rule has been trumpeting on taking the growth trajectory northwards and as a consequence reduction of poverty. Claims and actual achievements apart, is it possible to eliminate poverty in any part of the world? Has economic growth contributed to its elimination in any part of the World ever since the end of Second World War?

Managing NPAs: Cure worse than the Disease

RBI started anew a failed initiative in an amplified form after a make-believe consultation document. Not all the perfumes of Arabia would clean the stench of INR 5trn. The SMA categorization for monitoring the stressed assets had its origin in 2002 itself.

But the moot question: is micromanagement going to be the solution that failed to impose a regulatory information system? The pressures on the senior Managers in attending the DLBCs, SLBCs and host of others would leave little time for the now introduced JLFs which in turn have to seek investors for stressed assets’ buy.

If wishes were horses voters would be riders.

The Budget is neither Vote Catching nor Vote on Account

Vote on Account Budget 14-15 presented today is more an accounting than budget as all the income and expenditure for the next six months has to be spent on account. What the Union Finance Minister has done is gimmicks or jugglery of figures when it came to Fiscal Deficit. He postponed payments due during the last three months and demanded advance payments of dividend from all the banks and the PSUs and even asked the RBI to transfer its surplus to contain the deficit. In the process what would happen is that the government that comes to power has a responsibility to pay up all the pent-up dues and forego all the receipts for the six months April –October 2014 if they are at the expected level because they were all on the basis of some assumptions of revenues and expenses projected for the next financial year. He is for sure going to handover empty treasury to his unknown successor.

Nobody knows how the domestic and global environment would turn out. But the hope is that it would be better if we are to go by some global trends.

Arthakranti is only a half-way illumination - Moneylife

Arthakranti is only a half-way illumination - Moneylife

2014 A Tough Year for the Indian Economy

A tough year ahead for the economy:

First decade of the century had witnessed greater height and steeper fall in global economy the same has been true for Indian economy. The greatness of Indian economy, though at pains, is that it kept on expanding twice the global economic expansion rate during this period. Some even say that the economy is moving more by sentiments than fundamentals, because we do not have the rate of savings and investments moving up as was the case five years ago.

VITALINFO: Why FinMin wants public sector lenders to rush into selling insurance

VITALINFO: Why FinMin wants public sector lenders to rush into selling insurancePSBs to sell the insurance products and invest in training of its staff already overloaded with other regular banking work and not having time to spare for training off their operating desks, would end up selling soaps of TATA by Proctor and Gamble. The bancassurance itself has not take off as a corporate agency model successfully. Most staff today know only the system and not banking domain. If they are asked to get into another domain insurance as well, the banks' balance sheets will take a big hit. It is time that the banks are allowed to do banking more efficiently and in a more customer-friendly manner and also devote more time for innovation of new deposit and credit products competitively in the emerging rural areas. It is also important that the human capital should be allowed to add its weight for strengthening Basel III emerging capital requirements. 'Let not thy winged days be spent in vain, where gone no gold can try them back again.'(Oliver Goldsmith) It is time to revisit the recommendation of the First Financial Sector Reforms of M. Narasimham on the Government diluting its hold over public sector banks, particularly in not getting into micro management. Let the banks decide for themselves what business they should do and what they should not and hold themselves responsible for all their decisions.