This is what many in the
country – both economists and non-economists – are doing. Strange indeed that
fiction should overtake facts when an eminent economist and a popular
columnist, Bibek Debroy chose to counter Manmohan Singh-likes that are just
handful in the country in a column in the Hindu dated 12th December, '16. The fact is that majority of the population were in
support of demonetisation. I demanded for it even in 2011 for three reasons that the PM mentioned. There was one more reason at that time – to
contain inflation that was razing at 8.5% then.The fiction is that 98.7% of
households have bank accounts that too with the proportions mentioned by him.
My blogs are only subject oriented - Finance, agriculture, MSMEs, Cooperation, Corporate Governance etc. Do not relate to any comments on caste, religion, sex etc.
Wednesday, December 21, 2016
Wednesday, December 14, 2016
The Doyen Among Journalists No More
To imagine that V. Hanumantha Rao (Vihari) is no more, is hard to imagine. He is a journalist standing tall among the community. Till his last breath he was contributing to the columns. There is no Telugu daily without his article. 45 years of my friendship vanished yesterday to my utter grief.
He introduced the feature articles in Telugu as part of the triumvirate - Potturi Venkateswara Rao and ABK Prasad being the other two when EENADU daily was launched. Till then only the English dailies used to carry the features on editorial page.
When I was Agent (now the Branch Manager) of Agricultural Development Branch, SBI, in 1972, he visited my branch as a UNI correspondent. He inquired of the activities of my branch because ADB was a structural innovation in branch banking of the SBI to serve the farm sector different from the other sectors it used to engage in. After seeing the farmer crowd, he asked me how will the 2000 SF/MF would be financed their crop loans in a week or ten days - as seasonal lending is of utmost importance. I told him that we would be completing the documentation and due diligence process in the villages adopted by the Bank and they were 31 in number. He asked me whether he could accompany me on such visits. I said: yes and next day we started for the villages at 7a.m from my residence.
He saw the bank field staff and me filling up the 9 page application, taking signatures on 9 page document of hypothecation deed, Demand Promissory Note and Take Delivery letter involving no less than 400-odd signatures and thumb impressions ( inn respect of illiterate farmers). We could complete on that day documentation and disbursement of farm loans to the extent of just 50 farmers!
At about 3p.m he left telling that he has to file a story from the office. Next day, June 20, 1972 if I recall right, all the news dailies and weekly tabloids and monthly journals later carried a box item:
'A Farmer has to affix 420 LTI/signatures even to get a Rs.100 loan. B. Yerram Raju, Agent, ADB, confirmed in a village adopted by the SBI ADB in Thagarapuvalasa Block of Bhimunipatnam Taluk.'
My residential phone on that day started ringing from the day dawn - all calls from the Regional manager, Development Manager (Agriculture), Secretary & Treasurer and so on. The RM asked me to fly to Hyderabad as the Chairman R.K. Talwar wanted me to meet him. I took the Indian Airlines mid-noon flight.
The worry of the Bank top management was that using all the influence, they had published a photo of the inauguration of State Bank Staff College with Y>B. Chavan, the then FM and the Chairman of the Bank and the Principal in the front page of the then widely circulated Deccan Chronicle and right underneath the photo the above box item appeared almost annulling all their PR effort.
The most progressive Chairman that the SBI ever had in post-independence India, discussed with me over lunch the way forward to reduce the misery in such documentation. The solicitors were summoned to the Central Office and the Development Manager Agriculture facilitating documentation was simplified within a month.
VH proved what a journalist could do. He established DNF and published my first book under that banner: Commercial banks and rural development - Issues & Trends in 1981. He has a penchant for statistics and his analysis beats some of the best analysts on the financial dailies even at his 91. What a loss to the world of Telugu journalism? He has established the School of Journalism and produced a large number of responsive journalists.
He was responsible for my subscribing to the columns of Telugu dailies feature articles on subjects of public interest and they are as many as 250 out of my all the other feature articles numbering over 2000. Even 15 days ago he called me up and had a discussion on the fundamentals of GST and its impact on the economy. He wrote a piece on GST in Prajavani next day. A journalist of unparalleled stature exited this world!
He introduced the feature articles in Telugu as part of the triumvirate - Potturi Venkateswara Rao and ABK Prasad being the other two when EENADU daily was launched. Till then only the English dailies used to carry the features on editorial page.
When I was Agent (now the Branch Manager) of Agricultural Development Branch, SBI, in 1972, he visited my branch as a UNI correspondent. He inquired of the activities of my branch because ADB was a structural innovation in branch banking of the SBI to serve the farm sector different from the other sectors it used to engage in. After seeing the farmer crowd, he asked me how will the 2000 SF/MF would be financed their crop loans in a week or ten days - as seasonal lending is of utmost importance. I told him that we would be completing the documentation and due diligence process in the villages adopted by the Bank and they were 31 in number. He asked me whether he could accompany me on such visits. I said: yes and next day we started for the villages at 7a.m from my residence.
He saw the bank field staff and me filling up the 9 page application, taking signatures on 9 page document of hypothecation deed, Demand Promissory Note and Take Delivery letter involving no less than 400-odd signatures and thumb impressions ( inn respect of illiterate farmers). We could complete on that day documentation and disbursement of farm loans to the extent of just 50 farmers!
At about 3p.m he left telling that he has to file a story from the office. Next day, June 20, 1972 if I recall right, all the news dailies and weekly tabloids and monthly journals later carried a box item:
'A Farmer has to affix 420 LTI/signatures even to get a Rs.100 loan. B. Yerram Raju, Agent, ADB, confirmed in a village adopted by the SBI ADB in Thagarapuvalasa Block of Bhimunipatnam Taluk.'
My residential phone on that day started ringing from the day dawn - all calls from the Regional manager, Development Manager (Agriculture), Secretary & Treasurer and so on. The RM asked me to fly to Hyderabad as the Chairman R.K. Talwar wanted me to meet him. I took the Indian Airlines mid-noon flight.
The worry of the Bank top management was that using all the influence, they had published a photo of the inauguration of State Bank Staff College with Y>B. Chavan, the then FM and the Chairman of the Bank and the Principal in the front page of the then widely circulated Deccan Chronicle and right underneath the photo the above box item appeared almost annulling all their PR effort.
The most progressive Chairman that the SBI ever had in post-independence India, discussed with me over lunch the way forward to reduce the misery in such documentation. The solicitors were summoned to the Central Office and the Development Manager Agriculture facilitating documentation was simplified within a month.
VH proved what a journalist could do. He established DNF and published my first book under that banner: Commercial banks and rural development - Issues & Trends in 1981. He has a penchant for statistics and his analysis beats some of the best analysts on the financial dailies even at his 91. What a loss to the world of Telugu journalism? He has established the School of Journalism and produced a large number of responsive journalists.
He was responsible for my subscribing to the columns of Telugu dailies feature articles on subjects of public interest and they are as many as 250 out of my all the other feature articles numbering over 2000. Even 15 days ago he called me up and had a discussion on the fundamentals of GST and its impact on the economy. He wrote a piece on GST in Prajavani next day. A journalist of unparalleled stature exited this world!
Wednesday, December 7, 2016
Debates, Discussions, Demonetisation and Distress
Debates, Discussions, Demonetisation
and Distress
Most
discussions and debates on demonetisation have a few things in common: the move
is right; it is the worst planned event in India’s economic history;
calculations on black money went wrong; and rural masses are in distress unable
to meet their daily needs. I am a strong votary of demonetisation. I am,
however, not a supporter of complete digitisation or cashless economy. Less
cash economy can be a target of gradualism and not maximalism.
Former
Governors of RBI, C. Rangarajan, Y.V. Reddy, and Subbarao also lent support to
the move in their articulations in the Press and media. Kenneth Rogoff,
renowned economist also supported the move, but the mechanism suggested was
gradualism and not a sudden action like the currently engineered measure.
However, would all these articulations, mine not excluded, alleviate the
distress of the vast rural masses?
Both
houses of Parliament demanded a discussion, but were unwilling to discuss
demonetisation for reasons that the common man was unable to understand. The
distress of those who had to bury their dead or had imminent marriages in the
family, not to mention the plight labour on daily wages has been immense.
Tuesday, November 15, 2016
How Demonetisation affected rural areas
How Demonetisation
affected rural areas
By any standards and by
all means demonetisation of 86% Indian Currency that affects the valets of
1250mn population is no ordinary decision. Union Government sent shock waves
among not just the hoarders of unaccounted money but also among the state
governments and the huge political constituency. The measure may have
precedence but the dimension of the effect has no precedence and therefore,
economic historians are watching in gaze for generating a new script.
Cash is dirty; banks
keep Dettol or soap for their staff handling cash to wash off their hands
because of the bacteria that causes pneumonia, or viruses or skin infections.
Yet we would love to hold them. Most drug dealers, casinos or prostitutes or
casual farm workers prefer to receive cash for they only receive small
remunerations for their day’s labour or night’s pleasure. Under-ground economy
does not stop these few known. Waste and scrap dealers, many steel merchants
join the gang.
Sunday, November 13, 2016
Demonetisation hits road blocks in rural areas
Though late,
demonetisation has hit as many bottom lines as the media headlines. Life will
never be the same for those demanding gratis for nothing. No longer can the
Private Medical Colleges sell the management quota for crores of rupees, for
few are left with such crores. Even private money lenders would dispense credit
at lower rates than before. NBFCs compete with banks getting their vaults
overflowing with deposits in a couple of months from now. Institutional credit
will be able to fall in line only banks change their mindset to serve the
farmers, rural artisans, and MSMEs in a big way. While this is music to the
ears, rural areas at the moment are in tears.
Out of 1,50,000 odd
commercial bank branches, there are only other 1,30,000 access points with just
22 percent of them in the Post Office fold. Primary Agricultural Credit
Cooperatives and District Cooperative Central Banks’ rural branches do not have
currency holding capacities. A visit to the neighbouring villages on Thursday
in Mahabubnagar and Nalgonda districts revealed the sob stories of the effect
of demonetisation.
This being the season
of marriages, several of those engaged in wedlock said that they took cash to
buy the wedding clothes and decorations and they have to miss the Muhurtham if
they were to draw exchange only Rs.4000 per day and that too travelling a
distance of at least 20-30km to reach the Bank branch as the post office did
not receive cash in lower denominations to substitute the withdrawn currency
notes of Rs.500 and Rs.1000. And they have to do it every working day for at
least 20 or 25 days if their dreams of marriage were to come true.
A tribal village in
Adilabad served only by a Business Correspondent during the last ten months its
banking requirements has a different story to tell today. The tribal families
that are used to spending in Rs.500 denominations and remitting into the bank
have no outlet to convert their Five hundred rupees into lower denominations.
Rural and tribal
unbanked areas are not on the antenna of either the Union Ministry of Finance
or the RBI when the demonetisation is announced. The FAQs of the RBI did not
even make a mention of the Business Correspondents and Business Facilitators on
the route map of monetising the demonetised currencies.
RBI should mobilise
safe and secure Mobile cash dispensing vans to the rural unbanked areas for
pre-specified and notified hours to exchange and remit cash up to the specified
limits.
Presently, the BCs have
limited holding capacity that is used for putting cash into the savings bank
accounts of the villagers. The BCs since the early hours of 9th
November stopped receiving the barred currencies. They also are losing their
earnings by the day. Even they can exchange cash only to the extent of limits
specified for individuals.
Several Indians staying
abroad hold up to Rs.25000 per person in these withdrawn currencies. All the
foreign banks and exchange kiosks abroad as understood from my daughters
staying abroad have closed the counters for exchange of Indian currency. They
also said that the currency to the earlier legitimised limit no longer holds
valid and they can burn their Indian Rs.500 and Rs.1000. Our embassies and the
RBI site does not provide appropriate answers.
Yet, the villagers and
tribals are in great rejoice as they get money in smaller denominations hence
forward to spend on consumables and liquor. Before it is late, the RBI would do
well to immediately address the issue of replenishing the stock of old withdrawn
currency wherever it existed with the new and lower denominations and also
provide new outlets of exchange on war footing.
For the first time
after independence, the efficiency of Currency Department of the RBI and the
Security Transport system are put to test and it is hoped that the central bank
would live up to the expectations. Initial baby steps hold many lessons to correction.
http://www.moneylife.in/article/demonetisation-ndash-will-the-rbi-gear-up/48799.html?utm_source=PoweRelayEDM&utm_medium=Email&utm_content=Subscriber%2312914&utm_campaign=Weekly%20Newsletter%20-12%20November%202016
Saturday, October 22, 2016
22nd Convocation Address on 22nd October 2016
Mrs Arthy Sampathy, Mr Sailesh, Prof V.G. Chari and
all other Professors, distinguished audience and most importantly, all the
graduates getting coronated today - I am
delighted and privileged to be amidst these blossoming flowers of life whose
petals are in pleasant colours that the most beautiful butterfly would envy. At
the outset, let me congratulate all of you for all that you achieved on this
illustrious Siva Sivani Campus. I also congratulate the faculty and staff who
should be feeling equally proud of seeing you transcending to a different
territory.
When Dr Chari called me on the morning of 16th
of this month to adorn this dais I instantaneously accepted the invitation for,
it is a great honour to be in the hall of fame of Siva Sivani Institute
alongside doyens like Abdul J. Kalam who ignited the minds of youth and
scientists alike. I also realise the responsibility to share with you such
lessons of life that you would love to hear.
If it is my parents who taught me love and
affection, it is my gurus who made me sterner stuff. I shall invoke my parents’
and Gurus’ blessings before I call upon you to do all that you wanted to do
after you leave this campus. “Matru Devo Bhava, Pithru Devo Bhava, Acharya Devo
Bhava.
I was wondering what you would love to hear for the
next few minutes different from what you had been listening during the last two
years on this campus. I thought the choices made in my life at different points
of time could be of interest to you. You are today fortunate to stand in the
midst of an intersection that takes you to the roads leading to join a job or
setting up an enterprise that creates the jobs.
Friday, September 30, 2016
Lack of oversight on credit guarantee raises concerns
Lack of oversight on
credit guarantees raises concerns
Just a year back,
Pradeep Malgaonkar, the chief executive (CEO) of Credit Guarantee Fund Trust
for Micro and Small Enterprises (CGTMSE) scheme was extolling the great strides
it made in the geographical space of such guarantees. The Trust has issued
cumulative guarantees to 23.23 lakh MSE loans involving an aggregate credit of
Rs1.08 lakh crore over the past 16 years. Its corpus grew to Rs4,328 crore as
of 31 March 2016. About 133 member lending institutions are participating in
the scheme.
But the Reserve
Bank of India (RBI) in its Annual Report for 2016 expressed concerns about
overleveraging of corpus and the way the guarantee scheme is functioning.
Information asymmetry and adverse selection on the part of member lending
institutions seem to worry the regulator. More worrisome issue is the absence
of regulatory oversight on this institution.
Wednesday, August 31, 2016
Industrial Health Clinic for Telangana MSEs on the Anvil
Telangana Government
has already put in place transparent, accountable, progressive and globally
acclaimed industrial policy through TSiPass, T-Hub etc. Its inclusive industrial
growth agenda required that the MSEs that actually oil the wheels of innovation
shall be put on even keel with non-discriminatory promotional framework.
This has propelled the
Industries Minister to adequately and appropriately respond to the call of the
MSME Associations in the State that bee-lined to him to pour out their woes
with the bank’s hurried actions in declaring them as NPAs only to sell of their
silver that included their only dwelling house!!. KT. Rama Rao, Minister for
Telangana deserves kudos for taking the initiative of reaching the Governor RBI
directly – the first ever such effort in the Federal Republic of India to bat
for the MSEs’ issues.
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