Every year, farmers are forced to sell their produce especially perishable items viz. fruits and vegetables at throwaway price [quite often even destroy as the realization is not enough to cover even the cost of transporting to the mandi/market]. A major bottleneck is absence of infrastructure for handling and storage which apart from denying farmers their due also causes loss of output worth about Rs 100,000 crores annually. The problem has been festering for generations despite both the union government and states recognizing the dire need for setting up the infrastructure and umpteen committees making recommendations in this regard. Even the domestic private corporate has hardly taken any initiative in this regard. This is despite their being allowed entry in...
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Category: Infrastructure
Deceleration in bank credit – a good omen
According to the Reserve Bank of India [RBI], during the financial year 2016-17, credit growth plunged to a whopping six-decade low of 5.08 per cent as against 10.7 per cent in the previous year [as on March 31, 2017, banks’ outstanding credit was Rs. 7,501,000 crores – down from Rs. 7,881,000 crores as of April 1 2016]. This is the lowest since 1953-54 when it had inched up by a paltry 1.7 per cent. Critics including former finance minister, P Chidambaram under UPA – dispensation cite low credit growth in support of their contention that the economy is not doing well. They have even used this to question high GDP [gross domestic product] growth data churned out by Modi – government viz. 7.1%...
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Aadhaar – citizens’ welfare versus privacy
Even as Modi – dispensation is pulling all stops to deliver good governance, a major stumbling bloc is intervention by the judiciary; courtesy, a spate of PILs [public interest litigation] on almost every issue that concerns administration and delivery of public services. Unlike the executive where once a decision is taken, it gets implemented within a given time frame [under present government, things are happening in a fast track mode], any matter coming to the court for its decision inevitably gets delayed. A case in point is use of Aadhaar for dispensing various services. The Unique Identification Authority of India (UIDAI), established by UPA – II in 2009, issues Aadhaar cards to the citizens. Under the scheme, every citizen is...
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NPAs legacy – offshoot of bureaucrat-borrower-politician nexus
In a brief prepared for the G-20 meeting at Hamburg, the International Monetary Fund [IMF] turned the spotlight on vulnerabilities of the Indian banking sector caused primarily by unsustainable level of non-performing assets [NPAs]. As on December 31, 2016, gross NPAs were about Rs 676,000 crores – 90% of these with public sector banks [PSBs]. The figure will be close to Rs 1000,000 crores if one includes the bad loans given a lease of life via ‘restructuring’ – a euphemism for relaxing payment terms. The problem had been festering for quite some time under United Progressive Alliance [UPA] and assumed monstrous proportions during its second term [2009-2014]. This remained camouflaged until such time the Reserve Bank of India [RBI] initiated...
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TELECOM INDUSTRY IN SELF-DESTRUCT MODE
A good deal of the problems that the telecom sector faces today has been solely created by service providers. They must keep it in mind that public interest cannot be won by just keeping price low. It’s important to maintain quality of service Arundhati Bhattacharya, chairperson of the State Bank of India, recently sounded alarm bells over troubles surrounding the telecom sector. She wrote to the Government about the “highly unsustainable levels” of debt mobile companies face today. The industry’s debt to the banking sector is estimated at four lakh crore rupees. In a letter to the telecom secretary, Aruna Sundararajan, Bhattacharya stated that “stress in the sector has reached highly unsustainable levels after the entry of new players and launch...
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Telecomm industry – in ‘self-massacre’ mode
Arundhati Bhattacharya chairperson, State Bank of India [SBI] – India’s largest bank – has sounded alarm bells over troubles facing the telecommunication industry due to “highly unsustainable levels” of debt of mobile companies. The industry’s debt to the banking sector is estimated at Rs 400,000 crores. In a letter to telecom secretary, Aruna Sundararajan, Bhattacharya stated “the stress in the sector has reached highly unsustainable levels after the entry of new players and launch of free services, which led to erosion of EBITDA [earnings before interest, taxes, depreciation and amortization] of telecom service providers.” The gravity can be gauged by looking at following numbers. The total annual cash outflow of industry is Rs 178,000 crores which includes interest payments: Rs...
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3 years of Modi rule – too early to look for jobs
On completion of three years in office, even as Team Modi gears itself to celebrate with focus on disseminating to public at large its achievements, opposition parties [mainly Congress] have projected a counter narrative purportedly to show it in poor light. Picking on BJP’s promise of creating 10 million jobs every year, they point towards a few hundred thousand jobs generated during the last 3 years to proclaim that the performance of this government is dismal. Coming from a party whose own record on all crucial economic parameters [including jobs] was abysmal, such criticism is laughable. During a decade [2004-2014] of UPA rule led by Congress, employment increased by a meager 15 million which is one-fourth of an increase of...
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SAVING THE RURAL JOB SCHEME FROM DEATH
Modi has pressed all the right buttons to ensure that MGNREGS becomes an instrument of promoting his Government’s inclusive development agenda In a stunning revelation, Amarjeet Sinha, Secretary, Ministry of Rural Development (MoRD), revealed that the Government had cancelled nearly 10 million fake ‘job cards’ under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Including the fake beneficiaries struck off from the scheme earlier, the total number of such cards cancelled thus far is more than 31 million. Under MGNREGA — a flagship welfare scheme launched by erstwhile UPA dispensation in 2005 — ‘guaranteed’ employment is provided to a member of a poor family in rural areas for a minimum of 100 days in a year and wage paid...
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MGNREGA under Modi – has it ceased to be epitome of corruption?
In a stunning revelation, Amarjeet Sinha, secretary, ministry for rural development (MoRD) has revealed that the government has cancelled nearly 10 million fake ‘job cards’ under the Mahatma Gandhi National Rural Employment Guarantee Act [MGNREGA]. Including the fake beneficiaries struck off from the scheme earlier, the total number of such cards cancelled thus far is more than 31 million. Under MGNREGA – a flagship welfare scheme launched by the erstwhile UPA dispensation in 2005 – ‘guaranteed’ employment is provided to a member of a poor family in rural areas for a minimum of 100 days in a year and wage paid @ Rs 100 per day. For this purpose, one job card is given to each family. A card holder...
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Tackling NPAs – deep surgery needed
The non-performing assets [NPAs] or bad loans [as these are known in common parlance] in the banking system are threatening to cross the Rs 700,000 crores – this is 100% more since the asset quality review [AQR] was ordered by Reserve Bank of India [RBI] two years ago. For an economy that has been on a high growth trajectory since 2014-15, NPAs of banks has been identified as a major structural problem that poses risk in the medium-term even by International Monetary Fund [IMF]. To address it, RBI deputy governor, Viral Acharya has come up with a two-pronged strategy. First, for assets which are capable of generating cash flow in short-run, these may be transferred to a private asset management...
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