Let Artificial Intelligence Help Cure the Economy's Ailments

 

“Let AI Help Cure the Economy’s Ailments”

India has the natural abundance, human talent and a civilisational wisdom that should by now have translated into broad prosperity. Yet 75 years after independence many old ills — corruption, black money, inequality, poor public infrastructure, tax evasion, and uneven delivery of services Social Justice in particular — persist. The paradox is stark: a nation with Nobel laureates, leading scientists and great thinkers continues to suffer avoidable deprivation while a small fraction parades luxury.

This is not only an economic failure and absence of social justice but also ; it is a failure of systems, incentives and governance. Politics, sometimes driven by short-term electoral gains, can warp policy: freebies displace fiscal discipline, regulatory gaps invite abuse, and influence enables insiders to exploit loopholes. The result is a loss of public trust and the squandering of national potential.

Technology — and in particular Artificial Intelligence — is not a panacea. But when deployed thoughtfully, ethically, and at scale it can be the most practical remedy for many entrenched problems. AI can strengthen transparency, detect malpractice, improve delivery of social services, and redesign public administration so that honesty and competence are rewarded rather than undermined.

Imagine tax systems that use machine-assisted analytics to spot suspicious flows and close leakages, without harassing honest citizens. Imagine procurement and tendering platforms that are fully transparent, tamper-resistant and auditable; judicial and case-management tools that reduce delay and frustration; land- and records-management systems that cut out middlemen; and public health and education platforms that deliver personalised learning and care to remote villages. All of these are feasible today.

But technology must be married to ethics. AI systems must be explainable, regulated and subject to independent audit so they do not replicate bias or become new tools for exclusion. Digital rollouts must be accompanied by digital-literacy programmes so the poorest are not left further behind. And governance must be reformed to protect public interest: rules, firewalls and statutory accountability must keep pace with technical capacity.

Equally important is the cultural aspect. India’s philosophical heritage—its emphasis on duty, compassion and the common good—can provide the ethical compass for technological change. Reviving those values in public life, while equipping institutions with modern tools, could produce a synergy the country desperately needs.

The task is urgent. Greed, short-termism and opaque power structures have hollowed out parts of the system. Reversing that requires political will, institutional redesign and wide public engagement. Artificial Intelligence can help expose and prevent malpractices, make public administration efficient and humane, and enable policies that are evidence-based rather than interest-driven.

Let us aspire, not merely to be wealthier, but to be wiser custodians of our resources — human, natural and moral. If deployed with care and integrity, technology and AI can accelerate that transformation and help realise the promise of a just, prosperous India: a nation where “Vasudev Kutumbakam” is more than poetic aspiration — it is the policy outcome.

May noble thought translate into noble action and bring in highly desirable and most enviable results

Sarve Jana Sukhino Bhavanthu.

T V G Krishnan

(Personal Views)

Bridge Sham on the River scam

 This refers to article “Where is the money going?”, by Kum Kum DasGupta (NOV6) . A large part of public  money    appears to drain away without commensurate creation of durable physical or social infrastructure. While a few benefit disproportionately, the taxpayer is left to wonder why our cities are collapsing even as the economy expands and ambitious visions are announced. Governance and accountability appear to be missing in the management of public finances—and, increasingly, in private financial systems as well. It is time to revamp our financial reporting architecture so that accounts, reports and certifications not only capture numbers but are aligned with the stated vision, mission and outcomes of institutions. Financial statements must reflect performance against purpose, not merely compliance with procedure.

T V Gopalakrishnan

BENGALURU. 

( THIS appeared in ET dated 7th Nov 2025). 

Why not we have The Collective Will to realise the Dream of an Advanced Economy a reality ?

 

Policy Brief: 360° Balance Sheet Rating System

Restoring Trust in Financial Reporting and Governance

Background

Balance sheets today often conceal more than they reveal. Despite audits and regulatory oversight, window dressing, inflated valuations, and opaque disclosures have eroded public trust. The traditional focus on compliance and arithmetic accuracy no longer guarantees financial integrity or ethical governance. 

The Proposal: 360° Balance Sheet Rating

A 360° Balance Sheet Rating System is proposed to assess not just financial correctness but the entire ecosystem of transparency, governance, and ethics behind an organisation’s financial reporting.

Key Evaluation Dimensions

1. Financial Accuracy – True asset valuation, liability recognition, revenue authenticity.

2. Governance & Ethics – Board independence, accountability, conflict-of-interest controls.

3. Transparency & Disclosure – Clarity, completeness, and honesty in reporting.

4. Compliance Discipline – Adherence to tax, regulatory, and prudential norms.

5. Sustainability & ESG – Ethical, social, and environmental responsibility.

6. Technology & Risk Controls – Fraud resilience, cyber audit trails, AI integrity.

Rating Scale (Indicative)

AAA – Fully transparent and ethically sound
AA / A – Reliable with minor gaps
BBB / B – Moderate to high opacity and risk

Implementation Framework

• Independent Certified Agencies: Empanelled by RBI/SEBI/NFRA.

• AI-Driven Analysis: Data triangulation using audit reports, digital trails, and forensic tools.

• Annual Review: Mandatory re-rating for listed and large unlisted entities.

• Public Disclosure: Ratings to be included in annual reports and filings.

Expected Outcomes

• Restored trust in financial reporting.

• Reduction in frauds, NPAs, and governance failures.

• Strengthened market credibility and investor confidence.

• Promotion of ethical, transparent, and accountable capitalism.

Policy Recommendation

Regulators (RBI, SEBI, MCA,IRDA ) may jointly pilot the 360° Rating Framework for banks, listed companies, and large PSUs. Over time, extend it to NBFCs and major private enterprises. This reform can serve as a national benchmark for financial honesty and governance integrity.

Once a balance sheet is finalized strictly in accordance with accounting standards, regulatory norms, and the due satisfaction of banks, major clients, tax authorities, and professional auditors—with adequate internal and external controls to prevent fraud and manipulation—it should stand as a true and transparent statement of financial reality.

Such integrity in financial reporting strengthens stakeholder confidence, enhances trust, and reflects professionalism of the highest order. When governance standards are upheld consistently and without compromise, they have the potential to become global benchmarks. India can then truly emerge as a role model in accounting practices—where transparency is not an exception but the norm, and where accuracy and ethics inspire respect, admiration, and emulation across borders.

The question now is: Do we have the collective will—regulators, corporate leaders, auditors, and financial institutions—to make this vision a reality?

Satyameva Jayathe. May there be happiness, welfare and the Joy of enjoying Life by all in the Universe. 

Dr T V Gopalakrishnan

(Views are Personal).

The need of the hour is only to enhance better mobility of the people through Well RUN Administration.

 Dear Sir,

The  need of the hour in Bengaluru is better mobility  of the  people and fast and efficient  movement of goods and services to ensure optimum utilisation of the resources  under command for the maximum welfare of the people . From this angle, should BMTC take the privatisation road? is the debate thrown and  the answer is a definite NO. However there is urgent need to assess as to whether the Investments in the BMTC have done full justice in terms of optimum realisation of returns from the angle of utilisation of the human and other resources and whether all the objectives of the BMTC services have been met to the satisfaction of the Management of BMTC, the Authorities and the Public? No doubt the services of BMTC get badly affected for want of good roads and other infrastructure and the comparisons with similar placed organisations can have some meaning only if all ingredients in use are compared. In fact my own view is that BMTC does a good job when compared with other institutions if one were to take the limitations BMTC face to run its services in terms of infrastructure.Chennai. Mumbai and Delhi have better Roads and as well developed  industrial states have certain inbuilt advantages by way of political , social and economic developments. Bengaluru came in the development stature comparatively late and the sudden surge seen in IT development in Bangalore took the whole state and city by surprise and to match this development the infrastructure development lagged behind and this cannot be taken as a setback or serious lapse. 

Even now the situation is not that bad as is generally made out to be taking into consideration the natural advantages the state and city enjoy . 

The State and City have the best of Human Resources and nothing is impossible once they decide and get ready to take up the challenges. 

 What is required is a bit of coordination and clear cut policies from the Legislative, judiciary and administration. A top level committee consisting of all three can be set up to identify the gaps seen in the proper development of infrastructure and initiate steps to overcome and implement the required measures under some strict vigilance, supervision and accountability. 

Roads are only for free flow of traffic and not for marketing, dumping of materials of all kinds, wastages, and any other activities. The development of roads needs thorough thinking, planning , and execution keeping in view the expected increase in the population, economic developments , social advancements, etc.  

Accountability of the Institutions involved in the construction, maintenance and administration of roads needs to be fixed on an ongoing basis in a very systematic and professional manner without giving room for any interference of any sorts of power either politics or bureaucracy. 

Some of the steps that can be thought of to ease the traffic and improve the image of BMTC perhaps

City Traffic improvement Committee to be set up Consisting of 

1Some political leaders from all parties, Some  senior bureaucrats who have vast experience in the administration of  Transport system,Some very senior police Officers having experience in managing City traffic, Some eminent public representatives and think tankers who can contribute good thoughts and actionable changes.

2 Change of the present system of routes  pursued by the BMTC. There should be connectivity of Metros and the bus routes touching the major centers of population concentrates..Rerouting of the BMTC buses and covering long routes in less times should be thought of. while the present approach to terminate buses at Shivaji Nagar, Kr Market and Majestic can continue, there should be enough buses

 to ply long different routes and areas touching these points .

3 There are some traffic pressure points in the City like the Corporation area,JC Road , 24th main road,Jp Nagar, double Road, jayanagar some signals . These sorts of pressure points block the traffic which if planned and administered properly , traffic flow is made smooth, a lot of time can be saved and drivers and public can have a great sense of relief. It requires inviting public suggestions and surveying by regional Transport officers and Traffic control Police officers and BBMP and BDA officials.This requires only application of mind and adjustment of the movement of traffic Some man made hurdles which can and needs to be tackled needs to be taken care of by force or negotiation and compromise in public and larger interest. Involving the public and seeking their help would go a long way in removing some of the hurdles seen in some busy roads  and easing the traffic.

4 Continuous education of public in maintaining the roads in top condition and strict monitoring of the traffic rules and regulations on an ongoing basis can definitely be visible in avoiding haphazard parking, dumping of wastes on the roads, unauthorised use of roads for all sorts of activities etc, 

5 Encouraging sharing of private cars, Taxis and introducing smaller BMTC buses to manure in very small roads and gullies  and providing better connectivity to metros with meticulous planning and execution of arrangements to transport people can be a practical solution to minimise the traffic congestion.

6 The roads go bad due to several reasons which need to be fixed with long term and short term approaches having heavy expenditure and time lag effect. 

As a regular short term measure the authorities can think of having mobile Road repairing units to fix small and fixable potholes and this work can be given on a contract basis with incentivised compensation. To fix major repairs and provision of long durable roads, better to go in for an All India Tender and have some sort of tripartite agreement too. Once the road is completed this should be maintained by the same party for a definite period under an insurance scheme. The scope for corrupt practices should be minimised if not eliminated altogether though highly desirable. 

As a citizen deeply interested in the welfare of all , I just write to you as feedback to your wonderful ,well thought and wonderfully written article. 

Readiness of the authorities is all that matters. If there is a will there is always a way out to make things happen and work for the betterment of life for all. 

These are all my personal views . If it is useful in some way , I feel delighted. Since this is a point blank feedback I took the liberty. 

       

Thank you, I take this opportunity to wish you and family a very happy diwali and happy days ahead always and in all ways. 

With regards,
Dr.T.V.Gopalakrishnan

(This comment is given as Feedbaclk to an article on should BMTC take the privatisation road?that appeared in Deccan Herald on 17/10/25).

Provision of Good Roads is an inevitable social and economic Justice.

    Good Roads also a matter of  economic, social Justice

This refers to your editorial  Bengaluru seeks intent, not excuses Deccan Herald (oct,14).Due to the pathetic condition of Bangalore’s roads ,the daily hardships citizens endure, the loss of time, money , health and the reputation of the City and its people suffer are something unavoidable to a great extent if the intent instead of excuses as rightly put in the editorial is in place.  Provision of good roads and their upkeep is not merely an infrastructural need—it is a form of inevitable  economic and social justice. Roads are the lifelines for mobility, essential services, and economic activity, while also serving as a mirror of governance standards. Smooth, safe, and well-maintained roads make life not only comfortable but also dignified, reflecting a government’s commitment to citizens’ welfare. People miss a lot of their economic, social, emotional, sentimental, precious time, and other small small desires and  limited aspirations for want of the very essential movements in the absence of safe, comfortable and very  inevitable social visits within the city. Roads play a key role in maintaining not only the social connections but also keeping the people in good mental and physical  health conditions is a ground reality which cannot be denied to them on flimsy grounds.The leaders cannot ignore their essential leadership capabilities and these are all perhaps their memorable contributions worthy of  showcasing their image, reputation and proven popularity.    

The responsibility, however, cannot rest solely on the government. Citizens too must recognise their duty in avoiding / preventing hazards, potholes and damage by refraining from dumping garbage, construction debris, or unauthorised parking / violation of traffic rules that choke free movement. Civic indiscipline adds to chaos, delays, and needless suffering.

With better coordination between the administration and the public, Bangalore can have durable, quality roads. Proper governance and responsible civic behaviour can ensure optimum use of resources and prevent wastage of time, money, and effort. The man-hours lost in commuting, and the mental, physical, emotional, and financial stress citizens undergo due to poor roads, is beyond imagination—and must no longer be ignored. Corruption and corrupt practices in the general administration  of public goods and services if avoided  by thoughts, words and  deeds by all and any associated can have only pleasant,  lasting and ever relishing memories.  Good roads ensure not only the  welfare of people but also reflect on the sensitivity of the Governance system in vogue and prove to be the best and easiest way to earn the goodwill of the people.   

 

T V Gopalakrishnan

(Personal views)

Bangaluru.

( Modified version of this letter is published in  Deccan Herald dt 15/10/25).

Prevention of NPAs in Banks is an inevitable Social Justice.

 

NPAs in Banks — At Whose Cost? The Economy and Its Stakeholders

The banking sector in general—and public sector banks (PSBs) in particular—has long operated in a manner that drains depositors’ and taxpayers’ money, aided by a nexus of politicians, bureaucrats, bankers, and errant borrowers under a relaxed regulatory environment. Former Prime Minister Atal Bihari Vajpayee candidly stated in the 1990s that “NPAs are nothing but loot.” The system has known this truth for decades, yet the problem persists despite getting some enhanced legal support as of now again at a high cost in terms of time and money - just because depositors and taxpayers silently bear the burden. Periodic bailouts follow whenever the crisis threatens financial stability.

Depositors have few safe avenues for savings beyond banks, and alternatives like gold, real estate, or other commodities often serve as conduits for unaccounted money and speculative activity rather than productive investment.

A lasting solution to the NPA problem requires discipline—both among bank managements and their borrowers—and an independent, efficient regulator free from political or bureaucratic interference. Such a model was proposed as early as 2004 in Management of NPAs in PSBs by Dr. T.V. Gopalakrishnan, published by the Indian Institute of Banking and Finance, with a foreword by Dr. C. Rangarajan, former RBI Governor and Chairman of the Prime Minister’s Economic Advisory Council. The book proposed the creation of a Precautionary Margin Reserve Fund (PMRF)—a shared responsibility mechanism between lenders and borrowers—to contain NPAs, incentivise good borrowers, and penalise poor credit behaviour.

Despite professional acclaim and recommendations for pilot implementation, the model was never adopted. Had it been, the banking system would likely have been far stronger today—reducing NPAs, preserving depositor confidence, and preventing the “twin balance sheet” problem that has repeatedly strained India’s financial stability. The recurring and accrual loss to the economy because of the NPAs is something of a very high magnitude which cannot be easily set aside to ensure and realise the the status of fast growing economy.

Dr. Rangarajan observed in his foreword (2 July 2004):

“High levels of NPAs affect profitability, liquidity and solvency of banks, ultimately impacting financial stability itself. The author has made several suggestions to contain their growth. One such idea—the Precautionary Margin Reserve Fund—envisages both borrowers and lenders contributing to a common fund. Only an efficient banking system can fulfil the socio-economic goals set for it, and this book explores precisely that.”

The RBI’s recent move to introduce minimum provisioning floors (0.25–5% for performing assets, based on risk class) is, in essence, a partial acceptance of this idea. The PMRF concept—built on mathematical objectivity and fairness—could have become an inbuilt corrective mechanism to identify good borrowers, discipline defaulters, and safeguard the interests of all stakeholders without bias or undue discretion.

Ultimately, depositors’ money—the core raw material of banking—must not be used to subsidise inefficiency or moral hazard. A system that compels prudent behaviour, transparency, and ethical accountability from both lenders and borrowers is not just sound economics—it is social justice.

Loka Samastha Sukhino Bhavanthu.

Dr T V Gopalakrishnan

(personal Views).

RBI's Sensible and sound Support to Government's dream of Atmanirbhar Bharat

 Levy Precautionary  Margin Reserves as PROVISIONS  from bad borrowers to save the  bank depositors and tax payers from Bad debts.  

According to the news report “RBI proposes 100% Bank Provisions”, (ET dated 8th Oct), the central bank’s proposal to introduce minimum provisioning floors ranging from 0.25% to 5% for performing assets—based on asset class and credit risk stage—is a prudent though long overdue  step to save depositors and tax payers from subsidising the default borrowers  Hope this proposed provision is levied from the borrowers to have a built in mechanism to prevent the formation of NPAs. 

Strengthening bank balance sheets through disciplined provisioning and promoting credit quality are essential for maintaining the health of the financial system and safeguarding the interests of all stakeholders, including the government and depositors. Such measures will provide the much-needed foundation for sustainable economic growth.

The Prime Minister’s vision of transforming India into a developed, Atmanirbhar Bharat by 2047 can be realistically achieved through these sensible and sound RBI initiatives, complemented by ongoing fiscal discipline—such as containing fiscal deficits while rationalising Direct Taxes and GST 2.0.

However, these financial measures must be supported by robust governance standards across institutions and public utilities, prioritising ethics, transparency, and welfare. Ensuring low food inflation, a bearable cost of living, equitable wealth distribution, and measurable trickle-down effects of growth are vital. Equally crucial is improving the quality of data on employment, tax compliance, and wealth creation to guide policy decisions effectively and equitably.

T.V.G Krishnan

Bengaluru