Exporters and Incentives

Posted on: Oct 17, 2011 at 22:32 IST inresponse to the editorial'Misguided Sops'.

Exporters are always a pampered lot.They enjoy tax incentitives, concessions,reliefs and interest rate subventions as the economy needs them to bring in as much foreign exchange as possible to support its essential imports particularly oil.Now it is time for the Govt to assess the support extended to exporters and value the benefits derived by the economy and reallocate the resources to vital segments like infrastructure which requires a thorough review, restructuring and fast development.One source of black money generation abroad is through exports and the inflow of funds to the economy through FDIs etc are part of this black money needs to be given weightage by the Govt when tax reliefs and concessions are liberally offered to exporters.Need based support is essential to encourage exports but as rightly pointed outin the editorial,it should not be at the cost of public money ignoring the other support system vitally needed for the economy to make all round progress.

Dr.T.V.Gopalakrishnan

This appeared in The Hindu-Businessline dated 18/10/11)

MBA graduates and PSUs

Are PSUs unable to provide a conducive work envrionment to management graduates?

The work culture in PSUs will not suit the management graduates. What the executives do in a month in PSUs, these management graduates will do in a two or three days. Their thinking, and taking decisions are faster and their patience level is low. They are result oriented and their temperments will not suit the PSU culture. Inefficiency, delay,procrastination normally seen in majority of the PSUs are beyond the tolerable level of any modern management graduate. The systems and procedures in vogue in majority of PSUs cannot be acceptable to these graduates as they are for quick decisions and results which is something difficult if one adheres to the systems and procedures which are outdated and illogical to the present requirements. These modern graduates are ambitious and have high aspirations which our PSUs cannot meet. They expect to reach the top early where as seniority and promotion avenues in PSUs do not permit these graduates to go beyond certain levels.The realities are different in PSUs and these graduates cannot cope with that is the reality why they do not stick on to PSUs for long.

Dr.T.V.Gopalakrishnan
(This appeared in ET epaper dt19 Oct 2011, 1358 hrs IST)

Incentives and exporters

Exporters are always a pampered lot.They enjoy tax incentitives, concessions,reliefs and interest rate subventions as the economy needs them to bring in as much foreign exchange as possible to support its essential imports particularly oil.Now it is time for the Govt to assess the support extended to exporters and value the benefits derived by the economy and reallocate the resources to vital segments like infrastructure which requires a thorough review, restructuring and fast development.One source of black money generation abroad is through exports and the inflow of funds to the economy through FDIs etc are part of this black money needs to be given weightage by the Govt when tax reliefs and concessions are liberally offered to exporters.Need based support is essential to encourage exports but as rightly pointed outin the editorial,it should not be at the cost of public money ignoring the other support system vitally needed for the economy to make all round progress.

Dr.T.V.Gopalakrishnan

(This appeared in The Hindu-Business Line E paper dated 18/10/11).

Int Rate and Industrial growth

Int rates cannot affect the growth as it forms only an insignificant share of the over all cost of production. The growth gets affected for several reasons. The Govt's inaction on fiscal front,infrastructure development,on black money,corruption and so on and so forth has a negative impact on industrial climate. Labour reforms, legal reforms and administrative reforms which are long overdue in Indian economy affect the industrial growth negatively. The general level of confidence in our political and administrative system has been on the wane for the past few years and it needs to be revived.The industrialists have to be made more responsive to the societal needs and their greed to make money at any cost ignoring the national priorities needs to be given a cultural change. Will the Govt, bureaucrats and the industrialists do an introspection of their method of exploiting the society and come out clean to mutually cooperate and coordinate to work for the economy's welfare without ignoring their own pursuits?The economy needs a changed mindset and a common objective to take the nation on the growth trajectory without murmuring on issues like interest cost which is not significant.

(This appeared in ET Epaper dt 14/10/11).

Dr.T.V.Gopalakrishnan

Perpetual poverty of India

(This is in response to a write-up in ET dated 09/10/11).

Not only the planning commission is out of touch with reality but the govt,the industrialists,the middle class, the religious leaders, social reformers and who ever talk of poverty are out of touch with reality.The success of the successive Govts for past six decades after independence is to have successfully manipulated the governance system and exploited the helpnesses of the masses to keep them in perpetual illiteracy and poverty.It is a shame for our politicians,industrialists and bureaucrats to have framed policies in the pretext of removing poverty and made themselves shamelessly rich. Statisticians have aided the policy makers by providing bogus figures on poverty and measurement of poverty standards.It is really surprising to find that this article is from a planning commissiom member which only shows that there are still some left in the Govt with some conscience and concern for the poor.What the economy needs is policy correction and strict implementation of policies with representatives of common people to keep a watch on policies and their implementation.Taxation policy pursued since 1990s widened the inequality of income and the conditions of the lower middle class and poor the worst beyond imagination.It does not require any superintelligence to understand the poverty in India. It is sufficient if our politicians, industrialists and bureaucrats travel in their cars keeping observing on both sides of the road and visit some slums spread all over the country.

T.V.Gopalakrishnan

SBI's rating and Govt of India

The editorial is well written.The downgrading of SBI's rating by Moody reflects Govt's insensitiveness to safeguard the largest bank of the country with timely measures to raise its capital to the prescribed level.The Chairman of the bank has also to be blamed for his utterances against the previous chairman for allged window dressing of banks's balance sheet. The banks operations continue to be strong despite adverse economic conditions. Its deposit and advance growth have been well above many pvt sector and public sector banks.Its NIM is also comparatively high comapred to that of its peer group.The npas, provisions and profits have perhaps not been at the desired levels and for that the general performance of the economy needs improvement. All said, the bank has a competent management and support of its large clientele of customers and investors.The downgrading is only a warning to the bank to do well and it is not going to affect the bank's operations in any manner.

T.V.Gopalakrishnan

(This appeared in The Hindu Business Line dated 7/10/11)

Sharing of wealth in India

It is a shame that Indians have to be advised by outsiders on Dharma for sharing and distribution of wealth among the needy.Indian culture,heritage and philosophy speak very high of dharma and the real joy of life is giving and not taking and accummulating.The politicians and bureaucrats have looted the country and enabled a few industrialists to amass wealth through wrong taxation and other economic policies. Some of them share a part of the wealth to earn a name and gain tax benefits.Some are looting even in the name of charitable trusts and charities. Govt sponsored schemes to aid the poor are avenues for free loot and the money does not reach the intended beneficiaries. Loot is going on in the name of spiritualism and there are no checks and balances. Ethics and values have been given a go bye and for survival one has to be dishonest, corrupt, disloyal,and 420 in letter and spirit. Honesty and straightforwardness are openly condemned. Corruption,blackmoney,and out of the way dealings are openly encoraged and anybody raising voice against mal practices and irregularities are taken to task and harassed.Morals and Principles in day to day life have become things of past geneartion and very talk of these things are looked down upon with contempt. Before we beg the wealthy to distribute their wealth, let all Indians learn to introspect and realise that over a period we have discarded values, morals, and ethics which our ancient culture and civilisation were once proud of.

Dr.T.V.gopalakrishnan

GST and the masses

GST if introduced and implemented should benefit the economy and the people, but the way the Govt functions it is difficult for people to take for granted the govt's sincerity and good intentions if any behind it.All these years, the Govt has been fooling the masses and has made life miserable for aam aadmi. The latest is the Planning Commission's submission to the Supreme Court that person earning Rs 32 a day in an urban centre comes above the poverty line reflecting the Govt's insensitiveness to realise the ground realities of the living conditions of the masses and lack of concern for aam aadmi's welfare. The Govt is a miserable failure in combating inflation, corruption black money and bringing in fiscal discipline. GST should not be another modus operandi to favour the rich industrialists at the cost of general public is the fear lingering in the minds of masses. Govt should realise this and take proactive steps to convince that GST would turn out to be good for the masses and the economy.

Dr.T.V.Gopalakrishnan

SBI and Moody's rating

Your editorial is well balanced and most appropriately concluded by saying that Moody's rating of SBI must be seen as a note of caution rather than as an alarm bell. The present predicament of SBI is the making of its present chairman for his utterances on banks' balancesheet as on 31st March 2011. Further the economy has not been doing well because of Govt's inefficient and ineffective fiscal policies in controlling inflation,black money, corruption and providing the much needed support to give a boost to economic growth. Of late its quality of assets has been deteriorating affecting capital adequacy, profitability and recycling of assets. All said, the Moody's rating basically based on some quarterly results do not reflect on the bank's overall strength with the strong backing of the Govt and its competence to overcome the temporary upsets. SBI is the largest PSB and it has abundant resources at its command to improve its performance in terms of NIM, asset liability management and capital adequacy ratio. It enjoys the confidence of investors, depositors and borrowers and the moment,economy starts showimg some sysmptoms of good growth, in no time the bank's performance will turn better. Moody's rating is only a warning to the bank to be more alert.

Dr.T.V.Gopalakrishnan

Time for Exchanges for SMEs

The idea of SME exchanges needs serious consideration and at least four such exchanges should be set up in East, West,South and North regions. This will facilitate upcoming and already existing entrepreneurs to raise equity funds to set up SMEs and venture capital and Private Equity Funds can find some good avenues for investment. Such exchanges would facilitate distribution and better utilisation of wealth in the economy.It would also ensure improved participation of the masses in the capital formation and provide adequate resources for capital starved but well promising ventures.Banks continue to be shy in financing SMEs is a fact.The present exploitation of SMEs by large scale units needs to be given a go bye.This is possible only if well regulated and well run exchanges are set up in the economy.The country has all the potential in terms of resources,human power, technology including capital but it lacks the initiative and approach particularly from the Govt to take up new ventures in the form of setting up of exchanges for SMEs. The reasons can be adduced to the grip and control the industrialists have over the Govt.They want to take away all the facilities and benefits of policies for themselves hindering the growth of well deserving SMEs in the economy. Earlier the exchanges are set up,the better. The emergence of exchanges would help improve the functioning of the NSEs and other regional exchanges. This would also bring in the much needed discipline among Companies.

Dr.T.V.Gopalakrishnan

2G scam loss and the economy

(This comment is in response to the editorial'Telecom Turbulance' appeared in The Hindu-Business Line)

The fact that the Finance Ministry has failed to exercise its due vigilance on the proposal of the Telecom Ministry to jettison the auction procedure and adopt first come first served has led to the loss of the exchequer in crores of rupees needs an explanation from the Govt.This sort of leakage of revenue due to malpractices and lack of concern for managing public finance efficiently leads to avoidable deficit and consequent damages to the economy which has been facing problems one after another for want of resources.The failure of these Ministries should be viewed as the failure of the Govt as the damage caused to the economy is irreparable.Inflation remains unchallenged since 2009 and the basic reason is failure of fiscal policy and definitely not due to ineffectiveness of monetary policy.Easy money in the hands of a few due to failure of policies has adverse moral,ethical and financial impact in the economy. The confidence is shaken among public and the economy suffers.

T.V.Gopalakrishnan

( This appeared in The Hindu Business Line Dt,1/10/11)