Human development Index Make it known to all those who matter

The analysis is very informative to the general public and should be educative to the Government . A lot needs to be done by the Government and the bureaucracy to see that the Human Development Index of India needs a drastic change for the better in several areas. The ranking of 135 out of 187 countries cannnot be impressive taking into account the country's rich natural and human resources and the potential available to  do better. This assessment needs to be taken as an evaluation of the performance of the Government and based on this there is ample scope for improvement in the area of poverty, equality, education,health and environment. These are crucial areas affecting the less fortunate in the society and there is a moral obligation on the part of better off section of the society to take care of those who are getting left behind. All important Institutions, corporates and all those who matter in the economy's growth should be compelled to read such analysis and do their bit to improve the Index.This is Country's prestige.

Dr.T.V.Gopalakrishnan

(This comment is given in Business Standard aginst the aricle above average that appeared on 27/7/14).

Is it Finacial Inclusion or Exclusion?

With all compulsions and incentives banks have failed to make Financial Inclusion a reality is the real story and how the DY Governor knowing fully well the mindset of banks' human resources expect that given freedom for banks they will perform well.Right from the days of Nationalisation of banks,both the Government and RBI are after banks to bring the poorer sections and less fortunate segment of the society under banking fold though it was all done not in the name of Financial Inclusion. Under Garibi Hatao programme of the Government, several schemes were brought into being and the fact remains that nothing has clicked. Twenty Point Programme, DRI scheme, loans to weaker secions, NGOs, priority sector advances including housing loan for weaker sections were all attempts to make Financial Inclusion and they have all been a failure or not taken off well to the desired extent.The approach should be different and Financial inclusion should be attempted through various institutions including educational institutions, malls, health centres etc and compelling their staff to enroll as many people as possible in banks. All households can also be forced to ensure that from whom soever they take some service should be having bank account. The banks should be given separate timing and a separate set of staff with a social bent of mind to open the accounts. The people should be attracted to banks and banks should be willing to receive them heartily and happily. I think the approach of the DY Governor does not sound convincing and banks will only take advantage of that. The results can be seen in six months time.   

Dr.T.V.Gopalakrishnan 

(This is in response to a news report appeared in Business standard dated 24/7/14)

Dr Subbarao a real hero and a role model

Dr Subbarao is one of the best Governors RBI  has had in the recent history and that too during its worst turbulent time in terms of the economic and polical conditions the country was facing.He came to RBI when the world was facing the global financial crisis and left the RBI when the world had not come out of the crisis and uncertainities of the economic recovery were  very much prevalent.He had to work under two veteran FMs who unforunately turned hostile towards him for their political gains ignoring the merits and professionalism RBI had demonstarted and practised in not only maintaining the Country's economy safe  but also enhancing the prestige of the RBI as a saviour of the economy by ensuring  for it the strong and very vitally needed support of the  stable and sound financial system in general and banking system in particular. He waged a lone battle  during his entire period of five years in fighting inflation mindlessly created by the Government with all its wrong economic and administrative policies despite repeated warnings and strong signals from RBI. He deserved special kudos for his conviction and fight with limited success for RBI's autonomy. He has proved himself a man of great wisdom and by his present approach to decline fabulous job offers he wants to demonstrate that the duties of a public sevant end on attainment of retirement and service to socity starts with the wisdom and experience one acquired as a public Servant. He does not want to be compensated for his past designations is a great thinking and carries a lot of message to many who run after assignments at the cost of self dignity for a few rupees more.

Dr.T.V.Gopalakrishnan 

Improve service first to domestic customers.

It is better for the bank to improve its services first to domestic customers before it attempts to introduce/improve its services to customers outside the country. Charity begins at home is what the bank should understand at this stage. The bank's service record cannot be said to be that good seeing the number of complaints received by the Banking Ombudsman. The bank has a set up to receive complaints and feed back and the complaints can be registered at various levels, but the fact remains that the replies are standardised from all levels and the complainants receive the same stereotyped replies mostly regretting their inability to provide the service the customers require. It is always the turn of the Customer to provide the service to banks ie avoid as far as possible to make any demands. Manage with what they have to offer. Knowledge of banking  is alien to operational level staff and human touch and interaction are not expected of them and they were  all virtues of banking in the  1990s and earlier periods. The present set of staff are expected to know  and refer only to  some standard checklist fed in the  computer. Common sense and application of mind  are limited to the capability of the Computers  and human beings are not expected  to  depend or use  them in the discharge of their day to day duties. It is for the Customers to appreciate all these and adjust themselves for what they get. KYC and Technology also  become more of a handicap than a help for customers to switch banks. Old generation banks under certain compulsions do care old generation people where as new generation banks have been enjoying the unwritten freedom to ignore old generation people.  When the domestic customers undergo harassing and harrowing experiences without any way of getting relief, one cannot imagine what sort of suffering the NRI Customers would undergo. The very top management's intentions are good and laudable, but the fact remains that they seldom percolate down  and the ground realities are something different and unpleasant.

Dr.T.V.Gopalakrishnan

(A modified version of this comment has been published in Business Standard in Response to a report  ICICI Bank introduces convenient banking service for Indians migrating to Canada appeared on the 16th July 2014.)

Active middlemen and inactive institutions

Middlemen remain active and  continue to exploit the situation of price rise creating artificial shortage of food stocks and supply constraints,  is known to the authorities and consumers as well for decades and why it is so is what is to be examined? The APMC act has outlived its purpose decades back and it should have been repealed long back. The authorities, money lenders, policemen, transport operators, bankers etc  are all hand in glove with each other and corruption and black money rules the roost.The producers have no say in the matter and their weak financial position is exploited. The banks have no concern and they  do not lend money when the farmers are badly in need of money.The farmers particularly small producers have no facilities to store the goods safely, are not able to transport at reasonable cost, do not get adequate insurance and time to safeguard their interests and there is no support from any worth  while  institution to protect the farmers interests. NABARD which can be the best coordinating agency and problem solver  has miserably failed in taking care of farmers interests, There is a Local Board in  RBI which can play an effective and proactive role in coordinating and guiding all local authorities in various states and banks including NABARD has not been taking  any interests although they can be easily an effective and very useful tool .There is no serious way of finding any solution to contain the food supply constraints and price levels.  Every one wants to talk goodie goodie and enjoy all perks and facilities delivering nothing. A lot can be and needs to be done but who bothers?Producers suffer and consumers pay for everything and suffer perennially.

Dr.T.V.Gopalakrishnan   

Econo-Reflexions: Is there any professionalism in Banks Boards?

Econo-Reflexions: Is there any professionalism in Banks Boards?: Banks' Boards are the major NPAs is not a great news. If Board Members  discuss taxi fare reimbursement more than the recoveries of ...

Econo-Reflexions: Total inaction by authorities cause NPAs in PSBs...

Econo-Reflexions: Total inaction by authorities cause NPAs in PSBs...: The discussions on NPAs have been going on for decades and the fact remains that neither the Government nor the rgulators, nor the banks b...

A House per family

The basis on which stamp duty has to be paid sshould be uniform through out the Country. Every family is entitled for a house and the concessions and reliefs should be extended only on one house per family. The second house should be discouraged and no tax concessions and relifs should be extended. The tendency to make real estate market as capital market should be nipped in the bud itself.This requires an excellent data base and the Government should be able to tie up the acquistion of house with PAN number, Aadhar Card and bank account etc through IT.

Dr.T.V.Gopalakrishnan

Is Ache Din possible and within reach?

Inflation needs to be contained through a combination of fiscal monetary and administrative measures. This requires cordinated efforts on the part of Cetral , States amd the Reserve Bank of India. without any reservations among themselves. The three deficits food, fertiliser and fuel which cause the fiscal deficit need a very sensitive handling in such a way that the rich and undeserving  people do not stand to be subsidised by the Governement. The taxes which have an inflationary impact need to be pruned down considerably and this is an exercise by itself as the loss of revenue has to be made up through other measures. The taxes like STT, income tax, educational cess, luxury tax on high end vehicles, dividend tax on dividends above a cut off limit, foreign travel tax whicr are not inflationary in character can be hiked and some more such taxes need to be identified to augment revenues.Along with these, apt monetary measures coupled with strong administrative measures capable of containing corruption, hoarding,facilitating storage,transportation and distribution  of food items without wastages at any stage can bring down inflation. Anything is possible and ache din is within reach,provided the mindset is attuned towards the target  with close monitoring and follow up.The ensuing budget is an excellent tool and it is a chance for the new Government to show its mettle to meet the aspirations of the people to have  ache din ahead.

Dr.T.V.Gopalakrishnan   

Is it essential to have an OSD in RBI?

The appointment of an Officer on Special Duty in the rank of Dy Governor from the private sector bank in the guise of streamlining the functioning of the Central Bank and rid it of the reputation being a monolith seems not desirable and that too in an autonomous august institution exclusively owned by the Central Government circumventing the provisions of the RBI Act 1934 is uncalled for and definitely not in the interests of the economy, the institution and its human resources. It not only takes away all the positives of the public sector character of a mighty and a nationally sensitive organisation but also weakens the regulatory system meticulously built up over a period for ensuring sound and healthy financial system in general and banking system in particular.

Dr.T,V.Gopalakrishnan

Encourage savings

Reduce the tax rates and take away all exemptions.People will save as savings are in their own interest. The Government need household savings for capital formation and for this the Government has to facilitate savings.This is possible by controlling inflation, running the banks efficiently and profitably, discouraging investment in gold and real esates, developing a healthy and strng capital market with maximum retail participation, reducing corruption in the society and avoiding generation of black money.  All these are possible if the Government is strong, administration is efficient, accountability is fixed, transparency is maintained,information is gathered adequately and put into optimum use to draw appropriate policies etc. The present vicious circle of lower savings, lower investment, lower production,high inflation, needs to be broken.

Dr.T.V.Gopalakrishnan

(This comment is given in BS).

Keep Dhanalaxmi Bank in ICU and Monitor Closely.

The problems seen in Dhanalaxmi Bank is man made and made by the former Chairman Mr Chaturvedi.He has made a mess of it and the present incumbent has no magic wands to undo what ever damages Mr Chaturvedi has done. He went for a massive expansion of branches adding along with it additional human resources and loans using depositors' money. He has failed to do the balancing of various activities and he has gone unquestioned by the Board of Directors and the RBI. This is comparatively a small bank with a sound deposit base and a large number of clintele with all loyalty and continued relationship. All the parameters have gone from bad to worse to say the least; the establishment cost has gone beyond any control and the NPAs have grown  perhaps with the full knowledge of the Board and the then Chairman. The bank needs to be kept in ICU with intensive monitoring by some stalwarts both in the Board and Top management. The timing is ideal now to set right as the economy has started picking up and there is improvement in the confidence level all around. The bank has a strong base and it can turn the corner comfortably. The HR needs motivation and made to perform. RBI has to ensure that the bank gets proper guidance and support to perform.  

Dr.T.V.Gopalakrishnan
(This comment is in response to an Article on Dhanalxmi Bank that appeared  in BS).

Why to mix Oil and Water

A well analysed presentation. Oil and Water never mix and better to avoid any temptation to mix. Water is purely a domestic problem and oil is an international issue.  However, both water and oil can unfortunately  add miseries to our economy  particularly in combating the already  persisting high inflation. Monsoon failure can affect the agricultural production and food supplies and fuel the inflation but this calls for an exceptional solution by way of effective administrative meaures coupled with prudent management of the imports of esssential food products.Our economy unfortunately is also driven by black money, hoarding, mal distribution, corruption and exploitation of any crisis situation to make fast backs by anti social elements. Herein lies effective administartive measures and management of finance. Banks have a tendency to support hoarding activities and good old days they were strictly monitored and regulated. With the liberalisation, some of the regulatory measures have been removed but banks' involvement in financing such activities are not ruled out as RBI does not micro manage things under liberalised environment. A strict vigilance if kept on these activities and the government can act on black money and initiate other administrative and economic measures,inflation impact because of monsoon shortage if any can be minimised.On oil prices we have no control as such but here again  if efforts can be made to enhance exports,remittance of all export proceeds on time, contain non essential imports and maitain the value of rupee at some stable level, the situation can be managed reasonably well. Now the new Government is in power and the confidence level in the economy seems to be fast improving, the concern on account of water and oil can to a great extent be mitigated. Upside  Risk is  very high, but once it is identified and measured reasonably well, it can also be managed with  equally reasonable comfort.This article is timely and has provided sufficient warning to the Government.

Dr.T.V.Gopalakrishnan

(This comment is given to Business Standard in response to the article Oil and Water )