The Banks need to be highly professional

Apropos your editorial Banking on good faith (The Hindu dated 27/1/2017), the credibility of borrowers from PSBs in particular has been fast eroding thanks to the accumulation of bad debts and inability of the enforcement mechanism to recover the banks’ dues. The reasons for such a state of affairs are not far to seek. The failure of professionalism in PSB’s boards in running the banks commercially, interference of politicians and bureaucrats in the banks’ functioning, laxity of supervision of banks by the Reserve Bank, lack of involvement by the Chambers of commerce and Industry in disciplining their members in the proper conduct of banks loans which are nothing but depositors’ money  and tax payers’ ignorance that they are subsidizing the huge bad debts and consequent losses and inability to voice their concerns have all contributed in weakening the banks and the erosion of trust in the entire governance system. In this background, the arrests by the Central Bureau of Investigation of former IDBI officials and some of the borrowed Company’s officials are well intended and have definitely sent a warning signal both to the erring officials of banks and bad borrowers as well. However, this cannot be considered as adequate unless and until the key figure behind the corporate Mr Vijay Mallya is booked and made accountable for all the  banks dues and they are fully recovered. Of course, this sort of severe action should not make bankers wary of extending credit as the economy is very badly in need of huge investments for its all round growth and the banks are already flooded with funds due to the demonetization effect. Banks’ business is to lend and expand economy and this has to go on professionally covering the risks commercially and profitably benefiting all the stake holders of the economy Viz; the Government, the banks, the depositors, tax payers, borrowers and public at large.  

 Dr T V Gopalakrishnan      

Sathya meva Jayathe. Yatha Raja Thatha Praja.

Promises and practices do not match. If all the promises of the politicains had been implemented, the country would have reached welfare status decades back. Even after seven decades of independence politicians seek votes on the promise of removal of poverty,prevention of corruption , generation of black money and provision of essentials including toilets. food,shelter and clothes. People are realising this but they have no choice but to vote for some better crooks (with lesser evils)among the contestants as the country is destined to suffer perennially under Democracy.Loot is the criterion pursued by  majority of politiicans and who loot comparatively less is given a chance to rule. Politicians have plundered the economy and some politicians have looted for generations together.  Bureaucracy helps, plans and share the loot. In this background, whether Budget comes before or after elections, it does not matter much to common man as his status as common man ever remains the same under all sorts of elected governments. Of course, there is a welcome change if it can be said so that now he is also allowed to loot in his own way and that is reflected in the society in different forms ie, corruption black money, greed in the pricing of goods and services,etc.No accountability is seen anywhere. Policemen loot, Judiciary loot, bankers loot, traders loot, brokers loot, borrowers loot and why not politicians and common man? People have come to know these and they are also joining the band wagon.A small percentage is forced to follow virtue and they suffer.But the number is dwindling as indicated in the number of those who file tax returns and who pay taxes. Only 2.4 million out of 125 crores of people have declared income above Rs 10 lakhs is a prrof that pursuing honesty is not a virtue and is not expected unless some wants to be in a fools paradise. Delhi alone should account for this figure if honesty is practised by the rulers, authorities and people at large. No shortage for slogans. They are plenty to satisfy the masses. Satyameva jayathe. Yatha raja thatha Praja. 

Dr T V Gopalakrishnan

This comment is given in Times of India against the Article budget goodies cannot sway away indian voters appeared on 15/1/17).

Retain RBI's Independence in tact.

Never before has RBI's name been more besmirched than today.

The PAC wants to prosecute the Governor.

Wait for a few days more. It wont be an exaggeration if RBI becomes a part of the Ministry of Finance  and gets named as Central Banking Division headaed by a Joint Secreatay . Its Identity as an Independent Central Bank of the Country would be totally eliminated as things stand today. Its autonomy and Independence depends on the top  management and the way it handles its functions as envisaged in the Reserve Bank of India Act, 1934. RBI has earned worldwide recognition and is known as one of the strongest Central Banks amongst many a well rated Central Banks  for its professionalism, competence and  integrity in discharging all its functions keeping the interests of the people, the economy and maintaining inter-alia the democratic image of the Government Strong and Well noticed. RBI's way of handling both domestic and international economic problems is time tested and it has not only survived but also could keep its image very high in handling very ticklish issues like Balance of payment crisis in the early 1990s, foreign exchange crisis faced by the asian economies in late 1990s and global financial turmoil in 2008 etc. The very fact that RBI has earned a name for itself and the Government in power among both advanced and emerging economies  is something unique and this needs to be protected in the interests of the nation and the economy.   

Dr T V Gopalakrishnan

Introduce Transaction Tax to redue corruption and augment tax collection.

Replace capital gains tax  and introduce Transaction Tax both  for the buyer and seller of Securities, real esate and commodities.This tax can be recovered at the time of transaction like Security Trans action Tax  now in vogue and there is no administration hassle.The Government has only  to ensure that the tax collected comes to Government's kitty without any leakage. Once the GST is rolled, this can be merged as part of GST. The approach of the Government should be to simplify tax laws,make it attractive to pay voluntarily as far as possible and collect the taxes at source. The tax terrorism should not be there and the corrupt practices now resorted to  by the tax payers, tax officials and tax evaders can be got rid of if transaction tax is introduced. The transaction tax can also replace all forms of Direct Taxes to give a big boost to revenues and get rid ofthe corruopt practices seen everywhere. 

Dr T V Gopalakrishnan

Fix black money generation through the budget

This refers to the Article Get the lagaan Right(ET dated 10/1/17).No doubt the budget for 2016-17 assumes importance to fix sevewral problems of the economy including the black money in one stroke. The recently concluded  Demonetisation exercise with long term  well intended objectives  has not been a great success as envisaged due to its faulty  implementation, but it has succeeded to  bring the black money in banking fold which will help to fix the problem with ease. This has also created awareness on black money holders  on the need to fix corrupt practices, to avoid evasion of taxes and also to opt for payments through banking modes using technology. Now what it requires only a strong administration with lots of follow up measures and provision of facilities for tax compliance voluntarily. Enhanced Tax GDP ratio through an imaginative and result oriented budget can be a reality provided there are checks and balances to fix the evasion with simplified tax laws, lower taxes, and attractive tax compliance incentives. People have whole heartedly welcomed the demonetisation expecting Ache Din ahead and have put up with all sorts of inconveniences and the Government needs to be proactive to compenasate them. liberally. The economy needs a kick start to  attract investments, augment production both in agriculture and Industry to provide the much needed employment opportunities. Black Money Generation should be disincentivised by all means and the  ensuing budget is the solution for that. Hope the Government will not miss the opprtunity.. 

  

Dr T. V Gopalakrishnan