New Version of Loan Mela and the PSBs

The Govt's plans to dole out Rs 10000 to aam aadmi to boost rural economy through PSBs is nothing but replica of the 1980s loan melas and do not sound good economics or good politics. The banking system though financially sound thanks to Reserve Bank's regulation and supervision,but it is still under the Govt's direction is a curse.Particularly PSBs at this rate cannot be expected to be run on professional lines whether they come under RBI or not,as longs as Govt's interference is there. The system of financing agriculture is in a mess and the contribution of agriculture to the GDP is dwindling year after year. The presence of NABARD exclusively set up to develop rural and agricultural development is never felt and the RRBs, Local area banks and cooperative banks have equally failed to give a boost to the rural segment.Six decades of independence have not been beneficial to the rural masses is a stigma to our political system and economic management.Giving out doles like this to the poor only indicates that people can be fooled and they have not come out of their ignorance to have an independent thinking to assess our system of administration of the economy. This approach is nothing but an intelligent way of exploitation of the poor. This is another form of corruption perpetrated on the poor in our economy by the Government. It is time to change and see that real economic activities are introduced in our rural areas using the institutions set up with public money. Will the Govt act ?.

Dr.T.V.Gopalakrishnan
(This appeared in ET E paper dated 10/09/11).