Inflation , Prices and the life of Retirees and common masses

No Doubt Dr Rajan is a renowned economist and a champion of Inflation but his dosa economics to illustrate that the retirees are far better off today in the background of lower CPI at 5.5% does not carry conviction in Indian situation is the ground reality. The inflation component to arrive at 5.5% and the prices the compiler collects sitting in some office in Delhi do not really reflect the retail prices the Retirees pay for their day to day living is What Dr Rajan has to experience if not experienced so far. One visit to a doctor for a fever costs not less than Rs 1000 these days is a fact and where it reflects in the 5.5% inflation the retirees do not know.  The fact that  the Tur dal , ulund dal are selling between 180 Rs and 220 Rs a Kg where as vegetable oils are selling at  between Rs 150 and 200 a liter  which the retirees pay ,out of their reduced income of interest rate after income tax  may not be known to Dr Rajan perhaps.. The dosa is priced at Rs 50 and 65 in hotels and it carries a service tax of 14.5 % and Dr Rajan's calculations do not hold good at least for metropolitan centers..The conveyance charges incurred by the Retirees to visit some places even by bus these days carry a cost and where  and how it reflects in the 5.5% inflation is  not known to retirees.Their  take home incomes by way of interest have drastically come down and the expenses incurred by way of rent / maintenance Charges for their accommodation,  living expenses involving water,  milk, vegetables, provisions, medical , transportation  electricity charges , news paper /TV Charges , servant maid's wages, etc  have gone up by leaps and bounds because of increases in the prices coupled with the  compounding effect of Service Charges. Dosa Economics cannot be a convincing answer to the retirees and this is not expected from an eminent economist. who have been moving through out the world. Such statements from politicians are understandable but definitely  not from professionals of such high caliber even in lighter vein..Masses are suffering from high prices but may not be suffering  from high inflation is the fact of life.Price levels and Inflation are totally two different things for Indian Masses.

Dr T V Gopalakrishnan

(This comment is a knee Jerk reaction to Dr Rajan's speech "Retirees are better off " that appeared in Business Standard dated 7/2/16).

SEBI and Retail Investots in Ltd Companies

SEBI should bring about once in a while with reports on Companies which have 1) Excellent Corporate Governance Standards 2) Good Dividend payment records 3) Good Bonus declarations 4) fudged accounts having subsidiaries  and  window dressing of balance sheets by showing losses in some subsidiaries  5) delayed conduct of AGMs and delayed payment of dividends etc 6)  raised funds through IPOs and failed to keep their promises. Some of the IPOs are greedily priced and after raising the funds nothing is known about the Companies..7) failed to conduct AGMs and have not been informing anything about what they are doing. 8) have defaulted to banks and have been rated by banks as Non Performing Assets..9) Auditors and Accountants not well reputed and rated by the Chartered accountants Association of India 10) failed to Comply with the Government's regulatory requirements like PF Remittances, Excise duties, tax payments etc  11) Excellent track records for contributing towards the Corporate social responsibility.
The retail share of investors need to be augmented to prevent volatility in the market.More the retail investors the better for the Companies, for the economy and the market.The SEBI needs to be more proactive to make the Companies perform well in all respects by openly reconising them for their contribution to the economy in terms of GDP growth, Corporate Governance Standards and satisfying the Customers and the shareholders as well. 
Dr T V  Gopalakrishnan   

Banking system is in a mess.

A well written peace coming out of experience as a former banker and as a customer now. Banking has changed a lot and unfortunately for the worst.It has come to streets in different forms without having any knowledge of its own customers despite having supposedly stringent Know Your Customer norms verification.Competition among banks has taken away the principles of good banking and the greed to make money at any cost has taken away the banker customer relationship losing in the process the good money and the soundness of banking. The data is so to say misused and not put into strengthen the business of banking through improved Customer relationship. Machines alone cannot achieve the results and the Techonlogy not supported with human touch can only ruin the business in the long run. This is what is being wiitnessed these days in banking and other areas.. The deposits are falling, NPAs are increasing, profit margins are getting eroded day by day and the presnce of regulation and supervision is vanishing fast under some external pressures, have been unfortunately the result of too much of data , too much of technology and too less of human touch every where.Hope this article will turn out to be an eye opener of the powers that be.

Dr T V Gopalakrishnan

(This comment appeared in Money Life dt 5/2/16 in response to an articel on Big Data). 

Ball in Governments Court

This refers to the editorial macro Economic Stability the key (ET dated 3/2/16).The latest policy statement of RBI keeping its policy rates unchanged   carries  a  clear message to the Government as to how the ensuing budget of the Government  should be shaped to keep the growth trajectory of the economy strong and achieve the ever elusive macroeconomic stability.RBI has highlighted the urgency for structural reforms needed in the economy to attract more of private investments to accelerate the stagnant growth and on  the need to have prudent public investment and expenditure to contain fiscal deficit at comfortable level without disturbing the price stability achieved    in the economy. Ensuring its continued accommodative credit policy, RBI wants the Government  to come out with a strong economic policy through its budget encouraging private investments, employment and growth oriented public expenditures without ignoring the social aspects. While Fiscal Consolidation is the key to keep the macroeconomic stability, the growth of the economy is the master key   to achieve the much needed fiscal consolidation. .    

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 Dr T.V.Gopalakrishnan

(This apperaed in ET dated 4/2/16)

Introduce self correcting Mechanism to Liquidate NPAs in banks

Unless and until a  built-in  self correcting mechanism is put in place, the NPA menace will continue  to haunt the banks and the stake holders other than the defaulters will bear the brunt.  The credit discipline is the medicine for bringing down NPAs of banks.This needs to be recognised by the regulator and the Government as well and both the banks and the borrowers should be made to pursue the credit discipline expected of them with stringent penal measures. NPas of banks is not an insurmountable problem as is made out and widely discussed. 

Dr T V Gopalakrishnan.  

Tarapore the Veteran Central Bankeris No more.

Dr S S Tarapore the  veteran Central Banker and an authority on Monetary policy is no more.. He has dedicated his life to the cause of Central Banking , its role in achieving economic growth with price stability through the adjustment of the monetary policy in the background of not so strong fiscal policies and weak governance Standards in administration. He has fought for the Central Bank's autonomy and a strong banking system devoid of Government's dominance.through his writings with conviction and authority He has also written extensively on the need to improve the Customer Service in banks and also to ease the Know your Customer pursued in banks. .An economist having the feelings for the common man, argued and worked  for them through out his career unlike many of the policy makers who have only lip sympathy for the masses. His death has caused a vacuum and is an irreparable loss for banking fraternity and the common man as well..May His Soul Rest in peace.

Dr T V Gopalakrishnan

( This comment appeared in Business Standard in response to the Column Obit A diminutive Colossus)

Banks Boards

Board appointments are based on political contactacts and influence. Merit is the last and  the least consideration to get into banks' Boards. This can be easily verified from the  details of Banks' boards Members;  their qualifications , experience etc if one were to peruse the records of Banks.  All public sector banks have Board members  appointed by the Political Bosses and without having any qualifications  for  being in banks Boards. This has been the feature since Nationalisation of banks in 1969 and even now it is  continuing unabated.

Dr T V Gopalakrishnan