Stitching The Economy

                          

This refers to 'PC to Banks: Loosen Up Please'(Economic Times, Aug 19).

Mr. Chidambaram's instructions to PSUs - to cut PLR and to mobilse money through ATMs should be greatly welcomed.This would be a marked departure and a significant change, from the air of negativity that we have been breathing through the couple of months.

Following the PSUs, host of major Private Banks are bound to slash Loan rates and increase Deposit rates. Increased mobilization of money through Deposit route and Disbursal through Loan route would give the wheel of economy, much needed gyration.But under rising Inflation rate and declining Per Capita Purchasing power, the needed investment momentum cannot be sustained alone from Metro disapora. Banks need to tap villages. 
Hence one major agenda on the block would be, 'to Bank the Unbanked'. This is no more a subject of Financial Inclusion. Rather it makes an economic sense for the banks to cater to the semi-urban and rural segment due to their dominance in the population share and improving life style, owing to multiple rural schemes one them being MNREGA. Government additionally needs to provide some effective rural incentives to Banks (just as it did for industries in last few decades by setting up SEZs and giving exciting tax rebates) to ensure consistent and sustained efforts towards expansion into Rural Markets. So that banks go furthur from just Microfinance and Mobile-Banking.

That's an area Mr.FM would have to work on, apart from telling banks to double up ATMs and to setup cash collection machines.

The Tragic Tale of Two Hydrocarbons

Oil Bleeds

This refers to 'Indian Oil rakes up Historic Loss' (ET, Aug 10). Its a Perfect case of - Political paralysis leading to Petroleum paralysis.With such a staggering loss to both - the Oil marketing companies (OMC's)  as well as the ex-chequer, i think it is high time, to free petroleum prices.It actually makes little sense to collect high indirect taxes from the OMC's and then return it to them as subsidies. Government logic is that -- it is forced to sell petroleum products below  market rate only to protect the common man from volatility in international crude oil and product prices. But the fact is that these oil subsidies to OMC's are the taxpayers' money . About 70 per cent of agricultural land is monsoon-dependent. Due to erratic  monsoon, the diesel consumption has surged. An appropriate alternative would be deregulation of diesel  without sacrificing revenues, and abolish the direct subsidies.

The Coal Currency

 This refers to 'Corruption in Coal' (ET, Aug 7). In a sense, coal has become the new currency of Indian Rajneeti. Earlier, Mining Mafias entered  Politics to safeguard their coal interests, but now it's the other way. The supply-side constraint on coal created due to- mushrooming power plants, increased unauthorized extraction of coal and high tariffs while importing, has led to supply-demand mismatch. It's high time, Nuclear deal gets operationalized. It would cut down our dependency on coal, reduce political corruption. And eventually, increased power availability would boast growth in primary and secondary sectors, furthur strengthening our GDP.

Political Alternative - by Team Anna

Many of my wise & learned friends are relating Anna Hazare's current crusade against corrpution as a camera gimmick. I somehow am not able to purchase their argument.
I had witnessed the event at Jantar Mantar, the day before. It shouldn't be called an event rather, it was a history-in-making. That day as Anna broke his fast while citing the present plebiscite of a necessary political
alternative, there was a huge applause. I could feel the vibrations of the thundering noise emanating from all corners. I could see the ray of a new hope among the masses witnessing the event. Unprecedented crowds, Muslims and Hindus, Rich and the Poor... everyone was present to witness the scene when Ex-Army Chief General V.K. Singh was helping Ex-Sepoy Kisan Hazare with a glass of water. The crowd so unprecedented, that even cameras could not capture.
I can't grab any reason as to why some of we (aam aadmi) are hell bend in not allowing to see Anna's Party, the light of the day.
Any elementary mathematics would tell us that we have nothing to loose in the bargain. There are over 1000 political parties in India fighting for 543 Constituencies. We have given umpteen chances to these existing
parties for so long. What's the loss, if 1 more party gets created. The probability of we failing is None.. as we are already in the basket of tragedies and turmoils.... with such huge deficits piled up on governments balance
sheet, with such a surge in inflation , with constant spectacle of hung assembly every general election... what losses will Anna's party can bring now.
Playing a devil's advocate i may say.. that, similar movements such as Jai Prakash Aandolan in 1970's created politicians, who are currently under judicial scanner (Laloo and Mulayam) .. that, Anna is just a mask of this movement and not the face and hence Anna's Party would again be the
same in the time to come.. that, even Karl Marx's ideologies, which threw Czar of Russia, in turn gave rise to Stalin - The dictator, so the same fate may happen to Anna's Party as well.
But the point is, that, as a responsible citizen what do we do... just watch the spectacle.When one is drowning , even a straw appears an avatar of God at rescue. Hence, we should just not, be panicked by the media's views, especially the TV anchors who offlate have started loading their own opinions on us. And make a just judgement.