while everyone is counting the exact figure of non-performing assets, no one has taken time to see how messy, obsolete is the slip that is to be attached when depositing cash in a public sector bank. the modus operandi of government banks has led them to where they stand today; india’s so-called gem of banking sector, state bank of india, has posted a quarterly loss for the first time in 17 years. cut to solution. divestment is the only option to revive indian public sector banks, and yes this can come with challenges hence the need is to think of an appropriate method of divestment. when divestment is considered, we only think of making a public sector unit private by way of selling the stake of the government. this, however, can be a kneejerk decision. what is the alternative then? form a government trust and handover the stake currently held by government in public sector banks to this trust. yes,
what do you expect would trigger organic job creation? increased economic activity? and for this increased economic activity do you want new enterprises to come up or the existing ones to expand? if this is the case, you may be at fault while pursuing the goal of job creation. our country, india, is a typical example of how population rise outpaces creation of new economic activities. you may come up with best measures – liberalisation or incentives to new enterprises – but the impact of these measures wouldn’t be enough to result into creation of as much employment opportunities as the country seeks. a simple and untapped way out to this problem is expanding the existing economic activities in such a manner that already existing enterprises see an increase in their appetite to absorb more unemployed youth. take an example. a public sector bank in india works from 10 am to 5 pm and remains shut on alternate saturdays and
an undergraduate program in commerce takes at least 3 years, for engineering degree, one has to give at least 4 years and so on. whenever we talk of reforming education, the debate revolves around making education more skill-oriented and advanced in view of the prevailing industrial landscape. do we ever deliberate over re-thinking the duration of programs? no because we are now used to think that an undergrad degree needs a minimum 3 years commitment. but ask yourself. being a degree holder in some discipline you too have spent at least 3 years in learning the advanced aspects of some domain, say law, commerce or engineering. but what if the institution ran only a 1-year specialized program instead of 3 years, the successful completion of which would have secured you the degree? isn’t the argument sustainable? the rationale here is access to information has evolved in past few years. today, learners do not have to rely on classroom sessions for
most failures, whether more than 30 percent of population below the poverty line or rampant corruption in public services, can be attributed to poor administration. here we need to know that administration is not governance, which involves policy actions and legislative tasks, and it is the liability of civil servants, not politicians. thus, the salaried employees of the state, with fixed jobs and perks, are answerable for misadministration and implementation lapses. the constitution talks of all-india services, the personnel for which are hired through competitive exams conducted by upsc. an ias acts as the topmost functionary in the area under her jurisdiction, an ips heads the police department and so on. isn’t it then reasonable to hold these heads of different departments accountable for any lapse in services? indian bureaucracy is, time and again, regarded as red tape and the only task they are hired for – implementation of government policies and schemes and overall administration – still awaits their
wage restraint as a policy action can be traced back to germany, a european country that has trumped china (the so-called ‘factory of the world’) in terms of positive balance of trade. germany is a net exporter and its economy is one of the most stable and commanding. the edge was attained on the back of curbing any imprudent rise in wages of the working class. on the contrary, asia’s third largest economy, india, never cared about the rising government bill on account of salaries.central government employees or those of state governments or public sector undertakings, including banking companies, are paid salaries that are not proportionate either to their labour or to the financial capability of the employer. why do we have a current account deficit? simple, our exports are less and we import more. let us go in some detail. since our wages are high our exports become expensive than those by other countries where wage restraint is exercised.
country’s banking system is reeling under non-performing assets and a solution is being sought by way of forced bankruptcy, takeover of management and rulings by national company law tribunal. this basically means that the disease is being cured after it has managed to inflict irrevocable damage. a simple tool, in the form of ‘irreversible debit order’, can however bring an end to this by immunizing banking companies against loan defaults. an ‘irreversible debit order’ or ‘ido’ can work as an instrument of repayment of debt facility availed by the borrowing entity from the lender. in the present setup, the borrower, who either pays through cash/ cheque or an instruction in form of automatic monthly debits from bank account toward repayment schedule, has an upper hand. the borrower can either choose not to make the cash/ cheque payment on the pre-decided date or he can instruct his bank to not allow further automatic debits from his/ company’s account toward loan repayment.
question is simple, ‘why do we need a multi-year program for engineering, management or like streams?’. most of the lessons imparted to students in these programs comprise of already established formulas and techniques. consider this – a school pass-out would give most crucial years of her learning and development phase to a program that in the end will certify her knowledge of methods that were invented long ago. the same stint could have been utilized in furthering the child’s ability to formulate novel techniques that can replace the obsolete ones, for we have near-fully exploited them to their usefulness. even when you need someone to possess this knowledge and employ it in the same manner as done over decades and centuries, a few months on-the-job training is enough. the global economy is awaiting innovations that can drive growth for coming centuries. the setback is that people from whom these inventions are awaited are pursuing rather irrelevant goals – learning mathematical,
only two events are responsible for where we stand today, agrarian advancement that allowed non-agri populace become manufacturers and traders, and industrial revolution that increased availability of goods for which people worked to satisfy their wants. these two had a long-lasting impact on world economy, the rest, of which digital revolution is a part are only flashy successes. other factors included competition which kept prices in check, allowed employment growth and fortified the supply side, thus keeping the demand side in continuous motion; innovation that was real such as invention of motorized vehicles, telephones and consumer electronics, which tempted buyers who could only make purchases by lending their labour. in the past few decades, the world economy grew on the strength of services sector including banking, communication and information technology. and this is where we made mistake. consider each of this and you will notice that these aspects only compliment manufacturing, banks enable credit for business growth, communication and information
government’s reformist stance is appreciable and is set to usher in much-needed changes in the economy. but be it the denotification of higher currency notes or country’s shift from multiple indirect levies to goods and services tax, almost every policy decision fell short of realizing its real and desired outcome. demonetisation was targeted at checking corruption and black money, but bankers made fortunes out of this exercise. reason – the agency that planned the execution of this decision could not anticipate corruption by one of the implementing hands, the banks. not only notes were exchanged on fake identification documents, atm queues and misbehavior at branches added to the woes of already panicked currency holders. demonetisation was the first policy action that separated the present dispensation from former governments as this was not only a bold transformation, it also was greeted with cheer from the public at large; however the push behind this wide acceptance was related more with modi’s god-like
goods and services tax is being hailed as the most far-reaching tax reform ever in independent india. gst will curb ambiguity in indirect taxation, will ease compliance and can augment tax collection of the government, all agreed. but has gst delivered on the front that is all more critical than these, did the government factor in job creation while planning for gst roll out? in bits they did. they foresaw automatic creation of jobs once the tax reform comes into play, for businesses will need tax consultants to understand the new complexities and to steer clear of penalties for wrong/ delayed filings. but what the government did was to leave it to the market forces for creation of new jobs, and this is where they made a blunder. in a recent letter to chartered accountants across india, pm modi has requested for their cooperation in honest and effective implementation of gst. this is where the problem lies. the already well-off