Decoding why India's public sector banks are in trouble

StatsGuru-06-January-2014

Business Standard

This refers to the report "Modi as PM disastrous for nation" (January 4). The fact is that in the last four years, Manmohan Singh has played an indifferent innings when the economic growth rate slumped to about four per cent and corruption spiralled to shocking levels. Hence, a novice political party such as the Aam Aadmi Party (AAP) was able to make mincemeat of the Congress in the recent Assembly elections. It is natural for Singh to espouse Rahul Gandhi as the future prime minister of India. However, Gandhi has no experience in the government. If he was really sincere in his desire, he should have taken a ministry in the current government and delivered some results. To entrust this country, the world's largest democracy, to him, would be very asinine.Singh's deriding Bharatiya Janata Party's Narendra Modi was churlish. Till date, there is no concrete evidence or conviction against Modi that he abetted the riots in Gujarat. This allegation has become a handy tool to cast aspersions

Letters: Managing the nation

Rafiq Dossani's analysis of Massive Open Online Courses for engineering students in his article "India embraces MOOCs, but what if it is a 'lousy product'?" (January 8) is noteworthy. The effectiveness of learning outcome depends not only on the quality of information (knowledge) provided to the student but equally on the medium chosen to transmit it. Recorded lectures lack the quality of channel richness - the amount of information passed is limited. After all, listening alone is not an effective tool of learning; interaction is also necessary. Virtual learning has this glaring drawback - the lack of opportunity for clarification of students' spontaneous doubts as the recorded lesson is gone through. This makes subsequent understanding of the topic less comprehensible. The problem is accentuated in the case of average students. Since they are large in number, the benefit of effective learning through MOOC+ is lost to them. The associated issue of employability is also pertinent. Curre

Letters: E(mpty) learning?

India must guide Sheikh Hasina towards negotiations

The crisis in Dhaka

Time to redesign Lutyens' Bungalow Zone in Delhi

Give up the palaces

In Bangladesh's recently concluded elections, a dissident Awami League (AL) member Haji Mohammad Selim had stood as an independent candidate against an incumbent AL lawmaker. He was among a large number of AL dissidents who won. But his victory was also remarkable for the symbol he chose: an elephant. Nothing exceptional about that, since eastern South Asia used to be elephant country. Only observant naturalists would have noticed that the picture of the elephant on banners and publicity material proclaiming Selim's candidacy was not that of the Asian elephant but its bigger and more distinctive African cousin. An error maybe, but the fact is that the African elephant, unlike the Asian sibling, is almost impossible to domesticate - and that could be an appropriate message for the beleaguered Sheikh Hasina.

An MP's 'African safari'

The Aam Aadmi Party (AAP) has caught the imagination of the people in many ways. But what has caught the eye is the media coverage it has been getting of late. Recently, Rajya Sabha TV, which mainly telecasts proceedings in the Upper House of Parliament, beamed the full session of the vote of confidence in the Delhi Vidhan Sabha live, unlike other channels from the national stable. This apart, a top official of the channel also updated all the speeches in the Vidhan Sabha on his Facebook page during the proceedings. Some political commentators have interpreted all this as another sign of the growing proximity between AAP and the Congress party.

Partnership in camera?

Rajdhanis get top priority on the railways network. And so do the passengers. Fully air-conditioned compartments, breakfast, lunch, high tea and all the trimmings. But once in a while they also get stuck in a conundrum. The public announcement system in the Rajdhani usually informs passengers of the next station, and the railways' rules and regulations. One such rule asks them to strictly avoid tipping the train attendants. So, what do the passengers do when the attendants, on the last day of the journey, ask for tips? In fairness, the attendants cite logical reasons: low remuneration and no perks. Maybe that is something the Railways need to fix as well.

Over the tip

This refers to the report "CAG gears up to audit books of 5 private telcos, Delhi discoms"(January 7). Article 149 of the Constitution mentions inter alia that "the CAG [Comptroller and Auditor General] shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other authority or body as may be prescribed by or under any law made by Parliament…". Perhaps those who drafted the Indian Constitution might not have foreseen the kind of scrutiny now being necessitated by vanishing accountability on the part of "public servants" who handle public funds. If the cardinal principle of financial management, that sources and uses of funds should be subject to prudent accounting when money is collected from the public is still valid, contesting the right to audit by those vested with that responsibility doesn't stand reason. What baffles the common man is the resistance to transparency in accounting, whether it is gold, money or any ot

Letters: Ambit of audit

One definition of excise in the dictionary is "to remove by cutting". It sounds painfully similar to what the salaried taxpayer goes through at the end of every month. In fact, there is a case to rename income tax as excise, because it is a tax on the revenue of a salaried individual, and not on his income net of expenses, that is, his savings. It is also worth highlighting that every rupee collected from India's 40 million taxpayers, mostly the salaried class, goes in almost exact measure towards the annual salaries of our industrious central government workers. Unfortunately, these taxpayers are also so perfectly scattered across the country that they have been effectively gerrymandered out of political power. So, perhaps it would make more sense for them to spend a night out - for instance, on new year's eve - drowning their sorrows at a party rather than attempting to form their own party. At the very least, they would escape the next round of additional excise on liquor.Rohan Soar

Letters: Tax or excise?

This refers to the editorial "Party poopers?" (January 7). The emergence of the Aam Aadmi Party (AAP) has brought a revolutionary change in politics. Now, the Congress, the Bharatiya Janata Party and other parties have to readjust their strategies for the 2014 general elections. But they should not draw the wrong lessons and create a subsidies raj. The huge push of the aam aadmi (common man) has brought AAP to power. The only immediate setback for AAP is that they don't have an organisation to cover rural India. Their success at the national level could depend on how they are able to inspire rural India and its depressed classes - as they did it in New Delhi. Meanwhile, it will also be interesting to see whether the same Delhi model will emerge at the national level, too, with AAP or a similar party in power with the support of the Congress or some other secular party?Jacob Sahayam  ThiruvananthapuramLetters can be mailed, faxed or e-mailed to:The Editor, Business StandardNehru House,

Letters: AAP's national question

Rice milling  generates significant employment in agrarian India, and as a key sector of its agricultural and food processing industry, presents an attractive business opportunity for entrepreneurs across the country. CRISIL has analysed the performance and cost structure of 400 rated MSMEs involved in rice processing for 2011-12 (refers to financial year, April 1 to March 31).The analysis indicates that the cost of raw material, i.e., paddy, constitutes the largest portion of the MSMEs' overall cost structure (excluding depreciation and finance charges), accounting for an average of 90.68 per cent of their overall costs. This forms a significant proportion as compared to the share of processing expenses (4.89 per cent) and selling expenses (2.30 per cent). Employee and power costs also account for low shares of 1.34 per cent and 0.79 per cent respectively of the total cost.The analysis also indicates variations in the share of power costs from state to state - mills in the rice belts

Cost structure of MSMEs in rice milling

Isro's achievement

Parties draw the wrong lessons from the AAP's success

Party poopers?

Bharatiya Janata Party's prime ministerial candidate Narendra Modi's visit to Ranchi in Jharkhand late last month saw the customary turnout, according to the media. Although the fact of the large turnout was correct, as was the Bollywood-style cheering when Modi landed by helicopter, no one reported the fact that the crowds started leaving soon after his speech began. So wrote economist Jean Dreze in an article in Prabhat Khabar, the Hindi daily, an English translation of which appeared on a website called South Asia Citizens Web. Dreze wrote that, despite Modi's dramatic tone and gestures, his "rhetoric had the contrived feel of a film audition and the content was flat. Perhaps that is why people started leaving the grounds in large numbers soon after he started speaking. Those who remained showed little interest in what he said and rarely clapped or cheered despite prompting from party workers. To me it looked like Modi had failed to connect with the audience." Or maybe, as Dreze poi

Modi talks, Ranchi walks

Call it the Aam Aadmi Party effect but the newly-elected leader of the opposition in Chhattisgarh, T S Singhdeo, has decided to do away with the red beacon on his official vehicle. But not immediately - only after two months! The logic for this wait reflects how little he has understood the import of the gesture - or, indeed, how regressive his thinking remains despite having fought a democratic election. In these two months, he has said, he will take "the people's opinion". Which "people"? Singhdeo is a scion of the former princely state of Sarguja and he wants his "subjects" to see him moving around in a red-beaconed vehicle. Of course, Sarguja's "subjects" are not new to the concept of a VIP in the former ruling family since M S Singhdeo, T S Singhdeo's father, was the chief secretary of undivided Madhya Pradesh. T S Singhdeo will, however, hold a VIP position for the first time, so he wants to enjoy the perk for two months and travel the length and breadth of Sarguja and give up th

Aam VIP

The shipping ministry is going full steam ahead in spreading awareness about shipping terminology. At the entrance to Transport Bhawan, which also houses the ministries of road and highways, ministry of tourism, the ministry has installed a board to display the word of the day with its Hindi translation. The word of the day on Friday was "sea boat". Last year, the shipping ministry had uploaded an entire dictionary of shipping terms on its website.

Sea-word bound

This refers to the report "T2 set to give Mumbai a flying start to new year" (January 6). The description of the airport's expected facilities makes good reading, tempting one to make a beeline to get a ticket to any place, just for the experience. However, what average air travellers require is something different. They expect flights to be punctual. In case of any unavoidable delay, passengers expect the airline staff to be more forthcoming and transparent in giving information on the flight. Like most of the international airports, the passengers get to enter the aircraft through aerobridges only, and not have to travel through buses just because the airline company does not want to pay the aerobridge fee. Also, passengers expect the eateries to offer food at reasonable prices, and that their belongings in the checked-in baggage remain safe. The easy availability of transport (bus, taxi and autorickshaws) without fleecing incoming passengers is also important. One hopes that the tra

Letters: Judging an airport

It is sad that the government paid the entire cost - Rs 3,600 crore - of the AgustaWestland helicopter deal in advance. It is simple business acumen that nobody pays the entire deal amount in advance. If it is paid then a performance guarantee from a bank is obtained for the entire amount. This reminds me of the urea scam during the P V Narasimha Rao regime when the entire cost of importing urea from Iraq, about Rs 360 crore, was paid in advance.Sudhir K Bhave  MumbaiLetters can be mailed, faxed or e-mailed to:The Editor, Business StandardNehru House, 4 Bahadur Shah Zafar MargNew Delhi 110 002Fax: (011) 23720201E-mail: letters@bsmail.inAll letters must have a postal address and telephone number

Letters: Scams and payback

A Seshan, in his article "The dangers of tolerable inflation" (December 27), has lamented the lack of a definition of "monetary stability" in the authentic documents of the Reserve Bank of India (RBI). However, he agrees that it is generally accepted by the RBI to imply price stability or the maintenance of the purchasing power of the rupee. Here, it is neither necessary nor practicable to specifically define some crucial concepts in economics and even in general parlance. Reform, for example, has never been defined but the term has been used for years by economists and administrators. Once, the definition of reform was asked in a Parliament question. The revenue department of the ministry of finance defined it as "taking action towards what is contemporaneously thought as better". This is an approximation of a definition widely accepted by several economists and executives. The second issue put forward by the author is that there are two choices of stability. First, is to have more ri

Letters: The definition of reform

The Annual Report of the Insurance Regulatory and Development Authority (Irda) for 2012-13 said the decreasing trend in the number of life insurance offices in India continued as in the previous year. The regulator pointed there was a net reduction in number of life insurance offices. Among general insurers, Irda expressed its concern about non-coverage of several districts by the companies.In order to increase physical presence of insurance, Finance Minister P Chidambaram in his Budget Speech in 2013 said all towns with population above 10,000 would have one Life Insurance Corporation (LIC) office and one public sector general insurance company office. The FM had also allowed insurers to open branch offices in all cities other than tier-I without Irda's approval.With respect to the geographical distribution of life insurance offices, highest number of offices were in the non-metro and non-urban locations. This was true for both the private sector and LIC.When compared to life insuranc

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