With reference to the article “Cash transfers a good idea,but....” (Business Line, December 4), the idea is not without its pitfalls. Empowering the masses with cash without enlightening them on its effective usage shall spell doom in the long run. The flagship programme of UPA, MNREGA has put cash in the hands of people like never before. Subsidy transfer shall further add to their cash reserves and can find its way into unproductive spending. It is still common in villages to rent their ration cards and earn cash out of it.
Regarding the article “ Cash transfers a good idea, but...”, the Government’s intentions are noble. But we all know what happens in the case of all welfare schemes. In MGNREGA and mid-day school schemes, cash was misused to the hilt. There is no guarantee that cash transferred into the accounts of head of family would be utilised the way the government wants. Aadhaar has not reached its potential, which would further act as a hurdle in this cash transfer scheme.
Banks are earning profit on the strength of low cost deposits, but depositors are not offered a better rate of interest. Profits are not being judiciously distributed among depositors and employees. Depositors are compelled to maintain a minimum balance in savings and current accounts, however, banks do not offer a higher rate of interest for deposits above minimum balance requirements. On the contrary, when outstanding balance falls below the minimum ,depositors are heavily charged.
Banks in developed countries offer a low rate of interest on deposits, but they also charge a low rate of interest on loans.
Jagdip H Vaishnav