While the Finance Minister’s comments that cash-transfers are a “game changer” is true, it should be construed that it is not for the common man, but for the scam-ridden UPA-II Government.

With elections looming in 2014, the Congress party is desperate to connect with the common man after having mired itself in a myriad of scandals. Also, its inability to pass reforms to resuscitate growth, its coalition compulsions and, finally, its lack of leadership are not to its credit.

This election gimmick, for several reasons, is doomed to achieve its purported goals. First, for a country constantly flirting with rampant inflation, unlike food subsidies, cash doesn't provide a sense of security for the poor in buying the necessary.

Second, the ability of this scheme to succeed depends on a successful rollout of “Aadhar” and the timely opening of bank accounts for the needy. Many would have to travel or, in some cases, waste a day withdrawing the cash. Third, even if the logistics were smoothened, cash can always be misused instead of focusing it to feed the family.

Varad Seshadri

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Relax norms

This is with reference to the editorial, “Niche lending” (Business Line, December 8). With regard to past experiences of non-banking finance companies in serving the financial markets, many instances have proved the need for a strict control on them by the RBI, and this was done. Some deceived depositors committed suicide and associations of such losers fight for recovery from the concerned companies.

However, the situation has improved and the NBFCs without public deposits satiate the needs of the under-banked with capital provisioning.

Hence, they may be allowed to use some facilities of banks and permit them to serve in their niche areas, again under the control of the RBI. State Bank of India in each State can monitor the NBFCs.

N. R. Nagarajan

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(This article was published on December 10, 2012)
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