Your editorial, “Deferred distress” (November 10) is timely, but banks have no other choice but to restructure bad loans to prune their balance sheet since, from 2015 this leverage will not be available. Your suggestion of the RBI providing interest on CRR at 7 per cent will certainly persuade the banks to consider bringing down lending rates as it is a long pending demand of the industrial sector.

Your suggestion of providing financial assistance to the existing projects instead of pooling more funds to infrastructure projects will definitely reduce the risk of additional NPAs of banking sector. This will also help contain the restructured loans portfolio.

In addition to this, the suggestion to the RBI to ease prudential norms at least to certain sectors where circumstances are beyond their control will make them helpless to meet the repayment of bank loans which will help banks as well as sick units.

TSN Rao

Bhimavaram, Andhra Pradesh

Restructuring of bad loans is indeed just postponing the problem with the idea that in future banks will be able to meet the challenge. However, the business community has the knack of absorbing any temporary relief as permanent and when the banks are at their mercy, it becomes easier for them.

Gone is gone. Let us face it. Let all restructured assets be declared NPAs at one go by the cut off time provided by the RBI. No more deferment should be allowed. There may be adverse impact on the balance sheets but they will truly reflect their health. The Government may come to their rescue by enhancing their capital.

Providing interest on CRR cannot be a solution to this problem. Moreover, one fails to understand how interest on CRR will make banks bring down interest rates on deposits.

S Kalyanasundaram

Email

No concessions

This is with reference to “Freebies, or a sensible tax policy?” by D Sampath Kumar (November 10). The Government is not benign to corporates as can be seen from the fact that in spite of giving tax concessions, minimum alternate taxes can go up to 18 per cent.

The better course in any emerging market economy or developed economy is to keep the taxes on the lower side to give breathing space to corporates struggling against many odds such as hedging, raw material procurement, technology up- gradation, and sale terms and conditions and so on so that any fluctuation in income can allow them to maintain some surplus.

But inability to cope with social sector spending which generates very little taxes, leads to the axe always falling on corporates. Nor is the Government liberal when it comes to taxing corporates; on the other hand, it is harsh when it wants to extract revenue for social sector spending.

The Government showed its apathy to Vodafone and Nokia; the latter had to shut down.Foreign investors have clearly said that it is too difficult to work in India and one of the reasons for this is a distorted and shabby tax policy.

RK Arya

Faridabad, Haryana

Damp squib

The latest Cabinet revamp was a damp squib. The perception that it was at variance with Modi’s mantra of ‘minimum government, maximum governance’ is not entirely invalid. But 66 members for a country of 1200 million people is not oversized. Still, it seems unlikely the Government will go from strength to strength with induction of 21 ‘new faces’.

The rejig reflects a dearth of talent in the BJP and promises no great improvement in governance. Deserters from other parties, back-room players, influence-peddlers and tainted persons have been made ministers. It’s a who’s who of Modi loyalists. The one good thing that the new ministers will partcipate in will be the Swachh Bharat campaign launched to fog the real issues.

There is growing realisation that the Modi government is floundering. With promises unfulfilled and expectations unmet, disenchantment can easily set in. A government for communal forces and corporate houses cannot bring about changes to meet people’s aspirations.

G David Milton

Maruthancode, Tamil Nadu

Lose-lose

The ultimate sufferers of the ATM charges will be customers. If many people withdraw large amounts of cash in one transaction in quick succession, ATMs may run out of cash and will have to be frequently visited by cash refilling teams, thus increasing the bank’s operational cost. Also catering to the increased demand, if banks deposit more cash in ATMs or if users withdraw a lump sum at one shot, there is every possibility of a rise in crimes if proper securety measures are not taken.

TS Karthik

Chennai

Cabinet expansion

Well, when Modi formed his government with just 45 ministers, the media went gung-ho praising him for a lean cabinet, minimum government maximum governance and so on. The result: the country didn't have a full time Defence Minister, Arun Jaitley was overworked — he was giving statements from his hospital bed. Nirmala Sitharaman was not sure which ministry she as handling full-time. It is good Modi has realised he needs more hands; the media too would appreciate this.

Sridhar Narasimhan

Email

The reshuffle is more balanced on political considerations. The Government must fulfil the promises made to the people. The principles of good governance must be strictly followed by the Modi government — each and every department, wing, office. People must feel hassle-free in dealings with government offices at the Central, State and local levels (at least where there is BJP rule).

Mahesh Kumar

New Delhi

The 21 new faces inducted are an excellent blend of youth and experience. The elevation of Parrikar to Cabinet rank is a historic moment for Goa as he becomes the first from his State to earn this distinction. Divested of the Defence portfolio Finance Minister Arun Jaitley can now hope to breathe easy. The move to give non-performers the boot or give them insignificant posts is a step in the right direction and gives credence to the view that Modi believes in the adage ‘perform or perish’. The Prime Minister has also done well to enlarge the search for ministerial talent by inducting Olympic silver medallist Rajyavendra Rathore and Bollywood singer Babul Supriyo, both first time MPs.

NJ Ravi Chander

Bangalore

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