TN Budget pragmatic
The Tamil Nadu Budget for the year 2023–24, presented by the State Finance Minister, Palanivel Thiyaga Rajan, is pragmatic and deserves praise as it shuns fiscal prolificacy while announcing measures to improve the welfare of the marginalised in the State.
One of the significant takeaways from the Budget is the announcement that women heads of eligible households will be given a monthly honorarium of ₹1,000, a key election promise of the DMK-led government in the state. Known as ‘Magalir Urimai Thittam’, it will be implemented on September 15.
The announcement that the free breakfast scheme will be expanded to all government schools in the State is, in all likelihood, going to be a game changer. It would not only improve the nutritional status of children from lower strata of society but also further increase both the enrolment and retention of children from the lower strata of society.
Financial world in turmoil
This refers to ‘Ring-fencing our banks’ (March 21). The casualties of two banks in the US and Credit Suisse in Switzerland speaks volumes about the regulatory mechanism prevailing in these countries. The RBI Governor has been assuring time and again that all is well in India, but does it inspire confidence?
The ripple effect of financial instability is already being felt at the bourses and there is flight of capital as FIIs have become aggressive sellers. Hopefully, the contagion won’t spread to the domestic banking sector.
RBI must be proactive
Indeed, the collapse of Silicon Valley Bank, Silvergate , Signature Bank and Credit Suisse in such a short interval does not bode well for the financial world. Though the SVB crisis will not impact the Indian financial system directly, the RBI needs to learn its lessons.
The collapse of these US banks one after another should not be brushed under the carpet.
The RBI has mostly taken a reactive approach and time has come for the regulator to play a proactive role as seen in recent crises involving PMC, YES Bank, IL&FS and DHL. These have shown that the RBI can definitely be more active and hands-on in the dynamic banking world.
IT sector’s strategy
This refers to ‘US banking fallout may shake up IT sector’ (March 21). The over-dependence of the Indian IT sector on BFSI, that too primarily on the US and European markets, is the major reason for the sector’s current woes. Diversification is the basic tenet of any business and the IT sector needs to change its strategies and diversify its clientele base, so that they will not face a similar kind of situation that they are facing now.
The IT sector may be able to withstand the revenue losses due to the sudden downturn for its business from BFSI due to its earlier robust growth trajectory and innate strengths.
But what about the impact on the employees in the sector. Already, there have been widespread layoffs in the sector. Now, with the latest banking crisis in the US and Europe, the IT and start-up sectors may have to resort to further downsizing of their employee strength.
This will not only impact the existing employees, but will also dampen the spirits of the thousands of IT graduates coming out of colleges. It is time the IT sector rethinks its business expansion strategy.
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