This refers to the report ‘Government’s efforts to strengthen public sector banks paying off: FM’ (November 8). PSUs have played a major role in achieving economic growth and financial inclusion.

From the setting up of SBI to the PSBs’ reorganisation, RBI and the government have done a good job. The private sector too, from major conglomerates to start-ups, have played their part.

The need of the day is to provide a level playing field for public and private sector participants.

Appropriate regulatory and supervisory systems should be put in place to restore trust in governance.

MG Warrier

Mumbai

The FM’s statement that government’s efforts to strengthen PSBs have paid off clearly proves the welcome revival of banks.

The government’s move to set up bad bank (NARCL) and extending a five-year guarantee for its security receipts have paved way in resolving the NPA crisis providing enough legroom for banks to kick start the lending process.

Post Covid, the surge in retail loans and a higher NIM (Net interest margin) due to low interest offered on deposits had led to banks reaping huge profits. But loans given to infrastructure and manufacturing would have greater multiplier effect.

Disturbingly recovery of bad loans sold to ARCs which hardly stands at 10 per cent. The government has also been supporting PSBs by infusing capital under dire situations.

Instead of looking at select parameters like credit growth and profitability, banks’ overall assessment on their focus areas need to be evaluated rather than focussing on generation of profits alone.

Srinivasan Velamur

Chennai

A futile exercise

Six years have gone since Prime Minister Narendra Modi administered a shock by demonetising ₹500 and ₹1000 to eliminate black money. But it was a futile exercise as it inflicted pain on the poor, middle class and MSMEs.

But the government has been claiming it a success by pointing towards the increase in revenues from GST. Since black money is mostly routed as income or consumption expenditure or as business loans, large-scale reduction in black money can be seen through higher direct taxes or indirect taxes. But the country’s tax-to-GDP ratio is still at 16 per cent, the same as what it was a decade ago.

No doubt, given the discernible debilitating consequences, demonetisation will go down in the economic history of the country as a monumental economic folly.

M Jeyaram

Sholavandan (TN)

What about solutions?

With reference to the article ‘What ails higher education in India?’ (November 8), the entire article focusses on the faults in higher education institutions right from appointment of vice chancellors to the lack of knowledge of governance attributes by assessors from national accrediting agencies.

Some of the drawbacks are exaggerated (e.g. giving full credit to students of IITs and not the faculty). Govt institutions also function under various constraints — resource crunch, pay disparity of faculty vis-à-vis private institutions, poor quality of intake of students, political interference.

The National Education Policy aims at resolving many of these constraints.

The article should have anaylsed whether the policy is well designed for overcoming them.

YG Chouksey

Pune

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