The news reports are highlighting the flight cancellations and the inconvenience to passengers. One expects them also to look into the deeper issues, such as what exactly the demands of the pilots are and how much are they paid when compared with their peers in the private airlines?

When such large numbers of educated professionals in high demand are protesting, there ought to be some valid reasons behind the action. They are definitely not doing this and risking their jobs for fun.

Subh

MFI loans

A strong demand has emerged from the big and small micro-finance institutions to restructure their loans secured from banks.

The Indian Banks Association has backed this proposal of ICICI Bank, which has an exposure to the sector of Rs 2,500 crore. The recovery of MFIs has been affected because of Ordinance issued by the Government of Andhra Pradesh intended to curtail coercive recovery and the high rates of interest charged by the MFIs. Under these circumstances, restructuring of loans to MFI is allowed by enhancing repayment period to, say, five or seven years But where is the guarantee that these loans will be repaid promptly even after restructuring?

Most of the self-help groups (SHGs) are not investing the loan income generating assets, but use it is for consumption purposes.

Already, banks had a bitter experience in 2010-11, providing for most of the loans restructured loans in 2009.

Instead the Government also should share some of the burden by reimbursing the entire interest charged by banks to MFIs and and MFIs can pass on this benefit to their borrowers.

As for the banks themselves, once an account is restructured, they should monitor the account more vigorously.

If the Government is serious about enabling repayments of loans secured by SHGs from MFIs, it would do well to waive the interest on the loans and reimburse the interest charged by the banks.

T.S.N. Rao

Palakol

Promoting innovation

This is with reference to the article ‘Innovation deficit hurts India Inc' ( Business Line , April 29). While we had a tremendous economic growth lifting millions out of poverty, we need to embrace innovation, if we are serious about becoming a developed country.

Take, for example, the IT sector. The last two decades have brought in tremendous growth and profits to the industry as a whole. But what is missing is that we haven't produced the next Google or Apple from India.

The corollary can be extended to other sectors as well. It isn't that we do not have the talent, as many after graduating from top universities in the US and elsewhere return to the country.

What is absent is the environment that fosters entrepreneurship. Corporates and venture capitalists should encourage talent to take risks, promote a culture where failures are alright and invest in R&D labs.

The government, for its part, should look at extending tax credits. A collaborative approach by all parties, in the long run, would fuel the spirit of innovation and elevate India in the pecking order of innovators.

Varad Seshadri

California

Disappointing turn

This refers to “PAC members reject draft 2G scam report” ( Business Line , April 29). Indians abroad were hopefully looking forward to the gradual eradication of corruption in India.

The way the PAC has been made to look like a sham by all political parties marks a disappointing turn.

K. K. Lakshmanan

Sheffield, UK

Monetary policy

This refers to “No baby steps this time” ( Business Line , April 27). As a former governor of RBI once said, “The central bank can surprise the markets, but with the caveat that it should be a pleasant surprise.” The markets have priced in a 25 bps increase, but further increase for now might spook the markets.

Extending the cricket analogy what is now needed is a Doosra — instead of a googly, where the RBI takes a leaf out of the Chinese central bank by adopting the CAGR for each bank, after a review of their portfolios to restrict credit growth, or effect an increase in the reserves ratio. Maybe the inflation control policy is long overdue

Srinivas

Bank savings account

This refers to the article “A strange saving instrument” ( Business Line , April 29) Deregulating interest rates on savings bank deposits (SBDs) will definitely plug the price war among banks (especially between public sector and private sectors, and SBD holders (mainly middle class) will be the beneficiaries.

There is also a lot of talk regarding the withdrawal of cheque-writing facility the implementation of which will nullify the benefits of the deregulation of bank rates.

Fixed deposits involve lock in period. The middle class needs flexibility on their savings. The savings account, as it is now, offers them some returns while giving them flexibility to withdraw the money.

Small business houses also would prefer to have savings account so that they can earn some interest on their working capitalI oppose the idea of withdrawal of cheque system in savings account.

Gaurav Agarwal

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