IBC’s woes

This refers to the article, ‘IBC has been unfairly criticised’ (January 12). An institution’s functioning is dependent on a myriad set of factors — the Centre, accountability of the key players, borrowers’ responsibility, etc.

Political recommendation, lending authorities’ recklessness and lack of proper monitoring after disbursement of loans are still in vogue. Above all, the government policy to promote industrial production without improving overall demand continues to be the main reason for growing defaults, which need to be addressed on priority.

Even where growth is witnessed it fails to provide employment due to mechanisation and maximising profit. Labour component being the most flexible one is being misutilised.

AG Rajmohan

Anantapur

Tax and incomes

It is interesting to note that in India, net direct tax collections between April 1 and January 10, 2023 have reached 81 per cent of the full-year budgeted target (January 12).

This essentially means that the disposable money in the hands of the people in particular should have come down to a great extent leading to fall in demand and prices.

Hence, the RBI need not take any specific quantitative or qualitative credit control measure to rein in rising prices. Of course, the government should use the monetary resources to augment the supply of essential goods and services and bring down their prices.

S Ramakrishnasayee

Chennai

‘Banking’ on growth

While referring to the statement of the RBI Governor that the ‘Banking system is well-placed to support India’s growth story’ (January 12), although the banking sector is delivering better business in terms of capital, financial intermediation, asset quality, sustaining liquidity and profit margins and robust to support economic development, however, albeit that, Indian banks are lagging compared with major global banks.

The quality of the assets in the banking sector is not strong enough to counter the political shocks. Political stability and continuity of economic policies are crucial for sustaining the quality of assets of the banking sector. An in-depth evaluation of the quality of the outstanding assets and governance in credit management is imperative. Similarly, the banks’ dependence on bulk deposits and the sluggish growth of low-cost deposits are bad for the banking system.

Given the need to attain a strong competitive edge among international banking systems, consolidation of the banks is the pivot, and to ensure good governance and financial discipline in the economy as well.

VSK Pillai

Changanacherry

Farmers to the fore

This refers to the article ‘Farmers-a political blind spot’; India has come a long way in agriculture after the green revolution.

Despite all the progress, agriculture remains a weak spot in the Indian economy.

Instead of all the hype about being annadatas to keep the farmers happy; it would be better to provide a mechanism for remunerative prices of their produce. The political fallout of ignoring farmers’ demands is the worry for political parties.

The promise of doubling farmers income by 2022 has been forgotten and nobody is even reminding the government about it.

Anthony Henriques

Mumbai

comment COMMENT NOW