Bank nationalisation

The contribution of public sector banks (PSBs) in nation development in the last 50 years has been immense, particularly in the areas of financial inclusion, infrastructure, housing, agriculture and allied activities and digital banking. Private sector banks, which have eroded the market share of PSBs, have not ventured into risky areas like infrastructure and agriculture lending in a big way or even into the unsecured MSME platform. While PSBs have risen to the occasion in fulfilling social objectives — as evidenced by their predominant share in the over 33 crore PMJDY deposit accounts opened in the last three years, the nearly 90 per cent share in infrastructure lending, and the entire non-gold-backed agriculture credit — they are yet to prove their mettle as efficient and viable commercial organisations. The huge pile-up of stressed assets in their books shows the top management’s inability to withstand government and political pressure and the poor credit appraisal/monitoring skills of its middle and lower level executives.

But privatisation is not the panacea to all the problems faced by PSBs as evidenced by the bad loan episodes in some of the private sector banks. There is also the danger that inclusive activities, important to develop the social fabric but commercially unviable, might be pushed to the background as witnessed in the pre-nationalisation days.

While consolidation of PSBs might be one way to reduce costs and improve efficiency in operations, enhancing corporate governance in bank boards, non-interference in selection of directors/credit decisions, and diluting equity through price discovery for the shares of PSBs in the stock market are some of the immediate steps needed from the government to restore confidence of the public in PSBs.

Coimbatore

This refers to ‘School education needs a massive upgrade’ (July 19). Education has to be at the centre of any policy, especially since it so vital to the growth of our economy and country. Time and again it has been emphasised that we fare poorly both at the primary and secondary education levels. Indian Inc has been criticising the quality of graduates who come into the job market. Their employability is a big question mark. The poor student-teacher ratio and pathetic infrastructure in primary schools are well-know. We not only need a higher Budget outlay for education but also a clear roadmap on how to improve the quality of education Accountability has to be fixed and proper monitoring can fetch the desired results.

Noida

This is with regard to ‘India losing African rice markets to others’ (July 19). To remedy this situation, a multi-pronged strategy is required. The most important is to ensure that the cost of production is brought down. Apart from erratic monsoon, cost of labour is one issue that is bothering traditional paddy growers. Mere incentivising or fixing a better MSP may not help in absolute terms. The rice intensification system of paddy cultivation not only reduces input costs — by using lesser quantity of seeds and water, and eliminating weed issues to a large extent — but also improves yield. With monsoon playing truant year after year, State governments must encourage traditional paddy growers to switch to this method, which appears inevitable for the farm sector today.

Sakaleshpur, Karnataka

This refers to the editorial ‘Pound of flesh’ (July 19). All the regulatory bodies should be treated as sacrosanct and the executive arm of the government must be kept at arm’s length. SEBI, RBI and IRDAI, among others, should be considered like the judiciary so that their regulatory role is carried out effectively without any interference from the executive. For this, their financial autonomy should be respected. Reasonable auditing of their financial management by CAG should be enough and micro managing their activities will undermine the regulatory role for which they have been established.

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