Letters to the editor dated July 24, 2020

| Updated on July 24, 2020

No to divestment

Apropos ‘PSU stake-sale needs a rethink’(July 24). Indeed, the author has aptly advocated for not divesting in PSUs such as Coal India and IDBI Bank at this juncture, for it will lead to reduced capital gains for the Centre, loss of lucrative dividend income and added pressure on LIC, the big cash cow, to buy said stakes at a time when it is already burdened with NPAs on its investments. The alternative solution of borrowing against PSU stakes is a better idea, as it will keep the government stake alive and allow it to benefit from future dividends. Issuing long-term debt instruments will attract both institutional and retail investors.

NR Nagarajan


Political naivety

This refers to ‘PM ‘lacks vision’ while dealing with China, says Rahul Gandhi’ (July 24). The country should be grateful to the former Congress chief for pointing out that India should deal with China ‘psychologically’, from a position of strength. However, as regards his latest political salvo alleging that the PM lacks vision, it goes without saying that this Gandhi scion virtually remains hostage to his own deep-rooted and inherent misgivings. In fact, he has constantly been raking up a lot of irrelevant queries while harping on several non-issues. It seems he still has miles to go before he attains the much-needed political maturity, if at all.

Vinayak G


Credit woes

This refers to the media reports which state that crores of rupees have been disbursed to MSME units under the special dispensation scheme, under which non-NPA accounts are extended additional credit up to 20 per cent of their existing working capital with government guarantee (the units need not furnish additional collateral for the extra loan).

In reality, in many cases, banks have automatically credited 10-20 per cent of additional loans — even without any formal application by the units — but the actual disbursement is kept on hold for some reason or the other. These include pending submission of stock statements, execution of documents, or valuation of property. While such steps are undoubtedly in the interest of the bank, they spell trouble for the accounts with the capital not being available but interest getting charged. Some Banks are even insisting on additional insurance premium before the loan amount can be drawn.

The current business conditions of a few units are not conducive, warranting additional funds. In those cases, automatic credit entails a financial burden they can ill afford. These problems need the immediate attention of the authorities concerned at the bank level and monitoring by the Reserve Bank of India. Enthusiasm to show numbers should not override discretion for diligent commercial considerations and purposeful execution of scheme.

R Nagarajan


Women in politics

This refers to the welcome decision of the Haryana Government to accord 50 per cent reservation for women in panchayat elections. The Supreme Court has already endorsed the earlier welcome decision of the Haryana Government mandating certain educational requirements for contesting in panchayat elections. Such decisions should be implemented at the national level. Many political parties cry for reservation onreligion and caste basis, but oppose the reservation to women.

The Election Commission’s formula to mandate every political party to give at least 33 per cent of tickets to women may be immediately enforced as an interim measure. Moreover, to prevent women candidates from being misused as proxies for their male relatives, there should be a system whereby the name or photo of said relations may not be permitted in election-campaigns of women candidates.

There should be uniform 33 per cent reservation for women at all levels, from civic bodies to Parliament, that too with some stipulated minimum educational background.

Madhu Agrawal


Published on July 24, 2020

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