Letters

Letters to the editor dated March 3, 2021

| Updated on March 03, 2021

Start-up push

With reference to ‘Right push for start-ups’ (March 3), the slew of recent incentive measures undertaken in the start-up segment, are appreciable.

In spite of the product knowledge and skill support system available from so many incubation centres and aggregators, majority of these budding entities fail at the prototype and conceptual stage itself due to insufficient marketing, awareness of IP rights and financial literacy of the business involved.

Undoubtedly , the supportive role played by angel investors and venture capital funds is phenomenal, it is not adequate, taking into account the humongous growth of start-up ecosystem. The need of the hour is to provide more funding and knowledge support to these entities.

Sitaram Popuri

Bengaluru

DFI and infra growth

With reference to the article ‘How to make the DFI model work’ (March 3), while creating infrastructure is indispensable to the economy’s growth, the execution and timely implementation of the projects are crucial. The flow of credit from commercial banks have proved unworthy to the long-gestation projects. In this context, the proposal to set up Developmental Financial Institutions (DFI) is a corrective action to ensure the easy flow of capital to infra-projects.

Infrastructure funding must combine equity and debt to reduce the cost of funding. A realistic evaluation of credit requirements and it's timely delivery, apt documentation of the contract and ensuring the utilisation of delivered credit for the mandated purpose by the DFIs are key to avoid the generation of bad assets. The government while setting up the DFIs must raise capital from the public and private, keep itself away from interfering in decisions on funding of projects.

VSK Pillai

Changanacherry

There is indeed a huge vacuum for infrastructure financing, thanks to the conversion of development banks into universal banks. There is apparent gap in long-term funding in terms of appraisal of skills, asset-liability mismatches and adequacy of low cost funds. Along with DFI, equity participation by institutional investors will augment the needed funds for long-term projects at low cost and also to welcome public private participation projects. This process will also bring the needed technical expertise and professionalism for good project appraisal.

NR Nagarajan

Sivakasi

PM push for divestment

A major plus for PSU disinvestment was a feature of this year’s Budget and the Prime Minister’s recent support to it is welcome. The PM has correctly said he is not interested in investing the tax-payers' money into the sinking units.

However, during the PSU sell-off, the government must cut out the middlemen with political influence.

The Comptroller and Audit General must thoroughly audit all disinvestment the transactions and examine whether any loss to the exchequer has occurred.

There are already rumours of a secret agreement between Steel Authority of India Ltd, Vizag and a foreign company going around. Hence it is necessary for the CAG to start the audit so that facts are not buried.

TSN Rao

Bhimavaram (AP)

PLI for farm equipment

As a measure to boost economic revival, the government has earmarked ₹1.94-lakh crore for 12 manufacturing sectors under PLI scheme, which also curbs imports.

At present several equipment employed in the farm sector are imported from China, which poses not only quality and durability issues but also leads to post sales service deficiencies, jeopardising the farming community, which may not be able to afford repair at high cost.

It would be, therefore, ideal if the production linked incentive scheme (PLI) is extended to cover domestic manufacture of farm equipment which saves both the government as well as end users in several ways.

Rajiv N Magal

Halekere Village (Karnataka)

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Published on March 03, 2021

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