M&As’ time is here

It is good that the five associate banks of SBI are going to be merged into one. Of course, this is the first step in mergers and acquisitions among PSBs. It seems the five respective employees’ and officers’ associations have given the green signal.

Why don’t they go a step further and merge with the parent SBI? This will give other bank boards a chance to rethink M&As and become a part of the financial reforms and allow us to compete with foreign banks.

Barring the value of share pricing of merging banks, there will be improvements in aspects such as business, cost control, change in service conditions of employees, expansion of banking network and digitalisation of services.

There’s not much talk about consolidation of the banking sector though the government has already given its consent. So this is the right time to start M&A in the banking sector.

TSN Rao

Bhimavaram, Andhra Pradesh

Corruption’s to blame

This is with reference to ‘How subsidies have bled us dry’ by Uday Balakrishnan (May 17). In the 2012 UP Assembly elections, the Samajwadi Party won a thumping majority by promising free laptops, among other freebies.

However, many were bewildered because there was no electricity to charge them. Many people visited nearby cities just to charge their laptops. UP is now reeling under severe drought in Bundelkhand. The money should have been spent on education, training, healthcare and setting up critical infrastructure such as like water reservoirs and power plants.

Gaurav Singhal

Rewari, Haryana

The piece is timely and serves to bring back into focus India’s poor governance record at all levels which has resulted in the loot of of tax-payers’ money. The new DBT system is, therefore, a step in the right direction to ensure that subsidies are directed towards only those who need them.

This system needs to be spread across all areas. In a larger sense, subsidies result in severe economic distortion and poor allocation of resources. For example, free power and water (and often free pumpsets) for the agricultural sector have resulted in gross misuse of water. While it is not possible to get rid of many of these subsidies in the short term, awareness about their unsustainability has to be created. Citizens should turn away from accepting freebies and demand better schools, hospitals and roads instead.

V Vijaykumar

Pune

It is not subsidies but corruption that has bled us dry. Subsidies are an essential tool for delivering socio-economic justice. It involves wealth redistribution from the haves to the have-nots. Moreover, subsidies cannot be limited to long-term schemes such as infrastructure development.

Short-term subsidies in the form of dole are legitimate and essential for the empowerment of the downtrodden. Populistic subsidies have a significant impact on the livelihood of women and children as it adds to their income and helps in saving productivity time. The mixer, grinder and bicycle are the best examples of this.

Those who argue against populist subsidies overlook the socio-political complexities of our society. Such subsidies, if delivered honestly, have the potential to create new employment opportunities. However, it is always prudent to have a balance between short-term dole and long-term subsidies.

Naveen Agrawal

Puducherry

Give education a push

This is with reference to ‘Education needs high-impact investors’ by Prachi Windlass (May 17). The writer has rightly pointed out that with the implementation of modern technology and sourcing of debt-driven funds, primary education can be modernised.

The concept of engagement of parents and going to market strategies will work only with a push from government both at the Central and State levels by overhauling the present education system. There are investors willing to invest, however they need to get ample returns. This can be ensured by techniques and policies devised by the Centre.

Rahul J Gautam

Bengaluru

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