Wednesday, November 27, 2002, Chandigarh, India

National Capital Region--Delhi



Implications of new credit policy

THE new credit policy benefits the largest borrowers in the country viz. the Government of India and the state governments. They are naturally keen to borrow cheaply. Unfortunately, the central and state governments are living beyond their means. Therefore, they rush to the RBI for heavy borrowings. Though the RBI has agreements and mechanism to put an end to it, these are watered down in implementation. The result is massive deficit financing and continuous growth in debts.

The RBI should refuse to provide more funds to the central and state governments which are in default and dishonour their cheques. Then the governments would wake up in the hue and cry that the public will raise when government cheques bounce.

The new credit policy also benefits the banks. They have been rewarded for their low level of efficiency. The cost of funds to them is said to be about 7 per cent, which will now go down further. They are supposed to pass on the benefits to the borrowers. Unfortunately, this is not done in practice except for a few favoured borrowers.

In reality there is a gap of at least 8 per cent between the cost of funds to the banks and what they charge to the borrower. The implication of this to the depositor is a further lowering down of their interest rates. Many banks did this promptly on the announcement of the new credit policy. This has brought hardship to millions of retired people, pensioners and others who depend on deposit interest for their livelihood. The alternative of increasing operational efficiency of banks is never explored.


It is amusing that the RBI has allowed 1 per cent extra interest to the bank employees for which there is no justification at all. It is said that the banks and the RBI are afraid of the staff and officers’ unions to bring it on a par with the general public.

The RBI lacks the capacity to manage its statutory obligations for lack of modern management practices. It produces excellent committee reports but is not able to implement them meaningfully.

M.R. PAI, Mumbai

Reports on Pak visit

Your correspondent who has gone to Pakistan along with the Sikh jatha to celebrate Gurpurb has tried to project only the negative points like Pakistani banks rejecting the Indian currency, inflammatory speeches, the Indian Sikh jatha leader not being invited by the Pak President and so on. Can’t he let the readers know how hospitable the local people are towards the Sikhs, how the gurdwara campus was illuminated, how much fervour there was among the devotees who attended the nagar kirtan etc.

In the past The Tribune reported about the marked presence of Sikh militants on gurdwara stages and this time their absence from the scene has made the headlines instead.

Has your paper ever reported for how many years now the Pakistan Muslims have been denied visas by the Indian government to pay their obesience at the Roza Sharif at Sirhind? And how shabbily they were treated whenever they paid a visit to Sirhind? We expect more balanced reporting.

MANJINDER SINGH JOHAL, Mandiani (Ludhiana)

Baba Farid varsity

Baba Farid University conducted the Punjab PMT exam in mid-July and the classes for the first year of the MBBS started in mid-September. In contrast, the CBSE and most states conduct their entrance exams in April/May and start their sessions by July.

Baba Farid University has not bothered to hold the second counselling for the 30-plus seats lying vacant. The students who will be admitted now will lose six precious months for no fault of theirs.

S. KAUR, Ludhiana

Interlinking rivers

This refers to the editorial “Interlinking river waters” (Nov 8). The Centre plans to amend the Constitution to declare the water resources as a national asset. So Punjab will lose its right to waters of the rivers flowing through its territory i.e. the riparian right.

The river interlinking, proposed to be built by the Central Task Force, will not provide any benefit to Punjab, which may face, leave alone irrigation, even drinking water shortage.

G.S. DHILLON, Chandigarh

A utopian scheme: The proposal of interlinking the Ganga with the Cauvery, prima facie, is a utopian scheme involving a lot of pumping for which a tremendous amount of power is needed. Detailed techno-economic studies are required to be carried out to determine the practicability of the scheme.

G.R. KALRA, Chandigarh

A bold dream: Interlinking the rivers is indeed a unique dream of its type; which will definitely help us fight the recurring scourge of drought and famine. Besides increasing food production, it will lead to better water-management.

Connecting the four metros with super highways will provide a boost to our economy. Both these projects are mammoth in size and will require huge financial investments. This is a very bold dream of the Prime Minister.


Congress rally

A Congress rally was held on November 18 in the car parking area of the Feroze Gandhi Market of Ludhiana. It inconvenienced visitors to the market.

Who authorised the district administration to permit the holding of a political rally in a commercial and trading area on a working day? Who will compensate the loss of lakhs of rupees suffered by the business and financial establishments?


Sales tax on MRP

I fully endorse the Haryana Government decision to levy sales tax on the MRP on 60-odd items. So far the dealers were paying the purchase tax on these items and not the sales tax. Sales tax means in itself the tax on the sale of an item which is written on it as the retail price. Suppose the wholesale price of an item is Rs 100. Then the dealers were depositing tax on this price to the government whereas the retail price written on this item was Rs 200.

DR C.V. SINGH, Rohtak

PUDA allottees

Apropos the report HUDA reduces interest rates” (Nov 13), the allottees of PUDA (Punjab Urban Development Authority) also expect similar relief. An announcement from PUDA in this regard will cheer the allottees.



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