Subsidies are bad economics
Congress vice-president Rahul Gandhi suggested at the AICC session that the people of the country want 12 subsidised gas cylinders a year (Pradhan mantriji, desh ki janata ko chahiye barah gas cylinder). Ever dutiful, Petroleum Minister Veerappa Moily and the Cabinet complied. Raising the subsidised LPG cylinder cap from 9 to 12 is bad economics and bad as well as immoral politics. Moily himself had earlier justified the 9 cylinder cap claiming that it covered 90% of the consumers. The remaining 10% of LPG consumers dont make what Rahul Gandhi called desh ki janata. It is part of the Congress strategy of building Rahul Gandhis image in the faint hope of improving the partys grim prospects in the coming general elections, all at taxpayers cost. It is immoral politics of the Congress to add further a subsidy burden of Rs 5,000 crore to the countrys economy when the new government at the Centre, after the general election, is expected to be a non-UPA one. Putting the economy derailed by the UPA government back on track will be its monumental task.
Look out for bad loans
Apropos of your edit A stitch in time (FE, February 1), the public sector banks have to develop appraisal skills to quickly identify NPAs. Nevertheless, centralised reporting and information-sharing regarding NPAs, especially of large accounts, should be implemented immediately. Indeed, PSU banks hold a bigger chunk of NPAs, compared to private banks. PSBs could form a loan syndicate to which requests for large loans will be referred right at the very start and early signs of a loan going bad can be identified by the syndicate so that unnecessary provisioning may be avoided. Loans for infrastructure development could be sanctioned after projects obtain land and environmental clearance. A Parliamentary Standing Committee should be formed which vets large-loan requests before they are sanctioned, especially for projects of national importance. A periodic compilation of the reports on the progress of projects for which large loans have been granted is necessary. This will keep the borrower tuned for repayment.Depositors becoming scapegoats could be prevented by taking stern measures against NPAs. Otherwise, Peters will keep getting robbed to pay for Pauls gimmicks. It is time that we recalled the Global Trust Banks failure and learnt the right lessons from the Great Recession as well.
NR Nagarajan, Sivakasi