This refers to the news item Bandhan Financial, IDFC win banking licences, India Post in the queue (FE, April 3). Though the long wait for granting new bank licences has finally ended with RBI deciding to issue permits to two of the 25 applicants, yet some sections feel that the announcement at this juncture when elections are about to be held is one more effort by the current government to win some popular support from the masses. Here one may recall the words of former World Bank economist Percy Mistry who said that the political leadership still believes the Indian electorate comprises a bunch of babies that should be given jalebis at election time. In spite of every election which has shown that the electorate wants development and good governance, more than 90% of our leaders seem proud to remain economic illiterates. He had rightly expressed a fear that he did not see the prospect of political stability that would provide the kind of comfort that foreign and domestic investors will need and demand for the next few years. Answering to a specific question as to whether it makes any sense in giving new banking licences for bringing more people into banking fold, he had said that it did not. He also elaborated that the problem in India is not that we do not have a sufficient number of banks but that almost 70% of our banking
system is state-owned, inefficient, non-inclusive Hence, the necessary safeguards should be built by our policymakers to ensure that our banking system becomes not only vibrant but also remains healthier.
The country has gone to the polls. There are few bright spots in the economy in terms of inflation easing, though there are still some concerns persisting about its sustainability, strengthening of rupee against the dollar, accretion to forex reserves etc. The market sentiments have been improving. While concerns about growth that has slackened considerably in the recent times and other compelling issues are nevertheless there to be resolved, yet a general consensus was that Reserve Bank of India would prefer maintaining a status quo for now and wait for a more opportune time to take a call on the rate cut. Overall, the status quo by RBI in the first bimonthly monetary policy announcement for 2014-15 on April 1 is on expected lines. This is for the first time since Raghuram Rajan took over as Governor of Indias central bank that he had acted according to Street expectations. He likes surprising the market; this time the surprise was that he did not surprise them!
The Modi mirage
It is unfortunate that the BJPs prime ministerial candidate, Narendra Modi, is projecting himself as the sole saviour of the masses. Like a dream merchant, he mesmerises the public into believing that he has solutions to all the problems the country faces. But his such tone and tenor has not only offended politicians of other parties but also many from the BJP. It seems that our nations journey in political churning for finding the nectar of good governance is rather longer than the Modis dream of 60 months as the Prime Minister. Modi may be a efficient administrator, but he must change his antics of garnering votes through cheap slogans; surprisingly, the gullible public is readily buying into his promises. Last but not the least, we fear that his agenda may harm the Hindutva philosophy in the long run. It is time that the voter looked beyond the veil of rhetoric and questioned him on actual measures.
Brij Bhushan Goyal