Radical reforms needed
Radical reforms needed
Apropos of the column “Shrinking Bharat needs a new approach” (FE, September 18), villagers residing in the remotest parts of India are really unaware of the developments which are taking place in the more connected parts of the country due to lack of sufficient transport and communication. In fact, the government needs to bestow greater priority to infrastructure development including education and healthcare in these areas to ensure their participation in the growth process. Schemes like MGNREGA must deliver the intended results to address issues relating to rising unemployment, particularly with regard to seasonal unemployment. Although financial inclusion under the Pradhan Mantri Jan-Dhan Yojana is succeeding in rural areas too, yet more efforts are needed to ensure uninterrupted delivery of institutional credit at cheaper rates on flexible terms for farming and non-farming activities. The pattern of agriculture also needs to undergo changes in accordance to changes in weather conditions. Greater investment is needed for improving irrigation facilities and adopting modern technology in farm mechanisation to drastically improve yields. It will encourage farmers to stick to farming. At this juncture, the government must step forward with radical reforms to accelerate economic growth and development of the rural sector.
Apropos of the news report “Bad bank a bad idea for India, says Raghuram Rajan” (FE, September 19), the RBI Governor fortunately does not favour the creation of bad banks. The establishment of payments banks and small finance banks is relevant from the angle of financial inclusion in India. It is definitely a bad idea for existing players, especially for state-owned banks (SoBs). Increasing competition would take away their business. Payments banks would take away the fee-based business (remittances) of SoBs through their superior technology and customer-friendly service. Rural and semi-urban customers depend upon SoBs for sending remittances. The widespread network of SoBs makes them their preferred choice. But once they enter the portals of SoBs, at least half a day is lost, thus eating into their day-to-day earnings. The effective cost of banking is not merely the bank charges but also the loss of earnings. Payments banks would definitely address this issue. As for small finance banks, they have a wide field open for them due to the existence of a huge number of SMEs deprived of financing. They would hereafter flock to small finance banks for their needs.
KV Rao, Bengaluru
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