Letters to the editor

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Published: June 15, 2015 12:19:06 AM

Learn from Telangana

Learn from Telangana
Apropos of the Regional Cafe “Telangana lays an innovative growth path”, it is right to remark that the state’s maiden industrial policy hinges on the premise of “minimum inspection, maximum facilitation”. Indeed, the Telangana government, though in its infancy, has built high expectations around its industrial policy, which it says is resting on two pillars—minimum inspection and maximum facilitation. It goes to the credit of chief minister K Chandrashekhar Rao, who is busy wooing investors. The results are showing already. Marquee investors who have evinced interest in the state include private and public sector bigwigs; for example, Anil Ambani has committed investment in power, infrastructure and media, while NTPC has expressed its willingness to set up a 4,000-MW power generation plant. It is time other states—especially the ones that got formed in 2000—learn from the path Telangana is taking. It is never too late to learn.
Munesh Verma

Reforming PSU banks
This refers to the editorial “How do PSU banks grow?” (FE, June 12). Given the present state of PSU banks in India, they cannot grow as they are facing a peculiar financial conundrum. First, they have to clean up their books. How is it possible when the pace of earnings is quite less compared to the pile up of bad assets? The government has already communicated its stand on capital infusion. The majority stakeholder (read the government) will infuse capital subject to the stated terms and conditions. Most PSBs would not be able to comply with these terms. Even assuming the government agrees for lesser pay-outs in terms of dividends or sets aside these payouts as capital as suggested by certain PSBs, that amount would not be adequate to meet the capital needs of these banks. Second, the market will demand quite less share price and so the banks would not be benefited. Third, post-public subscription, the PSBs would be subject to greater market scrutiny and would not be able to stand up to the evaluation yardsticks. The present government at the Centre would not be able to disinvest its stake during its first term in office. Perhaps in its second term (if it continues), it can draw up a clear roadmap for privatisation. Till then, PSBs would continue to remain in the ICU, waiting for a second life.
KV Rao

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