Transparency & Integrity - Backbone of Revival

Lockdown under COVID 19 is 50 days old. Despite best efforts the virus has affected Indians. The virus has affected countries world wide. Coming to India, number of people affected by the virus is 74281 out of which 24386 have recovered. There are 2415 deaths. The country pays homage to the departed souls. The Government has taken steps to protect life. It is to some extent successful when we compare the figures with the world scenario and that of the most affected country, US. Lately, number of patients in Russia have swelled. There are 242000 cases affected. 48083 persons ( 19.86 %) have recovered . Number of deaths recorded so far is 2212 ( 0.91%). Russia has suddenly recorded an increase in the number of persons affected. Death rate so far is less than 1 per cent. The percentage is indeed encouraging. Death rate in US is around 8 per cent of those affected.

It surely makes one ponder why the death rate is higher US than Russia is due to the fact that US is a capitalistic country where people depend on treatment against health insurance. Treatment in US is costly depending on health insurance coverage. Insurance companies could be delaying admission of patients. This might be leading to more deaths. Russia is a communist country where health the responsibility of the state. The active participation of the state is helping to keep numbers under check. Death rate in India is around 3.25 per cent which is higher than Russia but below US. The rate goes to show that India is trying hard to check the number of deaths. So far 24386 victims recovered in India which is 32.83 per cent of those affected.

Like all countries, economy of India is affected. Government is trying to bring awaken the economy which was put into `sleep mode '. Several announcements have been made in the direction. Government has focused on development by first adopting a pragmatic monetary policy and then focusing on MSMEs. RBI has reduced the Repo Rate and has brought down the Reverse Repo Rate so that Banks can lend more. Focus is again on the growth of the MSME sector.

The policy is in the right direction but there appears to be a gap somewhere. Banks are not being able to lend and are parking their liquid fund with RBI. So the purpose of the relaxation has not hit the bull's eye. MSME off take has not been very significant far away from the desired level. Analysis brings out the fact that the number of MSMEs eligible to avail of credit does the numbers recorded. A significant number cannot avail of the credit norms fixed by Banks. A promoter of a MSME went to a Bank to ask for support . He was informed by the Bank that those with Rs 2 Crore Turnover and minimum net profit of Rs 5 Lac would be eligible for a business loan between Rs 10 to 15 Lac. The promoter had visited the Bank with great enthusiasm but had to return with a dampened spirit. This is the scenario of bank credit. Of course you cannot blame the bank specially if we look at the banking scenario in the last decade. we find that PSBs , IDBI and several private sector banks had to bleed with NPAs . Government had to fight tooth and nail to lay a road map of the banking sector. MSMEs abosorbing the increased liquidity of banks is facing issues due to one factor. If we consider the present defination of micro, small and medium with distinction between manufacturing and the service sectors which is as per the MSME Act, 2006, we find that the investment level fixed for each type of unit does not match the discipline expected by the banking sector. It is considered necessary to bring in the new definations based on turnover the proposal mooted but waiting approval for quite sometime. Taking the turnover criteria banks will be able to bring in more organised units within its ambit. This will allow more credit to flow into the system which is considered a must under the present circumstances.

Indian banking scenario during the last decade was dismal. Six PSBs had to be merged with other PSBs from 1st April, 2020. Apart from several instances of small banks failing Yes Bank failure drew attention . Government salvaged the bank failure by bringing SBI and other banks to save the situation. There were instances of failure of banks in the co-operative sector. The Apex Court has ruled that co-operative banks can now be dealt by DRTs. Close to failure of banks there are instances of failure of the NBFC, IL&FLand DHFL in the housing finance sector.

During COVID 19 we lost lives of a few noted personalities who died of other ailments. Among the many are the actors, Ifran Khan and Rishi Kapoor. They died of cancer. TV telecast an old interview taken of Rishi Kapoor. In the interview Rishiji said that India is great country with talented people. However, there was one thing that came in between to thwart success in every field that is the presence of corruption everywhere. If only we could get over corruption India will improve its position in all fields and soon be the leader in several fields.

So transparency and integrity are the two aspects that need to be inculcated in each field. If only Rana Kapoor would not have been dishonest, Yes Bank would not have been what it is is today. While depositors have been saved, minority shareholders have lost huge sums. Bond holders have also been affected. Dishonesty and lack of transparency is there on the part of the promoters setting up business. Case of Nirav Modi brings out several names who affected many PSBs. So transparency and integrity are required to be practised by all if we want the economy to revive. Best of intentions will fail if transparency and integrity do are not practised. Considering the recent happenings, banks are not being able to advance at the desired level to entities. Accordingly, banks are being forced to park funds with RBI. This is fetching them interest of 3.75 per cent per annum. But this is not the objective of the Government with respect to banks. They are supposed to lend the excess liquidity available with the banks as per the change in Repo and Reverse Repo Rates. In the week ending 2nd May,2020, banks kept Rs 7.2 to 7.57 trillion a day under Reverse Repo platform.

Banks have the money to lend but cannot lend due to the recent events which affected the industry. Weakness persisting in the trageted borrowers is prevalent and cannot be rectified immediately. If the banks act pro-actively to lend then NPAs are bound to multiply. Banks cannot afford to write off the NPAs which might generate. This would lead to litigation. In the past we have seen that laws have changed with each crisis but the persons have never been given tried in the right perspective. Money generates power. In India companies failed but their promoters had sufficient fund to go and live abroad and fight their battle from out of India. Instead of funding 100 dishonest promoters it is better to scout for 10 honest promoters who could make the difference. However, job holders being wage / salary earners have been affected . They are the ones that need to be supported immediately US has given financial support to enterprises for paying their wage and salary bills. India should also stress the route. It is the working class that requires immediate support. After them, promoters may be supported after their financial statements are examined. If this is not done then NPAs will surface within no time. India is a country which will continue to exist unless another Battle of Palassey surfaces with Chiefs like Mir Jafar surface. The country is ruled by a Government has a fixed term. India is a democratic country and there is no guarantee that a particular Government will be able to rule after a fresh election. The policies announced by a Government is applicable to the country and they are generally announced for the welfare of the people of the country - civil society.

Government has announced certain policies for the benefit of the people of the country to bring back the country to its rails. Before anything can be achieved it is important that transparency and integrity are stressed upon. These two words are equally important and have to be read with the policies for welfare of the people. We were taught by our teachers never to remind the weak of their weakness. Somehow this is forgotten due the present crisis. '`Shramik ' Special trains were meant for shramiks ( labourers) to bring back labourers home. Review of the name of the trains need to be reviewed. If you ask me the name is depressing when referred to.