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Dear Readers,

Bharatwasis have celebrated the Festival of Lights and had worshiped Lord Ganesha and Mother Lakshmi for removal of all obstacles and for grant of abundance of prosperity, happiness, love, harmony, peace and unity amidst diversity.

Indian economy: The Government of India’s supremacy and the Reserve Bank of India’s autonomy are required. The government is concerned with employment and growth of economy. The RBI wants to control inflation and ensure financial stability. Growth is more important than inflation. Of course, financial stability is essential. In the clean-up process of banks, several potential so-called stressed assets of the manufacturing sectors have been sold out and many are in the process of liquidation as insisted by creditors. NBFCs and housing finance sectors are in the grip of a liquidity crunch and much more drastic change due to the risk-averse sentiment of financiers and investors. In 2008, during the world financial crisis, several countries had rescued the affected sectors.

As advised by the government, the RBI will consider reviewing of the Prompt Corrective Action (PCA) rule, reconsider the lending norms for small businessmen, SMEs, NBFCs and Housing Finance Companies, revisit the capital framework and lending curbs imposed on some of the weaker banks. In addition, other aspects which deserve a review are the classification norms of non-performing assets, the provisioning norms for of loans of borrowers hit by external factors beyond their control and allowing easier access to loans for infrastructure companies. Some progress has been made in addressing liquidity crunch faced by NBFCs. A fund-raising plan for Rs. 10 billion by PSU banks to drive credit growth is also in the works. Credit squeezes to NBFC companies have affected the real estate sector, housing promotions, small and medium businessmen and industrial and service sectors.

Prime Minister Narendra Modi’s recent announcement of giving Rs. 1 crore to MSMEs will face constraint by the RBI’s instruction to not lend to stressed MSMEs. Infrastructure companies have been given relief for ECBs by reducing the minimum average maturity to three years from five years and to five years from ten years. Permitting NBFCs and HFCs to raise money through bonds is just a bromide. Termination and non-renewal of public private agreements for supply of power by state distribution companies is often the reason for loans taken by generation companies becoming stressed. But RBI does not want to give exception to stressed power gencos though the government is in favour of allowing some relief to the gencos. Being a democratic state, a government of the people, by the people, and for the people, has to work for the growth of the economy. The RBI needs to consider the short-term and long-term effects of autonomous decisions. The will of the supremo will need to be viewed with analytic risk factor approach after having panel discussions with experts.

The size of reserves and possible transfer of some funds to government are also contentious, political issues. The RBI governor has absolute powers in the matter of banking regulation. The board can only supervise RBI’s administration.

The government spokesman said the government is not asking the RBI to transfer Rs. 3.6 lakh crore or Rs. 1 lakh crore. Government is discussing only to fix an appropriate economic capital framework.

Big players are snapping up stressed real estate projects. The former RBI governor Raghuram Rajan said that 7% growth is not enough for the kind of people coming into the labour market and we need more jobs for them. Multi-pronged approach for NPAs is needed.

Rupee can gain against the USD due to sliding crude oil prices. Foreign investments sentiments are changing. As political scene in the USA is changing, the impact of a possible trade war may be softened.

World: USA’s economy is doing well. Its growth rate is close to 4%. Unemployment has also come down. The world economy has lost some steam in recent months and is likely to slow further in the next couple of years as predicted by various multilateral agencies.

Pollution: Air pollution is severe in New Delhi. Air pollution is the greatest contributor for pollution-related death globally. Globally pollution for multiple sources contributes to nearly 9 million deaths every year - about 16% death worldwide, as reported in the study of Mount Sinai School of Medicine, New York, USA. World Health Organisation reported recently that 93% of World Children breathe air with pollution level that exceed guidelines. 9 out of 10 persons worldwide breathe highly polluted air. Eleven cities out of twelve with the highest level of pollution are in India. Vehicles, fuel like coal and wood, dust storms, forest fires, leaves burning instead of converting into manure cause toxins in the air. Excessive use of lights and decorative lights by government also cause air warming.

Water pollution is also a major environmental issue. Factory discharges and other discharges, untreated sewerage, waste discharge in the rivers, lakes and oceans are causing havoc to the water resources. These also pollute underground water, not just the surface water. Holy Ganga cleaning initiative remains more of a matter of campaign and an exercise for educating the masses about the ill-effects of water pollution. Greatest problem is to find the land for outlet of these sewerage waters and wastes and that also to what extent. The same will again pollute the air and will be breeding ground of mosquitoes and diseases. Heavy investment need to be made for waste management and water management and recycling of water for at least agriculture uses. It will save the soil from use of excessive chemical fertilisers which pollute the soil, air and water. Soil pollution may alter plant metabolism and reduce crop yields.

Central government and state governments have promulgated various acts and imposed several rules. Effectiveness, implementation and enforcement remain very poor. Governments, themselves, do not follow these rules.

Slum and footpath inhabitants without proper facilities for toilets and cooking, hawkers cooking on footpaths are adding greatly to all sorts of pollution. Bharatwasis need to imbibe the civic practices followed in Singapore, London and other developed cities in the world. Let democratic governments work for the welfare of the people with lessons of simplicity and austerity as given in the messages given of Bapu Mahatma Gandhi, Swami Vivekananda. Core of work should be service to the living beings and not glamour and numbers of hoardings.

May Lord Ganesha, Lord Narayana, Mother Lakshmi navigate Bharatwasis towards the welfare of all.