Voice from the Rooftop

Blog of Vincent Augustine D'Souza

Modi and ministers

There are reports of Narendra Modi dealing with his ministers in a way different from his predecessors.   They make a good reading or viewing.

Modi wants punctuality.  He wants ministers to be present at office at 9 a.m.  He wants ministers to enforce punctuality on staff members.  We know Prakash Javadekar and Venkaiah Naidu had checked offices at 9 a.m. and many staff members were absent.  The absentees got the message that they have to be present at 9 a.m.  One woman minister belonging to a coalition party was not punctual.  Modi called her on phone.  She said she meets people at home.  Modi told her to meet people in office.  Otherwise bureaucrats will not be punctual.  I suppose that minister is Harsimrat Kaur.

Modi works on Saturdays.  Other ministers and bureaucrats have to work on Saturdays.  I understand Modi works on Sundays but not sure whether other ministers and bureaucrats have to work on Sundays.  Modi should make Saturday a working day for central government employees.  That used to be the case before Rajiv Gandhi made it a holiday.

Modi is against corruption.  One day he called the son of a minister.  He praised him.  During their conversation he told him he has heard he has taken money from an official for transfer.  He told him to return the money.  This son was supposed to be Rajnath Singh’s son Pankaj Singh.  When Pankaj Singh did not get BJP ticket to contest from Noida for UP Legislative Assembly rumours gained ground.  On 27/8/2014 there were reports that Rajnath Singh was unhappy about ministerial colleagues and had complained to RSS.  Around 1.30 p.m. Rajnath Singh met journalists, denied rumours about his son, and said Modi and Amit Shah were surprised when he talked to them about rumours.  Soon PMO issued a statement that rumours about Pankaj Singh were motivated lies and character assassination.

Modi wants ministers not to be subservient to industrialists.  He reprimanded a minister for kowtowing to a mighty industrialist.

Modi wants ministers to put work first.  One minister wanted to go to USA to attend his son’s commencement ceremony.  Modi did not permit him.  He reminded him his duty is to the public.

Modi is the master of his ministers.  He leads by example and others have to fall in line.

Modi has an advantage.  He is the undisputed leader of BJP.  BJP has absolute majority in Lok Sabha.  He can dictate terms to allies.  Allies cannot dictate terms to him.  Prime Ministers from Vishwanath Pratap Singh to Manmohan Singh did not have that advantage.

Some things Modi has done are strange.  He did not appoint any Defence Minister and Finance Minister Arun Jaitley continues to hold additional charge of Defence.  After Gopinath Munde’s death Nitin Gadkari holds additional charge of portfolios held by Gopinath Munde.  Vijay Kumar Singh could have been made Defence Minister.  He was army chief.  Instead he is Minister of State for External Affairs.  Smriti Irani is 38 and she has cabinet rank.  V. K. Singh who is above 60 is Minister of State.  He did not want his ministers to have anyone associated with UPA regime in their personal staff but gave extension to cabinet secretary whose term had expired.  He wanted Congress appointed Governors to quit.  When some of them quit there were no immediate replacements.  Governors of neighbouring states were given temporary charge.  He did not want discussion on Israel’s attack on Gaza in Rajya Sabha but India voted against Israel in United Nations Commission on Human Rights.  Visit to Japan was postponed twice.

Great Bank Robbery

India’s public sector banks belong to the people of India.  The banks have been robbed by corporates who borrow crores of rupees and default.

On 20/7/2014 Vishwas Utagi, Vice President, All India Bank Employees Association, released a list of defaulters and amounts.

  Rs. in crores
Bad debts restructured and shown as good debts 325000
Fresh bad debts in last seven years 495000
Bad debts written off since 2001 204000
  1024000

 

There is complicity in this robbery.  Lists of borrowers are kept secret.  The borrowers default in one bank and go to another bank to get loan.  Corporate Debt Restructuring is a way to avoid debt payment.  Many borrowers enjoy political patronage.

The loss to the people of India is 10,24,000 crore rupees.  I wonder how much money has been lost since 1969 when 14 banks were nationalised.  More banks were nationalised later on.

Banks have gone to courts to recover 70,367 crore rupees.  That is just about 7% of the amount.  Court cases take a long time.

Vijay Mallya’s Kingfisher Airlines tops the list of defaulters.  Top 10 defaulters owe 18,000 crore rupees to banks.  Subrata Roy of Sahara is in jail for defaults to private individuals.  Promoters and Directors of defaulting companies should be in jail.  Narendra Modi with Arun Jaitley’s help can bring a law in a day to put defaulters in jail as an ordinance was brought to hire a former TRAI chairman as private secretary to Prime Minister.  Then banks will recover their money.  Non-Performing Assets will disappear.  Those who do not pay should spend the rest of their lives in jail.

RBI and banks should publish the lists of all defaulters to prevent defaulters from taking loans from other banks and bankrupting them.  There is an old joke that a businessman goes in Maruti to bank to take loan.  He goes in Mercedes Benz to say he cannot repay the loan.

Recapitalisation of banks means RBI printing notes and giving them to banks.  This causes inflation.  Recapitalisation of SBI and some other banks has taken place.  On 19/7/2014 Arun Jaitley said recapitalisation of public sector banks to the tune of 2.4 lakh rupees to meet Basel III norms is a high priority item for the government.  That will result in more inflation.

Budget 2014

The more things change the more they remain the same.

NDA replaced UPA as ruling coalition in House of Peoples i.e., Lok Sabha.  BJP replaced Congress.  Narendra Modi replaced Manmohan Singh.  However the budget presented by Finance Minister Arun Jaitley on 10/7/2014 was not much different from UPA budgets.

BJP had a chance to undo the damage done by UPA over the years.  It failed.  People who voted for BJP had hopes and expectations.  Hopes were dashed.  Expectations were belied.

There was no repeal of retrospective amendment to Income Tax Act.  That was a huge letdown.  The assurance that NDA government will not bring retrospective amendments has no meaning and setting up CBDT committees to settle tax disputes due to retrospective amendment is opening doors for corruption.

Arun Jaitley did not abolish NREGA, JNURM etc.  Continuation of UPA schemes does not make sense.

Arun Jaitley should have called a press conference at 9 p.m. and answered questions instead of appearing on different channels and answering the same questions.

Fiscal deficit target should have been zero per cent instead of 4.1% for 2014-15.  There was no need to announce new IITs, IIMs, AIIMs, agricultural and horticultural universities etc.  Deficit budget means inflation will continue.

Expenditure Management Commission to look into cutting expenditures was not necessary.  People in government know where to cut expenditure.  Will is lacking.

Increase of FDI limit in defence and insurance sectors from 26% to 49% is good.  It could have been better.

Schemes like Pradhan Mantri Krishi Sinchayee Yojana, Swachh Bharat Abhiyan, Shyama Prasad Mukherji Mission, Deen Dayal Upadhyaya Gram Jyoti Yojana should be left to states, panchayats and municipalities.

Sardar Patel’s Statue of Unity was a private initiative.  There was no need to allocate 200 crore rupees to it.

Arun Jaitley has allocated 100 crore rupees each to schemes like Van Bandhu Kalyan Yojana, Village Entrepreneurship Programme, Promoting Good Governance, National Adaptation Fund etc.  Such schemes should be scrapped.

Various Rural Credit Funds should be scrapped.

There is no need for setting up Kisan TV and Arun Prabha channels.  There are enough DD channels.

Allocation of 10,000 crore rupees to MSME sector to attract private capital should be scrapped.

Government should not be promoting handloom and other products.  Leave it to private sector.

Strange is the proposal to allocate 5,000 crore rupees to set up 3P India, an institution to support PPPs in India.  Public Private Partnership means losses go to public sector, profit goes to private sector.

Let cities develop by themselves.  No need for government to spend money for smart cities.

Debt Recovery Tribunals are a good idea.  Corporates who have defaulted on loans to public sector banks should be punished.  Properties of companies and directors should be confiscated.  If debt is not recovered directors should be put in jail.  Sahara case is an example.  Banks should have a list of borrowers mentioning amount borrowed, amount paid, amount pending, defaults, on their web sites.

Issuing Kisan Vikas Patras is a bad idea.  KVP amounts are to be returned with interest.  That leads to more printing of notes and more inflation.

Government money should not be spent on sports.  Government has no control over Indian Olympic Association and various sports associations.  They are a law unto themselves.  USA government does not spend money on sports and USA is mostly No. 1 in Olympic medals.

Cess, surcharge, levy etc. continue.  What happened to education cess collected over the years?  Who benefitted?

Why investment allowance of 15% to manufacturing firms that invest 25 crore rupees annually?

Some (radio taxi providers etc.) have come under Service Tax.  Some (cotton transporters etc.) are out of Service Tax.

Excise Duty has gone up on some items, come down on some items.  Increasing Excise Duty on cigarettes and tobacco products is a good idea.

Divestment proposals are said to be in annexures.  We will know when they are implemented.

Narendra Modi spoke of bitter pill.  Arun Jaitley spoke against mindless populism.  This budget is bitter pill for some, sweet pill for some, no pill for others.  It is more mindless populism than of Sonia Gandhi.

Reactions to budget are predictable.  BJP and allies have praised the budget.  Other parties have not said anything good about the budget.

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