Banks May Face Decision Paralysis

Decision-making may slow down, say bankers-Business Line

FALLOUT OF POLL VERDICT

MUMBAI, DEC. 9:  

With the Congress Party getting a drubbing in the four Assembly elections, bankers say decision-making relating to infrastructure project clearances in various central ministries could slowdown.

The reason: the ministers are expected to get busy reaching out to the electorate in their respective constituencies to ensure that there is no fallout of the electoral rout in the Assembly elections on the upcoming general elections.

The likely slowdown in decision-making could impact credit demand during the busy season (for credit offtake), which typically runs from October through March, said a senior public sector bank official.

Currently, the banking sector is witnessing loan demand from non-banking finance companies, companies that are undergoing debt restructuring, commercial real estate – residential housing, small and medium enterprises and retail segments.

“As far as project clearances go, paralysis in the decision-making process may set in the central ministries in the run-up to the general elections as the Ministers will get busy with electioneering in their respective States and constituencies.

“If the general election throws up a fragmented mandate then the paralysis could get accentuated,” said a senior public sector bank official.

According to an official with another public sector bank, though the Cabinet Committee on Investment has cleared a few infrastructure project proposals, the clearances have not translated into robust credit pick up so far.

“There is not much demand from the infrastructure sector. Large companies are not borrowing for capital expenditure,” said the official.

The Reserve Bank of India’s data show that as on November 15, the year-on-year credit growth had slowed to 15.5 per cent against 16.8 per cent in the year-ago period.

http://www.thehindubusinessline.com/industry-and-economy/banking/decisionmaking-may-slow-down-say-bankers/article5440895.ece

It is unfortunate that verdict of voters in Delhi assembly election is not clear in favour of any party due to multi- party contest . None of political parties has got clear simple majority and as per norms defined in the Constitution, none of them is in a position to form the government without the support of other party and even if it is formed with the support of others, there is no guarantee that the government will be able to last long and it will be able to do business as per their manifesto or as per wishes of voters.

And if somehow or the other a cohesive group is formed media will not hesitate in pulling the pent of leaders because it is media men who are more negative minded than politicians of the country. Duty of the media is not to do constructive job but only to criticize all those who are in the good book of media promoters on genuine or flimsy ground. If BJP or AAP decides to form the government with the support of AAP or BJP or Congress Party, they will blame AAP or BJP of negotiating with the previous stand and if they do not form the government they will accuse parties of wasting the money spent on conduct of election and forcing the country to again spend good money on conduct of fresh election.

Congress Party is silently watching the Draupdi Chirharan sitting in AC room. After all who cares for common men?

 However the era of coalition government is not new and will not be abnormal and astonishing if the similar hung verdict comes in forthcoming Lok Sabha election.

Media like to humiliate specially BJP both ways without keeping in mind the interest of the common men. This is why politicians are keeping away from forming the government. In such ego clash and mad diplomatic stand of two or three political outfits as also due to sticking to six decade old Constitutional provisions, common men are constrained to and are bound to suffer, working of all offices will be adversely affected and in absence of stable government, anti social elements will jeopardize the safety and security and also spoil the economy from many considerations. 

And last but not the least, avoidable expenses on frequent elections, it is ultimately the common men who will have to bear the brunt of tax load. Not only this , it is also bitter truth that in case of multi -cornered contest, a person or a party getting 25% of votes or seats get power whereas large chunk of persons and seats are opposed to persons or party in  power.

It is also a bitter but undeniable truth that due to misrule of big national parties or due to some other reasons like caste and community based policies of local and national leaders, many small parties at state level have taken birth and slowly they are cutting the slice from national parties in overall seat strength in state assemblies or in Parliament. Due to multi cornered contest in general elections, votes are divided and wasted in many small pockets and many such situations has arisen in the past in many states and even in national election that none of contesting political party got the majority. It is also true that national or regional parties managed majority by compromising their own principles and formed the government. In many cases they failed to perform due to inter party rivalries and inconsistencies in their approaches that formed part of coalition government. . Even present UPA government or previous NDA government was also formed after taking support of many small parties. Nation has suffered a lot due to weak government at center or in state.

There is no doubt that bipolar election or election between two or three national parties may be good for the health of the country but great advocate of democracy will perhaps not allow such thing to happen. And when hung verdict merges in election results, some experts may suggest President’s rules in Delhi but I am unable to understand what they will suggest when the same hung verdict comes in forthcoming Parliamentary election.

Now since the era of multi parties has taken root a in all states and at national level too, there is a immediate need to reinvent Constitution to combat such critical situation.

IN case of Delhi, it is very much disheartening that neither Aam Admi Party nor BJP is ready to form the government at Delhi and AAP has even suggest second poll. Due to their own ego or due to constraints posed by the constitutional provisions, they are suggesting second poll even if will cause loss hundreds of crores of rupees. It is not their personal wealth which is wasted in conduct of election.

Not only this, there is no guarantee that verdict of second poll will give clear and simple majority to any political party. These parties may suggest third poll or fourth poll without taking care of huge loss to the country and huge manpower loss.

Such egoistic attitude or such blind worship to existing provisions of the Constitution may prove dangerous.

It is important to say here that forthcoming national election in 2014 may also not give clear verdict to any party due to increase in power of various regional parties in various states. In such position there is no provision of president’s rule and there will be compulsion for forming a coalition government at center even if the coalition government will have to sacrifice some of individual party manifestos.

Obviously advocates of democracy and Parliamentary democracy will have to invest new methodology to run the government in case of hung verdict either at state or at center level to save avoidable expenses on recurrent election.

IN such position I think  example of Delhi election verdict of hung assembly gives an opportunity to all lovers of democracy to formulate new policy and new solution to meet such critical situation and the same will be fruitful and money saver if the verdict in 2014 parliamentary election also gives the similar hung verdict.

Time has come to accept the ground reality and define new course of action now and now only. I condemn all those who are bent upon spoiling the money and energy in frequent elections.

It will be very much praiseworthy that learned, talented and intelligent members of AAP, BJP and Congress Party, constitutional experts, advocates and all relevant persons and groups’ will sit together and decide new path in the larger interest of the country.

I hope media men will stop Chirharan tactics and apply their mind and energy to discover best ways to have stable and effective government which will be for the people and without corruption. Century old Congress Party should also refrain from divisive and anti national diplomacy to remain in power. Country is already suffering from policy paralysis and administrative deficit, rulers should not add fuel to fire and save the country from vaccum of powerful government.