Bank staff union to protest against Budget-Hindu Business Line 04.03.2015
The Bank Employees Federation of India has called for a nationwide protest on March 6 against the ‘pro-rich and anti-people’ Union Budget. A BEFI statement said the subsidies for the poor and marginal people allocated in the Budget had come down from 2.1 per cent to 1.7 per cent of GDP. The revenue loss amounting to ₹5.89 trillion crore due to tax concessions given to the rich was more than the actual fiscal deficit of ₹5.55 trillion crore. The economy was suffering due to the weight of the subsidies to the rich and not due to the subsidies to the poor.
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I Submit my views hereunder:--
In my opinion there is nothing as such in Indian Budget 2015-16 which may annoy bank staff in particular. It is true that salaried class in general has got no tax relief in the proposed budget. But it does not mean that bank staff will follow a line of action which suits normally to opposition parties in India.
Perhaps bank union have not discarded their age old inclination towards left parties .But bank staff unions should keep in mind that bank staff were on agitation path for getting respectable wage hike for more than two years and none of left parties came to support their fight against injustice.
Therefore bank staff unions should focus on their own work and own wage structure . Already they are facing anger of bank staff due to inadequate rise in wages compared to wage structure of central government employees and compared to probable wage structure to be settled for Central government employees in 7th Pay commission .
So far as budget is concerned, the entire budget is focussed on preparing strong ground for growth of the country and there is no doubt that all provisions made in budget in all types of matters will ultimately prove to be pro-poor only. If country grows, it is Indians as a whole who will be benefited . Banks staff need to be unbiased and think intelligently whether the budget is pro-rich. They should also suggest how to make it better .
If proper infrastructure has to be prepared, Government of India do not have enough resources to fulfil this task. Similarly if GOI has to provide affordable house to all poor, provide rail connectivity to all villages, power to all, proper sanitation, provision of pure water, food for all etc, Government of India will have to seek the support of rich and High Net worth corporate houses. It is rich people only who can provide financial support and who can profitably work on all projects. Government has to regulate only price and quality of all products and services. Government has to take balanced approach , it has to do all possible for welfare of poor and downtrodden and it also have to create resources for fulfilling the dream of serving poor.
It is true that employees will be happy with budget only when their tax liability is reduced to Zero and their wages are increased every month ,every year.
It is also true that business men want they should not be taxed on sales or on income they earn . Professional also do not want any tax on their earnings.
People of India in general do not want any price rise on all goods and services needed for their family. They do not want rise in prices of fuel or food they consume .
Farmers want interest free loan to produce food grains for us. Students want interest free unlimited loans. Business men in general want cut in interest rates but poor savers and pensioners whose survival depends on interest income only want increase in interest rates. Banks want safe lending for their survival but Borrowers of the bank in general want that their loan is waived completely.
People of India want free water and free electricity. They want pucca road in all villages and towns, They want all amenities free of cost in trains. They want world class standards of living in all towns and cities. They want all modern facilities in all towns and in all nook and corner of the country. And so on...
But the million dollar question is that if everything is to made free, wherefrom money will come?
Who will give money for firstly producing goods and services and then making all goods and services free and for making all services of high standard ?
People of India are well aware how public sector undertakings are functioning, they know the level of corruption in government departments, they know how large scale pilferages taking place in Indian Airlines or BSNL or banks or insurance companies, coal India or PSUs have made them poor , weak, inefficient and anti common men and how employees of these departments are leading their pathetic life .
Keeping in view it is the need of the hour to take cooperation of business men who have not only adequate resources but who can execute the plan in better and professional way.
Duty of the government is simply to monitor them and regulate price and finally stop corruption in all government offices so that they may also compete with private giants .
And there is no doubt that Mixed Economy is best suited for a country like India. It is not a question of leftist or rightists. It is a question of growth and How India can achieve it with Indian people belonging to different regions, different religions , castes and communities and with conflicting mind set and conflicting culture.
Bank staff are considered to be intelligent class of people. And if they decide to protest Budget , it is desirable that they tell bank staff in particular and the people of India in general on following points
How the budget is anti-poor and justify their submission by quoting five main provisions made in the budget.?
How the budget is anti -middle class ? Illustrate the same by quoting five points of the budget.
How the budget is pro-rich? Illustrate the same by quoting five points of the budget.
What suggestions they make to the government so that the budget does not look pro -rich and anti poor and also liked by salaried class people.
It is important to mention here that for last six decades Congress party has made various polices which appeared to be pro-poor , pro-middle class or pro-rich or anti rich and so on. They made several experiments and made several promises to remove poverty from the country . They waived loans of farmers many times to win their votes. They made several changes and upgradation in quota for various castes, communities, backward caste or for minorities. They played secular card for six decades. Even after all efforts taken by Congress Party during last six decades of their rule to please voters , people of India rejected Congress Party and other regional parties in last Parliamentary election to a great extent.
Why?
Because people of India were not satisfied . Because Congress Party failed to do what they promised in various poverty alleviation schemes. Because they failed to contain price rise and stop corruption in government offices. Because people of India were completely disappointed with rule of Congress Party.
Now BJP has come to power under the leadership of Mr. Narendra Modi . Let him try his best and give him a few years to bring about change in the system , After all culture and system do not change overnight . It is the culture of opposition parties to oppose all plans and all policies of the ruling party. This culture has to be changed .
Bank staff should not become victim of such opposition for the sake of opposition. They should try to contribute their share in nation building instead of confining them to only wage hike or tax reliefs.
It is the duty of all Indians specially that of educated class people to contribute their knowledge, skill and all available resources to make India stronger than ever before . It is also their duty to point out the faults in policies and corruption in government departments and only then India can dream of leading the world. Indian can no longer afford economic or social or political indiscipline if it wants to compete with other countries and if it wants to keep its head high in international forum.
It is therefore need of the hour that bank staff and bank staff unions apply their full brain before protesting Budget . Government may be formed by BJP or Congress party, it has to take balanced approach, it cannot be purely pro-poor or purely pro-rich . If BJP is removed from power , they will give another chance to Congress Party to exploit the country. Delhi has given a chance to newly formed party namely Aam Admi Party. Let it prove its calibre. If for God sake, AAP gets success in winning the love of Delhi people they can provide an alternative to BJP . People should give time to both AAP and BJP and then decide which one is better. Or let Congress Part introspect for few years and transform it suitably to replace BJP in power.
Bank staff are considered to be intelligent class of people. And if they decide to protest Budget , it is desirable that they tell bank staff in particular and the people of India in general on following points
How the budget is anti-poor and justify their submission by quoting five main provisions made in the budget.?
How the budget is anti -middle class ? Illustrate the same by quoting five points of the budget.
How the budget is pro-rich? Illustrate the same by quoting five points of the budget.
What suggestions they make to the government so that the budget does not look pro -rich and anti poor and also liked by salaried class people.
It is important to mention here that for last six decades Congress party has made various polices which appeared to be pro-poor , pro-middle class or pro-rich or anti rich and so on. They made several experiments and made several promises to remove poverty from the country . They waived loans of farmers many times to win their votes. They made several changes and upgradation in quota for various castes, communities, backward caste or for minorities. They played secular card for six decades. Even after all efforts taken by Congress Party during last six decades of their rule to please voters , people of India rejected Congress Party and other regional parties in last Parliamentary election to a great extent.
Why?
Because people of India were not satisfied . Because Congress Party failed to do what they promised in various poverty alleviation schemes. Because they failed to contain price rise and stop corruption in government offices. Because people of India were completely disappointed with rule of Congress Party.
Now BJP has come to power under the leadership of Mr. Narendra Modi . Let him try his best and give him a few years to bring about change in the system , After all culture and system do not change overnight . It is the culture of opposition parties to oppose all plans and all policies of the ruling party. This culture has to be changed .
Bank staff should not become victim of such opposition for the sake of opposition. They should try to contribute their share in nation building instead of confining them to only wage hike or tax reliefs.
It is the duty of all Indians specially that of educated class people to contribute their knowledge, skill and all available resources to make India stronger than ever before . It is also their duty to point out the faults in policies and corruption in government departments and only then India can dream of leading the world. Indian can no longer afford economic or social or political indiscipline if it wants to compete with other countries and if it wants to keep its head high in international forum.
It is therefore need of the hour that bank staff and bank staff unions apply their full brain before protesting Budget . Government may be formed by BJP or Congress party, it has to take balanced approach, it cannot be purely pro-poor or purely pro-rich . If BJP is removed from power , they will give another chance to Congress Party to exploit the country. Delhi has given a chance to newly formed party namely Aam Admi Party. Let it prove its calibre. If for God sake, AAP gets success in winning the love of Delhi people they can provide an alternative to BJP . People should give time to both AAP and BJP and then decide which one is better. Or let Congress Part introspect for few years and transform it suitably to replace BJP in power.
Narendra Modi adding less cash to boost bank default risk-By Anoop Agarwal in Livemint
The govt will inject Rs7,940 crore into the banks in the year starting 1 April, that’s 29% less than initially targeted for the current period
Mumbai: The default risk for Indian banks is set to rise from a four-year low after the government proposed the smallest capital infusion to state lenders since at least 2009.
Prime Minister Narendra Modi’s administration will inject Rs7,940 crore ($1.3 billion) into the banks in the year starting 1 April, finance minister Arun Jaitley said 28 February. That’s 29% less than initially targeted for the current period. The average cost of insuring the debt of State Bank of India and three other lenders against non-payment dropped to 162, the lowest since April 2011, CMA data show.
The infusion is being scaled back as the government seeks to fund public spending after Jaitley’s budget projected a wider deficit than the previous goal. The additional capital is less than half the Rs20,000 crore Fitch Ratings Ltd. estimates banks need, after stressed assets climbed to the highest since 2001.
“Capital is going to come at a cost for banks and it will have a bearing on core business and plans,” M.S. Raghavan, chairman and managing director at state-run IDBI Bank Ltd. in Mumbai, said in a 2 March phone interview. “There will be a struggle. The course ahead is going to be extremely unusual because capital will have to be earned.”
‘Suboptimal’ performance
Of the Rs11200 crore target set last year for the period ending March 2015, the government has infused only Rs6990 crore into nine state lenders. Banks will be allocated capital based on performance, which has been “suboptimal” thus far, the Finance Ministry said in a 28 February statement.
Profitability at state-run lenders, as measured by return on assets, was at the lowest in at least seven years as of March 2014, data compiled by the Reserve Bank of India show.
“The communication that has been sent by the government to the banks is that they have to improve profitability and efficiency,” RBI deputy governor R. Gandhi told reporters in Mumbai Tuesday. “To send the message a little stronger, the government has taken the decision to reward those banks with better numbers by giving them more capital.”
The average capital-adequacy ratio for Indian lenders fell 20 basis points, or 0.20 percentage point, to 12.8% in the six months ended 30 September, central bank figures show.
‘Capital starved’
“This year the government cut the capital infusion to below what was originally promised,” Ankit Ladhani, a banking analyst at Karvy Stock Broking Ltd. in Mumbai, said by phone. “If that happens again, there will be a crisis at some of the lenders who are starved for capital.”
The finance ministry estimates state banks will need an additional Rs2.4 trillion by 2018 to comply with the Basel III requirements aimed at boosting the capital of lenders after the 2008 global financial crisis. Under the norms, the RBI is targeting a minimum Tier 1 capital ratio of 7% by March 2019 from the current 6.5%.
State lenders’ stressed assets, including soured debt and restructured loans, increased to 12.9% of total lending as of September, the highest since 2001, RBI data show. The ratio was 4.4% for privately owned banks. Loans in the system grew 10.4% in the 12 months through 6 February, near the 9.7% pace in September that was the least since October 2009. Loan growth at state lenders in the year ended 30 September trailed the overall figure by 2 percentage points.
More than Rs1 trillion of projects have been stalled due to land issues or regulatory delays, including Rs60,000 crore of roads, 20 coal mines and steel mills. The average time overrun increased to about 50 months in 2013-14 from about 20 months in 2008-09, according to CRISIL Ltd., the Indian unit of Standard & Poor’s.
Credit negative
“The low capital-infusion target is a negative on the credit profiles, franchise and growth prospects of midsize state-run lenders,” Ananda Bhoumik, a Mumbai-based senior director at India Ratings & Research Pvt., Fitch’s local unit, said by phone Tuesday. “Capital requirements are going to shoot up after March 2016. If there’s no proper plan in place, panic will ensue.”
Credit-default swaps insuring the notes of State Bank of India, nation’s largest lender, against non-payment for five years have declined 24 basis points this year to 147, according to data provider CMA. Similar contracts for the Bank of China Ltd. have dropped five basis points.
The yield on India’s 8.4% sovereign notes due July 2024 rose one basis point to 7.75% Tuesday according to prices from the RBI’s trading system. The rupee fell 0.1% to 61.9175 a dollar.
“There isn’t going to be any more hand holding by the government,” Radhika Rao, an economist at DBS Bank Ltd. in Singapore, said by phone on 2 March. “The government isn’t going to do much and will let banks face the reality.”
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