Ministry favours bank equity write-down
The Union Finance Ministry seems to have made up its mind in favour of allowing nationalised banks to write down their capital against accumulated losses. The RBI and the Finance Ministry are now pondering over the means to get the proposal through as the existing banking laws do not provide for such a move. A section of the Ministry is trying to incorporate this provision in the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 and 1980.
‘Forex reserves comfortable’
The Finance Secretary, Dr. Montek Singh Ahluwalia, today said that foreign exchange reserves have reached a comfortable level at $14 billions. Besides, the Government was also holding gold reserves of $4 billions. Dr. Ahluwalia said conventionally the foreign exchange reserves were considered sufficient if it covered about four months import need of a country.
Dr. Ahluwalia, however, refused to pinpoint what would be the safe level of reserves for India. He said the ‘India must develop abilities to manage its economy flexibly’ as that would.. also help the domestic economy respond adequately to both inflow and outflow of foreign investment.
Forex reserves claim misleading, says Ashok Mitra
Dr Ashok Mitra, eminent economist and also CPI(M) Rajya Sabha member, has sharply criticised the Union Budget for 1994- 95, saying that it provided no assurance on Government investment, no suggestion as to how to create more Jobs and no indication if the recession currently hitting the majority industry would ebb. He was analysing die Budget at a meeting organised jointly yesterday by the Nodal Research Centre and Frontline.