Make cities accountable

This is with reference to ‘Build a database of municipal bonds’ by K Subalakshmi (March 26). In mid-2017, the Pune Municipal Corporation raised ₹200 crore via a bond issue, slated to cover in time ₹2,464 crore which many saw as a test case for the revival of municipal bonds. That it was subscribed six times was good news.

This may also be seen against the loss of ₹156 crore in 2015-16 by the PMC; should the bond end up only balancing revenue deficit, it is flawed. Bonds are subject to investment ratings by independent agencies and coupon rates go up as ratings dip. The resultant rise in debt burden would make its servicing tough. Most cities consume more than half their revenue as salaries. If they have a pension scheme, the liabilities become open-ended.

Navi Mumbai

It is absurd to suggest that private banks (PVBs) have performed better than PSBs in priority sector lending. According to the RBI, the total priority sector advance as of March 31, 2017, of PSBs was ₹19,889 billion as against that of PVBs at ₹7,110 billion. Moreover, PVBs did not achieve targets under heads such as agriculture and weaker sections. Why does Panagariya recommend privatisation of PSBs?

Kannur, Kerala

‘Helping farmers cultivate digital ways’ by Bhavadharini KS and Nithya Palani (March 26) communicates the real picture. The Centre for Digital Financial Inclusion (CDFI) has proved that farmers can discover the advantages of current technological advancement even with the not-for-profit tag in dairy farming.

The formation and sustenance initiatives of Farmer Producer Organisation have been hit by new financial policies; many of them have become defunct due to non-repayment of loans, discrimination against beneficiaries, embezzlement and politicisation.

These maladies have been remedied in this application and its capacity for serving both seasonal and perennial activities will make up for the absence of an integrated system.

It has the reach for timely supply of inputs, reduction of inventory cost, support of right prices for produce, multiple cashless transactions for subsidies and different payments, elimination of exploiters, sensible payment of EMI for loans and encompassing creative template. State governments must take recourse to this application.

Bengaluru

The editorial,‘Bankruptcy matters’ (March 23) has raised some questions on the IBC process with respect to Binani Cement Ltd. We would like to point out that we are one of the highest bidders; we ought to be H-1.

The CoC members were fully aware of our revised bid of ₹7,200 + crore, even at the time they decided to choose Dalmia Bharat Cement as the highest bidder.

On the issue of promoters, the law is clear, which is that the promoters, in this case, the listed company, Binani Industries Ltd, would continue to own its subsidiary, unless it sells or is forced to sell its subsidiary by an expression of law. IBC only allows creditors to secure their money through IBC process. It does not change the ownership of the assets of the company unless there is a formal court order in this regard.

Contrary to what the editorial says, Binani Industries made the offer to our company. Consequently, the board was duty-bound to consider it.

UltraTech’s Board insisted that Binani Industries should proactively apprise the NCLT about their offer. The Board also made it abundantly clear to Binani Industries that the agreement would go into force only after the IBC proceedings are terminated. It may also be noted that the price offered to Binani Industries Ltd. is same as what was already offered to COC.

While taking this decision, the Board consulted legal luminaries on whether the Binani offer was tenable by law. Legal experts have opined that redeeming one’s mortgaged property is a matter of constitutional right, until the property is sold. Till date Binani Industries continues to be the owner of Binani Cement Limited.

Managing Director, UltraTech Cement

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