Wilful defaulters

The report that public sector banks added 1,186 more accounts to the wilful defaulters’ list in the past 27 months amounting to ₹1.28-lakh crore, a 67 per cent hike to the position before that, is certainly a cause for concern. The loans that were added in the last three quarters to the defaulters’ list are more because of the revised stringent norms prescribed by the RBI regarding classifying the debt as stressed asset where interest is not paid for a month.

It is not that the government and the RBI are not making any efforts to minimise the quantum of existing NPAs through more revival schemes, latest of which is NCLT. Yet, it is pertinent to note that the speed at which fresh NPAs are added to the list is more than the precesses of reducing the NPAs. Despite this precarious situation in the banking sector, the mindset of the borrowers has not changed towards loan repayment on due date. This is perhaps because the government has been writing off loans of wilful defaulters in the past which, now, is affecting the repayment culture of even among genuine borrowers.

This refers to the article ‘Time to focus on availability of funds’ (August 3). As capacity utilisation by some sectors is almost near optimum, at 75-80 per cent levels , it is obvious that capacity expansion is essentially. While supply-side constraints (in obtaining funds) are crippling the credit-flow into businesses, the demand for long-term funds is on a high. NPA is one such alarming factor that has been discouraging banks from lending. Hike in repo rate will certainly shrink the availability of funds. At a time when most of the public sector banks (PSBs) are financially ill, private banks must tread carefully rather than rush to grab the lending space left by PSBs.

It must also be noted that SEBI plans to instruct companies to raise up to 25 per cent of their total fund requirements through issuing of bonds.

Though this move would, to some extent, rejuvenate the lacklustre bond market, the cost of funds would be high. The government may consider raising the investment allowance (provided to businesses), whereby a business can deduct a specified percentage of total capital investment (plant and machinery) from the taxable income.

Cuddalore, TN

This refers to “17 parties to move EC demanding 2019 polls be held using ballot papers” (August 3). It is strange that the Opposition parties are wary about electronic voting machines (EVMs), fearing that the government at the Centre could manipulate them and help the party in power to maintain its winning streak. It is pertinent to mention that the Election Commission, sometime back, had invited all the political parties for a demonstration to show that the EVMs are foolproof.

Surprisingly, most of the political parties abstained for reasons best known to them. It is common knowledge that ballot papers are more prone to misuse, vandalising, and the risk of invalid votes due to wrong stamping.

Bengaluru

This is with reference to ‘Anything but simple’ (August 3). It is true that logistics operations have improved in the post GST era and life after GST is slowly and steadily improving. But when it comes to GST administration and filing of returns, much more needs to be done.

Rationalisation should result in the reduction of paperwork and simplification, by streamlining of the reporting mechanism. Otherwise, subsuming of various taxes and accompanied returns with just one comprehensive GST framework will not smoothen the process.

Why the GST Council is not thinking of making it mandatory for automatic generation of invoices through the GSTN registration platforms by the registrants. This mandate may obviate filing of multiple returns separately by the business entities, besides auto availability of input tax credit for which only many entities are battling with authorities concerned.

Bengaluru