Different strokes

With reference to ‘No decision taken on ₹2,000 note production: DEA Secretary’ (January 4), it was quite interesting to learn that the Secretary of the Department of Economic Affairs (DEA), Subhash Chandra Garg, has, in a tweet, stated that “no decision has been taken with regards to the production of ₹2,000 currency notes and there are more than adequate notes of ₹2,000 in India’s financial system.” However, such an averment comes a day after a top financial ministry official having commented that the printing of ₹2,000 banknotes, introduced post-demonetisation in November 2016, has been reduced to the “minimum” by the RBI).

How come that the government’s left hand does not know what its right hand is doing? However, it may be pertinent to quote the RBI data also, which show that there were 3,285 million pieces of ₹2,000 notes in circulation at end-March 2017. A year after (on March 31, 2018), there was only a marginal increase in the number at 3,363 million pieces. And of the total currency in circulation amounting to ₹18,037 billion at end-March 2018, ₹2,000 notes accounted for 37.3 per cent, down from 50.2 per cent at end-March 2017.

Panchkula, Haryana

This refers to ‘Unavoidable option’ (January 4). It was a much-needed lifeline for the MSME sector, which contributes significantly to both GDP and employment. All those companies which are defaulting but not yet NPAs will stand to gain from this move. And since lenders are not asked to downgrade their assets, they will also not feel the adverse impact of the latest move on their financials. This scheme will ensure that MSME loans don’t turn bad and are addressed well in time. It is a well-documented fact that both demonetisation and GST have hit this sector particularly hard and this relief is nothing but a kind of lifeline for them. Since most of the lenders are wary of lending to big corporates and fresh capex is not forthcoming, it is more than essential that the MSME sector is well looked after and revived.

Noida

This refers to ‘A fiscally prudent solution to farm loan crisis’ (January 4). The bond-route suggestion, which would help carry over a portion of fiscal deficit arising from loan waivers, would be music to the ears of Arun Jaitley who is struggling to bridge the fiscal deficit. But to save the farm sector from future crises, loan waiver funds need to be productively deployed in areas like infrastructure, reduction in input cost, ensuring reasonable return from agriculture, crop insurance, and so on. Moreover, so long as government funds are used for unproductive purposes like loan waiver, the impact will get reflected somewhere in the ‘national balance sheet’.

Perhaps, agricultural loan waiver became part of Indian political manoeuvring in its present form during the late 1980s resulting in massive loan waiver through the Agricultural and Rural Debt Relief Scheme,1990. The timely caution from the RBI about the damage such blanket waivers of loans can cause to the repayment ethics and, thereby, to the financial system by generating future hopes of similar waivers, fell on deaf ears.

All political parties are party to the ‘farm politics’, as none of them has so far raised the issues now highlighted by the Prime Minister openly, like, the benefits of investing ‘waiver funds’ in infrastructure and input support for farming. Another politically sensitive issue is tax on agricultural income. If agricultural income is taxed rationally, the revenue will part-fund infrastructure and insurance in the same sector.

Mumbai

This is with reference to ‘Sabarimala fallout’ (January 4). The State should not interfere in the rituals of religion and hurt the sentiments of the people, especially when the rituals are being followed for ages. As long as the rituals are harmless and are respected by one and all, including women, one cannot understand why the State has to interfere in the rituals. Our society will be called enlightened only when it empowers and protects women, and not by merely earning an entry in a temple by breaking age-old traditions.

Thane

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