Student loans

This refers to the article “A time bomb called student loans” ( Business Line , October 4). The authors are suggesting a very dangerous move: an in-built clause of waiver of loans.

What works in the UK may not work in India. Loan waivers in India in the past have already caused deep damage to the banking sector, with defaulters/borrowers time and again expecting a write-off and thus increasing the NPAs of banks.

There should be no ‘free lunches’. Many banks organise recovery camps/lok adalats, etc, to give a fair chance to the defaulters to settle the dues after availing a certain waiver. The repayment culture will be destroyed beyond repair, if such a clause of waiver is pre-announced. Once students get this benefit, other sectors will follow with suitable demands. What needs to be done, instead, is to subsidise education, with Government willing to invest a part of the cost as long-term margin money/subsidy for the students, wherever the fees are relatively high. Also, creation of adequate job opportunities will create wealth for the country instead of wilful defaulters.

Hari Madhu

Kunjibettu, Udupi

Small investors hit

This refers to “a wrong call” ( Business Line , October 4). Though FIIs have pumped foreign funds into our market after liberalisation, the retail small and medium investors have not benefited. In fact, small investors went into a debt trap and lost money in the share market. Meanwhile, inflation has worsened the lot of the aam aadmi .

Vedula Krishna

Visakhapatnam