Mirage of Development

sabka saat sabka vikas

Had Modi been serious about ‘sabka saat’, then ‘vikas’ won’t have remained mirage

By Prabhakar Kulkarni

For all inclusive development, the financial organizations should be so equipped that they will voluntarily contribute to the needs of commons consumers, farmers and small scale industrialists who are now deprived of the expected facilities. Banks in particular are now not duly represented for the purpose. Hence the urgent need to review the legal position and while modifying the relevant Acts, provision would be made for proper representation of the so far deprived sectors. Sabka Vikas is possible only when Sabka Sath is assured by due representation.

It is high time now to consider the need to broaden the RBI board and those of the nationalized banks by modifying the Reserve Bank of India Act which is enacted during the British regime. This is because the very formation of the RBI’s and the banks’ boards needs some basic change.

This is more so because both the Union and state governments claim that they are formulating monetary policies in larger interests of ‘am admi’. The very system meant to implement the policies needs to be duly formed with the result that the very policies will not be sidetracked or followed only on a token basis. This is more so because of the recent concept of financial inclusion and the Mudra scheme which will not be actually implemented unless there is proportional representation.

The much discussed financial inclusion is also expected to be taken seriously by bankers who seem to be more interested in providing various facilities to those who are already getting them. As the Union government and the RBI want more than fifty percent of population which is not getting any banking facility to be included in the financial inclusion program, bankers are expected to take special efforts to bring the neglected sectors and people into the banking network. No frill accounts to be opened without any credit balance and that too for those who are deprived of the banking facilities because of poverty should be considered by banks on priority basis. They should take special efforts for opening such accounts. It is high time that bankers, both officials and employees who enjoy various facilities by way of pay-cheques and perks mostly because of their organized strength and persistent demands should now be alert and enthusiastic in implementing schemes for the poor and the neglected sections of our society.

The financial inclusion and no-frill accounts are specifically meant for those having no bank accounts in rural areas. But one of the nationalized banks seems to have carried out the scheme in and around the huts around Mumbai and has claimed that it has achieved the aim of financial inclusion. (This claim is gloriously mentioned in its house organ.) While huts in city areas are selected by one bank, another bank refers to the specific guideline that the scheme is meant for rural areas while rejecting the scheme application to a needy rickshaw driver in urban area.

But the same bank has opened no-frill accounts of teachers who are regular wage earners and can keep the required balance and are not in need of such no-frill accounts. Strangely enough, the bank has mentioned this in its advertisements as the scheme of “No Frill Wage Accounts Scheme”. One can be shocked to find the diversion from no-frill accounts specially meant for those who cannot keep minimum balance to those wage earners who can afford to keep the balance and who are not in need of no-frill accounts.

Regarding the Mudgra scheme initiated by the Modi government it is much in discussion particularly because the BJP has used it in its election campaign in advertisements in print media. The Maharashtra chief minister Fadnavis’s photo along with Mr.Modi has created an impression that the scheme will have to be implemented without any hassles and delay. The scheme of the has various categories as per the requirements. As the loans or cash credit facilities are without collateral security banks need not impose their own rules over and above what the government offers.

In fact the government’s Mudra scheme says-

“Individual banks could ask for other documents as needed. The Banks are not supposed to take any processing fee and are not supposed to ask for any collateral. The repayment period is also extended to 5 years. But it is also made clear that the applicant should not be a defaulter to any Bank or financial institution.”

Banks have destroyed the very spirit of the scheme.. They have transferred most of the earlier sanctioned and well going on for several years credit schemes in to the Mudra scheme.According to a few search inquiries banks have turned most of the normal loans with hypotheication for various consumer items and collateral security in to Mudra scheme. It is obiviously because to prepare record that the scheme is alredy implemented and there is no further quota available for new schemes.

This obviously is the deception of both the government and needy costomers for whom the scheme is basically codified. This is confirmed by bank employees union and its office bearers. Banks are turning their NPA accounts in to the Mudra scheme in order to clear their balance sheets. In a post-budget statement joint secretary of the All India Bank Employees Association Devidas Tuljapurkar has stated that banks are reviewing their NPA accounts for sanctioning new loans under the Mudra scheme thereby defeating the very spirit of the scheme.

The Maharashtra chief minister Fadanvis has asked all banks to provide credit to farmers irrespective of their being defaulter or not. But as nationalized banks are not under the state government’s statutory control, banks may not respond positively. What should then be done to halt debt-ridden farmers’ further suicides? A Pune-based citizen and ex-development officer of the LIC, Prabhakar Lakade has suggested a novel scheme. He says that the state government can immediately offer state government’s guarantee to all farmers’ in the state and ask all banks not to harass the debt-ridden farmers for recovery until the end of 2018. In the meanwhile the government will offer payment of the interest due from all farmers so that banks are also not in a position to worry about the recovery. This will relieve both farmers and banks and also the state government if it is not now in a position to waive all farm loans as is being pressed by opposition parties and the government participant, the aggressive Shiv Sena.