Before 1991 banks used to charge higher rate of interest for higher amount of loans. The logic behind such approach was that rich businessmen could afford higher rate of interest. Small businessmen can compete in the market with wholesale dealers and bulk manufacturers only when they are given certain discounts on interest rates. This philosophy worked upto 1991 when social objective was real and truly followed by bankers and this was the sole target of the government too. Banks were nationalized in the year 1969 so that poorest among the poor can also approach banks for keeping their surplus fund and also to seek loan for their business and personal requirements. Banks were opened in villages so that it is made available in even remotest villages and its reach become wider and wider up to even downtrodden villagers and even scavengers in the towns. All types of facilities and rebates were meant for poor and middle class.
In the modern days i.e. after 1991or you can says in the age of economic reformation, liberalization and globalization, the approach of the government and also the bankers have completely changed. After 1991 social objective has in fact become a mask to conceal their hidden agenda of earning more and more profits. Now big businessmen can be given loans in hundreds and thousands of crores rupees at sub PLR rates whereas a small trader cannot expect loan below sub PLR rates. Exporters can be given bulk loan at subsidized rates. There is neck to neck competition among bankers to reduce their lending rates for home loan and car loan seekers. The more loans they ask for, the more discount they will get. All types of infrastructure benefits are now extended to business giants, and not small or middle sized businessmen.
It is ironical that banks even now boast for fulfilling social objective. Yes, they achieve the required ratio of lending in priority sector, but not by making fresh disbursement to small and middle borrowers but by including bigger and bigger loans in the domain of priority sector or by enlarging the activities in the domain of small borrowers. In this modern era even credit facilities upto Rs. 5.00 crores is considered as loan under priority sector.
Home loan up to Rs.50.00 lacs are considered as priority lending at lesser and lesser rates of interest. Here it is worthwhile to mention that loan of Rs.30 lacs can be taken only when house is of the value of at least Rs.40.00 (truly speaking such house may of Rs.50.00 to Rs.60 lacs keeping in mind the black money paid for each home sale). Car loan is given by banks at low rates and various discounts are being allowed to car buyers during festival season. But the million dollar question is who can afford buying a car? Can a common man (95% of population) afford a car?
Now can any one imagine that poor or middle class person having less than three lacs rupees as annual income can afford home loan of more than Rs.12 lacs because maximum permissible finance for home loan is four time of annual income in most of the banks.?
Can a person of income less than rupees three or four lacs can dream of buying a house of Rss.30.00 lacs (including black money) and can he afford repayment of loan of Rs.20.00 lacs by legal source of income?
Obviously banks are reducing lending rates for rich persons, they may be home loan seekers or buyer of costly car or they may be big trade houses, big exporters or large corporate houses.
It is not only banks which are crazy for big fishes. Even government is cutting tax or making such policies that cost on freezes, computers, laptops, mobiles, cars, scooter, wine, air travels is gradually coming down. On the contrary prices of essential commodities which are lifeline for poor and middle class people are sky rocketing day by day. Prices of potato,onion, tomato, green vegetables, pulses, wheat, rice, sugar, milk .and many more such things on which lie the survival of 95% of Indian population are rising up and up, not because of less production but because of faulty policy of the government. Hoarding, black marketing and profit making has become the accepted habit of rich traders and manufacturers.
Businessmen who have the capacity to store the goods of essential use can earn any profit by hoarding the same because government has given them unlimited freedom. Even education has become so costly that common men cannot imagine of quality higher education or even primary education in towns. Common men cannot imagine of cheap health care in government run hospitals and they have to pay unreasonable big amount for treatment in private nursing homes.
Who will take stern action?
Who will stop future trading in commodities?
Who will prevent hoarding and profit making in food items?
Who will prevent bankers extending credit facilities to rich and affluent class at sub PLR?
Obviously none. Because even Manmohan Singh, the Prime Minister of India tells that there is corruption rampant all where in the country, even he accepts that development fund given by government to different agencies do not reach in the hand of poor. Even PM tells that there is a need to check price rise immediately .But he is helpless and unable to prevent price rise. He cannot keep prices in control because he has given unlimited freedom to traders in the name of reformation. He also imagines just like a help less poor, like a common man and like average Indian imagines and curse the system.
After all who will cure the system when everyone cry and cry only against the cancerous disease of mal administration, corrupt and inefficient government machinery?
Who cares for poor?
Of course Bankers do not care at all and neither can they afford doing so.
If anyone is interested to know the reality I would like RBI to submit data on following two points so that educated class and so called economists and social reformers can understand the reality of social agenda of the bank.
Loans outstanding up to Rs. 5.00 lacs( including home loan , education loan, trade loan or agricultural loan ) as on 31.12.2005. 2006, 2007, 2008, 2009 and as on date and disbursed during these years .These data will tell the real story of social objective and tell whether poor and middle class men are really getting loans from banks.
Secondly to know the amount of bulk financing made by banks at Sub PLR ,year wise disbursement made by banks to rich people in the range of Rs.10 crores and above can also be obtained to compare the same with that made to common men up to Rs.5.00 lacs.
Danendra Jain
Agartala
26th September 2009
Friday, September 25, 2009
Monday, March 30, 2009
Indians are parking black money in Swiss Banks
There is no doubt that Indian money is being deposited at foreign bank and this has been continuing since long. Government of India has come out so many times in the past with schemes for voluntary disclosure of black money. It is government who first frame such rules which forces businessman to hide income and hoard black money either in Indian bank in fictitious name or in foreign based Swiss bank. Again it is government who instead of punishing the creator and hoarder of black money gives him an opportunity to get rid of punitive action under Voluntary Disclosure Schemes.
This is why businessmen hide money at foreign bank and always wait for new scheme for Voluntary disclosure and get immunity from legal action. Wrong culture has been inculcated in businessmen by the government only and it is bitter truth and undeniable fact that under such schemes officers and politicians also get an golden opportunity to convert black money ( earned by bribe and unfair means) into white money.
Black money is produced in Indian economy at greater speed than real white money. This black money is also invested in real estate or in Gold or in shares where ample opportunity is still available to conceal the black income. It is due to black money that in India all landed property , apartments, flats, commercial houses, shops or any type of building are traded at two rates , one for black money and one for white money. Flat of value of Rs.30.00 lacs will be sold in Rs. 10.00 lacs as while money and residual Rs. 20.00 lacs as black money for which no receipt is issued by seller of property. Registered deed is constructed for value of Rs.10.00 lac only. As such there is huge black money in Indian economy flowing for years and years without any interruption. Obviously real estate sector is the safest heaven to park black money for officers and traders as well.
After all, black money is the real engine of growth in all sectors. Even politicians will not survive if they do not take black money as donations from businessmen and servicemen .Political workers collect donations from all rich houses without issuing any bill or receipt or you can say without accounting for the same. Political parties account for money only to that extent which is received by cheque from big corporate houses.
It is an open secret that nine out of ten big and attractive houses built in any town or village is built by black money. An honest servicemen or true businessmen abiding all Income Tax rules strictly cannot imagine of having a house worth living. Most of luxurious cars are purchased only by those persons who have illegal income more than legal income.
Government need not therefore go to Swiss bank to verify and demand black money parked there. There is no need to place the matter at G20 meeting to demand disclosure of deposits of Indian parked in Swiss Banks. If there is strong will Government may get the culprit here itself and discover black money at least hundred times of what they suppose to be parked in foreign bank. But who will take such initiative seriously is the million dollar question. When all officers, political workers and all business houses are working in unison and in collusion with each other, none has guts to take strong initiative to stop the unhealthy practice flourishing in India for decades and decades. After all who will bell the cat when all are birds of the same feather?
Political leaders have been firing paper bullets on traders and officers for decades but from the core of their heart they play the same tune which hypnotizes traders and officers for contributing more and more for politicians and political parties. Traders, politicians and officers are made for each other and they cannot break their vicious circle without jeopardizing their survival in their area of operation. It is always the residual 90% of the population which have to suffer due to dominance of black sheep of the economy constituting hardly 10% of the population. Large scale corruption and sky rocketing price of all commodities , goods and services affects adversely the general mass and not at all the affluent class of traders, officers and politicians.
Danendra Jain Agartala
31st March 2009
This is why businessmen hide money at foreign bank and always wait for new scheme for Voluntary disclosure and get immunity from legal action. Wrong culture has been inculcated in businessmen by the government only and it is bitter truth and undeniable fact that under such schemes officers and politicians also get an golden opportunity to convert black money ( earned by bribe and unfair means) into white money.
Black money is produced in Indian economy at greater speed than real white money. This black money is also invested in real estate or in Gold or in shares where ample opportunity is still available to conceal the black income. It is due to black money that in India all landed property , apartments, flats, commercial houses, shops or any type of building are traded at two rates , one for black money and one for white money. Flat of value of Rs.30.00 lacs will be sold in Rs. 10.00 lacs as while money and residual Rs. 20.00 lacs as black money for which no receipt is issued by seller of property. Registered deed is constructed for value of Rs.10.00 lac only. As such there is huge black money in Indian economy flowing for years and years without any interruption. Obviously real estate sector is the safest heaven to park black money for officers and traders as well.
After all, black money is the real engine of growth in all sectors. Even politicians will not survive if they do not take black money as donations from businessmen and servicemen .Political workers collect donations from all rich houses without issuing any bill or receipt or you can say without accounting for the same. Political parties account for money only to that extent which is received by cheque from big corporate houses.
It is an open secret that nine out of ten big and attractive houses built in any town or village is built by black money. An honest servicemen or true businessmen abiding all Income Tax rules strictly cannot imagine of having a house worth living. Most of luxurious cars are purchased only by those persons who have illegal income more than legal income.
Government need not therefore go to Swiss bank to verify and demand black money parked there. There is no need to place the matter at G20 meeting to demand disclosure of deposits of Indian parked in Swiss Banks. If there is strong will Government may get the culprit here itself and discover black money at least hundred times of what they suppose to be parked in foreign bank. But who will take such initiative seriously is the million dollar question. When all officers, political workers and all business houses are working in unison and in collusion with each other, none has guts to take strong initiative to stop the unhealthy practice flourishing in India for decades and decades. After all who will bell the cat when all are birds of the same feather?
Political leaders have been firing paper bullets on traders and officers for decades but from the core of their heart they play the same tune which hypnotizes traders and officers for contributing more and more for politicians and political parties. Traders, politicians and officers are made for each other and they cannot break their vicious circle without jeopardizing their survival in their area of operation. It is always the residual 90% of the population which have to suffer due to dominance of black sheep of the economy constituting hardly 10% of the population. Large scale corruption and sky rocketing price of all commodities , goods and services affects adversely the general mass and not at all the affluent class of traders, officers and politicians.
Danendra Jain Agartala
31st March 2009
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