Monday, October 7, 2013
RBI EASES LIQUIDITY TIGHTENING - SEEMAANDHRA AGITATION - WHAT GOOD ALTERNATIVES EXIST?
Tuesday, October 08, 2013
NEWS – GOOD, BAD & SAD
There are always a few news that are heartening and invigorating. There are also always a lot of news which are depressing and demoralizing. Some news are – just not worth reading. Here are the Good, Bad and the Sad
1. Excellent : Raghuram Rajan, the RBI Governor, has eased Liquidity tightening – by reducing the Penal Rate of Interest and by agreeing to lend to Banks for a longer Duration. The rate of lending under MSF is reduced by 50 basis points to 9%. RBI has also introduced RBI lending to Banks for 7 days and 14 days instead of the present overnight lending. These measures will certainly improve the liquidity conditions for lending by Banks – and will go a long way in promoting Loans by banks. RBI has taken a very timely and pragmatic step. Banks which, markets thought would be affected by the liquidity tightening , will now be relieved of the pressure on them now. However, I feel, Raghuram Rajan can also gradually reduce the Interest Rates (Repo & reverse Repo) so that our manufacturers need not borrow outside India. I do not agree with the RBI Gov’nor’s logic that high Interest rates are a small fraction of the total manufacturing costs and therefore, do not affect our competitiveness. Total manufacturing cost is equal to the total capital – including working capital – being used by a firm. Incremental expansions and new units creation - become viable only when ROC is substantially greater than Interest on capital. In India, that is not the case. That is why, flight of capital is happening in India. If a firm can borrow at 2% interest and establish its manufacturing unit in China or US and sell at a cost differential of 8 % (ROC=10%), they will prefer China or US for establishing their units. Why will they choose India, where cost of capital itself is much more than 10%? I hope RBI Governor will reconsider his position on this.
2. SEEMANDHRA ON BOILING POT : The Centre’s announcement of a separate Telangana state – without an iota of compensating measures for Seemandhra was bound to anger the Seemandhra region, anyway. What makes matters worse, is the total ignorance of the centre to the dangers inherent in making Hyderabad City a part of the new Telangana state. The Centra, or for that matter, India, cannot wish away the dangers of naxalism and Islamic terrorists in the New state, if Hyderabad is left to Telangana State. News Reports suggest that Centre had intelligence reports to that effect but is brushing the reports aside. If so, the centre is committing a bad mistake. One must go back to Sardar Patel’s efforts to unite Hyderabad with India. Why is the Congress today lacking the foresight of Sardar Patel? It is creating a problem, which nobody will ever be able to solve.
Till N.T.Ramarao was elected as Chief Minister, Hyderabad was looking like a part of the most backward areas of west Asia and not as a part of India. The current crop of so called Telangana leaders were nowhere in sight then. Even though there were a number of CMs and Ministers from Telangana ALWAYS, they failed to develop any part of Telangana, including Hyderabad. This is a Historic Fact. It was only N.T.Ramarao, Chandrababu Naidu and to some extent, YSR who developed Hyderabad and Telangana regions during their Rule.
The entire Telugu Film Industry, including actors, technicians, producers, directors – everybody, migrated to Hyderabad, from Chennai, under the impression that THIS IS OUR STATE. Entrepreneurs from Andhra region pooled their entire resources into Hyderabad and surrounding districts to develop the same. Chandrababu naidu was instrumental in attracting Huge capital from outside Andhra Pradesh and India – into – especially Hyderabad – all under the impression that this is our state. Again, the current crop of selfish Telangana leaders were nowhere in sight then. In those days, they could not win even a score of seats even in Telangana region. This was the fact.
But, subsequently under the weak rule of YSR and his successors, these selfish leaders started spreading canards about bias, favouritism and so on against Telangana. Then came the Sri Krishna Committee – which categorically proved beyond a shadow of doubt that Telangana got more allocations than the other two regions all along. But, People like KCR will always twist all facts out of shape to raise the bogey of bias, which is not true. If the Centre could nail their untruths then itself – the present situation would not have arisen. Leaders like KCR and his coterie were asking even 10 years before that Andhra region born officials must leave Telangana totally. They were going to their houses and asking them to go. It was widely reported in news papers in those days. How much stress and tension does that create in the families of such low paid officials? Can a democratic state allow such things?
It was YSR who allowed such things to happen. KCR is the one Politician in India with the most abusive tongue. He has no respect for any politician or any person for that matter. And the Centre is dealing with him and his Party! To complicate matters further, You have Politicians like the one who said on a Telugu TV channel that “we are not Indians, we are not Indians, we are not Indians..India annexed us forcibly”. I have heard it myself and could not believe that such people are the ones leading the so called Telangana agitation. India must know that the Centre is dealing with such Politicians. I do feel that the Centre and the BJP have not understood the implications of handing over the state to such politicians.
With people like KCR and his party men, the crores of Andhras residing in Telangana region for decades feel absolutely Unsafe.
The centre and BJP must also not forget that Akbaruddin Owaisi hails from this region and his hate talks were being wildly cheered by the followers sitting before him. The centre and BJP must listen to all his talks before giving Hyderabad to Telangana. Any other country would have taken severe action on Akbaruddin Owaisi. But, India?
The least that the Centre must do – is to make Hyderabad a Union territory and ask both the regions to develop their own capitals elsewhere. That will not be fair to Seemandhra people who actually developed Hyderabad. But, that will at least keep the scales even. Second, centre must not allow Telangana leaders to meddle with water resources, ore resources etc. I must tell that Telangana leaders are already telling that Iron Ore from Telangana must not go to Vizag steel plant. These are people who will not allow water, ore, or even air, if possible to Andhra Region – until Other Regions retaliate in the same way towards Telangana region. This is the genuine fear of the Seemandhra People based on the everyday talks of these Telangana leaders. These leaders never built a case for separation of Telanagana – except their Hate talks – because, in reality, there is no case. But, seemandhra people must think twice about their agitational methods.
What they need to do INSTANTLY and IMMEDIATELY is – convene the Assembly, pass the resolution for a United State and send it to the centre. Instead, punishing their own people and others is devoid of all logic.
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