Cash Transfer for Subsidy
THE Finance Minister Pranabda , while presenting the Budget for 2011 announced cash for subsidy on kerosene, fertilizer etc to the poor section of Indian society. The cash transfer is possible only through bank or post office account, otherwise that could generate the biggest ever scam of the country.
A recent survey by BCG-CII has revealed that only 27% of people with income less than rs. 90,000 p.a. have a bank account. (Corresponding figure for people with income more than 2.0 lakhs is 91%) Families below poverty line, with income much below 90K, obviously, are not expected to have access to banks. Why?
THE Survey reveals that of the people with income below 90K, 41% have widely fluctuating income. They are compelled to take loan for housing (33%), health care (15%), family occasions ((8%). emergency (7%) and paying off loans (4%). Only 24% of the loan taken is for income generation and 9% for education.
Of the loan taken 52% is from money lender, family or friends while loan from formal sector accounts for 35%. Major reasons for these people not to approach the banks either for savings or for taking loans are the same : long transaction time and cumbersome paper work. Collateral security is another hindrance in seeking loans from banks.
AT the time of wavering of loans of farmers to the tune of Rs. 71,ooo crores taken from the organised sector, Mr. Rahul Gandhi had promised to do the same for the unorganised sector too. Now Pranabda has come up with proposal. How will it materalise?
Banks are no charitable organizations who will open their branches in the areas where investment opportunities do not exist and the demand for loans from the banks too is almost non existent? Who will foot the bill of expenses incurred by the banks? Where is the provision in the Budget to compensate the banks? In nutshell, why the FM announced it without doing any home work?
A recent survey by BCG-CII has revealed that only 27% of people with income less than rs. 90,000 p.a. have a bank account. (Corresponding figure for people with income more than 2.0 lakhs is 91%) Families below poverty line, with income much below 90K, obviously, are not expected to have access to banks. Why?
THE Survey reveals that of the people with income below 90K, 41% have widely fluctuating income. They are compelled to take loan for housing (33%), health care (15%), family occasions ((8%). emergency (7%) and paying off loans (4%). Only 24% of the loan taken is for income generation and 9% for education.
Of the loan taken 52% is from money lender, family or friends while loan from formal sector accounts for 35%. Major reasons for these people not to approach the banks either for savings or for taking loans are the same : long transaction time and cumbersome paper work. Collateral security is another hindrance in seeking loans from banks.
AT the time of wavering of loans of farmers to the tune of Rs. 71,ooo crores taken from the organised sector, Mr. Rahul Gandhi had promised to do the same for the unorganised sector too. Now Pranabda has come up with proposal. How will it materalise?
Banks are no charitable organizations who will open their branches in the areas where investment opportunities do not exist and the demand for loans from the banks too is almost non existent? Who will foot the bill of expenses incurred by the banks? Where is the provision in the Budget to compensate the banks? In nutshell, why the FM announced it without doing any home work?
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