Articles by Charvaka

The New 'Drain' Charvaka The phenomenal profits of foreign banks operating in India have come not from genuine banking, but from treasury operations, from so-called portfolio management and from lending in the money market non-deposit resources garnered essentially from other banks, financial institutions and public sector undertakings.

Saving-Investment Conundrums Charvaka THE Central Statistical Organisation (CSO) has at last released its quick estimates of national product, saving and capital formation for 1978-79, though its White Paper for the previous year, 1977-78, is yet to be available in print. At a time when many contradictory developments are taking place in the Indian economy, the ready and quick availability of such data in a more disaggregated form should be of great help for students of current economic affairs. In the absence of many details which are generally contained in the White Paper, no definite con- elusions could be drawn from the quick estimates about the directions in which the Indian economy is moving. Let us take the instance of the estimates of domestic saving and investment. Both the Reserve Bank of India and the CSO

April 8, 1978 spired by the government

No Check on Managements Charvaka THE Reserve Bank of India has just published, in the September 1977 issue of its monthly Bulletin, the fuller version of its latest annual study of the finances of 1,650 medium and large public limited companies in the private sector, covering the year 1975-76. The performance of the private corporate sector in 1975-76, as it emerges from the study, has to he assessed in the light of certain by now well-established tendencies which characterise the working of the private corporate sector. First, those in control of companies deliberately inflate costs to evade tax liabilities and to decieve both workers and the general class of shareholders. Secondly, in these efforts of the company managements liberal finance provided at low cost by the public sector financial institutions, including banks, plays a major role. Finally, despite the enormous amounts of investible funds provided by the public sector financial institutions and the growth of capital assets, expansion of employment in the private sector has been niggardly.

All Things to All Men Charvaka December 17, 1977 refinance likely to he available from this new 'window' will be no more than Rs 5-8 crores a year, which is a pittance compared to the regular refinance facility of some Rs 1,000 crores which banks enjoy. This underscores the importance of a total recasting of the refinance/rediscount arrangements so that refinance/rediscount facilities are linked to qualitative changes in the lending policies of banks. As things are, given the rate of growth in their deposits, the refinance facility equal to one per cent of demand and time liabilities, which is available to them as a matter of course, alone will take care of the banks' needs in the next two years or so.