It is true that banks in India earned the nation’s kudos by passing the 2020 stress test with flying colours. Even when the Covid pandemic kept most offices, including government departments, closed, bankers were at their post. The coming days would doubtless be challenging for the banking industry, with the expected exponential growth in digital and cashless transactions.
Increasing use of AI and data mining in credit decisions and use of humanoids in performing routine transactions would save bankers’ time to be put to productive use. There is also the talk of the setting up a Bank Investment Company and the eventual introduction of Central Bank Digital Currency.
However, for transaction costs for public sector banks to come down, their customers in rural and semi-urban centres would have to become tech-savvy, which is another big challenge.
Apropos the farmers’ agitation, the latest round of talks, too, has failed to achieve a full breakthrough on the contentious issues in the three farm laws. Farmers believe it would be suicidal to accept a compromise formula, as it will validate — though inadvertently — the perceived Modi government’s intentions built into the Acts. They seem to think that when the laws take roots, the mandis under the control of the APMCs will gradually disappear. And the long-term agreements for contract farming make the periodical announcements of MSPs inconsequential, too. Further, the removal of the restrictions on stock limits of agricultural produce frees the agricultural markets for traders and corporates to operate at will. In short, Indian agriculture won’t be the same in the future with the entry of behemoth national and international companies.
This refers to ‘Watch out for the looming debt trap’ (December 31). The pandemic has rendered every economy highly indebted and we are no exception. Classical thumb rule places nations exceeding 80 per cent debt/GDP ratio as prone to economic stagnation.
Today every major economy is either at this threshold or past it. And none is holding back from oversized fiscal stimulus, the mantra for revised economic perceptions in the wake of the pandemic.
In this huge disruption to the supply-demand equilibrium, normal financial tools alone are inadequate. The need is for substantive decisions to support consumption, promote manufacturing and broader reforms to ignite the spark. Rate of inflation, near bottom nominal interest rates, and buoyant levels of the stock market are positives to start 2021.
Apropos ‘Testing Times’ (December 31), the Covid-19 pandemic has now started taking a toll on board exams. State authorities with great difficulty completed conducting Class 12 exams between June-July when there were few relaxations in the lockdown. Academically, Class 10 performance is also crucial as many students prefer to pursue vocational streams.
A question arises as to why Class 10 exams need to be singled out when the Election Commission plans to have State Assembly elections with all SOPs in place and Class 12 exams also would be held as planned.
While we have every reason to cheer over our collective efforts in bringing the pandemic under control, it should not lead the people to develop a false sense of complacency. The emergence of new variant of coronovirus with faster transmissibility suggests that time has not yet ripe to lower our guard. As the government is set to vaccinate only 30 million people in its first phase of vaccination, close to 75 per cent of the population will continue to remain vulnerable until they are vaccinated. Prudence suggests us to strictly abide by the established health protocols devised to keep the contagion under control.
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