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Posts Tagged ‘Oligarchy in India’

Big Business gets Big money

Big Business supports Big Banks who support Big Government ... all of whom depend on us to to fund them ... (Cartoon by Alex Hughes; courtesy - http://alexhughescartoons.co.uk). Click for larger image.

Big Business supports Big Banks who support Big Government ... all of whom depend on us to to fund them ... (Cartoon by Alex Hughes; courtesy - http://alexhughescartoons.co.uk). Click for larger image.

Country’s largest bank SBI has breached RBI’s credit exposure norms during three consecutive years with regard to its loans provided to Mukesh Ambani-led Reliance Industries Ltd (RIL).

This is the third straight year when SBI has exceeded the single-borrower ceiling with regard to RIL, as per the bank’s annual reports for the past three financial years.

However, the bank brought down its exposure to RIL within the limit on the last date of the previous fiscal, i.e March 31, 2011, according to the SBI annual report.

The public sector lender had provided credit in excess of prudential norms to RIL during 2009-10 and 2008-09 also.

During the year 2009-10, the bank’s credit exposure was in excess of prudential limits for Reliance Industries, Indian Oil Corp (IOC), BHEL and Tata Group.

As per RBI guidelines, the exposure ceiling limits are 15 per cent of capital funds in case of a single borrower. However, the credit exposure to a single borrower can go up to 20 per cent, if the additional 5 per cent exposure is on account of extension of credit to infrastructure projects. (via SBI breaches RBI norms on loans to Reliance – Times Of India).

Follow the leaders

A few days later another report showed that ICICI, the second largest bank in the country is also in the same boat. SBI and its subsidiaries are slightly less than 25% of the Indian banking industry. ICICI is less than 10%. Together these two banks are 30%-33%of the banking industry.

Four companies are getting more than 15%, i.e. 60% of the total lending by SBI – and one company in case of ICICI. The report also confirms that there was window dressing. Borrowings were brought down to RBI norms on the day of reporting. We are not even started on the Birla groups, the Essar, Adani group, L&T, plus other public sector companies.

Behind closed closed doors or out in the open. Reliance alone gets more money from SBI and ICICI than Indian agriculture sector. (Cartoon by Adam Zyglis - Courtesy of Politicalcartoons.com). Click for larger image.

Behind closed closed doors or out in the open. Reliance alone gets more money from SBI and ICICI than Indian agriculture sector. (Cartoon by Adam Zyglis - Courtesy of Politicalcartoons.com). Click for larger image.

Sense of priority

Priority sector lending target has been fixed as a percentage of total lending. Banks are targeted to lend 18 % of their lendings to agriculture and 12 % of their NBC as export credit.

Just Reliance alone gets more money from SBI and ICICI than the entire agricultural community in this country – or the exporters.

Presumably this a pattern with the banking industry. Larger business groups get larger amounts of funding – and the smaller customers get the leftovers.

I am not using oligarchy as an adjective anywhere, at all.

Remember.

Points of view

For banks, the cost of doing business with an RIL, BHEL or a IOC is that much cheaper – because costs of servicing these accounts are not equal to the costs of servicing small clients. But then, the margin from these lendings is also well below average lending rates. So, overall, it is unclear, if it is just laziness or a government policy or good business practice.

There is a place for Big Business in India – but can Big Business replace Indian agriculture or the exporter segment.

Pranab-da?

Season for oligarchies – Corporates may control vegetable trade

November 26, 2010 33 comments
Very soon, this is all we will get to eat. Some overpaid corporate executive will decide what we eat at what price! (Cartoonist- Andy Singer; cartoon courtesy-www.mindfully.org.). Click for larger image.

Very soon, this is all we will get to eat. Some overpaid corporate executive will decide what we eat, at what price! (Cartoonist- Andy Singer; cartoon courtesy-www.mindfully.org.). Click for larger image.

death for ordinary rythu bazars and vegetable markets, (as) the entire trade of vegetables, fruits and meat will come under the control of corporates like Metro, Heritage, Reliance or Al Kabeer once the massive terminal market complexes (TMCs) being proposed come into existence in the state.

The corporate setting up the TMCs will (INVEST) Rs 150 crore towards this business, the state government will have a 26 per cent stake (for) 50 acres to 200 acres of land. The private enterprise (PE) will own the remaining portion of the business.

The state government is constructing these massive modern whosesale markets in Hyderabad, Guntur, Vizag and Tirupati, ostensibly to help the farmers. The farmers will directly sell the produce to the TMC, thereby cutting out middlemen. Another advantage is a cleaner, modern bazar with facilities like warehousing, cold storage, ripening chambers, cleaning, grading and processing along with extension of advisory service to farmers.

However, prices will be fixed by the corporate. (with) retail prices of vegetables likely to go up for the consumer. The question is would it benefit the farmers or the company which will gain control over the entire vegetable business of the state.

Corporations will decide which pesticide, what seeds, what prices, what items we eat. Who do you think will benefit? Not me, I know! (Cartoonist - Joe Mohr; cartoon courtesy - http://ecopolitology.org.). Click for larger image.

Corporations will decide which pesticide, what seeds, what prices, what items we eat. Who do you think will benefit? Not me, I know! (Cartoonist - Joe Mohr; cartoon courtesy - http://ecopolitology.org.). Click for larger image.

The TMC will control the production and collection of vegetables from the farmers over certain radius, “While it is not mandatory for the farmer to sell his produce to the TMC, the private operator will offer him a higher price as well as induce them with loans for procurement for seeds. This in the end will make the farmer a captive seller to the TMC and for the retail consumer, the prices of vegetables, fruits and meat will become costlier,” said the sources. (read more via Corporates may control vegetable trade; parts excised for brevity).

Ignorant bureaucrats

Kasargod in Kerala is in the grip of a strange malady. Deformed children.

The Plantation Corporation of Kerala (PCK) has been cultivating cashew in 4500 hectares spread across this district. Since the early 1980s the PCK has been aerially spraying an organochlorine pesticide called endosulfan that has been banned in many countries including Singapore, Denmark, Germany, Holland and Sweden. Over the last several months, various reports in the media as well as studies done by institutions like the Centre for Science and Environment (CSE), New Delhi have indicated a strong link between the aerial spraying of endosulfan and the number of deaths and illnesses in the area. (read more via The Hindu : Cashews for human life?).

Cartoonist - Clay Bennet; cartoon courtesy - www.ritholtz.com). Click for larger image.

Corporate executives will soon dictate to us. They will buy Government's silence. (Cartoonist - Clay Bennet; cartoon courtesy - http://www.ritholtz.com). Click for larger image.

We have seen stories on how swine flu started in La Gloria, a little town in Mexico, at the one of Mexico’s biggest hog factories, owned by the world’s largest pig processor, Smithfield Foods. The world diabetes epidemic by industrial and junk food is become an old story.

And now this

AP Government wants to handover vegetable trade to highest bidder. Some 50-150 acres of land is proposed to be given these companies. These corporations will be able to raise all that money for investment just by p-ledging the land that the Government is handing over to them.

These private monopolies will have monopoly over agricultural output in their designated areas. Producers will given the choice of selling at any mandi to that monopoly buyer. All the ryuthu bazaars will close. The nearly 10,000 vegetable vendors who serve Hyderabad’s 10 lakh (1 million) households can buy from the one monopoly buyer. Another 10,000 eating houses will have the choice of one vendor.

India has indeed becoming a ‘free’ country.

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