WEEKEND LIGHTER: BYE 2016, WELCOME 2017!
WEEKEND LIGHTER: BYE 2016, WELCOME 2017
(December 24/25, 2016, No.54/2016)*
Weekend Lighter is posted every Saturday
@mgwarrier.blogspot.in
HAPPY X’MAS & HAPPY NEW YEAR
*Posted on December 21, 2016. Next issue will be posted
during the first week of January 2017
Opening remarks
RBI meddling with public trust
Reserve Bank of India circular* dated
December 19, 2016 on deposit of
Specified Bank Notes(SBNs) issued to banks can impair the public trust in the
banking system in general and in the RBI as the institution statutorily
responsible for Currency Management in particular. Consequent to the withdrawal
of ‘legal tender’ status of Rs500 and Rs1000 currency notes on November 8,
2016, GOI and RBI have issued and implemented various restrictions on deposits
and withdrawals of money, many of them for administrative reasons.
By and large, despite political
provocations, citizens accepted the measures conceding the broader objectives
of fighting corruption, black money and fake currency in the system. Remember,
GOI has not yet withdrawn the RBI promise to pay value, backed by government
guarantee which made SBNs currency notes in the first place.
The instructions now issued,
restricting deposits to just once, giving discretion to bank officials to
accept/reject deposits of SBNs and re-routing such deposits compulsorily to deposits
under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana,
2016 smacks arbitrariness. If someone alleges that RBI is acting under
‘instructions’ from GOI to ‘promote’ fund raising, the allegation may stick on
the central bank.
Such casual approach to Currency
Management can impair the public trust not only in the central bank but in the
banking system, which can have long term implications for the economy.
M G Warrier,
Mumbai
*Clauses i to v of RBI
Circular** dated December 19, 2016 copied below(On December 21, 2016, RBI has through another circular practically withdrawn instructions of December 19, 2016):
i Tenders of SBNs in excess of 5000 into a bank
account will be received for credit
only once during the remaining period till December 30, 2016. The credit
in such cases shall be afforded only after questioning tenderer,
on record, in the presence of at
least two officials of the bank , as to
why this could not be deposited
earlier and receiving a satisfactory explanation. The explanation should be kept on record to facilitate an audit trail at a later stage. An appropriate
flag also should be raised in CBS to
that effect so that no more tenders are allowed.
ii. Tenders of SBNs up to 5000 in value received across the counter will
allowed to be
credited to bank accounts in the
normal course until December 30, 2016. Even
when tenders smaller than 5000
are made in an account and such tenders taken
together on cumulative basis exceed 5000
they may be subject to the procedure
to be followed in case of tenders above 5000, with no more tenders
being allowed thereafter until December 30, 2016.
iii. It may also be ensured that full value of tenders of
SBNs in excess of
5000 shall be credited to only KYC compliant accounts and
if the accounts are not KYC compliant
credits may be restricted up to 50,000
subject to the conditions governing the conduct of such accounts.
iv. The above restrictions shall not
apply to tenders of SBNs for the purpose of deposits under the Taxation and
Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016.
v. The equivalent value of specified
bank notes tendered may be credited to an account maintained by the tenderer at any bank in
accordance with standard banking
procedure and on production of valid proof of Identity.
**The disputed instructions contained in the circular were withdrawn by RBI on December 21, 2016.
**The disputed instructions contained in the circular were withdrawn by RBI on December 21, 2016.
Confusing
between ‘LESS CASH’ and ‘CASHLESS’
M G Warrier
This refers to Amit Varma’s article
“Three reasons why a cashless society would be a disaster” (By Invitation,
Times of India, December 18, 2016). The writer has done fairly good research to
padd up his arguments against what he fears as an emerging cashless India. So
much so, he has dug up several quotes from young Mohandas Karamchand Gandhi
(pre-1910) to prove that howsoever great the people may become in later life,
it is possible that they might have made some absurd observations in their
30’s! Don’t ask me the relevance of this proof to the disaster (Cashless India)
he is talking about, in this well-written piece. Unintended damage is, of
course to ‘Brand GANDHI’, as the observations by the 21st Century
version of that brand-name are becoming ‘viral’ as WhatsApp jokes
instantaneously.
Let us be clear about the foundation
on which the feared ‘disaster’ is built. It is conversion of India into a
‘CASHLESS SOCIETY’. So far, the talk is only about using ‘LESS CASH’. Even
remotely, it will be tough to attribute the motive of making India ‘CASHLESS’,
as printing of currency is in full swing even when I am keying in this
response.
Privacy angle
Here, the writer is more clear about
his intentions. He doesn’t want his financial transactions to leave a digital
trail. This is a matter of opinion. And, perhaps, Amit Varma is making a valid
point, which needs to be looked into. The problem could be real for those who
are handling ‘unaccounted’ resources including money and for those who do their
transactions through illegal channels to remain outside financial supervisory
system and tax net.
A realistic view may have to be taken
on this issue.
Cost angle
Every transaction, cash or cashless,
has a cost and costs and benefits will find an equilibrium, in a market
economy.
Political donations
This issue needs to be addressed
independent of legal tender character of high value currency.
**********************
Recent Blog Posts
Bridging
the learning deficit
Excerpts
“The problem of poor learning outcomes
is of particular concern, for it is a structural issue pertaining to the design
of curricula and ingrained rote learning methods. These have been the backbone
of India’s teaching tradition for over half a century. But will this help
create the kind of workforce that India wishes to develop: nimble,
highly-skilled and ready for the digital age, the global economy and new
pathways of occupational mobility? Or will the sheer weight of an outdated,
colonial-era education system make Indians too sluggish and skill-deprived to cope
in a highly competitive global arena? While efforts of the present and previous
government to boost the quality of learning in higher and vocational education
must be appreciated, policymakers ought not to ignore early childhood education
and primary schooling, the phases during which the most important cognitive
development milestones are attained. The tenth Annual Status of Education
Report found that in 2014 the proportion of Class 3 and Class 5 students in
rural areas who could read a Class 2 textbook was 23.6 and 48.1 per cent,
respectively. Until Activity-Based Learning and “teaching at the right level”,
tools for real learning and skill-absorption, become the norm, hopes of the
country becoming a great power may well remain a dream.”
The
Hindu, December 19, 2016
Interview:
Ramachandran Venkataramanan, the managing trustee of Tata Trusts in
conversation with Piyush Pandey:
Excerpts:
“We operate businesses and life on trust and
confidence,
not necessarily on a legal contract. That doesn’t mean we are doing anything
illegal. If you have to finalise the books of accounts of a particular company,
you could say ‘Financial systems and processes do not exist’. It could be
reworded to ‘There is a need to strengthen the financial systems and
processes’. It means the same but the way you interpret it or deal with it
makes a huge difference. If you have trust, you will say the latter. If you
don’t have trust, you will say the former.
*** ***
Salt
fortification
We worked with the Ministry of Women and
Child Development, Health and the Food Safety Standards Authority of India
(FSSAI) to formally adopt and notify standards for fortification. These were
announced on November 16, 2016 in the presence of Hon’ble Minister Ram Vilas Paswan.
Several states are formally launching Double Fortified Salt using such
protocols.
Fortification has been a practice
globally. For example, many years ago, China found a way to embed
micro-nutrients in soya sauce because soya sauce is a staple food in China.
India has always been privy to this sort of fortification, earlier. In the 80s,
iodised salt came into being that way. Then it became a standard, over the
years. Now, we hope that in the coming years, Double Fortified Salt (DFS) or
fortified milk will be a mandatory standard. It is available in the market but
the key difference is that today, Tata Salt sells DFS at a price of about
Rs.28, beyond the reach of many people. What we are attempting to do from the
Trusts is, we are agnostic to any company or any state. The price points in
public programmes will be around Rs.10 or less.
It is on initiatives like this that Mr. Tata has been personally
involved. Conceiving it, providing strategic direction and also, reviewing it,
very periodically – some times more than a programme manager.
We worked with the Ministry of Women and
Child Development, Health and the Food Safety Standards Authority of India
(FSSAI) to formally adopt and notify standards for fortification. These were
announced on November 16, 2016 in the presence of Hon’ble Minister Ram Vilas
Paswan. Several states are formally launching Double Fortified Salt using such
protocols.
Fortification has been a practice
globally. For example, many years ago, China found a way to embed
micro-nutrients in soya sauce because soya sauce is a staple food in China.
India has always been privy to this sort of fortification, earlier. In the 80s,
iodised salt came into being that way. Then it became a standard, over the
years. Now, we hope that in the coming years, Double Fortified Salt (DFS) or
fortified milk will be a mandatory standard. It is available in the market but
the key difference is that today, Tata Salt sells DFS at a price of about
Rs.28, beyond the reach of many people. What we are attempting to do from the
Trusts is, we are agnostic to any company or any state. The price points in
public programmes will be around Rs.10 or less.
It is on initiatives like this that Mr.
Tata has been personally involved. Conceiving it, providing strategic direction
and also, reviewing it, very periodically – some times more than a programme
manager.”
LEISURE
When
life as you know it ends*
Excerpts:
How many of us
while giving an account of a day that turned on us without a warning have begun
its telling with the following lines: “It was a perfectly normal day. The sun
was bright and the sky blue and clear”? Whether it was 9/11 or 26/11, or deeply
personal narratives, normalcy is the default position at the time of their
retelling. Joan Didion’s bestseller, The
Year of Magical Thinking, reveals itself in different ways with each
rereading. “Life changes fast. Life changes in the instant. You sit down to
dinner and life as you know it ends.”
*The Hindu,
December 18, 2016: SHELF HELP
Review of
the book “The Year of Magical Thinking” by Joan Didion
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