Apropos Ratan Tata’s open letter to the people of West Bengal, he should remember that the state can’t become prosperous if poor farmers’ land is snatched away forcibly. Farmers were on the losing side: a Nano factory worker would have earned Rs20,400 per year — minuscule compared with the potential appreciation in land value over the years of his employment. There are also the questions of India’s oil import bill and road congestion. As a socially responsible member of the corporate sector, Tata could have used the money to improve public transport. Uddhav Thackeray has invited farmers to Mumbai and open vada pav stalls instead of committing suicide. Would Tata agree if farmers propose converting Bombay House into a vada pav SEZ?
— Deendayal Lulla
Several banks in the US and Europe have failed in the aftermath of the subprime crisis, shaking the confidence of depositors and investors worldwide. So far, Indian banks have come out unscathed from this catastrophe. However, in the past, some smaller Indian banks have failed for a variety of reasons; they eventually had to be merged with state-owned banks.
Indian bank deposits are guaranteed up to Rs1 lakh per bank. This limit was revised upwards (from Rs30,000) in 1993. Considering the inflation rate in last 15 years, there is an urgent need to increase the limit to Rs10 lakh. The UK and the US have higher limits to provide greater comfort to depositors. Higher insurance coverage would be more effective in restoring confidence than the Prime Minister’s and finance minister’s assurances.
— B.N. Bharath
If a ban on short-selling is sought during a bear market, then, by the same logic, why doesn’t anyone demand a ban on buying during a bull market, especially since many stocks (realty, power sector, etc.) were trading at obscene valuations? (“Why short sales ban won’t work”, Mint, 21 October) The truth is that severe a correction in valuation was imminent as many stocks, especially of mid-cap and small-cap firms, had gone up merely on speculation by operators, and cooked-up stories about prospects.
— Ketan R. Meher
Mergers and acquisitions of corporate giants in an hour of financial crisis is always a welcome move. The Jet-Kingfisher deal is no exception to this.
The firms would be able to consolidate their positions and accrue savings. So far so good.
But the employee retrenchment issue that fell out of all this was unwarranted. It sent out all the wrong signals. If layoffs naturally follow from mergers in a country like ours, it’s bad news for job creation. Layoffs have always been the last strategic move of Indian companies. In this particular case, the ripple effect could have been very severe.
Instead of publicizing this issue and retracting on political interference, the issue could have been managed prudently by devising a strategy for restructuring or retagging of these employees instead of firing them outright.
Although Jet Airways chairman Naresh Goyal denied the fact that the fired employees were taken back because of political interference, it is very clear that the the truth is otherwise; the decision to reinstate the fired employees was very swift after MNS leaders threatened Jet Airways.
Was this kind of drama really necessary? Is Indian industry not mature enough to handle such issues on its own?
Resolving the issue after political interference was really a dent in Indian industry’s image. Once again it was proved that politicians in India are much stronger than the industry, and political interference is deeply ingrained when it comes to resolving national-level controversial issues.
— P.S. Vishwanath