‘Your maid funds Unani’, in the column ‘Thinking It Through’, Mint, 8 March, is a clever piece that overreaches itself to reveal a strong sectarian and utilitarian bias! What the finance minister knows, and what Amit Varma may not agree with, is that in the years to come, our traditional systems of medicine could serve us, more so our hapless maidservants, a lot better than what the mainstream systems do. And if that happens, what could happen to the millions of dollars that are being currently bet, essentially by the West, on modern medicine? Would those money merchants pause to give the traditional systems a much-delayed fillip? There could be some hope if they follow Vinod Khosla’s footsteps in the way he has bet on wind-energy. Very improbable.
Tamal Bandyopadhyay’s piece in the weekly column “Banker’s Trust” on 12 March is characterized by the courage of a serious journalist and the wizardry of an insightful finance professional.
However, as a reader, I would have liked him to tread a few more steps. The whole issue of “window dressing” of balance sheets and the meaningless pursuit of “business figures” indicates that there exist a few serious structural disconnects in the system.
For example, no chairman of the public sector banks is accountable for profit as much as for business. Growing business means increasing credit flow to the system which is, by and large, a good proxy for political constituencies. As a corollary, the culture of profit accountability does not exist in the system. This leads to the pervert performance measurement system based on either deposit or advance figures—mindless of the cost and yields.
Swapan K Giri, Mumbai
Your editorial, “Risk is back,” Mint, 7 March, has got it spot on. Global asset markets had been rising and everyone was taking it as a one-way ticket as shown by the VIX index.
An eye-opener in the article was the fact that many companies have gone in for FCCBs and, yes, if the markets were to remain flat, a real balance sheet problem could be developing for many companies.
Warren Buffett has always been insisting that investors take a closer look at balance sheets rather than just the income statement. But before we become a doomsday prophet, one thing to be accepted is that the global economy and India especially are doing pretty well.
So, fundamentally, things are still good. But what Alan Greenspan said may have to be looked at—he said the US economy is in a mature phase. So, the rallies may have to be looked at in the light of this fact.
Anyway, let us be prudent in our investing, finding companies in which value is present and not get carried away with ‘This time it’s different!’
I have been reading Mint since its first issue. Its content as precise and crisp as its name, has excited me a lot. Notes spread across its pages are thought-provoking and well documented.
The “My View” column by Amit Varma on 8 March makes an interesting reading in highlighting ‘misdirections’ in which the taxes that people pay find their way.
The governments have to levy taxes, I believe. to provide security to citizens. Health, education, research, infrastructure, housing are the “add-ons” in the development process, and hence budgetary allocations.
It is, however, well known that in most cases a significant portion of the funds allocated for a government scheme are spent towards administrative costs, including salaries and perks of governments. There is need to give a tilt to the ratio of budgetary spends, more in favour of end-beneficiaries.