Banks jugglery can help borrowers out of debt threat


While banks are afraid of loans going bad, long term borrowers are pleading to accept their proposal to waiver some part of their loans.
Apparently the Reserve Bank of India (RBI) is coming up with some policy in April, so banks are in a wait-n-watch mode to see how favourable this policy is.
As per the Goa 2013-14 budget announcement, the state government has allocated Rs 139 crore for implementing schemes for the mining dependent people. The details of the scheme is yet to be known – whether it will be by way of sops, interest funding or interest sub-invention or subsidies is yet to be known, said a banker wishing anonymity.
However, the question arises on what happens to the existing loans. It is also generally felt that individual banks would probably come out with some kind of special package to rehabilitate the existing loans – so that the borrowers would come out of the debt threat.
The Chief Minister said that the Rojgar Yogna seems to be a good programme, but it depends on how the government would frame the scheme. Here generally the banks are averse to funding of financing projects where no tangible security is created. He also said that Rs 15 crore is allocated for minimum employment guarantee schemes, as this will give an opportunity for locals to get jobs.
Mr Virendra Prabhudesai, a Chartered Accountant said, “The CM, Mr Manohar Parrikar, also the Finance Minister of Goa, indeed presented a tightrope budget on Monday. Considering that the mining ban is continuing to hurt the Goan economy, one could not have expected much from this budget.”
The budget was surprisingly a very good one. The relief proposed to the mining dependent people to the tune of Rs 139 crore is most appreciated.
A lot of thought and consideration has been given to employment generation within the state. This will definitely benefit lot of Goan youth and young entrepreneurs. The taskforce to be formed to draft the Investment Policy which will be unveiled by May 30, is yet another step in the right direction.
In the area of VAT, the proposed VAT refund to foreign tourist will help local sales and boost tourism industry as well. Secondly, the concessional rate of VAT on locally manufactured handicraft items will give our local artisans an edge over the others and help them compete better. The proposed higher entry tax on contractors who do not purchase from local dealers will help boost local sales. The tax on housing projects of builders and developers which has been levied in the proposed budget may hamper construction industry and increase cost of housing further within the state, said Mr Prabhudesai.
Said another bank official, “In the budget, the CM has circumvented the debt threat. The concern is that he is not taxing tax nor is he depending on mining, he has moved into unchartered areas like entry tax, and others. He is centering on development of infrastructure in a big way like public private projects (PPP).
He is trying to move the bank assets (money that have been moved out of the state) back into the Goa system, or into areas such as infrastructure and other areas such as housing. [NT]