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s_praharaj
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Joined: 10/Sep/2006
Location: India
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Posts: 357
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   Posted: 03/Mar/2008 at 9:58pm |
Real danger to farmers are from private money lenders, not Banks.
Banks do not force the farmers to commit suicide. They simply do not give another loan when one loan is bad. This loan waiver will help the farmers to the extent that, they can get one more loan from Banks. By this time the farmers also know that the loan from Bank is not to be paid. Every 5-6 years they get one such opportunity, which goes bad right from the beginning in more than 75% of the cases. Once this loan is a NPA, the bank do not lend further. The farmer again goes to the moneylender and gets all sorts of harrassment.
Loan waiver is no solution to the miseries of farmer. Yes, its a temporary relief.
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Shashi Praharaj
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manishdave
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Joined: 05/Aug/2006
Location: India
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Posts: 1371
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Posted: 03/Mar/2008 at 10:04pm |
Originally posted by tigershark
it is positive for the psu banks they get npa back,but what has hurt sentiment is that govt interferes with business although the big question remains from where does the govt bring the money. forex reserves?? |
It is not just lona waivers. Deficit in fert subsidy/oil subsidy is going to much much much bigger than what ever is projected. Fertilizer prices are going up like sensex was going up in 2005. The way there is shortage of agri products, Fert prices will go up further. Oil price is known by everybody. Q is, is that going to change for better? No.
This budget is HIGHLY misleading. At the end of year books won't match.
There is always one source for funding. Burn Furniture(Disinvestment). And IMO this is going to happen. There is no other way. For govt. price doesn't matter. They can just increase Qty. It will suck money from mkt though and that may provide some excellent buying opp.
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johnnybravo
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Joined: 17/Jan/2007
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Posts: 533
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Posted: 03/Mar/2008 at 11:48pm |
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I plan to initiate an effort to form a group of working professionals who will lobby for Housing Loan waivers for the big middle class. We can promise to vote for PC/madam/pawar/deshmukh if that is done!
With this, PSU bank shareholders will not feel cheated, since the most envied hum hai na bank will also get affected.
How long can the govt ignore the ever growing middle class!
P.S. All those fat tummy holders who don't mind a day or two of fasting, can PM me...
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Saab Moh Maya hai!
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basant
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Joined: 01/Jan/2006
Location: India
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Posts: 18403
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Posted: 03/Mar/2008 at 7:07am |
Count me in. But can we have also agitate on a waiver for loan against securities. I have a few accounts on that?
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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deepakshenoy
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Joined: 16/Feb/2008
Location: India
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Posted: 07/Mar/2008 at 7:14pm |
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Well, the US government is trying exactly that, by getting some waivers to home loan borrowers. But there some of the hit is being taken by the govt. the rest is by the banks. They even changed the tax law to accomodate this (effectively any part of hte loan waived is income, subject to income tax, but they waived this as a one timer)
Loans against securities have been written off in the past, in India. But the kind of crash that is required to have a widespread waiver will need the Sensex to go back to 6000 and the Nifty to 1800...I'm not sure we want that :)
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kulman
Senior Member
Joined: 02/Sep/2006
Location: India
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Posts: 9319
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Posted: 08/Mar/2008 at 9:46am |
Two of the best columnists from the Sunday Times:
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Life can only be understood backwards—but it must be lived forwards
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basant
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Posted: 08/Mar/2008 at 10:14am |
| Imagine the staggering paradox — to turn a nation dishonest in order to win an election, and then go on and lose it! This is one irony that the UPA government might prefer to forget |
Excellent points of arguments.
Economist Surjit Bhalla says less than 5% of farmer loans to banks are overdue. If so, then the 95% who have repaid loans will not benefit. They will be angry at being penalised for honesty. The beneficiaries will include some of the truly distressed who merit relief, but will also include cynics who can afford to repay but have not done so, anticipating a waiver.
Chidambaram says the waiver will benefit 40 million farmers. This amounts to almost half of India’s 90 million farm households. But only a fraction of farmers have bank loans, and only 5% of these are overdue, according to Bhalla.
Going by this calculation, overdues should exist for only 2.25 million farmers. Overdues to co-operatives may be higher. Yet, it is impossible that half of India’s farmers are defaulters: bank experience is far, far better |
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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BubbleVision
Senior Member
Joined: 05/Aug/2006
Location: India
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Posts: 3142
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Posted: 08/Mar/2008 at 10:21am |
Originally posted by deepakshenoy
Well, the US government is trying exactly that, by getting some waivers to home loan borrowers. But there some of the hit is being taken by the govt. the rest is by the banks. They even changed the tax law to accomodate this (effectively any part of hte loan waived is income, subject to income tax, but they waived this as a one timer)
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They even did it in 2001 if I rembember correctly, when every tax payer recieved a cheque of $300 from the US Govt. Ofcource the Dollar was 50% higher than current level then against EUR.
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You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!
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