From governments to companies, the citizen and consumer is always facing the wrong end of the barrel
Everyone claims to fight for the rights and welfare consumers. But when it comes to guarding their interests? That is when you feel everyone may be skating on thin ice.
Last week RBI Governor Raghuram Rajan made an unexpected 50 basis point cut in rates. Given his tough stance against a cut, because inflation had not been fully tamed, his critics were surprised. Some even went ahead and said that it was a decision taken by the Finance Minister and/or Prime Minister and announced by the RBI Governor!
Banks have a reason to be happy. A cut in interest rates means leading can become cheaper and drive companies and individuals to borrow more. Little wonder, they were quick to react. Buoyed by the cut in rates, they have announced a cut in lending rates for various products.
Companies whose standing gyrates with interest rates – banks, finance companies, realty, consumer goods, automobiles and others – have been demanding that the Reserve Bank cut interest rates so that demand can pick up.
Unfortunately, banks have chosen not to pass the entire rate cut to their customers, leaving them high and dry, alone in their battle. Despite the tough words from the RBI, banks have managed to get away with what some call daylight robbery, adding to what is called the net interest margins – the difference in rates at which they borrow and the rates at which they lend.
It is the same story with governments. Citizens have been left high and dry on a number of issues.
The government of India’s most populous state Uttar Pradesh has hardly managed to present a creditable face on the issue of its resident being killed on the beef issue. Every political party has visited and met the family members of 50-year-old Akhlaq, when a group of people believed that he ate beef. But the politicking on the issue continues. The Indian Air Force (IAF), where Akhlaq’s son is employed has had to step in and move his family to a safer area, away from the prying eyes of politicians and frenzied mobs.
As Bihar goes to polls to elect members of the state Legislative Assembly over the next few weeks, the Janata Dal (United) government had been talking about development. That, ideally, should have resulted in jobs for the residents of the state and increased industrialization. As BJP and its rivals, the combine of JD(U), Rashtriya Janata Dal (RJD) and others, slug it out there is little mention of the issue of development. The election campaign has deteriorated to name calling and raising issues that appeal to the emotions of the masses.
Now, given the heated political exchanges, and the lack of mention of development issues, residents of the state cannot be faulted in believing that the development story may have several fault lines that could cost Chief Minister Nitish Kumar his chair.
A somewhat similar story is now brewing with the NDA government in Delhi, which was voted to power by the biggest popular mandate since 1984. The promise of jobs, development, transparency and fighting corruption has, definitely in popular perception, been relegated to the background. A policy move asking people to declare black money to the taxman by the end of September or face prosecution has been an embarrassing failure. The BJP had promised to bring black money back to the country, believed to be stashed in overseas tax havens.
Farmers in Punjab and Maharashtra are perhaps going through worst times. Exports have been slipping for nine consecutive months. Capital expenditure by companies, which could fuel the next wave of jobs creation, has vanished in thin air.
While several emotive issues take centrestage, the country will soon be restive for action.