Lynchpins of ecosystems Accountability of banks Radical reforms
With reference to the very topical “Don’t let the buzz die” (October 29), the contribution of insects to human survival has long been recognised. Insects are the lynchpins of many ecosystems. After bacteria, they constitute the second largest species. Insects play a vital role in pollination and make it possible for us to eat many types of fruits, vegetables and food. Our major food crops require pollinators and insects play a crucial role in this. Since India is a tropical country, the value of insects pollinating our crops will be far higher.
Approximately 60 per cent of birds rely on insects for food, 80 per cent of wild plants for pollination. Insects—including wasps, flies, beetles and butterflies—fertilise many of the 100 crops that provide 90 per cent of food supplies. They provide a free service estimated at $153 billion a year to the world economy. If they disappear, ecosystems will disintegrate. Many are pollinators and they ensure the transfer of pollen in or between plants so they reproduce. Others are prey for a variety of wildlife or are predators of others. Some are decomposers of organic matter. We do not know what the tipping point is but when we do reach that phase and not in the distant future when numbers decline plants will go un-pollinated and die fruitless. The UN, in a report last year, said declines have been detected in various parts of the world and that possible causes include habitat loss, pesticides, pollution, invasive species, pathogens and climate change. It stressed the importance of protecting pollinators to ensure stable fruit and vegetable output, amid concerns over the challenge of feeding a growing population in future.
H N Ramakrishna Bengaluru With reference to the aptly titled write-up, “Bank recap: Band aid for cancer surgery” (October 30), Debashis Basu hits the nail on the head by superbly tracing the footprints of what truly ails our public sector banks. No wonder then that he strongly opposes the government’s latest move to “recapitalise” our unimaginatively nonperforming assets (NPA)-stricken banks in an unprecedented manner to suitably enhance their lending capacity and thereby help creating an investment-oriented atmosphere that is so necessary to spur economic growth. However, the success of the Centre’s latest “generous” move— which entails ~1.35 lakh crore of recapitalisation bonds, ~58,000 crore of equity raising by these banks from the market and ~18,000 crore of equity infusion by the central exchequer—may remain suspect.
One tends to agree with Basu when he seeks a clear-cut demarcation of the roles and responsibility of the government (as public sector banks’ owner) and their managements, which are well known for professional incompetence, largely following the self-serving path shown by the powerful political lobby and being dogged by some personalised instances of deep-rooted corruption. No amount of equity oxygen can take the NPAs-ridden public sector banks out of their financial ICU till they are insulated from government intervention in their day-to-day policy matters and the respective managements are held accountable for professional inadequacies. Reasonably speaking, “perform or perish” should be the key watchword.
Vinayak G Bengaluru With reference to “A gathering cloud” (October 30), it is high time the government looked for more radical reforms in banking, especially public sector banks (PSBs). The proposed recapitalisation of PSBs will augment the capacity to lend. But their functioning needs an overhaul to eradicate deep-rooted inefficiencies and emphasise on accountability. Resource mobilisation and its deployment are equally crucial to ensure healthy banking.
While policies are being framed based on broad guidelines of the regulator, it isn’t uncommon to see violations meant to accommodate big-ticket borrowers at the behest of politicians and bureaucrats. The debt servicing capacity of big corporates has been compromised resulting in piling up of non-performing assets. Asset creation and maintaining asset quality is essential for reasonable returns. More professionalism is needed around delivery of credit. Within banks micro-management of credit is crucial to ensure the health of loans. In the wake of divergence in reporting the quality of the assets, the Reserve Bank of India must look to strengthen supervision of the activities of lenders. Without need-based infusion of capital reviving the health and growth of public sector banks cannot be restored.
VSK Pillai Kottayam