Pori­bor­ton in Ben­gal

The Economic Times - - The Edit Page - Neerja Chowd­hury

Three months ago, po­lit­i­cal pun­dits pre­dicted a run­away vic­tory for Ma­mata Ban­er­jee in the assem­bly polls, proph­esy­ing a 220-230-seat win for West Ben­gal’s feisty chief min­is­ter. To­day, as West Ben­gal goes to the fourth phase of polls, it’s an open elec­tion.

At the end of most con­ver­sa­tions I’ve had while trav­el­ling in and around Kolkata and in North 24 Parganas, I heard peo­ple say, “Ma­mata is los­ing ground but she may scrape through.” She is los­ing ground in the ur­ban and semi-ur­ban ar­eas, among the ‘bhadralok’. And there are voices against her in her own con­stituency of Bhawa­nipur, one of Kolkata’s 11 con­stituen­cies.

It is a de­fen­sive, not a con­fi­dent, Ma­mata Ban­er­jee in ev­i­dence, even as she fights back. Her ner­vous­ness was ev­i­dent when in a poll meet­ing she stated that had she known ear­lier of the Narada sting op­er­a­tion that ex­posed some of her party lead­ers ac­cept­ing bribes, she would not have given them tick­ets. ‘Narada’ took place in 2014, but was made pub­lic in March 2016 when the poll cam­paign was un­der­way. It is hardly sur­pris­ing that Ban­er­jee’s foes should make com­mon cause at this mo­ment.

Saradha, Narada, the Vivekananda fly­over col­lapse and the CPI(M)-Congress ‘joth’ (al­liance) have all taken their toll. To see the Congress flag aflut­ter on the gates of the leg­endary Alimud­din Street head­quar­ters of the CPI (M), and Congress leader Manas Bhuiyan share the stage with CPI(M) state sec­re­tary Sur­jya Kanta Mishra (seen as the CPI(M)’s chief min­is­te­rial face) speak vol­umes about the changed times. The pres­sure for an al­liance came from be­low, not im­posed from the top.

What­ever be the fi­nal out­come, the Left is on a comeback trail. The CPI (M) cadre are now com­ing out of the wood­work. The poll vi­o­lence speaks of re­sis­tance to the Tri­namool Congress’ dom­i­nant ways. If the Left makes size­able gains in West Ben­gal, and also wrests Ker­ala, it would strengthen the hands of CPI(M) gen­eral sec­re­tary Si­taram Yechury. He could well emerge as the ‘su­trad­har’ for op­po­si­tion unity in 2019.

In the last five years, Ban­er­jee tried to out-Left the Left. She ap­pears to re­tain the loy­alty of the poorer and ru­ral sec­tions across com­mu­ni­ties. The rick­shaw-puller, the agar­batti-seller, the tea hawker, the cy­cle re­pairer, they vouch for her. West Ben­gal pol­i­tics be­ing about class, not caste, she has emerged as the sym­bol of the sub­al­tern classes. Her pro­grammes for the poor, like .₹ 2 a kg rice, and ‘Kanyashree’ to en­cour­age girls to study, or bi­cy­cles to stu­dents — may be the buf­fer that shields her from the grow­ing sen­ti­ment for 2016 ‘pori­bor­ton’.

Two fac­tors will have a bear­ing on her fi­nal tally. One, the ex­tent to which the BJP pulls in anti-Ban­er­jee votes that would oth­er­wise grav­i­tate to the Left-Congress com­bine. The more stri­dent Prime Min­is­ter Naren­dra Modi is in his at­tacks on Ma­mata, iron­i­cally, the greater the pos­si­bil­ity of his help­ing her. The BJP may have played its cards ini­tially to make her more de­pen­dent on it na­tion­ally. But as the ‘joth’ has gained trac­tion, the BJP would now want her hand strength­ened. Even though the BJP had polled an im­pres­sive 17% of the votes in 2014, it missed the mo­ment when it could have cap­tured the op­po­si­tion space and gone for an ag­gres­sive cam­paign against Ma­mata, be­cause of its par­lia­men­tary con­sid­er­a­tions with re­gard to num­bers in the Ra­jya Sabha.

The sec­ond fac­tor is the di­vide that may take place among the Mus­lims, who add up to 29% of the elec­torate, and who had stood solidly be­hind Ban­er­jee in 2011when she had won184 seats. There are signs of some of them mov­ing away from the Tri­namool Congress to­day, with the more ed­u­cated and the en­trepreneurial Mus­lims ex­press­ing a de­sire for change. Un­like Mus­lims else­where in the country, in West Ben­gal, they do not have to con­tend with the fear of a ‘resur­gent BJP’.

One of the rea­sons why Ban­er­jee did not plump for a pre-poll al­liance with the Congress was the cal­cu­la­tion that a tie-up with the lat­ter would make her re­la­tion­ship with the Cen­tre very dif­fi­cult. A state govern­ment has to con­stantly turn to the Cen­tre for funds for projects. (This was also a con­sid­er­a­tion in Mufti Mo­hammed Say­eed’s de­ci­sion to ally with the BJP in Jammu and Kash­mir.)

If Ban­er­jee notches up seats up­wards of 175, she will con­tinue to call the shots in her party, and take in­de­pen­dent po­si­tions in na­tional pol­i­tics. If her tally dips to around 160, even though this con­sti­tutes a ma­jor­ity, the knives will come out for her within her own party, mak­ing her govern­ment vul­ner­a­ble. She will be caught be­tween a de­mand­ing Cen­tre in Delhi and an ag­gres­sive Left in Kolkata. The rise of dig­i­tal in­no­va­tors in fi­nan­cial ser­vices presents a big threat to the tra­di­tional busi­ness mod­els of re­tail banks. Banks of­fer ba­sic ser­vices, such as low-cost check­ing, and so-called sticky cus­tomer re­la­tion­ships al­low them to earn at­trac­tive mar­gins in other ar­eas, in­clud­ing in­vest­ment man­age­ment, credit card fees or forex trans­ac­tions.

To bet­ter un­der­stand how at­tack­ers could af­fect the eco­nom­ics of banks, we dis­ag­gre­gated the orig­i­na­tion and sales com­po­nent from the bal­ancesheet and fulfilment com­po­nent of all bank­ing prod­ucts. Our re­search shows: 59% of the banks’ earn­ings flow from pure fee prod­ucts, such as ad­vice or pay­ments, and orig­i­na­tion, sales and dis­tri­bu­tion com­po­nent of bal­ance-sheet prod­ucts, like loans or de­posits. Here, re­turns on equity (ROE) av­er­age an at­trac­tive 22%.

That’s much higher than the 6% ROE of the bal­ance-sheet pro­vi­sion and fulfilment com­po­nent of prod­ucts (such as loans), which have high op­er­at­ing costs and high cap­i­tal re­quire­ments. Dig­i­tal star­tups (fin­techs) — and big non-bank tech com­pa­nies in e-re­tail­ing, me­dia and other sec­tors — could ex­ploit this mis­match in bank­ing’s busi­ness model.

Across the emerg­ing fin­tech land­scape, the cus­tomers most sus­cep­ti­ble to cher­ryp­ick­ing are mil­len­ni­als, small busi­nesses and the un­der­banked: seg­ments sen­si­tive to costs and to the en­hanced consumer ex­pe­ri­ence that dig­i­tal de­liv­ery and dis­tri­bu­tion af­ford.

From “A dig­i­tal crack in bank­ing’s busi­ness model”

Hmm, there ees a poblem

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.