Bane of banning export of Agricultural Commodities

This is something weird every Government has done!

Since the prices of onion has hit a high, Government has banned export of Onions in the entire Country from 30 Sep 2019!! It is difficult to comprehend why the Government is unhappy with the farmer or the trader who seems to be getting a better price for onion! This is protectionism for the consumer at the cost of the producer.  This method of banning exports is also done in case of cotton.

What happens is when such sudden ban of commodities is declared, the agreements which have already been entered into for exports has to be reneged upon.  This would result in loss of trust on our exporters and consequently buyer countries would move away from India, some even permanently.

India Exports 2.2 million tonnes of Onion every year.. When there is a sudden ban, the markets in other countries also goes in a tizzy with spiralling Onion prices. In this price rise, the farmers of other countries producing onion will have windfall, which per se should have reached our farmers.  Double Whammy!!

While the Government is happy with the increase in petroleum prices (because it gets more taxes and cess) which is being imported, it is punishing the farmers by banning exports and also loses precious dollars. Why this Kolaveri!!! Just to protect the Urban Consumers...

Ideal thing for the Government to do would be to allow market forces to determine the prices and allow the farmers to profit, like how it profits in having higher Petroleum prices!

Will the prices of Onion come down just because it has banned exports?? I do not know!

By the way, Onion is not considered a nutritious component to make people weaker because of lack of its consumption.  Yes, it will make the food a bit lesser tastier! So what?  People who feel the pinch need not have their full quota of onion for a few days.

What say?

Late Latif - RBI

The RBI has become like a "Caretaker" of the Morgue in some ways.  For time immemorial, after all the frauds have been committed by top bank officials and after the owner of the bank has accepted that the fraud has been committed by him for last several years, the RBI steps in to do the last rights.  The last rights means appointing a set of its confidents as new Board Members to ensure that the bank is dissolved or merged with some other stronger entity, mostly by force.  

The Punjab & Maharashtra Cooperative Bank, Managing Director has today confessed that he has been committing the fraud of not disclosing NPAs (today it is 6500 crore exposure to one single entity - HDIL out of its total portfolio of 8800 crore) over the last 7 to 8 years to its Board, Auditors and RBI.  The total exposure is 73% of its total assets --- so much for RBI's Supervision and adherence to Exposure Norms.  That's a total failure by Board Members, Concurrent Auditors, Statutory Auditors, RBI Inspectors

Ultimately, it all boils down to the capacity of the Supervisory staff of RBI to identify such frauds.  Are they being professionally trained to do such forensic audit or are they totally dependent on the Statutory Auditor's Report who are ever compliant to the bank's demands lest they may not be given the job next time!!

My take is, the Home Ministry is professional enough to keep pace or move one step ahead of the terrorists and the Maoists in defeating their fissiparous tendencies.  However, the Ministry of Finance and the Reserve Bank of India do not even have a clue as to what types of frauds are possible in the messy world of Deposits and Credits in our financial systems.

Another meaninglessness in the circular of RBI in the case of PMC Bank imposting restrictions ban on withdrawals upto Rs.1000/- (which was later on increased to Rs.10000/- per day).  RBI has, in the interest of the depositors, has put the restriction on withdrawals.  However, in the same circular it has stated that salary of all staff has to be paid on due dates without fail.  Adding fuel to fire, it also stated that all Gratuity and superannuation benefits has to be paid to all those staff who retire even when there is a restriction on withdrawal by depositors.  What is the message that is conveyed?  While the bank staff who were party to the fraud or unable to stop this fraud will enjoy all the benefits, the poor depositors, with whose money the bank is being run, are imposed restrictions on withdrawal!!!  Is this even tenable during this age!!!

Time to Wake Up MoF & RBI!!

Two Steps Backward for the Environment

Six Single Use Plastic Items that were to be banned from 02 October 2019 in India were :

1. Plastic Carry Bags
2. Plastic Cups
3. Plastic Plates
4. Plastic Straws
5. Plastic Sachets
6. Plastic Small Bottles

The special day of 150th Gandhi Jayanthi was selected to impose the ban on use of the above plastic items.  This was purely to save our environment and our Prime Minister also made a statement of banning single use plastics in the UNGA.

However, it was unfortunate that the plastic lobby had a chest more than 56 inches to make the Prime Minister to withdraw this ban for the time being stating reasons of slow down in the economy.  

As Greta Thunberg said, money has won over the mind!!!