Tuesday, September 29, 2009

Letters to Frontline-II

Subtle views have their own specialty to comprehend and rationalize the crux of matters. Present post is just the way forward in this manner... these letters have been emerged straight out of my concern with respective issues…

Budget2009 (August14, 2009, Frontline)
The Budget marks the shift of the second UPA government from the Common Minimum Programme to a programme of more liberalization. To infuse new hope into the economy it is essential to come up with a strategy that is suited to our own requirements of inclusive development instead of borrowing ideas.

Public banks (September11, 2009, Frontline)
The manner in which the Indian Banking Association acted towards almost ten lakh Public Sector bankers is a matter of grave concern (“Strike notice”, August14). The proposed merger of banks is another serious issue. It cannot be applied to the subsidiaries of State Bank of India and other nationalized banks as their business model is distinct from that of the Regional Rural Banks (RRBs). The IBA must opt for an amicable solution taking into consideration the genuine demands of the bank unions. The splendid performance of Public Sector banks in these adverse times and the implementation of the sixth pay commission report in various government departments make the bankers’ demand justifiable.

Afghanistan (October9, 2009, Frontline)
The United States has no exit strategy from its present more than half a decade involvement in Afghanistan (“Obama’s unspoken trade off”, September11). It is shocking that the military action is being prolonged by president Obama.
The United Nations must intervene to end this long, disastrous occupation and ensure swift justice for civilians. Members of NATO must think of the price they are paying for being the U.S.’ allies in its so-called war against terror.

(Atul Kumar Thakur
Ghaziabad, U.P)
September 27th 2009, New Delhi

Friday, September 25, 2009

Lessons from Lehmen Brothers Failure

Lehmen Brothers is no more ….Alas, September2008 was truly a black month that grasped such iconic financial giant from scene, even more such financial crisis that only occurred in a generation finally amounts the toll of institutional banking failures up to sixty-nine until now.
Impact of current financial crisis could be judged in retrospect as the most financially devastating after the Second World War; no regulators (including IMF) could timely foresee the actuality of potential situation despite possessing the thousands of economists battalion. Crisis broke out with the continuing fall in U.S home prices that relentlessly faded the price of Mortgage Backed Securities (MBSs); it had also hit those who insured MBSs against default through Credit Default Swaps (CDSs).

Consequently unrealistic returns that equity investors have expected to earn by taking the additional risk simply failed to materialize. If we got back to the actual causes of such large-scale failure, it becomes essential to distinct it between practice related causes and the causes emerged through institutional tempering in some core regulation.
Like former Federal Reserve chief Alan Greenspan had kept interest rate too low for too long time which led to negative sentiments; in1999 the Glass-Steagall Act of1933, which had prevented commercial banks from tying up with risky bets on securities had been repealed, further it curtailed the checks from any irregular financial practices. Even more, Securities Exchange Commission in 2004 relaxed the limits on top investment banks to leverage; so policy makers grossly exhibit the oblivious attitudes towards mushrooming of complex derivatives.

In extreme sycophancy financial regulators couldn’t became able to assess risks and also the inherent interest of financial market participant towards multiple market transaction which finally leads to excess volatility and state of chaos in financial sector across the integrated economies.
During that period of volatility, some regulators resorted to a ban on short sales to alter the movement of market, at least for time being. Albeit, that idea could not succeed as subsequent events and studies shows us in later course.Unlike initial observation of 2008, our engagement with western market is quite deep, so it was unlikely that we would have been completely saved from a financial crisis of mammoth proportion.

Liquidity arises as major problems of Indian financial sector especially the Mutual funds industry that were handled efficiently by RBI and SEBI. So, matter siege to growing in worse direction, although the Indian financial sector particularly Mutual fund industry keep witnessing the sluggish response of its business until the bad developments are halted at Dalal Street.
Despite relieve from slowdown it’s imperative for us to keep eagle watch on the development in the crisis strife markets to assess its actual impact in Indian market; the second wish list could be to bring as many as viable product to exchange traded markets, so the regulations will have better say on unrestrained myopic financial roots of investment.

Those who cannot learn from history doomed to repeal it that shows their failure ness to rationalize the unduly persisting greed’s; U.S.A Banks in large fails to learn such exercise. U.S economy roughly account for quarter proportion of world economy when its population only accounts for five percent.
It would be worthwhile to note that despite having such superb statistics America remains the largest borrower even from developing countries like India that shows the rampant artificiality in U.S core strategy; so bubble had to burst, so it has burst.

Bubbles followed by crashes are actually a recurrent theme in financial history (Tulip mania 1634-37, South sea bubble1711-20, the long Depression1873-96, Great Depression& Stock Market crisis 1929-32, Asia/ Russia/ LTCM crisis 1996-98, Dotcom Burst2000-02 and current crisis 2007…?); the impact of the present crisis was exacerbated due to a vicious circle of defaults and liquidation…and indeed also through bandwagon mania.
Innovations is always desirable in financial domain only a distinction is must between innovations like technological up gradation and complex derivatives because the ability to use derivatives to speculate, create off balance sheet positions, increase leverage, arbitrage regulatory and tax rules… and manufacture exotic risk cocktails will continue to a major factor in derivative activity.
Tectonic shift that we need in financial market should come as meticulously crafted process instead through push-button methods that would require clarity on the goal of financial sector reform. For the time being, it is quite essential to reduce the unintended consequences of financial meltdown like spiraling inflation and increase in western government’s debt & budget deficits.
Escalation of top-notch officials in American financial circle is not a right step forward instead; a utility-based pay scheme should be approached in banks and other financial institutions that would lessen the hassles from exchequer. Keynes came back in fashion…so government should ensure employment first; like NREGS (India) was implemented much before the downturn of economies.

Now it would be quite blissful for nations to appropriate fine mix of socialism and capitalism as it was conceived by the India’s first Prime Minister J.L Nehru for India’s planned development.
Also essentially we should carry on the teaching of our grand mothers on practical financial behaviors, so we become able to avoid gaining $613 billion dollar debt on iconic bank like Lehmen Brothers( Whom we commemorate our adieu presently) as policy makers. Ultimately quotation of Charles Dickens, (Literary protagonist of Great depression era, from his magnum opus work” Great Expectations”); that “we have every thing before us and we have nothing before us “…it’s up to us how we visualized the things.

Atul Kumar Thakur
22nd September2009, New Delhi

Friday, September 18, 2009

Indian Model of Financial Services

It has become fashionable in this country to believe that anything to do with financial services has to be made in America without being aware about the ground realities. As the world commemorates the first anniversary of collapse of legendary Lehman Brothers, it would be vital to memorize that India was one of the few economies where banks and other financial services didn’t felt similar trouble; the cause were very simple that regulatory regime in India never shown leniency for unethical practices.
RBI has been consistently monitoring the situation since credit bubbles start in western and some leading Asian economies half decades ago; Indian central bank timely acknowledged the difficulties ahead and so never let allow banks to deal in exotic or toxic financial instruments. Credit delivery structure in India has stark differences from U.S.A or any other western economies; here in India banks follows well placed collateralized support for all commercial lending that minimize the risk of non performing assets.
There is utmost need to understand the Indian point of view to appropriate any functional change in financial system; context out rightly matters in any specific change in a system, like nationalization of banks in 1969 by the government was a prudent initiative from India’s own perspectives but quite astonishing from western point of view as they considered than it as a sheer humble effort of a languishing economy.
But now the landscape is entirely shift and leading policy makers from U.S.A, Vis Joseph Stiglitz, Henry Kaufman (Former board member, Lehman Brothers) necessitates on the better regulation and rationalization of the bank’s size. Indian economy being the second growing economies of the world should avail its edge of financial services which all is in well shape and naturally growing under the regulatory compliance's but still some policy makers in India couldn’t foresee the forward development in appropriate sense.

The Committee for Financial Sector Assessment, the high level RBI- Government of India’s joint assessment group came out with its conclusion that “Financial soundness indicators” like capital adequacy, asset quality and profitability of Indian banks were found in good state at the end of last year. As per the Basel Standards the Capital to Risk Weighted Asset Ratio (CRAR) of banks that’s a required amount to incurred unexpected looses should be maintain at minimum nine percent.
The CRAR for all Indian banks except two (One an old private bank and the other a foreign bank) stand substantially higher than the recommended minimum and also steadily improved over the years. Capital adequacy in the PSBs as group is itself stands above the norms; it was an average of 12.5 percent as of March2008.

In spite of witnessing such conducive fundamentals, officials in finance ministry is making exercise to flee to World Bank for merely three billion dollars loans to recapitalize the Public Sector Banks that seems quite shocking since there are several options are available within their own ambit.
Foreign exchange reserves must be a most reliable source for the government to fulfill its obligations; this way the banks would have recapitalized and they remained in government. China did same with such options even though their requirements were quite high from India, surely such options be less expensive and without any conditions.I again stressing on the potential imposition of conditions from World Bank following after such conceived materialization like, consolidation of banks, abrupt liberalization in their specified terms and conditions which may left many adverse repercussions.

Any major policy initiatives in India must be free from any external pressures because we can judge our requirements best in our conditions. In last two decades Indian financial sector has been witnessing a gradual and regulated liberalization which may remain bone of contention even in further time.
Consolidation is another matter that must be seen in the light of genuine perspectives; U.S.A’s biggest bank is tenth time bigger than India’s largest bank albeit that not guarantee the performances as we have witnessing sixty nine failures in American financial services till now and many more in future. We have many options to follow the Raghuram Rajan committee and Percy Mistry committee on financial sector reform rather than becoming entangled with external institutional pressures.Complexities could never be an ideal condition, so a comprehensive way would always be an imperative; we can come out with many innovations like adoption of consortium finances in place of unnatural consolidation and liberalization with ongoing regulatory norms. So, at the moment our hand is not tight only we have need to priorities the potential propositions.

Atul Kumar Thakur
17th September2009, New Delhi

Magic of Indian Ocean Band

In the month of March this year, British council division of New Delhi arranged an alluring musical evening with Indian Ocean Band that fetched lot of delights for music enthusiasts especially for them who have meaningful leaning towards their roots. Fortunately I had an invitation for this evening which was a precious gift for me since it granted me a chance to feel the unusual charms of this one and half decade year old innovative band through live presentation in India’s most prolific central business district area (Cannought Place) .
Persons of all the age and reputation besides nearby standing giant concrete structures, all could sensed and thrilled with the meticulously woven expositions of musical numbers that all prepared through long extensive research and innovations by its team across the world and beyond lingual fortifications.
Asheem Chakravarty, percussionist and vocalist of Indian Ocean said “A lot of people think that we are an issue based band, it’s wrong, we just sing with motives to change the peoples, no body has even been able to change the world”. Indian Ocean band stands with such pious motives and spiritually striving to connect peoples especially Indian to their roots with eternal soundness of proposition.
Band has a lot of spiritual elements, people like this because it’s spiritual appeal that is markedly distinct from any particular religious fervor. Indian Ocean acknowledge the characteristics of mood, so it posses lot of diversity from special Bhojpuri number (Hille le Jhakjor Dunia) composed by Gorakh Pandey to soothing prayer in Aramaic language “Kandisa”.

Songs like “Maa Rewa” influenced by the folklore of central India which was composed for the cause of Narmada River. There’s most popular and soulful number “Bandey” stuffed with the intricacies of intelligent lyrics, entrancing guitar and percussion; “Jhini” carries Sufi elements in its infectious composition, on the other hand number like “Tum abhi se dare ho” (Composed by Pakistani poet M.M. Rashid) unleash their humane concern and worries towards insensitive political practices.
In the end of programme Rahul Ram, bassist and lead vocalist went into an enjoyable “Jugalbandi” with Amit Kilam, the drummer. Ram played the bass guitar while Amit matched him with his gub gubi; Sushmit remained superbly consistent on guitar throughout the show. Indeed listening Indian Ocean leads music passionate to the voyage of supreme spiritual destination that seems both satisfying and adorable.

Concepts on which Indian Ocean are active is an outcome of its team members integrity with the causes and standpoint they stand for; they have vision for unified social order with close proximity to their cultural backgrounds. Very few people may have awareness about the academic backgrounds of these four persons; Rahul Ram the lead vocalist and bassist had done his doctorate in Toxicology from California University, so is the case with remaining team members, they all are educationally proficient and knows its application very well to harness theirs cosmic vision.
Emergence of Indian Ocean band has revitalizes the practices of meaningful themes in musical arena and caused for supreme transcendence's of enthusiasts. Although magic of this musical group has emerged from Bengal albeit whole cosmos is its ambiance.

Atul Kumar Thakur
September17th 2009, New Delhi

Wednesday, September 9, 2009

Material Planks in India-China Relations

India-China seems very similar in many trajectories like both countries had faced monarchy and later western imperial pressure in the past but surprisingly they emerged with entirely distinct ethos. China opted for socialism along with classical way of statecraft and diplomacy where words used to obfuscate the real intention; like its projected insistence on border issues which creates complexities in relationship with India.
Most strikingly China didn’t recognize the Mack Mohan line (Excerpted from its official minutes) and further kept denouncing the promises made by their statesmen like Zhou Enlai and others on strategic mutual agreements with Indian authority.

Consequently there never formed a unified perception on India-China relationship either in India or China. So, at least initial years showed very gloomious outcomes for both the country just after successful experiments with their respective mode of political system in late nineteen forties. Its matter of fact that apart from its dubious standing on foreign policy China has been showing a deliberate progressive development in their internal governance under visionary leaderships that stimulated the growth pattern of its economy.
Albeit these not remained consistent in equitable manner following an institutionalized pattern of corruption and denial of basic rights like freedom of expression and independence of press or fourth estate as it is called usually.

Unfortunate Tienmen square incident was much at par with such repressive state policy; China’s internal conditions are very different and fragile from an outsider’s perceptions of its might and prosperity. Today China facing huge resentment of its civil society and media over the atrocities they impose on rudimentary natural rights; an alluring example being vivid in my mind how peoples acted differently from Chinese government.
Recently China’s Central TV (CCTV) came under the fire and very outlandishly there was huge joy among the media persons including staffers of this state owned Tele Vision since they became overloaded with its biased view with the government authorities.

Chinese authorities out rightly denied such basic rights and any other similar claims like introduction of multi party democracy in socialistic pattern; a senior party leader had recently refuted such any propositions in near future.
So, China have very stringent consideration on its own insistence both at home and the world; such impatient with others view presents major hurdles for any constructive maneuvering.
Case is somehow very different in Indian side where its immaculate ethos has very strong constitutional backups with absolute democratic formulation which radically marked its difference with dogmas of Chinese system.

In its part India have been sharing very patient relationship with China though always gained complex and improper reply in their deal, so it’s remain a daunting task for even an expert to completely comprehend the transcendences of China’s world view. Explicitly Chinese authorities on many instances shown its uneasiness over India’s emergence in recent decades as they respectively supposed themselves more developed in economic and strategic terms, so never want any comparisons with India since they found only U.S.A, Japan and erstwhile U.S.S.R as their optimum comparable force.
China performs dubious role in foreign policy not only with India but its acknowledged partners like U.S.A as sometimes its called for G2 (China and U.S.A) as drive of aggressive foreign policy but also soonly refuted it.

Even despite being too much integrated with American economy China could visualize the fall of Wall Street as great news and see all such troublesome outcomes as an opportunity and a shift of Geo-economic scenario , so dealing with China indeed requires a cautious approach to handle such fluctuating policy. It’s completely outrageous policy of China where they wish to rise albeit refusing to trust others standing at their feet.
At every level of diplomatic move its foremost challenge before India to constructively engage China in their relationships that may be possible through harmonization of nationalism in both the country. Also both country needs to comprehend their power since conditions are now more balanced as a feeble India and mighty China like of ground realities are no longer exists. So China couldn’t undermine India now and think for India to breakup as they think in 1960’s as many complexities of power equations are becomes historical now.

China-Pakistan equations are another issue that bears great implications for India-China relationship because India seen at center locus by the Chinese government during framing its propensity of strategic ties with Pakistan. China puts their best commitment for Pakistan and India remains the strategic determinant for this albeit it’s also a counter reality that despite such efforts Pakistan is more dominated by the U.S.A than China since their Arm forces sustain on U.S dollars instead of Chinese Yuan.
On the issue of border problem with India, it would be quite asymmetric to conceive that it’s an outcome of India’s position on Tibet instead these policies started long before the Tibetan stalemate. Indeed Tibet should be a matter of concern more for China than India because of historical and geographical similarity but India let continue playing their humanitarian role with the sufferers of Tibet.

China recently professed that Dalai Lama has no role to play in peace negotiation which means now he ceased to be the representative of Tibetan peoples that is in itself a showpiece of China’s fragile and confused policy on such crucial matters. India has firm standing on its foreign policy which allowed it’s to show genuine concern to strife ridden peoples besides it’s also striking co-incidence that historically Tibetans has always showing their faiths in outsiders, so Indian role on Tibet must not acknowledged and confused as an act of intrusion.
Internal scenario of China presents confused and fudged picture for outsiders since hardly it’s provide impartial circumstances of introspection; noted author and journalist Prem Shankar Jha’s book on China “Managed Chaos” vehemently unleash such fabricated trends of Chinese development.

Despite all such odds India and China can strive for good deals on economic co-operation, it’s evident from historical enquiry that economic co-operation has reversed the chronic political stalemate between many countries. Besides both has superb presence at world politics and facing many common challenges like terrorism, economic slowdown, communalism etc, so at numerous level both countries has options for better co-operation that must finally up heal the Asian growth.
India’s bid for permanent seat in United Nations Security Council is a crucial issue where China’s constructive intention could boost the Indian claim which may ushered into a new paradigm of relations.

Both countries are highly integrated to world economy and can move for great symbiotic ties by manipulating Indian software expertise with Chinese hardware edge. India must keep availing the mid path theory of Confusias and Buddha…. Consensus is possible even between the stark divergent sides.
Like India’s first Prime Minister Mr. J.L.Nehru who once gifted with a Panda from Chinese president Zhou Enlai in his China’s visit, some months later Zhou Enlai visited India than he got a healthy dog from Mr. Nehru; but real story is ahead when Mr. Nehru visited next time to China he asked for well being of his gifted dog… reply of Zhou Enlai was it was quite tasty. These means diversions can make things more interesting like these unusual incidences.

Atul Kumar Thakur
September 8th2009, New Delhi

Must Innovate but Cautiously

Recently I have attended many events on entrepreneurial innovations including last one at FICCI (8th September, New Delhi); the theme of conference was Making India an Innovation Hub, which was quite noble from the perspective of spurting faith in entrepreneurial potential in the country. Indeed innovation is imperative in every domain in life since it has creative bearings over a potential target, so it’s a sort of energy that’s capable to harness the skills along with imparting conduce ground for entrepreneurship.
Without even a bit of hassle it could be said that presently Indian business seems badly thirsty for the drops of innovation; India being a billion plus size country with its sub-Saharan infrastructure erstwhile remained focused on conservative and cumbersome path of development which normally came out with many depressive impediments.

Choosing the path of mixed economy, Indian economy have been consistently coping up with ideological fractions in political- economic circle that caused for its sluggish development until ushering into phase of liberalization in early nineties, somehow in compelled situation.Crux of the matter is either Socialism or Capitalism let allowed a national economy to grow in its fundamental fervors unlike the Indian experiment with mixed economy which with many languishing political decisions remained standing in bizarre situation.
Any way it doesn’t mean to say that concept of mixed economy was proven failure in Indian circumstances instead its maligned political handling that undermine the potential growth of Public sector enterprises which further dampen the socialistic temptations of economy.

Despite such frills some Public sectors enterprise have proved their worth; performances of Public sectors banks including Regional Rural Banks (RRBs) could be counted in these lists as they more or less remains unaffected through global financial crisis. Here it may takes into long introspection that how these banks remain unaffected?
But a simple answer could be that these banks were less integrated with the fluctuating global businesses albeit it wasn’t an innovation or any counter of such propositions; it was merely an act of inaction regarding the myopic financial routes like hedge funds and other derivatives product that finally saved them from losses. Sometimes inaction is better than action as in this case but that approach shouldn’t be germed in minds for all actions.

Some time back,United Kingdom released the Turner’s review report on financial meltdown which lay out the main themes behind the acute financial failures in western countries.As per the report that mechanized experiments in the name of innovation and blind move for creating bigger entities was the major cause of failures for financial sector players in Europe and U.S.A. Joseph Stiglitz expressed similar contention that bigger entities needs bigger supervision and regulation without having such backups sometimes makes business vulnerable for failure; of course efficiency maters more than the giant sizes of a business entities in most of conditions.
A true innovation can be panache for empowerment of its practitioners besides fuelling growth in productive activities; there are many subtle experiments in our daily life that deserves more proper consideration for its institutional and professional advancement from the respective policy makers.

Persons like Prof. Anil Gupta (IIMA, National Innovation Foundation, SRISTI and Honey Bee Network)is doing exemplary jobs to conserve and retrieve the extinct traditional knowledge and infuse lease for curious observations from bottom of pyramids. Campaign like Universal Financial Access (UFA) evangelizing by eminent banker Mr. Sanjaya Bhargava and others like minded peoples for attaining the goal of complete financial inclusion in early next decades, its theme (Billions through innovations) presents a sanguine picture for innovation that reflect the rosy outcomes of innovative thoughts.
It’s quite alluring to feel that Mr. Sanjaya Bhargava has entered in such arena after leaving his phenomenal stint in City bank where he heading for corporate charges that have very few similarity with such grass rooted and non-profit movement; he is a man of focus and he deserves applauds for such though innovation.

Mr. Mahendra Pratap is next name (President, iMFAST and co-founder NCR Tech Group) in this series; he is similarly the doyen of innovation who relentlessly keeps striving for technological innovation in Indian financial sector with motives to spread its easy reach to the common masses. Spreading of ATM network including with some bio-metric applications, electronic payment to workers of NREGA, door banking, mobile banking,24@7 banking etc are some outcomes of meticulous innovation that maximizing faith in financial inclusion movement.
Innovative ideas in thoughts, services and action are very essential for encouraging and rationalizing socio- psychological perceptions and its development among the all age groups since innovation hardly need any specific age to materialize. Like many other positive ideas, an innovative proposition also requires some rudimentary cautiousness that must be followed to avoid any future chaos; what we have witnessed through financial sector failures in U.S.A and all over the world. Positive restraint would even enhance the capability of an innovation… we must deliberate under our own imposed disciplines that would further take us into an ethical level playing field.

Atul kumar Thakur
September9th 2009, New Delhi

Thursday, September 3, 2009

March of Universal Financial Access

Debate is still in full swing for attaining the goal of financial inclusion in stipulated time-frame to usher India in a new age of institutional finances. The rudimentary goal of financial inclusion in Indian perspective is very compatibles with the long sought-after necessity of expanding institutional financial services to the unreached segment of society. It would be imperative here to see that despite witnessing spectacular success with regulated inclination of Indian financial sector still a considerable pool of population is out from its core ambit.
These financially untapped common masses are not only missing the access of formal banking services but they are also deprived from a proper entitlement which eventually outpaced them from mainstream and leads them in the trajectory of exploitative money lending markets.

Such conditional fall leads them to the financial viciousness and alarming indebtedness that altered the course of their lives; for checking these sorts of unfortunate developments, institutional financial delivery at rational interest rate would be a plausible panacea. As the maladies of indebtedness being evident among the farmers, it’s an urgent need to combat these problems on two different front; first to raise the reach of institutional financial services among untapped groups with avoiding the practices of exorbitant charges as some of Micro Financial Institutions (MFIs) are indulged in similar practices and second to offer timely credits for productive purposes instead for consumption.
Models of Regional Rural Banks (RRBs) and co-operative banks could be the fine example for newly emerging Micro financial institutions by lessening their operating cost through technological innovation and adaptation to local conditions and wisdom of practices.
Movement of Universal Financial Access or UFA is a very comprehensively shaped idea that drawn and being propagated by the distinguished banker Mr. Sanjaya Bhargava who left his illustrating full time career for activism of financial inclusion. The basic idea of UFA is meticulously woven for the conditions which are frequent in bottom level of banking practices in India.
Today lack of entitlement primarily fuelled by the low penetration of formal banking and other services among the marginalized section especially in rural areas. UFA movement is trying to bridge the gap between actual demand and supply scenario by tracing the operational loopholes in existing Micro financial institutions and retrieving solutions for better materialization of financial inclusion.

Indeed the conceptualization of financial inclusion by UFA evangelist introduces a new chapter of innovation in Indian financial sector entrusted with broad welfare aims. The drive for universal financial access becomes more vital especially it’s concern with languishing fortune of farmers and others from the bottom of pyramid who grossly left untouched from the great Indian growth story, so its focus area is adverse tantamount generated from unequal growth agenda.
UFA stressed for appropriating technological innovation in the operational domain by the financial institutions in rural areas to curb the cumbersome expense on its service delivery. Revolution in Telecommunication sector is the finest available example before the financial institutions to spread their products at affordable price in hassle free environment.

Consequently with such approaches Telecommunication today enjoying the most respectable position in Indian business and its bullish impact could be visualized any where,spectacular monthly addition of four million subscriber bases with growing Average Revenue per Users(ARPU) rate signaling the makeshift of a sluggish sector into a full bloom arena.At policy level government is too looking serious to attain the goal of financial inclusion by lending directives to Reserve Bank of India,to accommodate the hitherto unbaked persons.
Social schemes like NREGA, Indira Awas Yojna, Self Help Groups etc;are helping the conducive proceedings of financial inclusion plan since the all transactions has to be dealt only through the banks now that giving a lease for institutional financial awareness.

Unique Identification Programme (UID) is an other initiative of government under the visionary chairmanship of Mr. Nandan Nilekani, to end the identity crisis among a large chunks of population who hitherto were not able to avail the benefits of institutional support as they were lacking to fulfills the Know Your Customers(KYC) norms and other hassle full obligations. Previously the only exceptions were the Regional Rural Banks (RRB) & Co-operative Banks as they actively used to practicing the Different Rate of Interest Schemes (DRI) to weaker sections with no frills account services.
Comercial banks including Private sector banks & privately MFIs have to go a long way to come as par the endeavour made by the RRBs & Co- Operative banks through their rural focused & exactly need based services to cater the aspirations of Common Men (Aam Aadmi).

This is the prime area where the UFA movement can persuade to new age players in financial sectors for making action on many previously drifted approaches ;so, first of all it is most essential to be pragmatic on rural India’s needs and than making such effective efforts to contain the handicaps of attaining the full scale financial inclusion.Movements like UFA has greater bearing for the plights of small house holds who involves in unorganized sector and largely defunct from any institutional favour for their basic financial needs.
At this point, rural India’s today needs big push from all sides as the rural hinterland craves for basic facilities & proper opportunities that forces there dwellers towards upward migration in bigger cities; for maintaining equilibrium of prosperities (growth & effectiveness)these area must be given their due.

Financial Services has to play a major role in further development of rural India since investment in different domains going to play catalyst role in economic activities and productions. A grass root effort of spurting entrepreneurship can effectively address the rural areas .
A country like India with billion plus size of population could hardly underrate the importance of its primary sector; so, it should be the foremost aim of any noble initiatives like Universal Financial Access (UFA) to spread the word for saving the villages from despair and infuse hope in these core areas through ensuring basic facilities. Lot of wishes for UFAs like phenomenon movement … hope this movement would relentlessly strive for a vibrant ecosystem that may forward financial inclusion ahead and increase access to financial services in India in very democratic manner.

Atul Kumar Thakur
September2nd 2009, New Delhi