SARADHA SCAM !!!

An Agent of Saradha Chit Fund Company:- Look at me, Sir! At present, I am earning around 40,000 INR per month and that too in a rural village of Bengal. Even the experienced LIC agents don’t earn that much money in a month.

A reputed Headmaster of a village school of Bengal:- How are you becoming so rich?

An Agent of Saradha Chit Fund Company:- If anyone invests around 2 lakhs INR in Saradha Company for 6 months, then he will get 4 lakhs in return after 6 months. As that person has invested 2 lakhs through an agent like me, so, as an agent, I will get 30% commission on the invested value of my client. That is; I will get 60,000 INR for any investment of 2 lakhs INR. Become an agent of our Saradha Company and also invest some money in our company. Within a year or so, you will become a rich man. 

A reputed Headmaster of a village school of Bengal:- Ok! I will join Saradha Company as an agent and I will also invest some money in this Chit Fund Company.

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A Farmer:- The Headmaster of our village has invested around 4 lakhs INR in Saradha Company. Now, a headmaster is not a fool to invest such huge money in that Chit Fund Company. After all, he is a learned person. We will also withdraw major portion of our savings from several PSU Banks to invest in Saradha Company.

A Labourer:- Yeah! I will also do the same. Even, I will tell my wife to withdraw some money from their SHG Account in a PSU Bank and invest the money in Saradha Chit Fund Company.

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A retired teacher of a primary school:- I want to withdraw all my fixed deposits from this PSU Bank. Even, I will withdraw 90% of the money from my savings account. This PSU Bank is giving 9% interest on Fixed Deposits for 1 year. Look at Saradha Company, they are doubling the invested money within 6 months.

A staff of an PSU Bank:- As a primary teacher, you have no idea about Economics as well as about Indian Economy. Not a single company can give you such a high interest on Term Deposits in this scenario of global recession. Anyway, you can withdraw all your money from our Bank. 

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An MLA of a Panchayat of Rural Bengal:- Invest in Saradha Group of Companies. Saradha Company has made Bengal proud. Bengal Government will give all types of support to Saradha Company. Saradha Company has created so many employments in Bengal. If you invest in Saradha, you are not only doubling your money, but, you are also generating new employment.

Villagers of Bengal (while applauding):- Baah! Baah! This new Bengal Government is really doing wonders for us. We will invest in Saradha. 

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A top leader of a political Party in Bengal:- We need some more funds for the upcoming Panchayat Election of Bengal. Don’t forget that due to our support, your company has been able to get complete clearance from SEBI. 

A top shareholder of Saradha Group of Companies:- The cost of operation of Saradha Company has increased by so much that we are unable to siphon out money for your political party anymore. 

A top leader of a political Party in Bengal:- Accha! Ok! Now, we will see how Saradha Company exists.

A top shareholder of Saradha Group of Companies:- If your party does anything silly, then our boss will disclose everything about your party workers. It will hamper the image of your political party before the upcoming panchayat election. 

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A staff of an PSU Bank:- The retired school teacher of a primary school tried to commit suicide. Even some agents of Saradha Company has committed suicide. One agent got murdered too. Really, rural people are so greedy by nature and that greed factor has ruined their life now.

A Common Person of Bengal:- Not only Saradha; there are other Chit Fund companies too which are doing illegal business. MPS Greenery, Rose Valley, Kolkata Electricals, Tower Group, Alchemist, Sahara and Prayag are under the suspicious radar of SEBI. These Chit Fund Companies failed to get any response from urban areas or towns, but, they tapped the rural market very well, as most of the villagers are illiterate in Bengal. Chit Fund Companies are basically the Cheat Fund Companies.

An Income Tax Officer:- But, many agents of these Chit Fund Companies have earned too much money. Most of them have not kept those money in any bank account but kept it hidden somewhere. We are planning to do surprise raids at the houses of those agents of Chit Fund Companies. But, one has to accept the fact that Bengal economy got ruined again and all the other states are laughing at Bengal after seeing such an unhealthy and feeble skeleton of Bengal Economy after the famous “SARADHA SCAM”.

REGENERATE REVENUES AND EASE EXPENDITURES !!!

Giriraj:- GDP growth of India came to its lowest point since 2008 at around 4.8% in the last half of 2012. Therefore, the industrialists, economists and politicians hinted about some economic reforms in the Budget of 2013-14. But, 2014 is a very crucial year for the UPA-II government as several scams and corruption have already ruined the image of Indian National Congress. Therefore, Chidambaram had no other options than to play some defensive shots to draw the match on the 5^th day instead of getting out in the 2^nd innings of the Test match by playing rash shots.

Meghdoot:- Chidambaram played the seam bowlers very well on a bouncy pitch. On one hand, he has not given too many advantages to the foreign companies, but, side by side, he has hinted that without some sound investments of the private sector companies, it is difficult to have a healthy GDP growth of Indian economy. Finance Ministry has allocated 10 billion rupees for ‘Nirbhaya’ fund. The Delhi gangrape of December 2012 compelled UPA-II to do something for the rape victims. But, where from this new expense will get adjusted?

Arindam:- Are you earning more than 1 crore rupees in a year? Then, you have to pay 10% surcharge on your income. Only around 43,000 taxpayers in India have their annual income over 10 million rupees. Are you a chain smoker? Don’t worry; you just need to pay some extra bucks to buy cigarettes. Pay more money and become a cancer patient. On the other hand, the tobacco companies like ITC will increase their PAT. As their PAT increases, the extra increase of corporate taxes and other excise duties will automatically increase the revenues of Indian Government. Dividend distribution surcharge got raised to 10% from 5%. 

Chandramukhi:- Ok! We understand that by increasing taxes and surcharges on certain things, the Indian Government can manage to do some expenses. But, still, the fiscal deficit will increase if you look at the recent allocations. Allocation of 330 billion rupees for rural employment schemes! Recently, we have found out that several panchayat samity members are taking around 10% commissions from the labourers for each 100 day work they do. So, is it not just an increased allocation to make panchayat members richer? 273 billion rupees for Sarba Shiksha Mission! Can anyone provide me the statistics how many villagers have really become literate enough? How many villages really get the benefits of Sarba Shiksha Mission?

Meghdoot:- You are going in too much depth. Everyone knows that around 30% of the funds of these schemes are really wastage. We can’t help it. India is yet to have a systematic top-down efficient monitoring system in its Panchayati Raj. What has Chidambaram declared for the infrastructure of our domestic sectors?

Giriraj:- Nothing so significant in this budget. But, yes, SIDBI’s refinance capacity has been doubled to 100 billion rupees. Even the Rural Infrastructure Development Fund corpus got raised to 200 billion rupees. Why 140 billion rupees got allocated to PSU Banks for recapitalization? Banking Bill has passed. Bipartite settlement may take place in 2013 itself. Mergers may happen for several PSU Banks. Then, why such allocations have been done in this budget?

Arindam:- Oh! There is a long story behind it. But, I must admit that there are some positive things for Banking and Insurance sectors in this Budget. When Allahabad Bank started acting as a corporate agent for LIC, many PSU Banks criticized the move. But, now, Finance Ministry wants all the rural people to have at least one life insurance from LIC and that through any PSU Bank. Private Insurance companies may get a good chance to enter Indian market if the Insurance and Pension Bills get passed. So, LIC may do far better in challenging scenarios to tap at least 60% of rural India under its insurance coverage schemes. Special emphasis given on creating Women’s Bank. Are Banks rejecting the loan proposals of women? Strange! Post offices have lost its glamorous and glorious days. So, it is a good move to transform post offices as CBS enabled mini banks. Many critics said that Budget 2013-14 is a very sleepy budget, but, one must not forget that Chidambaram is also a contender for the post of PM in 2014 polls. UPA-II suggested FM to “REGENERATE REVENUES AND EASE EXPENDITURES”.

BUDGET 2012 !!!

Omprakash:- Tax exemption limit has been increased from 1.8 lacs to 2 lacs only. I am somewhat disappointed. Excise duty has been raised. So are some other service taxes. It means that automatically, the prices of the daily commodities will increase.

Narayanan:- Boss, don’t look this Budget of 2012-13 as a budget of aam-aadmi. Look at it from an angle of Indian economy. If we look at the budget with reference to the global economy, then economic growth becomes the topmost priority at present. But, that does not mean that we will allow our farmers to commit suicide or there will be no inclusive education.

Shabnam:- Yeah! That’s why; our Pranab Mukherjee has given some emphasis on education and agriculture sectors also. But, I don’t understand one thing. On one hand, you want to pass the Food Security Bill and on the other hand you want to reduce the fiscal deficit to 5.1%. How is it possible?

Arindam:- The ‘FFF’ factor is a pain for UPA-II government because of the poor IIP in recent times. That’s why; Indian government is trying to reduce the subsidies on fuel, fertilizer and foods by a marginal percentage.

Narayanan:- Accha, what about the expenditure on social sector schemes. 18% of our treasury goes to that only.

Rangabati:- See, actually, expenses on social sector schemes is not the real problem. The real problem is where the money is actually going. That’s why; this time, Pranab Mukherjee wants to form a strict monitoring cell to ensure that the money getting out of treasury for social schemes should reach the real beneficiaries.

Omprakash:- But, I don’t think that the fiscal deficit will remain within 5.1%. It may easily cross 6% because on the other hand in the name of marketing of future long-term economic reforms, Pranab Mukherjee also talked about investments and indirectly generating the demand for investments. Real Estate sectors may not be too happy with this budget, but, surely, the new economic reforms will provide some booster for the Housing Finance sectors by 2014.

Shabnam:- When almost everything becomes dearer after the budget, how the common people of India manage to handle the situation!

Arindam:- Shabnam, let me give you a small example. Say, you are earning 50,000 bucks per month and I am earning only 15,000 per month. Now, if a dabbawala sells you a vegetarian meal at 100 bucks, you will buy it, but, I will look for other alternatives to have a vegetarian meal at 50 bucks only. When the dabbawala is getting a customer who is giving 100 bucks for a vegetarian meal, will he ever reduce the price of food? The answer is a big no. So, indirectly, inflation is increasing. Now, after the budget of 2012, even rich people will start doing personal fund management. They will start negotiating and bargaining while buying any product, because everything has become costly for them also. Therefore, now, you will start bargaining with the dabbawala to give you the vegetarian meal at 70 bucks instead of 100 bucks. I may now increase by budget for a vegetarian meal to 60 bucks as everything has become costlier. So, at your end, you are not giving any room to increase the inflation and at my end, I am increasing my purchasing power. Therefore, when the purchasing power of a person and the inflation comes closer to each other, it creates the platform for economic growth, which has to be capitalized by RBI with their tools of Bank Rate, SLR, CRR, Repo and Reverse Repo Rates.

Omprakash:- Yeah! To some extent, I agree with Arindam, but, another thorn for UPA-II is the uniform taxation system on goods in India. All states should have uniform taxation system on the goods that are to be sold. That will be a healthier approach for the economic growth.

Narayanan:- Anyway, I will regard the “BUDGET 2012” as a balanced budget where the subject of economics became a painful medicated syringe for the subject of politics, but, believe me, to cure a patient (i.e. Indian economic growth) from a swine flu (i.e. Global recession), you require medicines (i.e. good and strict economic reforms) from the Central Government Hospital (i.e. Finance Ministry of India). The doctor (i.e. FM, Pranab Mukherjee) just gave the medical prescription (BUDGET 2012-13) only.

WHAT ARE MINING STOCKS ???

Nargis:- Have you guys got the news! Due to heavy rainfall in Andhra Pradesh, coal mining has been hampered and as a result, NTPC is not having enough coal reserves as a backup to generate electricity. There may be power cuts for long hours at a stretch throughout India before Diwali.

Harris:- Oho! That’s sad news. Due to power cuts, my small business gets hampered as I don’t have enough pennies to do expense on inverters or generators. But, every now and then, we can hear that Coal India gets some new mining areas for coals. Then, why is this shortfall?

Katrina:- Oh! You people are talking about power cuts and ‘Bijli Blackout’, but, right now, I am having blackout in Sensex and Nifty. Why the hell I invested on those shares! It is a total loss for me. The Indian market is very volatile right now and the global economy is still not recovering well since its downfall in 2008.

Arindam:- Well, Katrina…this time, the global economy is facing the heat of sovereign debts. By the way, why are you not investing on mining stocks?

Katrina:- ‘WHAT ARE MINING STOCKS ???’

Nargis:- Hmm…the stocks of those companies which are engaged in mining of valuable metals or natural resources. Am I right, Arindam?

Arindam:- Yeah! You are. But, unlike India, investors of USA are more interested in investing in these types of stocks.

Harris:- But, there is risk in investing in these stocks. What’s the guarantee that a company will get the desired amount of metals or natural resources, by digging a particular area? Whatever they predicted to fetch, they may get less output than that.

Katrina:- No risk, no gain, dude! Invest on those shares when a company declares about a new area of exploration. Every share in its nascent stage is bound to get higher price due to sensitive human psychology and market hypes.

Nargis:- Hmm…Katrina…it seems that you have burnt your hands in stock markets several times to learn those tips and tricks.

Harris:- Just hang on! Now, I have a valid question. As an amateur investor, should I invest on metal stocks or stocks of natural resources?

Arindam:- Ha ha ha….Harris, you can never ignore the black diamond, it will always have its own demand. But, still, in this global turmoil, the safest investment will be on gold stocks. Gold is such a commodity which will never lose its glitter, though; there may be a temporary crash as per the law of statistics. USA is the dominant holder of gold, but, China has started the race now.

Katrina:- How funny! When I know, that there will be a temporary crash on gold stocks in the near future, why should I buy those stocks?

Arindam:- Don’t worry; the crash will not kick you down from the break-even point, but, look that scenario from the other angle. If gold stocks crashes, there will be new buyers from Middle East Asia and other Afro-Asian countries. As a net result, the eroded soils from USA will have its sedimentation to the banks of Asian markets. That’s none of your headache. As a trader or investor, you will keep on gaining as a ferry-boat owner. So, go for the Mining Stocks. It’s the ideal time for it.

KYC Vs FINANCIAL INCLUSION !!!

Paritosh:- Indian government is targeting to provide banking services to 73000 villages of India by 2011-12. That’s a good initiative. Financial inclusion will surely help to boost the Indian economy.

Satish:- Financial inclusion is only possible after the successful implementation of UID cards, otherwise, even the dacoits, robbers, smugglers and terrorists will open Savings account in their name.

Neelam:- No, no, that’s why; the RBI is giving more stress on the KYC (Know Your Customer) compliance.

Arindam:- But I can show you many people in India who don’t have any identity proof.

Paritosh:- If any person is not having any identity cards like Ration Card, Voter ID Card, PAN Card or Driving License, then we can ask for a letter from the Sarpanch of village or the Councilor of that ward where that person lives.

Arindam:- There lies the game. The Sarpanch or Councilor distributes his blank letter-heads (format) like leaflets with his signature on it. Now, any person can write his/her name and address on that blank letter-head. In many cases, the Sarpanch or Councilor doesn’t even know that person but the resident certificate remains with the Savings Account opening form of that person.

Satish:- Forget about letters. I have seen many people having 2-3 Voter ID Cards. In PSU Banks, yet there have been no machines installed to check the original holograms in a Voter ID card, PAN Card and Driving Licenses. They can copy everything but not the original holograms of Indian government. Also as per the RBI circulars, an introducer should have a Savings/Current Account for more than 12 months in that branch; otherwise he/she cannot introduce another person. Moreover, the introducer should know the person for at least 1 year or above before introducing him/her to open an account. But hardly these things are maintained. At least, in private banks, they don’t issue a passbook to the account holder so easily. They send the thanksgiving letter to both the customer and the introducer. Both Introducer and Customer have to visit the branch to take the passbook. That’s a good practice.

Neelam:- What about the address proof? Nowadays, a person of Kashmir is opening accounts in a branch of Kanyakumari by showing an electricity bill of his landlord/landlady. But, what is the proof that the customer is really living in that particular rented house. No inspection is done in that regard. No question is asked why a resident of Kashmir is opening an account in Kanyakumari. Neither the landlord nor the customer gives an application letter/request letter regarding it. Regarding service holders, no one asks for a letter from his/her respective employers before opening an account. There are still many rural branches where no Form 60/Form 61 is signed up by the customers who don’t have a PAN Card number.

Arindam:- Neelam, the conditions of rural branches in any Muslim infested area are very bad. First of all, Muslim women wear burqahs. They will give you the passport photos where they are wearing burqahs. So, those photos are of no use as you can’t identify anyone with burqahs on her face. Secondly, most of the Muslim women are illiterates and even if they are educated enough also, they will go for left thumb impressions to open the channels of fraud. Thirdly, the illiterate Muslim women intentionally open Joint Accounts where one is literate and another one is illiterate. So, the literate hubby takes the advantage of that account in the long run for illegal fund transfers from Bangladesh or Dubai.

Paritosh:- Oh! The battle of KYC Vs Financial Inclusion will continue, but if we can tighten the KYC norms, then only the financial inclusion will have a positive impact on Indian economy in the long run.

BEWARE! BANKING BILL!

Gopinath:- The Asian markets are having a sea saw effect after hearing the news of USA losing AAA ratings. Even France to lose AAA ratings! I wonder how France can still show the courage to bail out Greece. The recent hooliganism in Syria as well as in UK will also affect the global economy. Moreover, the Spaniards are becoming jobless now. After Greece, many people predicted about Spain & Portugal and it is becoming a reality now. The concept of Euro has failed to revive the European economy.

Manjulika:- So, are we heading for a double dip recession? If yes, then are we ready to face it?

Gopinath:- India and China have learnt the art of investing more on their own core competencies during the recession of 2008. That’s why; Indian Tigers are chasing the Chinese Dragons. As a result, China has started investing in Sri Lanka, Myanmar, Nepal and some countries of Africa to safeguard themselves from Indian Tigers.

Arindam:- So, you want to say that Indian Tigers (common people of Indian economy) are in a very healthy position. Maybe, I think that Indian government is showing too much confidence on FDIs and as a result focusing less on manufacturing and mining industries. The outcome of this complacency factor has indirectly created a gap between poor and rich. Moreover, the UPA-II completely failed to control black marketers & hoarders. Rich people are paying more for foods and the food supply is less in the open market. As a result, the food inflation rises. RBI, being frustrated with the callous initiatives of the UPA-II, has to increase the key rates every time to curb inflation. But, at present, as the USA lost its AAA ratings, some PSU Banks will not try to raise money from overseas immediately. RBI will also not raise any of its key rates in the next meet, as there is a concern of double dip recession. In this hotchpotch scenario, why UPA-II is instructing the RBI to make all banks NPA free? Rescheduling all the suspended loans mean you are increasing the repayment period of loans for another 2 years. As a result, the money is not recovered but the Banks are saying that they are NPA free. After 2 years, when UPA government will not be there, who will be liable for the loss? It is the respective PSU Banks and the RBI only.

Manjulika:- Indira Gandhi nationalized those banks to raise funds for Indian economy. Manmohan Singh went for economic reforms. That was good, but somehow, the recent scams and the black money in Swiss Banks have negated those reforms. India would have become the 3rd largest economy by 2012 had there been no financial corruption at the top level. Now, UPA-II came out with a Banking Bill where they can either privatize nationalized banks or centralize all the PSU Banks. Profitable PSU banks may get merged with loss-making PSU banks or maybe the loss-making PSU banks will be completely denationalized. See, the Manmohan’s cabinet is a puppet of USA. So, it is evident that the UPA-II will blindly follow the policies of USA. The Indian government is saying, ‘If private banks can survive, then privatize all the loss-making PSU Banks.’

Gopinath:- Just hang on! Are those private banks opening no-frill accounts for the poor people? Are they giving subsidies while giving agricultural loans to the poor farmers? Without PSU Banks, banking development of Indian poor society cannot happen. US Banks thought of profit only. That’s why; their unemployment problems at the root level still exist. The best feasible solution will be to merge some loss-making PSU banks under SBI on a trial basis. But still, I will say,”BEWARE! BANKING BILL!”

 

RISE OF EMPLOYMENT INCREASES THE INCOMES OF POOR PEOPLE

Raunaq: - Employment exchanges in India are just useless. Hardly, you will find a person, who has got a job from any employment exchange. The employees of employment exchange have no responsibilities. They don’t even maintain proper records. The Indian Government is yet to computerize the Employment exchanges.

Farhan: - Don’t worry, the ‘UIDAI’ project will smoothen these things. But, no one knows when the project will get completed. Mindtree has got a deal for ‘AADHAR’. They should complete the project as early as possible.

Shamina: - You people are blaming the employment exchanges, but, can’t you people see the global economic recession. It is spreading like a swine flu. If one country is reviving its economy, then the other country is getting infected by the virus of economic recession. After Dubai, Greece and London, now, it is turn for Spain and Hungary. Then, you never know, who will come next. Even China can get infected too. Indian Government needs to increase their job quota for the Muslim people.

Arindam: - This quota system in job should be banned. Show me any other country where there are all these quota system for jobs. Till date, not a single political party of India showed the courage to declare that India will not have any caste or religious quota. All candidates should be treated equally in all respects. Separate reservation should be kept for handicapped people only. B.R.Ambedkar just created a divided Indian society in the name of framing a new Indian constitution. In this modern era, a person of SC/ST sleeps in a palace and a person of GENERAL category sleeps on footpath. Then why the Indian Government is still continuing that quota system and caste-reservation system? 50 years after the Indian independence, all the SC/ST people have been revived to the full extent. Now, this SC/ST people have become a creamy layer of our society by utilizing the advantages from the Indian Government. Indian Government should abolish the reservation system as early as possible.

Seema: - All the Indian political parties believe in ‘Divide and Rule’ policy. That’s why; they always come up with new reservation and quota systems to gain votes. They even shamelessly start supporting those Harianvi and Jat people, who kills their own younger sisters in the name of honour. If a Brahmin girl marries a Dalit person, she gets killed and politicians like Mr. Jindal feels proud about that. It’s a shame on B.R.Ambedkar and his caste-based India.

Raunaq: - All these problems will get solved if India can create its own domestic market. Create more job opportunities; then no one will demand for separate quota or caste reservation.

Arindam: - If Indian government just keeps on sleeping, then how can you create a domestic market? Take the example of MNREGA only. For MNREGA scheme, the money comes to the village panchayats, but if you ask the villagers, you will find out that hardly any villager gets the job of a laborer in every month. The sarpanch keeps the money of MNREGA in his own pocket. Rahul Gandhi spoke out about that truth, but the UPA government scolded Rahul for speaking the truth. Declaring a scheme or a yojana does not increase employment, but there has to be proper governance and monitoring system at the root level. One basic thing you have to understand that if you cannot increase employment in your domestic market, then no matter, how much you play game with CRR, Repo, Reverse Repo, Bank rate and SLR; inflation of the reviving Indian economy will start killing the poor people. If poor people start dying out of hunger, then again Indian economy will go back in recession. If a college student gets a job today, then tomorrow, he can afford to eat meals at 50 bucks instead of 30 bucks. He will even board a taxi instead of bus. So, a taxi driver will also get more customers than before and hence his income also increases. In this scenario, inflation is rising, but the income of poor people is also increasing. Therefore, the Indian economy will become a balanced economy due to the growth in domestic market and increase in domestic jobs. This will lead to social equilibrium also. The time has come for the Indian Government to realize that the “RISE OF EMPLOYMENT INCREASES THE INCOMES OF POOR PEOPLE”.