PRINCIPAL OFFICE BEARERS OF OUR DIAMOND ODYSSEY

1949 1950 1950 1950 1954 1957 1957 1958 1958 1959 1959 1960 1960 1961 1961 1962 1962 1964 1964 1985 1985 1990 1990 1993 *SCC ANTHONY PILLAI *T.S. RAMANUJAM *S. RAJAGOPAL V.E.RANGANATHAN CHETTY V.PERIANNAN G.NAGAIAH P .BALAGOPALA MENON G.NAGAIAH P .BALAGOPALA MENON C.R.CHANDRASEKARAN P .BALAGOPALA MENON P .BALAGOPALA MENON (upto 31/03/1991) L.BALASUBRAMANIAN (from 01/04/1991) 1993 1996 1996 2000 2000 2004 2004 2007 2007 2010 L.BALASUBRAMANIAN L.BALASUBRAMANIAN L.BALASUBRAMANIAN L.BALASUBRAMANIAN L.BALASUBRAMANIAN G.NAGAIAH G.NAGAIAH G.NAGAIAH G.NAGAIAH G.NAGAIAH V.PERIANNAN G.NAGAIAH C.R.CHANDRASEKARAN C.R.CHANDRASEKARAN P .BALAGOPALAMENON D.MOHAN D.MOHAN (upto 31/03/1991) S.SRINIVASAN General Secretary (Ag) (from 12/07/1992) S.SRINIVASAN S.SRINIVASAN S.SRINIVASAN S.SRINIVASAN S.SRINIVASAN S.SRINIVASAN

2010 2013 L.BALASUBRAMANIAN (* were not employees of IOB)

VARIABLES BUT INSEPARABLES

President L. BALASUBRAMANIAN and General Secretary S. SRINIVASAN

we can most o f all work for cause they are benefit of all th sacrifices for th en we shall ex perience no p e etty, limited, se happiness wil l belong to m lfish joy, but o ur illions, our d perpetually at eeds will live work, and ove o n quietly but r our ashes wil people." l be shed the h ot tears of nob le "History calls those men th e greatest wh o have ennob working for th led themselve e common go s by od; experienc e acclaims as who has made h appiest the m the greatest n umber of peop an le happy." - Marx, letter to His Father (1 "We develop n 837) ew principles fo r th e world out of We do not say the world's ow to the world; C n principles. e ase your strug give you the tr g le s; they are foo ue slogan of st lish; we will ru g g le . W e merely show really fighting the world wha for, and consc t it is iousness is so mething that even if it does not want to." it has to acqu ire, Marx (1843) "History does nothing, it 'p ossesses no im battles'. It is m mense wealth an, real, living '. it 'wages n o man who doe fights; 'history s all that, who ' is not, as it w p ossesses and ere, a person apart, using m achieve its ow n aims; history an as a means is nothing but to aims." the activity of man pursuing his - Marx (1846) "And this life a ctivity [the wo rker] sells to a nother person the necessary in order to sec means of life. ure ... He works th not count the at he may kee labor itself as p alive. He do a part of his life es ; it is rather a sa It is a commod ity that he has crifice of his life auctioned off . to another." - Marx, Wage Labour and Ca pital (1847) urdens can bo w us down, be

mankind, no b

"If we have ch o

sen the positio n

in life in which

The labor movement was the principal force that transformed misery and despair into hope and progress. Out of its bold struggles, economic and social reform gave birth to unemployment insurance, old-age pensions, government relief for the destitute and, above all, new wage levels that meant not mere survival but a tolerable life. The captains of industry did not lead this transformation; they resisted it until they were overcome. When in the thirties the wave of union organization crested over the nation, it carried to secure shores not only itself but the whole society." With all their faults, trade unions have done more for humanity than any other organization of men that ever existed. They have done more for decency, for honesty, for education, for the betterment of the race, for the developing of character in men, than any other association of men-." Martin Luther King Jr. 'Tis the final conflict; Let each stand in his place. The international working class

CHALLENGES FOR TRADE UNIONS

o Understanding the Silent changes within members. o Understanding dimensions of the commercial reality including that of technology. Understanding what a customer wants. Taking a non-orthodox and non-dogmatic approach towards analysis o Appeasing is necessarily not the best strategy. Convincing members to think hard on realities

He who knows not and knows not that he knows not is a fool: SHUN HIM He who knows not and knows that he knows not can be taught: TEACH HIM He who knows and knows not that he knows is asleep: WAKE HIM He who knows and knows that he knows is a prophet: FOLLOW HIM

Grams: IOBUNION E-Mail: gsaiobeu@gmail.com

Phones: 044-28523561, 28523392 Fax : 044-28522969

ALL INDIA OVERSEAS BANK EMPLOYEES UNION

(Affiliated to National Union of Bank Employees NUBE) Regd. No. 1026 dated: 06/02/1949 (Recognised by the Management of Indian Overseas Bank) Administrative Office: Post Bag No. 5231, 763, Anna Salai, Chennai - 600 002. Circular No.12/2013
Dear Comrades,

Date: 10.09.2013

NOTICE
Notice is hereby given that our 34TH CONFERENCE (GENERAL COUNCIL MEETING) will be held on 19.10.2013 (Saturday) & 20.10.2013 (Sunday) at D.M.K.Charitable Trust, Kalaignar Arangam, Anna Arivalayam No.367-369, Anna Salai, Teynampet, Chennai - 600 018 to transact the following : 1. To read and confirm the minutes of the last General Council Meeting. 2. To receive, consider and adopt the report of the General Secretary on the working of the Union. 3. To consider amendments to Bye-Laws of the Union and resolution connected therewith. 4. To consider and adopt the audited statement of accounts and balance sheet and the auditors report for the period ended 31/12/2010, 31/12/2011, 31/12/2012 and 31/03/2013. 5. To appoint auditors and fix their remuneration. 6. To adopt resolutions. 7. To transact such other business as may be brought forward with the permission of the Chair. 8. To elect the Office-bearers and the members of the National Executive and Regional Committee for the ensuing period.

The General Council will commence its session at 8.00 a.m. on 19.10.2013.
Members are requested to send in advance, resolutions and amendments to be considered in the General Council Meeting. Such draft resolutions and/or amendments should reach us on or before 03-10-2013.

Yours comradely,

(S.SRINIVASAN) GENERAL SECRETARY

AIOBEU NUBE WORKERS UNITY OUR 34TH CONFERENCE _ _ _ _ ZINDABAD ZINDABAD ZINDABAD ZINDABAD

ALL INDIA O VERSEAS B ANK EMPL OYEES UNION OVERSEAS BANK EMPLO (NUBE) REPOR T OF THE GENERAL SECRET AR Y REPORT SECRETAR ARY TO THE 34TH CONFERENCE / GENERAL COUNCIL OCTOBER CHENNAI 19TH & 20TH OCT OBER 2013 CHENN AI
CHAPTER - I
Dear Comrades, On behalf of the National Executive I cordially greet and welcome you all to this 34th Conference / General Council and place for your discussion and adoption of the report of the activities of our Union since the last Conference along with most important events and developments in the National and Global plane during the period under review which have direct and indirect bearings on the issues and challenges faced by us. Also placed is the audited statement of accounts up to June 2013. We are meeting at a time when the Indian State is facing its worst ever crisis since independence. Open revolts against our constitution and its institutions seem to be underway. Our society and our working people are under assault. After the New Economic Policy, Indias External Debt burden has risen to zenith . While the prices of food grains have gone up and the wages as a percentage of value of output are decreasing, millions of poor and dispossessed Indians are falling through the safety net. Export or perish policy is becoming Export and Perish in reality, globalizing the prices without globalizing the incomes. It has become evidently clear that Indian Economy is being globalised at a break neck speed at the wrong time, in a wrong way, under the wrong external environment, with wrong strategy of gambling of the greedy and neglecting the needy. This social, political and economic crisis of India has to be seen in the context of world economic and sociopolitical crisis. We are meeting at this 34 th Conference in Chennai in a crucial background where there are open challenges to collective bargaining and public sector banking. Hence, this Conference also assumes extraordinary significance. Todays systemic crisis is common both to India as well as the world. A system in crisis is integrating itself into a larger system in deeper crisis. India is apparently adopting the Export led growth path at a time, when the rest of the world is equally under compulsion to export.
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The discouraging of the Indian public sector seems to be happening at a time when the world private sector and their multinational operations seem to require encouragement. India is contemplating changes in its labour laws which seems to be a pre-requisite for the world private sector business. The powerful and united Labour movement in India which was put on the defensive a decade back is sought to be divided by various means just when the world private sector seems to be requiring an educated but emasculated labour. India continues to be globalising in global terms than on their own. Being forced to integrate with the global mess, for their convenience, on their terms at the point of a double barrel gun, held in velvet gloves, so that the arthritic fingers are not visible. The fingers are Dunkel Drafts, the Super 301, the Nuclear Non-Proliferation Treaty, the GATT / WTO resolution and the finger squeezing the trigger is the IMF conditionalities belonging to the hand of World Bank. The main question however, is whether such a growth process can be sustained without financial and management prudence. The era of liberalisation commenced in the year 1991, also has opened the flood gates of corruption and scams. Scams after scams shocked the nation and the people. Whatever be the nature of the Government, scams besmirched the powers that be. Initially people were dumb founded and now they are attuned to the fact that scams are the feature of neo-liberal economy. The scams faced by the nation subsequent to the economic reforms are illustrative and remain as a tip of the iceberg. 1992 1994 1995 Harshad Mehta Securities Scam Sugar Import Scam Preferential Allotment Scam Yogoslav Dinnar Scam Meghalaya Forest Scam Fertiliser Import Scam Urea Scam Bihar Fodder Scam Sukh Ram Telecom Scam Snc Lavalin Power Project Scam Bihar Land Scandal C.R. Bhansali Stock Scam Teak Plantation Swindle UTI Scam Dinesh Dalmia Stock Scam Ketan Parekh Securities Scam Sanjay Agarwal Home Trade Scam Telgi Stamp Paper Scam Ipo-Demat Scam Bihar Food Relief Scam Scorpene Submarine Scam Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. 5,000 650 5,000 400 300 1,300 133 950 1,500 374 400 1,200 8,000 4,800 595 1,250 600 172 146 17 18,978 Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr

1996

1997

1998 2001

2002 2003 2005

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2006 2008

Punjabs City Centre Project Scam Taj Corridor Scam Hassan Khan Tax Default The Satyam Computers Scam Army Ration Scam SB Of Saurashtra Scam Jharkhand Medical Equipment Scam Rice Export Scam Orissa Mine Scam Madhu Koda Mining Scam 2G Scam Commonwealth Games Scam Coal Scam Delhi Airport Scam

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

1,500 175 50,000 10,000 5,000 95 130 2,500 7,000 4,000 1,76,000 8,000 1,86,000 1,63,557

Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr Cr

2009

2010 2011 2012

And Crores of illegal monies parked in Swiss Banks. Within a span of three years, while a series of scams exposed the Governments incompetence to rule, more liberalisation and more privatisation has become the hallmark of Governments economic policy. The policy has widened the chasm between haves and have-nots, while making the rich richer and poor poorer. The widening disparity and inequity has created more socio economic problems. Note: The above list is only upto the time of giving this Report for printing. There are more skeletons in the cupboard which we expect will come out. The nature and scale of the scams encircled our nation is so enormous, naturally the anger was mounting in the peoples mind. Mis-governance and maladministration, omission and commission at the various levels of political administration have further inflamed the anger. Nearly three lakh crores is accepted to have been either lost or misplaced in the recent NPA, Bank Scams. Wasteful expenditure and project-over-runs are well known. Corruption and mismanagement seem to have become endemic problems of our system. On the other hand, the period under review has been full of activities, struggles and strike actions. It has been a period of challenges and activities. But at the same time it has also been a period of various achievements. We had gained new experiences during this period. But all of us are aware that the challenges that are emerging are seeking to overturn the achievements of the organisation made so far. The attempts of the Government are clear that they want to reverse the clock back, whether it is banking policies or our hard won rights. The Government is moving with a clear agenda. Banking reforms are knocking at the door. Khandelwal Committee recommendations are also staring at us. It is understandable that the Government is targeting banking sector and bank employees trade union movement. For the past two decades, we have been opposing, resisting, repulsing and fighting against the opening up of the banking sector under the plea of financial sector reforms. We can safely predict that there would be intensified attempts on the part of the Government to accelerate their policies of banking reforms. We can also expect that when we fight back these attacks, there would be obvious counter attacks on our wages, benefits, rights and privileges. Thus the period ahead is going to be witnessing double throated attack on the banking sector and on our movement.

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We should have met in our Conference much earlier in July 2013 itself but due to our on-going struggles and activities there has been some delay. At the outset, I seek the condonation for the delay in holding this Conference. We shall, now, have a brief look at the International context and the national situation. We shall then look at their consequences on the labour scene in general and Banking sector in particular. Later we shall consider our achievements under these adverse conditions.

In Sad Remembrance
The inexorable forces of Death has snatched away, many dear ones during the last 3 years. Natural calamity, floods, earth quakes have taken their toll. Many left us while fighting for the causes of humanity, trade union rights and civil liberties. Added to that is the brutality of the dehumanized society. Hundreds of people have lost their lives in the incidents of terrorist and communal violence We dip our banner in the memory of all those who have sacrificed their lives during the period for peace, progress, socialism, liberation and fighting against exploitation and tyranny of all sorts. It is my duty to pay respect and homage to our comrades, colleagues who worked along with us everyday and night, veterans of our movement and eminent personalities from different walks of life who passed away during this period. There are also great persons of our human society who enriched the life of mankind lost but not forgotten during these years. Now let us observe a minutes silence in the revered memory of these noble departed souls out of a consideration that mourning for the departed is not a mere ritual for all of us but it is accepted by us as a necessary sobering moment and as an inspiration to carry forward the unfinished tasks for enriching the mankind they have left behind.
! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

I K Gujral, Former Prime Minister of India B S Shekawat, Former Vice President of India Karunakaran, Former Chief Minister of Kerala S Bangarappa, Former Chief Minister of Karnataka Vilas Rao Deshmukh, Former Chief Minister of Maharashtra Chaturanan Mishra. Former Union Minister and President AITUC P C Alexander, Former Governor, Maharashtra K C Pant, Former Union Minister G M Shah, Former Chief Minister of J & K Janeshwar Mishra, Former Union Minister Ram Niwas Mirdha, Former Union Minister Prabha Rau, Former Governor of Rajasthan Digvijay Singh, Former Union Minister Sidarth Shankar Ray, Former CM of West Bengal B Shankaranand, Former Union Minister Arjun Singh, Former Union Minister Bal Thakrey, Shiv Sena Chief Vimla Dang, Veteran leader of the Left and former MLA from Punjab

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! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

Homi Daji, Veteran CPI and AITUC leader Dr. Raj Bahadur Gaur, veteran CPI leader and Former President of APBEF C K Chandrappan, noted CPI leader and Former MP E. Balanandan, Veteran CPM leader Potluri Nageswara Rao, AITUC leader and Former President of APBEF G V Chitnis, Veteran communist and AITUC leader Pramod Gogoi, Veteran CPI leader and Former President of AITUC M K Pandhe, Veteran CPM leader and President of CITU Dipankar Mukherjee, Secretary of CITU and Former MP Bhogendra Jha, Veteran CPI leader and 5 times MP O P Gupta, Veteran leader of Telecom Employees Ahilya Rangekar, Veteran communists leader & founder member AIDWA Suhas Chakraborti, CPM leader and Former Minister in West Bengal A M Gopu, Veteran CPI leader and leader of AITUC TRS Mani, Secretary, AITUC Tamilnadu Mrinal Banerjee, Former Minister of West Bengal Madhukar Sarpotdar, Former MP and Shiv Sena leader Varkala Radhakrishnan, Former Speaker of Kerala Assembly Pappa Umanath, CPM leader Ustad Bismillahkhan, famous Shenoi Artist Bhupen Hazarika, Cultural icon of Assam Dr. Mamoni Raisom Goswami, famous poet, writer and social activist Prof. Suresh Tendulkar, noted Economist Dr. Arjun Sengupta, noted Economist MAK Pataudi. Former Indian Cricket Captain Rajesh Khanna, noted Film Actor Shammi Kapoor, noted Film Actor Yash Chopra, famous Film producer Jagjit Singh, famous composer and singer Dev Anand, famous Film actor Pandit Ravi Shankar, the Sitar maestro A K Hangal, noted film artist G Kasturi of The Hindu Newspaper Satya Narayan Goenka, Spiritual Leader and Vipassana Guru His Holiness Sri Satya Sai Baba

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! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

Hargobind Khurana, Nobel prize winner in medicine Steve Jobs, Co-founder, Apple Inc. Nalani Jayawant, Hindi actor Beena Roy, famous film actress of yester years Tapan Sinha, renowned film Director Nagesh, famous tamil film comedy actor Sakthi Samantha, noted film maker Feroz Khan, famous film actor K Balaji, Tamil actor-producer B. Rajam Iyer, senior Carnatic musician-scholar Admiral S M Nanda, former Chief of Navy Staff Prakash Mehra, legendary Bollywood producer G K Sundaram, noted Industrialist of Lakshmi Mills group in Tamilnadu Palghat Raghu, mridangam maestro M F Hussain, famous painter Habib Tanvir, noted playwright and theatre director Lakshmi Krishnamurthy, noted social activist and freedom fighter Ustad Akbar Ali Khan, sarod maestro Shingara Singh, the last known survivor of Jallianwala Bagh massacre Syed Abdullah Bukhari, Former Shahi Imam of Jamma Masjid Nilu Phule, legendary Marathi State and cinema actor Gangubai Hangal, doyenne of Hindustani classical music Gayathri Devi, former Queen mother of erstwhile Jaipur State K S Awasthi, Kannada actor K N Raj, noted Development Economist Pravinchandra Gandhi, Former Chairman of Dena Bank K V Krishnamurthy, Former Chairman of Bank of India Vinda Karandikar, noted Marathi poet, Jnanpith Award winner C K Prahlad, famous management specialist Mac Mohan, veteran hindi actor K A Krishnaswamy, Former Minister in Tamilnadu Manohar Malgaonkar, famous novelist Dr S Krishnamurthy, doyen in Oncology Obul Reddy, Industrialist in Tamilnadu Kottakkal Sivaraman, Kathakali Maestro

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! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

Peer Abdul Ahad, the Sopore saint K M Mathew, Chief Editor of Malayala Manorama Ravindra Kelkar, Konkani litterateur from Goa Dilip Roy, well-known Bengali actor and director Arjun Sengupta, development economist Ashok Bhat, Gujarat Assembly Speaker Soundara Kailasam, Tamil poet and writer Satyavati, oldest living freedom fighter Sikkil Kunjumani, noted Flute artist DVS Raju, doyen of Telugu film industry L C Jain, economist from Delhi Dashrath Patel, Indias first multi-disciplinary artist B S Ranga, noted Kannada film director Surendra Mohan, noted socialist thinker Jayaben Desai, a pioneer of Asian women workers movement in Britain Ramaprasad Banik, eminent thespian from Kolkata V Balakrishna Eradi, former Supreme court judge B N Hoskote, former leader of MSBEF and foreign bank unions Com. Prem Singh, former President of HBEF V.S. Subbiah, Co-op. bank union leader from Tamilnadu Jacob Mathew, AIBOA leader from Kerala S G Joshi, former General Secretary of EMBEA S P S Sarao, former president of Haryana Bank Emp. Federation Vijay Behari Gupta, former leader of SBBJ/DSBEF,, Delhi Hugo Chavez : President of the Bolivarian Republic of Venezuela Homi Sethnan Indian nuclear scientist Bharat Ratna Bhimsen Joshi Musician Sushil Kumar Dhara Indian revolutionary T.M Soundararajan Tamil play back singer Sivanthi Adityan Owner, Dinathanthi KIM JONG II,the President of DPR Korea, one of the socialist countries facing the US onslaught Captain Lakshmi Sehgal a veteran freedom fighter and a powerful Commander of the Rani Jhansi Regiment of INA. Dr. Vishnuvardhan : Veteran Actor. Bhupen Hazarika: Renowned Assamese singer and music Director Jagjit Singh, noted Ghazal singer
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! ! ! ! ! ! !

! ! !

! ! ! ! ! ! ! !

Gangu Bai Hangal: Noted Hindustani Vocalist. Sri Lalgudi Jayaraman, renowned Violinist Smt. Indira Goswami , Jnanapeeta Award winner. Mario Miranda, leading cartoonist Mehdi Hassan: Famous Pakistani Ghazal Singer Mrs. Mrinal Gore: Ex.M.P From Maharashtra And A Socialist Leader. Dr. Varghese Kurian: Founder Of Amul And White Revolution In India Mr. Jaspal Bhatti: Journalist, Stage Artist, Comedian And Film Producer. Died In The Last Week Of October 2012 In A Road Accident Sri. P.B. Srinivas Renowned Play Back Singer Mrs. Shakuntala Devi Human Computer. Sri Sujatha S Rangarajan, Versatile Tamil Writer Dr. Narendra Dabholkar Anti-superstition activist and Maharashtras most vocal rationalist Prof. Park Jae Woo, Pioneer of Sujok Acupuncture

! ! ! ! !

Com. R.J Sreedharan : One of the unifier of the Bank Employees movement in India, a veteran trade unionist, former President and General Secretary of AIBOA since 1991, and the Chairman of AIBOA since 2011, a great orator and a mass leader of the working class movement, a brilliant speaker, a powerful narrator on all issues affecting working class, ardent supporter of our union and NUBE passed away on 15-06-2013. He was one of the pioneers in realizing the demand of fair second option for pension to the bank employees and a crusader in fighting the doctrine of equal work equal pay in the banking industry. AIOBEU dips its banner in memory of this valiant fighter and pays its respectful homage. Com. A.Vijeyendra Kumar: Regional Secretary Hyderabad, another valuable asset of our union, known for his helpful nature, a dedicated soldier of union breathed his last. He was always sincere and was keeping serious concern about our members problems in Hyderabad region. His untimely death is a set back to all of us. We Also Mourn The Deaths Of: a) b) c) d) e) f) g) h) i) j) Victims of Floods in northern regions of Himachal and Uttarkhand. the 2 jawans who were beheaded by Pakistanis at the border recently, Victims of natural calamities and nuclear radiation in different parts of the world Victims of communal caste, class and ethnic violence Victims of mindless killings by terrorists and extremist groups in India and elsewhere victims of communal riots in different parts of the country. Victims of train and road accidents in India and elsewhere Women victims of rapes in different parts of India and world Victims who could not get timely medical treatments Savita Halappanavar, the Indian woman who died due to pregnancy complications in Ireland due to the countrys strict abortion laws and protests from India and elsewhere forced Irish Parliament to allow limited abortion rights for the first time.

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l)

Deaths of the workers/leaders who laid down their lives throughout the world for the causes of working class, common men and for achieving freedom and democratic political system in their respective countries and fields and for participating in struggle against exploitation of mankind.

Unto Ourselves The report purports to be the narration of our activities during the period, our achievements and successes as well as our unfulfilled tasks and weaknesses. This conference provides us with an opportunity of analyzing our activities during the period. At the same time the conference will also chalk out our course of action in the days to come, both immediate and long-term. In our last report we emphasized that in todays world and in the state of affairs we find ourselves in, no trade as well as its union are isolated or immune from the happenings elsewhere, the government policies in particular, and the factors affecting these. If we do not understand the background properly, if we cannot identify the main source of the challenges that confront us and the maladies that affect us, we will be failing in articulating our priorities and setting out our objectives. This will be a severe mistake. So whatever we have done and whatever we intend to do have to be viewed in the above perspective and for that is required a look in retrospect to the events, global and national, and we begin therefore from a global perspective.

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CHAPTER - II Preamble and Pledge

The materialist doctrine that men are products of circumstances and upbringing, and that, therefore, changed men are products of other circumstances and changed upbringing, targets that it is men that change circumstances and that the educator himself needs educating. (Kari Marx 1845) In India, we admire philosophers. We have had Philosopher kings, religious philosophers, philosopher statesmen and philosopher artists. To call someone, from any field, a philosopher is almost the ultimate accolade in India. The land of philosophy where a religion is described as a way of lifewhere common people philosophise in routine conversation. So what is the philosophy so dear to us. For Pythogoras, who originally coined the term philosophia it meant love of wisdom. Later, Plato defined philosophy as the love of the truth but he also referred to it as the love of wisdom. A wise person, said another philosopher Palma would have to love the truth of course but he or she would have to love other things as well, such as human beings. We can easily understand that. For truth is property of certain propositions while wisdom is the character of a person. So whatever may be the philosophy a philosopher is definitely a wise person. That is why philosophers are not only engaged in pursuit of certain truths but even more concerned with becoming a certain type of person. The quotation at the beginning recognises a fundamental truth about men or women, their capacity to change circumstances and themselves. It recognises the political will of the people. Many explains the above further. The coincidence of the changing of circumstances and of human activity can be conceived and rationally understood only as socializing practice. With the wisdom, the philosopher said, The philosophers have only interpreted the world, in various ways, the point, however, is to change it. People, in their pursuit of truth and love for wisdom, have been continuously changing their circumstances and themselves by engaging in social practice and we call this continuous activity their history. So we saw in the intervening three years of this General Secretarys report people and their history changing circumstances and themselves in the process. So we find ,twenty eight years after communism was officially declared buried, history was announced as ended in favour of liberal democracy, working class movement was declared as outdated and unionism was dismissed as the last refuge of endangered species. We are facing a situation where we see an avalanche of tirades and ideological attacks unleashed against the working class. A systematic, well planned campaign is going ahead on the so called futility of struggles. This has to be countered effectively. We have to understand and also make the workers and people in general understand that whatever we have gained have come only because of struggles for which, we also had to pay a very heavy rice. Unity and united action alone can bring about changes. The extent of the problems has been to reverse tide in some of the worlds largest financial Institutions which have collapsed. Others have been bought out by their competitors at low prices and in other cases, the Governments of the wealthiest nations in the world have resorted to extensive bailout and rescue packages for the remaining large Banks and financial Institutions.
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The total amounts that the Governments have spent on bailouts have sky rocketed. From a world credit loss of $2.8 trillion in October 2009. U.S. Tax payers alone will spend some $9.7 trillion in bailout packages and plan. According to Bloomberg $14.5 trillion or 33% of the value of worlds Companies has been wiped out by this crisis. The U.K. and other European countries have also spent some $2 trillion on reserves and bailout packages. More is expected. (all in trillion dollars) 1 2 3 4 5 6 7 8 9 10 11 12 13 Value of worlds Companies wiped out U.S. GDP Total US house mortgages U.S. bail out Promised aid to poor countries still outstanding since 1970 Aid to poor countries since 1970 U.K. GDP European bail out World Military spending in 2007 U.K. bail out US cost of war in Iraq and Afghanisatan Debt of Poorest countries Marshall plan to rebuild Europe 14.5 13.8 10.5 9.7 3.3 2.6 2.5 1.4 1.3 0.9 0.7 0.5 0.1

On the working people of these countries in the form of cut backs in pensions, education, health etc., even as the workers are being made to work longer hours to earn less amounts. This will surely lead to another phase of crisis as the spending capacity of the people has been reduced. In order to ensure its profit maximization, Finance Capital seeks to create such a world order that no barriers for its movement across the nation States and removes obstacles for its unhindered movement. Just when capitalists were bailed out by the respective Governments mainly the investment Bankers and big Banks, mortgage Banks etc., the common people also gathered together with the slogan Occupy Wall Street Movement (the hub of world capital center in New York). Some such movements spread their wings to more than 85 countries throughout the world. We are 99% you are 1% slogan caught the imagination of ordinary people. The movement was alive for more than a year. Although battle lines were drawn, it had its limitations. Nevertheless, it could kindle a spark on the needless bailout resorted to by the capitalist Governments across the world. In Britain, students took the lead. In Greece, the working class took the lead. So is the saga in Euro countries. We find the working people striking and protracted peoples war going on for years on and on in several countries of the world. The past three years have seen numerous mass movements erupt across the world in the wake of the global financial crisis, at a scale which has been unimaginable for a long time. The languages of all these diverse movements have been different, the immediate questions that they have been trying to answer have varied as have the provisional answers that they have come up with. Yet their voices from the Arab countries toppling decades old dictatorships to the demonstrating students in London, the striking miners of Maricana, South Africa, the Occupy activists across the word and the rioters on the streets of Greece,
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Turkey sound in unison against the existing order of things. These movements have emerged at such a time when the first campaign for world proletarian revolution has failed and the second is yet to start, a time when the revolutionary transformation of society seems to be a very marginal idea in the society compared to the hegemony of ruling class ideology, even among workers and student youth. Yet it is a time when capitalism faces one of its gravest structural crisis generated from its own bastion and is still uncertain how to handle it. Such is the time when collective struggles are breaking the boundaries of sectors, countries or even regions on a mass scale when aspiration for a new society seemed an old idea amidst a celebration of difference and the local We find voters alienation evident as the differences between the traditional Left and Right converge around imaginary agenda while their parties shrink in the face of their incapacity to respond to crisis. We find soccer and cricket matches attracting more attention than political campaigns as they provide a distraction from political deceptions, economic insecurities and hardships which are bitter legacy of the policies of the political elite. It has become increasingly common to read and hear people say that electoral regimes are not the same as democracy. The gap between electoral political elite (their media and academic publicists) and populace is widening, extending to working people and students who bear the brunt of the crisis and see no electoral parties addressing their interests. Thats why the working people in all these countries and several other European countries are regularly on the streets, erecting barricades and fighting pitched battles against their respective states. Inspite of their credit cards, mortgaged homes, variety of cars, electronic gadgets and cyberspace the working people of even these economically advanced nations have not given up their right to struggle and continue to struggle relentlessly to change their circumstances and themselves in the process. That is why the International proletariat have begun to looking seriously at their comrades in oriental and backward economies as their allies in their world-wide struggle against globalisation. Globalisations only sole motive is profitwhile for us the working people concerns include our livelihood, jobs, security of jobs, jobs for our children, their future, other quality of our life and such matters which any state and any economic system is bound to provide us, irrespective of profits and losses. While total solidarity is still a long way from forging the iron fist that can deal a last and final death blow to global capitalism, it has definitely established that the enemy that the working masses of the world face, across national, linguistic, racial and gender differences, is one. Finally, the most significant contributions made by these revolts and protests is to retrieve the question of wide ranging social transformation from the clenches of disappointment and skepticism that had set in among the struggling masses with the failure of past revolutions and the increasing attack by the neoliberal order. They have shown that at some junctures of history time takes wings and the very materiality of our experiences prepares the ground for a wider generalization; that the unity of the struggling labouring masses of the world is not an abstraction made mind but constitutes the very existence and reproduction that better future presents itself in the contradictions of present day capitalism. The many questions that we encounter while engaging with these movements therefore also reflect on our own concrete experiences with the neo-liberal regime in the country and are also crucial for enriching our understanding of the exploitation and oppression free future that we aspire to We are not interested in their populist budgets and popular slogans, anyway cooked up and false. We are more interested in balancing our aspirations and hopes and our realities.

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That is why in India-we reject-and totally reject any discussion about the Public Sector only in terms of their profitability-inspite of the fact that they are indeed far more profitable than the private sector. The concept of Public Sector., it is by now common knowledge, was promoted in India at the behest of the captains of Indian Private Sector as early as in 1944. Private sector Industrialists including JRD Tata were involved in drafting the 1944-Bombay Plan detailing the need for creating a Public Sector. Private Sector industries needed cheap infrastructure like power, railways and roads. They needed subsidized raw materials. They were neither willing nor had the financial resources of such massive scales to invest in long-gestation periods. The way the politicians, bureaucrats and private parties bleeded the public industries., appropriated its resources and generally used it for building their regime of patronage system is also well known across the country and needs no detailing. The Capitalists and ruling elite always skimmed off the entire cream of public sector profits for their own private consumption. They have collected the returns, reaped the profits and generally demoralised the morale. The Public Sector has survived inspite of them and because of the dogged determination of the working people of the country to preserve their jobs, security, dignity and future. As far as the Public Sector banks from the infamous Nagarvala to the equally flamboyant Harshad Mehta scams are only increasing in their volume and audacity. So why are we being asked to participate in their insincere crocodile tears for the efficiency and profitability of the Public Sector banks. We are not interested in their on line offences and structured. We know they are not interested in even one days honest labour they want to leave it to us. We know that they cannot afford to close down the public sector banks in rural areas and non profitable centres. They are only interested in the cream in the cities and profit centres like their cats warming itself inside in the fire place while we slog outside and guard the country like loyal dogs. Let them not however think that the great working people of this country, the great middle class of this country, dont know what is going on. It is not incidental that the working people of this country, the great middle class of this country dont know what is going onIt is not incidental that the working people of this country strike in a telling manner whenever there is an election... no wonder they are willing to make any kind of an alliance to avoid elections. They know, alright, that we do know. Whoever, anyway thought, its not going to be a struggle. We are in the midst of a long protracted struggle where there will be several failures, may be final victory will be ours I assure you comrades, I will be there with you all along Let us meanwhile recount their successes and our successes and understand the nature of this siege and struggles ahead. Having described the protracted struggle going on in the arena of Public Sector Banking in particular it is time to briefly recapitulate the struggle in public sector in general. Why are they attacking the Indian Public Sector? Not because the Indian Public Sector created the infrastructure, established a core sector, generated employment etc. on the contrary they needed them to do just that and leave it. The Indian Public Sector, however, along with all that cheap economic infrastructure also generated a demographic revolution unlike in erstwhile Soviet Union after the 1917 revolution.

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With secure jobs came several generations of children of free India who grew up in relative affluence with sturdy health, steady homes and educational opportunities unknown before creating the new world renowned technical manpower of India the third largest in the world. Thus the Great middle class of India became an International force to reckon with. They have transformed a backward country into a modern nation threatening to upset the hegemonic ambitions of super powers and imperialist forces. Just when world capitalism is exhausting their home markets for consumer and other goods a gigantic potential market is opening up in India. When world Automobile sales are down to merely one percent growth. Indian Automobile requirements are leaping to around thirty percent with an expected average of around 8 percent growth in the next decade. This is the case in every sector. The battle for this market, is a war of survival as a super power for the imperialist forces. Several billion dollars of surplus are searching markets for maximum returns, failing which they may vanish. The cut-throat competition between the advanced Nations is compelling them, not merely to open markets but to necessarily monopolise them if necessary by recolonising them. So they want to buy up our farms and agriculture, they want to set the prices of electricity and fuel, they want to buy all our leading companies and drive the remaining out of business or atleast marginalize them all. They want a pliable populace and an emasculated labour. The single greatest threat to their plan in once again the great educated middle class of India who exposed the trader who came in 200 years ago, the East India company and went on to rule India. The single biggest base of this middle class in India is the Public Sector in India. So if you want to destroy the political sagacity of the middle class, you attack their economic base in the Public Sector. Who are attacking the Public Sector? Where did the Narasimham report come from. It is a photocopy of the IMF conditionalities. All the TNCs and MNCs of the advanced nations in general and America in particular We know the names of the foreign banks taking away the cream of business from the Public Sector banks. We know the new names of Cold Drinks, potato wafers, soaps and soap operas, cars and white goods, television and stereos, mobile phones and hotels, ice creams and footwear. The list is long. They are already everywhere, only the uniformed soldiers looking for entertainment is missing. What is the great middle class of India going to do? They will struggle against them as always. Even though the enemy has always adopted the method of divide and rule we shall not get divided by religion, language, ethnicity or even levels of poverty and affluence. We, the great Indian middle class, will never allow the religious fundamentalists to decide how we should live or spend our time, what our daughters, sisters, wife and mother should do and how we should behave with our neighbour, fellow country men and comrades in arms. However affluent, educated and sophisticated we are, we dont forget that our country is still largely a land of small farmers. We take our vacations regularly to our villages and use our leave travel concessions to keep in touch with the heartland of our country. We, the organized working people cannot forget the twenty crore working people in the unorganized sector. We cannot over look the unpaid multitude of women in India. We cannot forget them for we could be one of them tomorrow. The truth is that there are no jobs. We are more worried about preserving the jobs we have. We know the consequences of runaway unemployment. When the organized working class is systematically reduced, lumpenisation is systematically encouraged and unleashed to further attack the organized working class movement. Riots are unleashed. The noon of market fundamentalism always comes with the darkness of all other fundamentalisms including religious fundamentalism to strike the terror of darkness at noon.
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We shall develop programmes to counter these forces. We shall struggle against these imperialists and their local lackeys in whatever garb they come. We shall constantly expose the nefarious activities of these foreign banks and struggle against their attempt to entrench themselves in our country. We shall consider boycotting all foreign products and opting for better products of India. We shall examine the attempts of foreigners to buy our shares for shrimp and such other farming rendering countless women labourers unemployed and wasting good agricultural land by making them saline. We shall inspect all foreign deals for kickbacks and hawala rackets which in turn sponsor terrorists. We shall demand transparency in all invitations to foreign companies in core sector. We shall struggle against all their attempts to turn everything into contract labour. We shall sight them in the banks, in the beaches, in the shops, in the court, in the farm, in the streets, in the hearts and minds of our fellow country men who are gullible enough to consider them as tourists who have come to spend. They have come to loot, as always. On the occasion of our union completing 65 years of purposeful, productive existence, two year from now, we shall draw inspiration from the famous midnight speech on the eve of independence in 1947 by our First Premier Jawaharlal Nehru. The future beckons us whither do we go and what shall be our endeavour? To bring freedom and opportunity to the common man, to the peasants and workers of India, to fight and end poverty and ignorance and disease, to build up a prosperous, democratic and progressive nation, and to create social economic and political institutions which will ensure justice and fullness of life to every man and woman. 3 Nobel Women: Women laureates have been a rarity in the history of Nobel Prizes. Only 15 women including the three last year have won the Peace Prize in 110 years. The Nobel Prize for 2011 has been won by three women. Each has shown sustained moral and physical courage in situations of war and state violence. Ellen Johnson Sirleaf, an economist with a Harvard Masters in Public Administration survived imprisonment and a rape attempt during the brutal regime of Samuel Doe. She won the Liberian Presidency in 2004 becoming Africas first Women Head of the State. She immediately started rebuilding a shattered economy. Declaring that empowered women were essential to a civilized and safe society she got 40% of girls into free compulsory elementary schooling and tightened the laws on rape and womens property rights. The second winner is also a Liberian. Leymah Gbowee, a social worker tuned activist started a womens prayer for peace on a football field in 2002. This became a daily even though soldier involved in the savage civil war could have fired on the women while driving fast. She then led her followers to surround the hall used for peace talks until the Delegates signed a deal. The third winner Tawakkul Kaman of Yermen, a journalist activist has campaigned for womens right in a conservative society. She became an iconic figure in her countrys protest which have resulted in the dictator Ali Abdullah Saleh announcing his departure. She has often been jailed and survived an assassination attempt. These three very courageous women eminently deserve the prize. Here one will be compelled to call to mind Ms. Irom Sharmila, the Civil Rights Activist from Manipur who has been on a 12 year protest fast demanding that the Armed Forces Special Power Act be repealed. She started her hunger strike in November 2000 after the Malom Massacre, an incident in which 10 innocent
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persons were killed by personnel of Assam Rifles. She was arrested by the Police and when here condition became to deteriorate she was transferred to Jawaharlal Institute of Medical Sciences where she was force fed. Recently the Kovilan Trust at a function organized at Kolkata decided to confer the first Kovilan Smaraka Activist India National Award on Ms. Sharmila. On behalf of her, her brother requested the Trust to keep it in their custody and present it to her when she has achieved her goal.

The International Situation

The international situation continues to be marked by a profound absence of perspective of the capitalist world. Almost five years after the beginning of the sub-prime crisis, the system is incapable of escaping from its crisis of over-accumulation. The pressure organized by the banks and the power centres of capital to maintain the rate of profit in spite of weak growth only worsens even further peoples living conditions. The prolonged and worldwide character of the crisis is confirmed Today growth has slowed in all the sectors of the capitalist world: The transfer of the crisis from US and European banks to sovereign debt and public deficits has also developed and spread. The world crisis continues. It has entered its fourth year. Its unfolding takes the form of financial crises, crises on the food product or raw material markets and crises of the public debt, notably in Europe. Its combined character economic, financial, social and climatic- is confirmed. The notion of crisis of civilisation reflects aptly the depth of this crisis. At the level of the world economy, some, like Paul Krugman (an economist identified with the left of the US Democratic Party) suggest that this Third Depression resembles both the stagnation that began in Europe and the United States in the 1870s - he calls it the Long Depression and the stagnation of the 1930s, which he calls the Great Depression. There is no decoupling of the emergent countries in the course of the crisis. China and the emergent countries are not in a position to relaunch the world economy. The structure of insertion of these countries in the world economy is fragile. Dont forget that 42% of Chinas GDP originates from its exports, and that in the medium term the solidity of Chinese growth will depend on its capacities to construct an internal market, with new infrastructures, wage increases and social security. The economic dynamism of these countries poses the question of whether the world economy today is not a single locomotive with the USA but several, with China, India and other emergent countries. Chinas dynamism is such that it can draw other exporting economies, whether in raw materials like Brazil and Argentina, or capital goods like Germany. It is one question but it is key to understanding this tipping point of the world. The US is in decline but maintains a position of strength thanks to the breadth and unified nature of its economic and financial market, due to the power of the Dollar, but above all due to its political-military hegemony, still felt despite the contradictions in the processes underway in Tunisia or Egypt. But it is no longer the US imperialism of the Bush years. It must make arrangements with others - in the area of arms with the Russians and tomorrow China or other states - Brazil in Latin America or with the pressure of the peoples. In this new world equilibrium, the US declines but keeps its political-military power, its huge market and its dollar, it is Europe which is falling back. Some even speak of the crisis of the Eurocentrism that has dominated the world since 1492- the date of the discovery of America. One of the striking elements of the current historic period and the crisis is the structural weakening of Europe.
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In this crisis, there are weak links of capitalist globalisation. We see it today with the contradictions which explode in the Arab countries but also in Europe where, for the dominant classes, in the battle between capital and labour, the crisis is a lever for the dominant classes who use it to destroy a series of social rights and gains. Since profit rates cannot be restored by production and mass consumption, world competition demands further lowering of the cost of labour in Europe and the USA. It is necessary to attack, deregulate, privatise. Despite its technological, social, economic power and its accumulated wealth, Europe is the weak link in capitalist globalisation, in the sense where it is caught in the pincers between the USA and the rise of the emergent countries. The purchase of a part of the Greek, Portuguese and Spanish public debt by China is, effectively, more than symbolic. From the conjunctural point of view, the crisis manifests itself in the form of a crisis of the debt. It has passed from the banks to the states with a public debt crisis which results from decades of inegalitarian tax policies and the public intervention into the financial and banking crisis. The public deficit went from 2 to 6.5% in the Euro zone and from 2.8 to 11% in the USA. The public debts between 2008 and 2009 went from 69.4 to 78.7% of GDP in the Euro zone and from 62 to 83%, from 2007 to 2009 in the USA. The states are now in the front line of the crisis and even if there are differences between the European Union and the USA the latter having had much more significant reflationary economic policies the dominant classes and government of the two units deploy austerity policies which in particular asphyxiate public policies. Imperialist Globalisation is a result of the internal dynamic of capitalism itself. For profit maximization, newer avenues have to be created and for this it praises to open the economy of the third world countries, seeks privatization of public sector of the services and goods and unhindered access to mineral & natural resources. It does not allow a sovereign country to exercise its sovereignty to control the movement of the international finance capital. The Imperialist Globalization lead by US has set itself three objectives. The first seeks the dissolution of the remaining socialist countries, the second, to review the impotent either through deflect or co-option third world nationalism, which materialized the non aligned movement following the decolonization process; and finally the establishment of an unequivocal and unambiguous military and economic superiority over the world in general and particularly over perceived competitors. Around the World we have been witnessing many changes. Capitalist countries, particularly the US imperialism have been facing serious economic crisis but owing to tremendous capital and asset reserves, scientific and technological development in IT and Communication fields and its hold on corporate media US capitalism has been prolonging its life. To day World is divided into several groups of countries with diverse political and economic system. US imperialism with its highhanded unilateral actions against the countries, who dared to oppose them in their imperialist design and asset their determination to decide their own destiny, has been posing a great threat towards World peace. Continued presence of US and NATO forces in Afghanistan and a handy Pakistan to sub-serve its military needs. USA carried out the operation to kill Osama Bin Laden in Pakistan soil which exposed both the US imperialism and the Pakistan before the World. It was also a blatant violation of the sovereignty of Pakistan as a nation. It is also an unhealthy sign for the entire Indian Sub-continent. During the period under review there have been mass upheavals in Egypt, Tunisia, Libya, Bahrain, Morrocco and several other countries in the World with a demand to end the autocratic and dictatorial governance. Fight against autocracy in West Asia and North Africa enthused Muslim World for democratic political system. Millions of people occupied Main Square and Streets in the Capital and other major cities. In Libya the rebels backed by USA freed the country from the clutches of Gaddafi. In the bloody clash Gaddafi and his son were killed. Dictatorial rules might have ended but it has not brought the desired democratic set up in
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those countries yet. These movements manifested the urge of the people for democracy and freedom and end of extreme economic exploitation. In Egypt, Muslim Brotherhoods Freedom and Justice Party has won the Parliamentary election. Md. Morsy has become the President and it is expected that a new era may begin. The Syrian crisis is fast becoming a civil war. CIA, as appeared in press is backing the rebels to remove the present Syrian Government led by Assad. The Syrian crisis cannot be resolved through military intervention. We have seen this in Iraq. Iraq is still bleeding. Palestinians are yet to achieve the statehood and are subjected to Israeli military action duly backed by imperialist forces led by USA. World should recognize the sovereign existence of Palestine and be admitted as member of U.N.O as a State. The USA has been pressurizing Iran to abandon its nuclear energy programme. The Western Capitalist countries led by US imposed sanctions on Iran. India recognizes Irans right to harness nuclear energy and though India did not agree to implement sanctions on Iran but as per dictate of USA it has reduced the import of crude oil from Iran. Iran is a key country for our energy needs. US goal is to invade Iran and capture the oil fields as it did in Iraq. That Iraq was developing weapons of mass destructions was the cry of USA and its allies. They resorted to military intervention, captured the oil fields, destroyed the relics of the Babylonian civilization and implanted deep hatred between one community and the other. US imposed sanctions on Iran have been adversely affecting the economy and people of the Country and to be withdrawan. Recently Non-aligned Nations Movement (NAM) was hosted by Iran at Teharan. 120 Nations, including India, attended and expressed their concern in the matter. India played its due role. India must and should pursue its independent foreign policy in the national interest and it should not subjugate its national interest at any cost. Capitalist domination all over the World has been on decline. The cry that there is no alternative to capitalism has been drowned in the social and economic turmoil in most of the capitalist countries. The liberal and deregulated economic system which satisfies the greed of the capitalist class and help exploitation of people, social wealth and national assets have not been working. Countries like China, Vietnam, Cuba, Venezuela, Equador, Brazil, Argentina, Uruguay, Bolivia, Peru are trying to develop alternate system for all round development of their country and people. Victory of leftists in Latin American countries have brought more stable and democratic Government than ever. Policies for equity and social justice for the people have been adopted by these countries as alternative to capitalists prescription which helped concentration of wealth in the hands of few and perpetuated the exploitation of large section of society. The World has been witnessing various experiments in social, economic and political field after the disintegration of Soviet Union and collapse of East European Socialist Countries. Russia has adopted the capitalist market economy to solve their problem. China, Vietnam and Cuba have been building socialism according to their specific conditions and characteristics of their respective Countries. China and Vietnam have adopted the course towards socialism through a market economy. Cuba is also opening its economy, focusing on the goal of socialism. We have yet to see the consequences of such changes. In 2011, the combined production of the Euro zone and the US only just returned to its level of 2008. In the same period, economic activity in the emerging countries grew by 25 per cent and by more than 50 per cent in Asia (India + China + the ASEAN 5: Philippines, Thailand, Indonesia, Malaysia and Singapore). The production of value in the three poles of activity is tending to converge, but with different dynamics: The economic levers, such as the IMF and the World Bank, remain entirely in the hands of the American and European powers and nearly 80 per cent of capital in the form of stocks and shares remains concentrated in the advanced capitalist countries (of the 50 groups holding most shares in other international groups, 24 are American, 8 British, 5 French, 4 Japanese, 2 Swiss, 2 German, 2 Dutch and only one Chinese) but in
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2010 the emerging countries accounted for 38.3 per cent of goods exported, 57.8 per cent of foreign exchange reserves, 52.5 per cent of CO2 emissions, and above all 83.5 per cent of the world population. The period under review have been marked by the tremendous uprisings of the Turkish and Brazilian youth. We must also add the movement in Bosnia, started around the defence of the right of babies to have an identity. These social and political mobilizations are part of a movement of social and political resistance against austerity, inequality, attacks on democratic freedoms. Whether it is the defence of a park, the reaction to the rising cost of transport or the defence of democratic rights, these movements also have their specificity. They are movements that are springing up, in any case for Turkey and Brazil, in emerging countries that previously were not affected by the crisis. This gives these movements a whiff of May 68, with a strong mobilization of youth relayed by the mobilization of sectors of the labour movement. In Brazil the austerity measures indicate perhaps the premises of the exhaustion of the Brazilian model. But the mainspring of these movements is precisely the contradiction between some growth - although it has slowed in Brazil - and glaring inequalities. In Brazil, it is the tension between budget cuts that affect health, education and housing. In Turkey it is the opposition between socio-economic growth and the oppressive regime that the Erdogan government wants to impose. It is too early to draw any lessons from these events, but new political generations are moving into action and that is of capital importance for the situation in these countries. Current growth rates and those predicted for the long term are weak: 3% in 2011 and 3.5 % in 2012. This breaks down as follows in the various zones: 1 to 2 % in Europe, 2 to 3 % in the USA; and 6 to 7% in the socalled emergent countries. Unemployment rates in the main capitalist countries remain high, around official figures 10%, in fact much higher. Poverty is increasing, hitting in particular women, youth and immigrants. Global Economy In Quicksand Serious economic crisis around the Globe is the gift of capitalist system and particularly the policies advocated by World Bank, I.M.F., Finance Capital and Multinational Corporate Houses. This is an era of financial imperialism and it has been trying to dominate the economic and political system World over. In the wake of disintegration of erstwhile Soviet Union and collapse of the socialist regimes in Eastern Europe, the capitalist countries and its protagonists termed it as the end of socialism, class struggle and proclaimed that only path of development was through capitalism based on the theory of Globalization, Liberalization and Privatization. Actually they enjoyed total freedom for maximization of profit by all means and loot of natural resources and wealth in any part of the World. Finance capital, which has neither a national character nor grooming in industrial activity, started control of the economic and political system to their advantage and greed for profit in a most unregulated, brute and inhuman method. Aggression against Iraq and Libya, continued blockade of Cuba, military campaign against DPR of Korea and propounding of theories like excess of evils reflects this dangerous trends of international finance capital. It destabilizes the economy and political system of various countries. In economic sphere, it has been manipulating through its arms like World Bank, IMF and even WTO. Finance capital is one of the contributors of present day economic crisis, concentration of wealth / assets in the hands of around 1% people, increase in national debts of the countries, uncontrolled price rise, job cuts, job losses, cuts in subsidy on social security, health security and old age security of people and wide scale discontent in common people throughout the World. In our Report of last Conference, we described in detail about the Global Meltdown of 2008, its cause and impact and its adverse effect on Global economy and economies of different Countries as well. Its cascading effect has been still continuing, Euro zone crisis is a matter of great concern and challenge before the World, when we are meeting in this Conference. The crisis in euro zone and the US is an inevitable outcome of the financial system based on promoting debts and borrowings. Not only families were lured to spend more than their income and caught in the web
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of ever increasing loans and compounding interests but even Governments were forced to traverse this disaster course. The net result is bankruptcy of banks and financial institutions in the first stage and later bankruptcy of the Governments themselves. The economies of Greece, Spain, Portugal and other European Countries are under severe strain. Germany, UK and France have also been facing the crisis. European leaders have been working over time to save these economies and Euro dollar through bailout packages, reduction in expenses through so called austerity measures meaning cut in peoples welfare spending and cut in export etc. Finance capital has generated devastating Tsunami in the economies of Euro zone countries and adverse effect on people and also on other countries in the World. USA is yet to come out of its economic crisis created by Global Economic Meltdown of 2008. It is the most indebted country in the World and losing fast its debt credibility. In November, 2011 its national debt was estimated about 15.03 trillion dollar, of which 10.31 trillion dollar was held in the public and 4.72 trillion dollar was intra-Governmental holdings. It means the public debt was more than the latest GDP of 15.003 trillion dollar. The deepening crisis and growing bankruptcy of the Government and financial institutions are sought to be overcome by giving billions of dollars of public money in the name of Bailout Packages and by enforcing continuous cuts in public funding of education, public health and pensions. Job cuts and reduction in wages have become a routine affair. Unemployment has crossed doubled digit figure. In most of European Countries unemployment has touched 20%. Average public debt of European countries has touched average of 82.5% of their gross domestic products of 2011. As per World Economic Outlook April, 2012 public debt percentage of GDP of leading European countries such as Germany 81.2%, France 85.8%, UK 85.7%, Italy 120.1%, Belgium 98%, Greece 165.3%, Portugal 107.8%, Ireland 108.2%, Hungary 80.6%, Spain 68.5%. These are some examples. The sustained economic prosperity of Euro zone is at stake. National currencies are under pressure. Greece, Portugal, Spain, Italy have to face the ignominy of inability to repay their loan commitments. India has joined BRICS countries in salvaging the Euro zone economy. The unemployment, job cuts, reduction in wages, pension, cut in subsidy on health, education and social security, uncontrolled prices are some of the worst situations common people are facing in Europe. While people and institutions, responsible for such situation, are awarded by bailout packages, financial assistance and loans on concessional rate, the common people are subjected to unprecedented miseries and financial crisis in the name of austerity measures. Anger of common people led them to streets. Occupy Wall Street call which show huge turn outs in all cities of America for several weeks flaunting placards, and slogans against capitalism showed that mass indignation against capitalism was no longer confined within the peripheries of the developed capitalist world. The metropolis too is now under attack. This movement which had spread over in more than 1500 centres in 86 Countries of the World reflected the general anger of the people against the very capitalist system but lacked leadership of organized political force to give it a proper direction against capitalism. In absence of strong left political forces and organized Trade Union movement the peoples anger could not lead to real class struggle. However, lately the Working Class and also many sections of the middle class are not taking this attack on their living standards lying down. Everywhere they are fighting back determinedly with massive militant actions concentrating their anger against corporate greed and its quest for maximizing profits at the expense of the common people. It took the form of mass upsurge in many capitalist countries with people voicing their demand for an alternative to capitalism. Finance capital institutions while imposing conditions of austerity for offering bailout packages are also directly intervening politically. In Italy and Greece Prime Ministers were changed through such intervention. In number of countries, particularly in Austria, Finland and Hungary, rightist parties have gained in recent
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elections. These forces have launched an offensive against the left. Hungary has outlawed the left. France has also witnessed change of President through election. In UK, people came out on streets against unemployment and economic inequality. The so called London riot which took place not only in London but also in several other cities of UK was an expression of anger of masses against capitalism. In different Countries rulers are applying brute Police force to crush the Working Class and Common People Movement. Examples are at galore during the period. On 16th August, 2012 Police firing upon Rockdriller of Lomcin Platinum Mine, 100 k.m. North West of Johannesburg, South Africa killed 36 Workers and injured many who were demanding wage hike. It is a mine owned by British Multinational. This is one example of recent time. The global economic crisis is affecting the countries and people in different regions differently. If Europe is in dire strait by heaping the miseries on the people through cut in pension and wages, reduction in public fund for education and public health, raising of interest of public borrowings, develop countries too are in turmoil. The bankruptcy of banks and financial institutions in USA and Europe have dwindled the incomes of Sheiks and Amirs who are passing the burden on their own people. Apart from urge for democratic and human right there are economic reasons for the peoples uprising in most of the Arab countries. American imperialist along with their NATO allies are out to exploit the peoples uprising to protect their own interest in Middle East and North Africa. They are protecting their stooges, manipulating to install puppet regimes. But harsh economic situation and Global Economic Meltdown have been hurting the people of these countries and forcing them to come out on streets. The global economic situation and crisis have been adversely affecting many African Countries, Japan and ASEAN countries. Peoples resistance to international finance capital has been increasing. New thinking and economic order is the demand of the day as an alternative to economic neo liberalism. Global crisis has also adversely affected our Country. Uncontrolled price rise, retrenchment, lay offs and closures of factories, unemployment, casualisation, contractualisation and outsourcing of jobs, wage cut, job losses, violation of labour laws etc have become the order of the day. GDP is going down, production in agriculture and manufacturing sector has been declining, export has decreased, inflation in uncontrolled and big business, corporate houses, World Bank, IMF and even USA have been dictating the terms to protect and promote their interest. The international finance capital and big corporate houses completely de-unionize the Working Class in most of the countries. Trade Unions are marginalized. Unorganized work forces have been encouraged in the economy to minimize resistance to their game plan for maximum profit and maximum hold on Worlds assets. They are under process to de-politicize the political parties through NGOs and other methods to develop political system and parties to serve their purposes and helped them to their control over the administrative, economic and political system of any country. We should join the forces of Working Masses and Common People to put resistance to the imperialistic control, design and exploitation of countries and people by international finance capital. Military Imperialism has been giving way to Financial Imperialism. Resistance movements to such economic and political policies have been developing through out the Globe and capitalist domination is under challenge. The Neo liberal globalization is widening economic inequality amongst the Nations and people, generating poverty, National debt and burden of loan on people and unemployment. Disparities among and within Countries continue to grow. Richest people have grown faster and have been controlling vast amount of wealth and assets, generated during the period. The poorest people and Countries are robbed and have become the victims of extreme exploitation and deprived of bare means and need for existence. The following facts expose the result of Neo Liberal Economic Policies on vast masses of the people in the Globe.
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Nearly one and a half billion people out of World population of 6 billion continue to leave in absolute poverty and on the verge of starvation. More than eight hundred million people go to bed hungry though World resources, production capability and advancement in science and technology are capable to meet their requirement of food and other fundamental necessities. But fruits of development have been cornered by a few, while depriving the vast majority of population. The gap between the rich and poor, among people and Countries have been widening day by day. The richest 20% of the Worlds population hold almost 83% of the Worlds wealth. The poorest 20% of Worlds population now controls only 1.4% of Worlds wealth. This was 2.4% on the 35 years ago. The poorest of the developing Countries have more than half of the Worlds population, but only 5.6% of the Worlds income. BRICS Nations: Brazil, Russia, India and China, the emerging strong economies in the World, have been co-ordinating themselves on major economic and international issues. This block has further admitted South Africa as a member. This block is for greater flexibility in international economic relations, global governance of financial institutions, broad based reserve currency which will serve alternative to the dollar and payment of credits in local currencies instead of dollar. They are also voicing support for a comprehensive reforms of UN including composition of Security Council. Time to time they are echoing their voices on different political developments in the World and have been focusing the need to avoid the use of force and insure in respect for the principle of non-interference in the internal affairs of the nations. BRICS account for 26% of the World area, 40% of its population and 32% of Global GDP. Their combined voice has been posing a concern to the domination of developed countries and an inspiration to developing countries. These are few examples, not exhaustive report. Since the days of experimenting and implementation of Neo Liberal Economic Policy in our Country we are also subjected to such phenomena. We cannot remain a silent spectator to all these developments. We cannot accept such state of affairs. We have to fight to change it and also join hands with other democratic forces who are opposed to such policies.

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CHA TPER - III CHATPER Hope F or T he 3rd Millennium For The

West Polluted We Are Paying.
Earths climate has become warmer. This in turn means more evaporation. When more moisture goes up, more comes down. It means more destructive storms and more flooding. Worldwide economic losses, during 1998 for example, from floods, storm, droughts and weather related natural disasters totalled some $ 72 billion. The most dramatic numbers come from India, where withdrawals of under ground water are now believed to be double the rate of recharge. With massive aquifer depletion in prospect, some speculate that this could reduce Indias rain harvest by as much as 25%. In a country that is adding 18 million people per year, this is not a good news. Human numbers are four times the level of century ago, and the world economy is 17 times as large. The western economic model the fossil-fuel based, automobile centered, throwaway economy is in trouble. The key limits are fresh water, forests, range lands, oceanic fisheries, biological diversity and the global atmosphere. At present 70% of all the water worldwide that is diverted from rivers or pumped from underground is used for irrigation, 20% is used for industry and 10% to residence. The economics of water use do not favour farmers. A thousand tons of water can be used in agriculture to produce one ton of wheat worth $ 200 or it can be used to expand industrial output by $ 14,000 70 times as much. A combination of logging and clearing land for farming and ranching has weakened forests. A healthy rain forest will not burn. Fisheries actually preceded agriculture as a source of food, but ours is the first generation to reach and perhaps exceed the sustainable yield of oceanic fisheries. The welfare of more than 200 million people around the world who depend on fishing for their income and food security is threatened. A solar-powered, bicycle/rail centered, reuse/recycle economy one that uses energy, water, land and materials much more wisely is needed. Parents everywhere are concerned about their children. In their efforts to ensure a better life for them, they invest in education and medical care. But unless we now assume responsibility for the evolution of the global economy, our short term investments in our childrens future may not amount to much; our principal legacy to them would be a world that is deteriorating ecologically, declining economically and disintegrating socially. Building an environmentally sustainable global economy depends on a co-operative global effort. No country can do all these things alone. The challenge is to reverse the last decades trends of rising international inequalities and shrinking aid programmes. The assets of the richest three individuals exceed the combined annual economic output of the 48 poorest countries.
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Taking into consideration the pressing urgency the developed countries that have over used the atmospheric carbon sink should come forward to help developing nations build infrastructure for alternate sources of fuel that do not result in carbon emissions. Let us not forget to put in place the priorities which will be crucial in the battle against dangerous climate change and in embedding a global low carbon economy. As all this basis for a flourishing democracy is established, the road to prosperity will smoothen and a new society of happy relations can be constructed. We can abolish all discrimination on the basis of caste, religion, gender and region, encourage local initiative, creativity and scientific experimentation to tap our traditional resources and knowledge, inculcate values of modesty, selflessness and concern for others in place of selfishness, greed, ego etc. and ensure the flowering of the individuality of every person in place of the present extreme individualism.

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CHA TPER - IV CHATPER National Situation

Indian Economy: Lumbering Elephant or Running Tiger?
The slogan coined for the Twelfth Plan was: Faster, Sustainable and More Inclusive Growth. In his Budget speech, the Finance Minister stated that a principal objective of the Budget was to focus on domestic demand-driven growth for recovery. Whether one says inclusive growth or domestic demand-driven growth, both mean the same thingto raise the purchasing power of the people to faster industrial dynamism, thereby enhancing overall growth. Such a policy, if really implemented, would result in a spiral of ever-increasing growth, determined by domestic factors and not by international support. Greater industrial activity means more employment, and more employment means further increased purchasing power.... and so on, the spiral of growth and development continues upwards. The concept is perfect; the flaw lies in its implementation. The policies implemented so far unfortunately are not in accordance with the stated intention. These have led to structural distortions. This has created a warped economy, rising and falling dependent largely on foreign transfusions. If we analyze in more detail the various sectorsfinancial, industrial, agricultural etc.and then the nature of the existing market before finally concluding. The first and major structural deformity: while agriculture accounts for a mere 14% of our GDP (Gross Domestic Product, that is, the value of all the goods and services produced in our country in one year), it supports over 60% of our population; on the other hand, while the service sector accounts for over 60 per cent of the GDP, it supports barely 5% of the population. Even manufacturing is stagnating at fewer than 20% of the GDP. In developed countries, though the service sector is also large, there they support a proportional part of the population. But, in a developing country like India, vibrant growth could be fostered only with a dynamic industrial/manufacturing sector, which could absorb the population displaced by agriculture. But here, manufacturing and local entrepreneurship is being strangulated due to various factors, and the population displaced from agriculture becomes a floating mass of semi-starved people. Second structural deformity: increasing dependence on international trade, further crippling the domestic market. Foreign trade has leapt from 37% of the GDP in 2004-05 to 53 per cent of the GDP today. (Economic Survey 2011-12) A flood of imports of cheap commodities drowns indigenous production, making many an industry export-dependent. Why, even the government promotes imports (rather than local production), as in defence. For example, the foreign Tatra heavy-duty trucks were being imported at over double the cost of what could have been manufactured at the Jabalpur plant. Not only were imported trucks said to be sub-standard, and the taxpayers money wasted, but such a policy helps generate job in the West rather than India. No wonder the West is elated by the huge defence orders. The third structural deformity: the bulk of the population barely comes within the market mechanism itself. With 77% of our people, or 80 crores of them, living on a mere Rs 20 per day and another 10% hovering just above that, what market could these people possibly create? Though policy-makers seek to squeeze out a market even from these decrepit people even then their capacity is limited. All that happens is that big business squeezes out local production of basic necessities, adding to the unemployment. It is basically the top 10%, and more particularly the top one per cent, that act as the major domestic market for industrial goods.

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And the fourth major structural deformity: it is the systematic siphoning off of vast amounts of wealth from the economy through the black market (estimated at 50% of the GDP) and abroad by varied means. Both act to restrict revenue collection and also prevent capital accumulation within the country. It is then these four major structural deformities within our economy which negate the stated good intentions mentioned in the Plan policy and budgetary expectations. And it is these that have brought the economy to the brink of a precipice, notwithstanding the routine statements of sound fundamentals being made by the media. Let us now make a brief overview of where we stand today. First, the rate of economic growth has fallen from a peak of 9.5 % in 2005-06 to 6.9% in 2011-12, and is expected to fall even further in the current year to 6.1% or less. The Index of Industrial Production (IIP) has been continuously falling in the last financial year, the worst being in the capital goods sector which has been having a negative growth of over 15%. Many key sectors, like power, telecom, aviation etc., are in a state of severe crisis. Then, the Government is on the verge of a Balance of Payments (BoP) crisis, much similar to what we faced in 1990-91, when our gold reserves had to be mortgaged. In that year the Current Account Deficit (CAD, that is, imports exceeding exports and foreign remissions) peaked at 3% of the GDP, while in the financial year just over it has skyrocketed to 3.6% (it had dropped to 0.6% of the GDP in 2000-01). At that time our foreign exchange reserves had also been totally depleted, leading to panic. Now, though it stands at about $ 300 billion, things are not as comfortable as they seem on the surfacethe external debt by end-December 2011 was $ 335 billion (with about $ 120 billion having to be repaid by June 2012) and the trade deficit last financial year was $ 200 billion. Not only this, repayment amounts and value of imports have jumped due to the drastic fall in the value of the rupeea de facto devaluation of 13% since July 2011. Then again, many spheres of the economy are in a state of semi-bankruptcy. The bank NPAs (non-performing assetsa euphemism for bad debts) have sky-rocketed last year, needing huge infusions of government funds to bail them out. In addition, in 2011-12 industry was badly bit with 389 companies having bad loans amounting to Rs 2 lakh crores, seeking bail-outs. So, both finance and industry are in dire straits. If we turn to the governments finances, the situation is no better. Tax revenues and domestic savings are dropping, while the fiscal deficit and public debt are rising. Tax revenue as a percentage of the total expenditure has dropped from 60 per cent in 2006-07 to 46 per cent in 2011-12. Gross Domestic Savings have dropped from 37 per cent of the GDP in 2007-08 to 32 per cent in 2010-11. The fiscal deficit of the Centre reached 5.9 per cent of the GDP in 2011, against a budgeted figure of 4.5 per cent. As a result the governments debt has drastically increased from Rs 1.3 lakh crores in 2007-08 to Rs 4.1 lakh crores in 2011-12. The per capita debt in the same period increased from Rs 23,287 to Rs 36,888. Such spiralling debts entail huge interest payments, sucking away much-needed funds for rural development and peoples welfare. Finally, if we turn to agriculture, the situation appears bleak. The growth in food grain production has dropped from 3.1% average in the decade of the 1980s to 1.1% in the 1990s and a mere one per cent in the 2001-10 period. As a result, the per capita availability of food grains has dropped drastically from 510 grams daily in 1990-91 to 440 grams daily in the 2009-10 period. The viability of agriculture is also being affected by the rise in the cost of inputs and no commensurate rise in yields or market value. Then, is there no silver-lining in the Indian economy? Of course, there isrising stock exchange indices and large inflows of foreign capital! True, FIIs (Foreign Institutional Investors) in the first three months of 2012 grew astronomically; but that was only after the Finance Minister announced a series of concessions demanded by them. And as far as the rise in the stock indices are concerned, these are not due to a buoyant economy, but only due to the large FII inflows. The government desperately needs to sustain these inflows, to (i) sustain the stock prices, (ii) prevent the rupee from crashing further, and (iii) most importantly, prevent a BoP crisis. So, the government is bound to bow further to foreign dictates, caught as it is in its web.

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But, such dependence is fraught with great dangers, given the high volatility in the international economy. In fact it would be good for the government to take note of what the President of the CII (a top body of business) had to say at a conference held on March 24, 2012. He had said: Throughout the 20th century, resources and commodity prices had declined in real terms which gave a huge boost to growth. The global GDP grew 20 times. During the past 10 years, things have changed unpredictably unlike the past centuries. The era of resource-based growth, which was the result of declining commodity prices, was now over; huge volatility is the new phenomenon.... Higher prices and scarcity of commodities have started haunting the globe. It is going to be a different kind of world from what we have seen. It would witness not only imbalance but much more volatility. If we are to avoid the abyss, the time has come for strong measures. First and foremost, there is urgent need to set right the structural distortions in our economy. Financial Sector: Where has All the Money Gone? Funds/finances are essential for investment and developmentwhether agricultural or industrial. Finance/ money in itself has little meaning, unless it is fruitfully utilized to generate assets. Unfortunately, in this era of globalization, much of the finances goes into speculative activities, creating bonanzas for the billionaire club, but little for the countrys development. Primarily, the sources of finance are banking and domestic savings, government funds, and foreign funds. In this article I shall focus on these three spheres of financing. Banking and Domestic Savings Here we have clubbed the two as a sizable part of the legal savings (both individual and business) is held with the banks. But savings also go into other spheres, as stock markets/mutual funds, gold, real estate etc. However, as the latter remain mostly in the speculative sphere, I will only focus on the former, which is mostly utilized for investment and loans for consumption. Of course, also included in savings, together with banks, should be insurance, Provident Funds/Pension Funds, postal deposits, etc. Here I will not go into details but consider domestic savings overall. After that I will look at the state and health of our banks. The Gross Domestic Savings, which was 37% of our GDP in 2007-08, has dropped to 32% in 2010-11. With inflation sustaining at high levels, earnings are being sapped up with little left to be saved. In addition, with the declining state of peoples health, even these little savings are getting drained by the huge expense incurred in case of illness, medicine and hospital charges. It is estimated that households spend as much as 10% of their overall income on healthcare. In addition to this, public sector savings have fallen drastically from 5% in 2007-08 to 1.7% in 2010-11. With inflation remaining high and indirect taxes being consistently increased, savings are likely to drop further. Now, if we turn to the banking sector, during the 2008 meltdown it was said that our nationalized banks are among the safest in the world. This is not entirely accurate. In reality, they are quite fragile, with spiraling NPAs (non-performing assetsa euphemism for bad debts) and hefty government infusions to keep them afloat. The giant US banks crashed due to speculative investments in the derivatives/mortgage markets going wrong; the euro debt crisis is a result of hefty loans to countries unable to pay back; and Indian banks are facing problems due to irresponsible lending, mostly to big business. In the financial year just over (2011-12), the NPAs of these banks have sky-rocketed to cross Rs 1.5 lakh croresa three-fold increase since 2008with huge outstandings from the power, real estate, road, textile and aviation sectors. The RBI estimates the banking sector will lose 35 per cent of its value. In 2010-11, the government provided a whopping Rs 20,157 crores to the public sector banks; in 2011-12, the figure has been around Rs 26,000 crores. But these two years are not an exception; it appears to be a
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trend linked to policy. The Finance Minister has said that in the next decade it plans to pump in a massive Rs 4.5 lakh crores into these banksthat is, some Rs 35,000 crores per annum!! This is taxpayers money being thrown away as big business (Kingfisher-style) do not pay back their huge loans. As of today, large borrowers (with loans over Rs 10 crores) have defaulted to the tune of Rs 47,000 crores and the banks have not even bothered to pursue even half of these. While banks often use strong-arm tactics to recover loans taken by farmers and the middle class, they take a soft approach when it comes to these gigantic amounts. Whatever, this situation is not only an indication of the precarious situation of the banks, but also of the sectors unable to pay back. As long as the government continues bailing them out at huge cost to real development and welfare expenditurebig business and banks gain, but the country and its development loses. If the government is serious about its own slogan of privatisation, it should not interfere in such companies and allow the loss-making companies to sink. Government Investments In this there are two aspects: the raising of funds, and second, the nature of expenditure. Funds need to be maximised by particularly taxing those who can afford to pay. And expenditure should primarily be geared to asset creation. Now, if one looks at Indias tax revenue, it is a mere 10% of the GDP, while in most other countries it varies between 20 to 30%. Part of the reason for this is the huge black economy. And of this limited revenue, a major part comes from indirect tax (tax on commodities and services which mostly affect the poor and middle classes), while direct taxes (mostly on the rich and corporates) have been stagnant. A continuation of such a policy can be clearly seen in the current Budget. While on the one hand, indirect taxes seek to raise a massive Rs 45,000 crores (plus threats to further raise petrol, diesel, LPG rates), on the other hand, tax on security transactions was reduced by 20%, the film industry was exempted from service tax, a tax holiday was declared for the power and roads sectors, and many of the concessions to big business continue. Now, if we turn to the governments expenditure, though it has gone totally out of control, little of it goes for asset formation. Over 25% of the government revenue goes merely to pay its employees. And this does not include the large amounts taken by Ministers, MPs etc. Another big chunk goes towards interest on the Rs 5 lakh crore government debt. Then again the large amounts on social welfare schemes are mostly doles rather than generating employment through asset formation. Even if we turn to items like the large capital expenditure, as in defence (budgeted at Rs 80,000 crores in 2012-13), the bulk goes for imports rather than indigenous manufacture. No doubt such big defence orders create elation in the West, who are desperate for a market, but it deprives Indians of employment. Finally, there are the huge amounts of wasteful expenditure on foreign trips, five-star living etc. of our Ministers and MPs. For example, the former President has spent Rs 206 crores on foreign tours (the highest ever), Rs 6 crores on a newly-fitted car, and now, post-retirement, a big bungalow is being built for her on military land in Pune. Then again, as against Rs 47 crores budgeted for their tour expenses in 2011-12, Central Ministers spent Rs 400 crores (compared to just Rs 56 crores in the previous year)!! So, we find here the government is foregoing much revenue that could easily be tapped even within the existing system; it is also unable to rationalise its expenditure to make it more productive. If one looks at the Approach Paper of the Twelfth Plan, it does not even seem to go in a constructive direction. So, we will end up with continuing, fiscal deficits and rising debt burdens while real development will remain an illusion. Finally, let us turn to the third sphere of the financial sectorforeign fundingwhich seems to be a key aspect in the present scheme of things.
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Foreign Investments These investments comprise three spheres: (a) external borrowingsboth private and government; (b) Foreign Direct Investment (FDI)more geared to either taking over business or setting up new business; (c) Foreign Institutional Investments (FIIs)more speculative capital. (a) External Borrowings:

Both the corporate sector and the government have been borrowing heavily on the international market seeking to make use of the cheap creditinterest rates in the developed countries are about 0-1 per cent. But last year, when the FIIs withdrew funds leading to the crash of the rupee, when repayments are coming due this year, they will have to pay 15-20%t moreso, instead of cheap credit, it has turned into one of the most expensive credits ever. At the time they borrowed, the rupee was roughly Rs 46 to the dollar; it is now just around Rs 65a de facto devaluation of 29%t. Since the last two years, the government has been borrowing heavily abroad and now the external debt has reached $ 320 billion. Of this, $ 133 billion is short-term and coming up for maturity shortly . Assuming that the rupee does not fall further, the government will be repaying a good $ 10 billionthat is, a huge Rs 50,000 croresextra!! (b) FDIs:

FDI have recently been in the news regarding their entry in retail. This has been strongly opposed by the small kirana shop owners as also farmers organisations. It has been hailed by Walmart, the US retail giant. Also by the government. Though FDI is not speculative investment, often it is capital/business that tends to destroy (or swallow up) indigenous companies. So FDI is retail will displace lakhs of small shopkeepers and also squeeze their profit margins. Recently, most of the major pharmaceutical companies were taken over by foreign capital; this is also happenings in other spheres of the economy. One could understand FDI in the hi-tech sector where India may lack the know-how, but to manufacture soap, toothpaste, medicine etc. and to sell goods seem counterproductive. If the government is serious about FDI, it should first prevent such large outflows. But, let alone prevent these, the government itself utilises taxpayers money for investment abroad. In the current Budget as much as Rs 1000 crores has been allocated to the Ministry of External Affairs for investment in foreign countries!! (c) FIIs:

In a situation of increasing international economic instability, such speculative funds are bound to be highly volatile, moving to those parts of the world where returns are maximum. So, for example, FII inflows in 2011 dropped to a fraction of what they were in the previous year. But in the first few months of this year these have shot up after the government announced a series of concessions to FIIs. Such measures are fraught with great dangers in a period of economic volatility. While most countries are putting up protection walls to safeguard their economies, as in Latin America, India, inexplicably, appears to be opening out even further. Rationalisation of the Countrys Finances So, overall we find the finances of our country are not particularly sound. Banks seem to have systemic NPA problems and may need continuous bailing out. Government finances are increasingly fragile with a growing fiscal deficit and burgeoning public debt. And, as regards foreign funds, the continuing fall in the value of the rupee and extreme international volatility have made such funds exceedingly unreliable and even dangerous.
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Yet, a judicious rationalisation of even existing available sources of finances could itself make all the difference. It just requires a more effective mobilisation of funds from those who can afford to give them, and at the same time focusing on a more scientific use of such funds. For example, as Gurumurthy of the Swadeshi Jagaran Manch said (Sunday Standard, March 11, 2012): absence of tax on derivatives by big-wigs is ridiculous... A tax of 10 paise per Rs 100 derivatives will yield Rs 88,000 crores In addition, bringing the huge black economy into the tax net, removing the Rs 46,000 crores per year (average for the last six years) concessions to the corporates, increasing the slab of income tax on the super rich etc.are just a few of the measures that could raise funds amounting to Rs 5 lakh crores. Even if indirect taxes are reduced to give relief to the poor and middle classes (which will also enhance the consumption expenditure); the government could still have Rs 3 to Rs 4 lakh crores available for expenditure. And if this entire amount is not frittered away but used to boost asset formation, it could result in miracles overnight. But for this, wasteful expenditure should be cut, bailouts to banks and business stopped, subsidies/ welfare made more development-oriented rather than dole-oriented, all contracts be made fully transparent through open tenders as suggested by the Supreme Court, capital expenditures be given to indigenous industry rather than imports etc. etc. All such measures could go a long way in putting our country on a truly developmental path. Agriculture and Industry: Going Around in Circles Productivity in agriculture always lags behind productivity in industry as technological advancement is much more rapid in the latter. That is why all developed countries, to cover this gap, heavily subsidise agriculture. Thereby the imbalance with industrial goods is minimised. Unfortunately, in India we see no such scientific planning; so agriculture is thrown not only to the vagaries of climate, but also to those of the market mechanism. Agriculture: Increasingly Unviable Agriculture not only faces the vagaries of climate, stagnating yields due to environmental degradation, the tyranny of the market and middleman, but recently it has also been attacked by the neo-carpetbaggers seizing its lands. First, let us look at the viability of agriculture. According to the Food and Agricultural Organisation in its recent report, both yield and per hectare crop value are far behind China, let alone the more developed countries. Over and above this, huge amounts of prime agricultural land are being lost to industry, mining, real estate, and infrastructure and just to speculation as with many an SEZ. In most cases the farmers get much below the market price, and are also deprived of any form of alternative source of livelihood. Those around the urban pocket who get huge amounts of cash, get drawn into money lending, gambling and crime and the lumpenisation of an entire population. According to the ADB (Asian Development Bank), between 1951 and 1990 land equivalent to 1.5 lakh sq kms have been grabbed; more than half of this for private property. But in the last decade, the land grab has been even more fearsome. In UP alone, 33% of agricultural land is being divested. Already 6.6 million hectares would be taken out of farming, which would mean a production loss of 14 million tonnes of food grains. In Maharashtra, the CM stated that the area under cereals and pulses further declined to 3.7 million acres in 2010-11. In Haryana, the government itself acquired 60,000 acres while all land in the neighborhood of Delhi/Gurgaon has been bought up. In Chhattisgarh, 40,000 acres of double-cropped land has been bought in just two districts. And the story could go on and on from one State to the next. In Tamil Nadu, it is said that in most large villages, or those near towns, the land mafia is purchasing agricultural land, dividing it into plots, which are mostly bought up by middle-class employees of the region. Such a phenomenon is probably widespread in other areas as well.
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All this displacement would be fine if this large mass of uprooted people could find fruitful employment. But, this is not the case as industry is not able to absorb themfor two reasons. First, it is itself somewhat stagnant due to the shrinking markets. And second, what little growth is there, is hi-tech, and so has little use of displaced farm labour. Stagnant Industry Industry, notwithstanding the major concessions given by the government, is not in a very healthy condition squeezed by falling markets, high cost of money, and spiralling inflation. Indias power, telecom and aviation sectors are in various states of crisis. All are capital intensive which attracted investment when global capital was cheap. As already mentioned, the Index of Industrial Production (IIP) has been low throughout the latter part of last year. In January of the current year it dropped to just over one%. Companies were in such a pathetic state that in the nine months to the end of 2011, 75,000 loans from banks had to be restructured. Over two-thirds of these were those of big corporate with loans of over Rs 1000 croresnearly 30% being in the power sector. In spite of this downturn in industry, the top echelons fortunes have been rising. In just last year the top 87 company CEOs have found that their average salary (that is, the legal part) rose by a gigantic 30% to reach Rs 2 crores each. While Indias top 100 families have a wealth of 25% of our GDP, 90% of our labour force is in the unorganised sector. Our billionaires are not true entrepreneurs, but more like the carpetbaggars of the 19th century, Arindam Chaudhuri, a management guru, has put it succinctly (The Asian Age, April 13 2012): Our billionaires have accumulated their wealth purely through scams, loot and the criminal transfer of national wealth into private hands... In the latest phase, it is actually the GOI (Government of India) that created the process of creating numerous global billionaires out of our existing industrialists through the SEZ Actwhat we at IIPM have termed the National Loot Actand other such processes of giving away natural resources to private hands (for example, 2G, Coalgate etc.) And that unfortunately is the story of Indiablood billionaires making their billions out of scams, poverty and bloodshed. If the government is really serious about privatisation and liberalisation, why does it give such massive doles to big business in the form of tax holidays, tax/excise duty concessions, low royalties, bailouts etc.? These business houses and banks should live or be allowed to die without state support, and the concessions etc. should go to those who really need them. With such measures the inefficient and corrupt businesses will disappear, while the peoples purchasing power will grow to create a vibrant market for industrial growth. Towards Sustainable Agriculture / Industry The present form of industrial-agricultural complex is resulting in urban ghettoisation and rural destruction; it is just not sustainable at both the human and ecological levels. It dehumanises man and toxifies nature. Not only in most Third World countries we see this, but also the erstwhile communist societies like Russia, China, East Europe etc. are going in the same direction. This dehumanisation often takes place in the name of religion and in a country like India it fits comfortably in an already existing inhuman caste system. But before we take a look at the possible alternatives in the light of past experiences, let us first have a look at todays GODthe Market in India.

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Market Fetishism or Necessities for All round Growth Seeking necessities and reasonable comforts in life is one thing; it is quite another to destroy nature and even man (his values) to serve the God of the Market. One does not grudge the middle-classes a decent lifestyle; what one does condemn is the obscene wealth (white and black) in the hands of the top 1% on the one hand, and the excruciating poverty of the 70% on the other. This market mania is primarily promoted by the media (newspapers and TV) as also the film industry. Advertising, serials, films etc. all act to debase our values, create the urge to buy more and more items, and promote the lifestyles of the ultraelite (film stars, cricket stars, corporate barons). Today it is these media barons intertwined with the corporate world and politicians (who primarily own the mainline media), who are the main promoters of market obsession and cultural trash. So, one gets the absurd situation where only 31% of the rural households have latrines, but 55% have phones (mostly mobile). The youth will beg, borrow or steal to mimic the latest fashions on TV/films but will not show an iota of concern for the multitudes living in hunger and destitution. The media has effectively numbed our sensitivities, warped our emotions, destroyed our creativity, and reduced us, particularly the bulk of the middle classes, to robotic cogs in the market machine. It is not that the market per se is bad; its growth and development is a pre-requisite for the industrialisation of the country. But, the focus should be on what the ordinary masses and middle classes need. The masses are in need of toilets, clean water (not Bisleri at Rs 15 per litre), cheap cooking fuel (63% in rural area still depend on firewood), affordable medicines/hospitals, a hygienic environment (drainage etc.), and, most important, food/vegetables/fruit at reasonable prices and uncontaminated with pesticides and chemicals. Also, to this we should add the basic needs of the middle classes like consumer durables, white goods, computers/internet, phones etc. But, instead what we find is an obsession with the luxury market, five-star hotels and real estate, tourism, the beauty industry, SUVs etc. To understand this phenomenon of why the Indian market functions in this way, we need to take a look at where the money lies in our country. For, it is this and this alone that determines what items are given priority. If, for example, 70% do not have enough money to afford toilets, then toilets will not be made. But, if the one per cent have pots and pots of money to purchase jewellery, then jewellery will be produced and not toilets. Why, even the Finance Minister will remove the 2% hike in excise duty on jewellery, but not on the items of necessary consumption! Who Comprise the Market? Is it the 70% who can hardly afford two square meals a day? Or is it the roughly 25-30% middle classes, or is it the ultra-rich one-to-two per cent? According to a recent NSSO study (The Times of India, April 29, 2012); about 60% population in the States live below the poverty line and buying power is concentrated in the top 30-35% of the population. This would comprise the latter two sections. Of course, they also try and penetrate the bottom of the pyramid. As far as the middle classes go, we can, to an extent, estimate their market reach from the fact that 68% of the entire retail market (of Rs 25.8 lakh crores) is merely on groceriesthat is, necessities for existencewhile the balance of Rs 8 lakh crores ($ 150 billion) would be on white goods and other consumer durables. This in fact is not such a big market, given that the middle classes are being squeezed by spiralling inflation and lower earnings. There have been systematic attacks on their earnings, the latest being the huge cut in the interest rates of Provident Funds from 9.5%t last year to 8.6% now. This affects all. Now let us turn to the two extremesthe super-rich and the super-poor. Ultra-Rich At the top of the ultra-rich are the 2.5 lakh households (1.2 crore people)and super poor are 70% of the rural house holds in India . These have gained disproportionately and due to their phenomenal wealth would comprise an important market. In the 1980s they cornered 5% of the national income, while in 2010
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it was 15%. Besides, it is primarily this section that generates the bulk of the black money (about 40-50% of the GDP). If this too was included, their share of the national income would be about 20-25% They comprise 55 households having $ 1 billion (Rs 5000 crores) net worth, 70,000 households worth $ 5 million (Rs 25 crores), and 1.7 lakh households worth $ 1 million (Rs 5 crores). These figures do not include primary residences (like Mukesh Ambanis Antilla), collectables and consumerables, and of course the black money. The wealth of these total High Net Worth Individuals (HNWIs worth over $ 1 million) grew from $ 477 billion in 2008-09 to $ 582 billion in 2009-10that is, by 22%in just one year. Similarly, if we look at the money amassed by politicians, an example could be found in the recent UP elections. The average individual assets of the 285 re-contesting MLAs for the 2012 UP Assembly elections increased from Rs 1.21 crores in 2007 to Rs 3.56 crores in 2012a growth of 194 per cent or 39 per cent per annum!!! Again, these are only the legally declared amounts and do not include the pots of black money. Even the earnings of some of the top owners/CEOs of big business houses have jumped in the last one year, though the companies profits have been falling. At the top of the list are the Maran couple whose pay package increased from Rs 74 crores in 2010 to Rs 130 crores in 2011; Navin Jindals increased from Rs 49 crores to Rs 67 crores; the Birlas increased from Rs 29 crores to Rs 40 crores. The list could go on and onthe incomes of two top executives of Dabur doubled in just one year from Rs 5.5 crores to Rs 11 crores each. But this is not all. Foreigners have been coming in, in hordes, not merely at the top but even the middlelevel managementas though Indians are not good enough. This brings back memories of the British Raj where they earned exorbitant salaries as compared to their Indian counterparts. Even today they are paid by Western standards and are depriving our middle classes of jobs. Their numbers are increasing at the rate of 15-20% per annum and they have reached a total of 40,000. Of course, with their huge salaries and perks they may add to the market: but this too is likely to be limited as they would mostly purchase imported goods. Super-poor: Real India At the other end of the spectrum you get the impoverished 70 per centthe bottom of the pyramid, who comprise the bulk of our population, the REAL INDIA; Justice. Katju, quoting NSSO figures, stated (June 4, 2011): the average monthly expenditure of an Indian farm household is Rs 503, of which 55% was on food, 18% on clothing and footwear, leaving little for education and health, let alone other commodities. The 2011 Census states: 70%of our rural households have no latrines, 60% use firewood to cook, 45% have no electricity and only 18% have tapped water from a treated source (polluted water is a major source of disease). The government has de facto privatised water purification, they maintain poor standards so that the sales of mineral water, aquaguard and other purification equipment go upbut for those who cannot afford these they must suffer disease. Half of Indias households have no drainage system, which existed even 4000 years ago in the civilisations of Mohenjodaro and Harappa!! No doubt the big business houses seek to penetrate this section too, pushing necessities like salt, soaps, detergents, medicines etc.; but this takes place at the cost of the local industry which gets crushed. Can any country really develop when such a large section of its population is maintained in such an acute state of backwardness? But companies, TNCs, policy-makers could not care for this massthey are to be sacrificed at the altar of high-end markets, where the real moolah lies. A vast black economy, low direct taxation, tax holidays etc. ensure that the latter grow and grow; increasing indirect taxation, cuts in welfare and subsidies, reduction in social schemes etc. ensure that the former, already deprived, are pushed further down. Unfortunately, it is precisely this policy that has been formulated in the Approach Paper to the Twelfth Plan.
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With the wealth and income of the top one-to-two per cent increasing at such a fast rate, it is no wonder that the market for high-end products is also expanding fast. High-end Markets Aim for the Sky Luxury goods, beauty products, five-star hotels, business aircraft and even what is now called designer weddings are all expected to grow by leaps and bounds. Such positive predictions only mean that the policy is being geared to give even more money into the hands of this top one-to-two per cent, notwithstanding a slowdown in the overall economy. Indias luxury goods market, which has been growing by 20%, is expected to grow from the present $ 4.8 billion to $ 14.7 billion by 2015that is, a three-fold increase in three years. Mackinsey estimates that Indias beauty industry, including cosmetic surgeries, will grow to $ 5 billion by 2015. Indias five-star hotel industry has been witnessing a massive growth. The number of rooms increased from 1.45 lakhs to 2008-09 to 1.63 lakhs in 2010-11that is, an increase of 6000 per year. And just in the last one year Taj has opened five hotels and Hilton six. ITC has just opened its biggest hotel in Chennai with 600 rooms, and Mariott plans 100 hotels by 2015. It is estimated that by 2021 some 1.5 lakh more rooms will be needed. The business aircraft market (jets and helicopters) is set to grow from 600 aircraft in 2011 to 1780 aircraft in the year 2020a potential business of $ 12 billion. And, of late, there has been a phenomenal growth in the Indian wedding industry: growing at 20% annually and estimated already at Rs 1.5 lakh crores. The budget range for a so-called Designer-Planned Wedding ranges from Rs 50 lakhs to Rs 20 crores. We also see how such weddings are being promoted in the media, not to mention the films. Who can afford such weddings except those with pots of black money and the corporate bigwigs? If these predictions of market growth in such spheres is to come true, particularly in a period of economic downturn, it will require even more concessions to the super-rich and corpo-rate world. And at a time of spiralling fiscal deficits, such money can only be got by cutting welfare measures to the poor and increasing tax (indirect) on the middle classes (for example, petrol, diesel, LPG, electricity, water etc.). Though such a type of growth may keep the GDP figures high, it is unsustainable in the long run, for two reasons: first, because it does not bring the bulk of the Indian people into the growth process; and second, because the unproductive expenditure will continuously increase, acting as a burden on the economy. As we go to the press the rupee continues its slide and has fallen further to nearly Rs 54 to the dollar, and even the Finance Minister has begun talking of a possible Balance of Payments crisis. People-Centric Growth Notwithstanding the continuous double-digit inflation over the past two to three years, the Planning Commission in March 2012 reduced the rural and urban poverty-line figures from Rs 26 to Rs 22.42 and from Rs 32 to Rs 28.65 respectively. Even a servant in the Planning Commission heads house would know that these figures are ridiculous. But then why do they repeatedly churn out such figures? One, of course, is that they live in ivory towers and would probably know more about the US and five-star culture than about the Indian people. The second is that the poor are dispensable and one should not waste subsidies on them. Here the question is not merely of a policy paradigm. It is of a mindset that lacks humanity and stems from the grab-what-you-can mentality. To hell with the poor, to hell with the ecology, to hell with the country; I must grab what I can. Though wealth does not trickle down with the GDP growth, this grab mentality certainly does. We see it, in its crude manifestation with politicians, we see it with a big chunk of the middle classes. We see it even among the poor who are forced into this situation in order to survive. It is also promoted by the media wherein it is made out that not to grab is foolish, nave. And the smart are those who
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can grab the most, swindle the maximum. Probably the Planning Commission is the smartest of them all. Hail the God of the Market; Death to Humanity. As long as this mentality prevails, the result will be the same whatever the system be calledcapitalist, socialist, communist et al. We just need to take a look around the world to see similar policies (and results) no matter what the system is called. We have a host of new-age gurus who talk of humanity, but their approach is divorced from the daily economic and social activities. They act more as a balm to sooth the guilty conscience from our bad deeds. 19 M Job Losses: Indias Demographic Deficit India is not only having a jobless growth, it is also losing out on employing its people. The agriculture sector lost almost 14 million jobs, according to the Planning Commission and the Economic Survey. Likewise, the manufacturing sector, which should have absorbed this excess labour force, is itself gasping for breath. It is estimated to have lost about five million jobs in just a little over five years. With GDP growth shrinking to about 4.5% in 2012-13, it may see more difficult days. Rising inflation, falling investment and more people out of jobs might lead to untold miseries for the Indian economy. Indeed, the demographic dividend has become the demographic deficit in Indias growth story. Importantly, the Economic Survey surmises that more people, particularly rural females, are opting for education and skill development. It seeks to connect the trend to the rising number of students. From 20.5% in 1993-94 it went up to 24.3 in 2004-05 and up to 26% in 2009-10. But so has the population. And, therefore, the surmise seems far from reality. Additionally, the Economic Survey accepts that employment growth in the second half of the decade has been modest. It also states that 137 million females in 200910 opted not to work so as to continue education. If the figures are accepted as authentic, then the actual number of jobless would be much higher than estimated. If and when these 137 million join the queue for job search, what would be its impact has too not been assessed. The premise that the rural employment scheme, MNREGA has reduced migration is also being contradicted. If the rural people are migrating in such numbers, it calls for a review of the policy dimensions. It is not only an issue of priorities but one of how the country is losing its revenue without solving its problems. If the MNREGA Rs 30000-crore allocation is withdrawn, the country would be in deep crisis. The number of jobless would multiply. And let us keep in mind that MNREGA even otherwise gives only partial employment. Migration of agriculture labour and the unwillingness of women to join the workforce also raise the question of sheer efficacy of MNREGA. In many areas, it is not considered prestigious to seek MNREGA work and therefore, the sociological profile of the scheme needs a review. Further, the so-called experts views in the Government that a large section of the people is going for more skill development is also suspect. The displaced agricultural people as is evident have not got jobs in manufacturing. They apparently have gone to the low-paying construction sector, which has seen 44.04 million being employed in 2010 up from 26.2 million in 2005. This means that there is employment of more deskilled people rather than skilled. The big question is whether this pace will continue in 2012-13. A slowdown has been noticed in this sector along with infrastructure. The McKinsey report estimates that India could suffer a GDP loss of $200 billion, around 10% of GDP, during the 12th Plan till 2017. In terms of annualized growth it would imply a loss of 1.1%. It says fewer infrastructure projects have been awarded during the 11th Plan. Average rate is 70% of the planned rate. Government data suggest that 60% of the projects are plagued by time and cost over-runs. In other words, the projects are suffering because of high inflation and not so efficient execution norms.

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Its fall-out again is on job creation. The delayed projects or those mired by problems in the public private partnership (PPP) has also led to quagmire. It simply means not many jobs would be created even in the next five years. The Planning Commission is not oblivious to the growing difficulties. There will be around 63.5 million new job seekers till 2016, in the age group of 23-35 years. The vulnerabilities will increase as the number of job seekers increase with rise in population as also further shrinkage in agriculture. The countrys former chief economist Raghuram Rajan , now governor of RBI states that India is creating jobs mainly in low productive constructions not in the formal organised sector. Even the services sector, despite higher returns, is not creating jobs. Increased automation, according to industrialist Venugopal Dhoot, has lowered demand for labour in manufacturing. The Plan panel estimates 70 million more jobs have to be created to maintain the growth pace. Till the end of 12th Plan it is estimated there would be 183 million more job seekers. It means even with additional jobs more than half of them would remain jobless in 2017. Solutions are not difficult but may not be easy. These have to come with a change in outlook. Investment in industry has to increase manifold and the neglect in the agriculture sector has to end. Rather it has to be given a massive boost so that it can absorb the 70 crore people dependant on it. Additionally, industry is highly capital intensive. However, the corporate sector, despite a high cash balance, has cut investment of Rs 90,000 crore because of uncertain market situations, low consumer demand, inflation and policy bottleneck. This apart, Government investments are mired by delayed decisions, search of right policy option and a terrified bureaucracy owing to high-pitch campaign against corruption. Another reason is the increase in Government expenditure leading to cut in Plan investments. The hackneyed policy approach of the past 20 years, since 1991, has to end. The trickle-down theory has failed. Stock markets could not create jobs. The finance sector is entering a phase of crisis. The new public sector jobs are being created only in police and security services a non-productive activity. If employment is not generated deterioration in law and order is but natural. To counter it with additional police force leads to oppression, discontent, social conflict and corruption. This further leads to job loss. 1.12 lac job losses in public sector banks Pubic Sector Banks policy of branch expansion without fresh eecruitment may help In increase in Per Employee Business But quality erosion may spoil banks future. Public Sector Banks have opened hundreds and thousands of branches during last few years without adding equivalent number of employees in their bank. This has resulted not only in deterioration of quality of service but also adversely affected the quality of assets, quality of lending and quality of monitoring and control over the assets. It may be noticed from below given chart that total number of employees in public sector banks has come down from 8.83 lacs in the year 1998-99 to 7.71 lac in the year 2012-13 . In a span of 13 years of reformation, number of branches has increased at least two fold and the volume of business has gone up by at least ten times. Though per employee business of state run bank has increased compared to that in private banks to labour exploitation policy adopted by these banks, the quality of assets is much better in private banks than in public sector banks.Customers get better service in private banks and investors give better value to shares of private banks.

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CHANGING EQUATIONS
Public Sector Banks Year Employees (lakh) 8.83 7.57 7.31 7.57 Cost per employee (Rs. lakh) 1.68 2.70 4.72 7.16 Private Sector Banks Employees (lakh) 0.60 0.59 1.76 2.18 Cost per employee (Rs. lakh) 1.69 3.55 4.84 5.63

1998-99 2002-03 2008-09 2010-11 Source : RBI

Moreover during sixties and seventies, public sector banks used to have one officer over five to six clerical staff. It means clerk to officer ratio used to be 5: 1 or 6: 1. As of now the situation is just opposite to it. Now in public sector banks ratio of clerk to officer is now 1: 5 or 1: 6

Hoax of Petrol subsidy

Reasons being cited by the government and OMCs (Oil Marketing Companies) for hiking petrol prices are huge losses incurred by these companies on account of selling petrol, diesel at lower prices, huge stress on import of crude oil following depreciation of rupee and worsening fiscal and current account deficit caused by government heavily subsidising these products. Armed with these arguments the hike in fuel prices is claimed as inevitable and unavoidable. A close scrutiny of these claims however shows a different picture. First of all very statement of petrol being subsidised in itself is a big lie. Is the cost of production of a litre of petrol really higher than its selling price? Below calculations reveal its production cost is merely Rs. 40.6 (on average). Now when price of crude oil in international market has come down from $107 in March to $90 today, cost of a litre works out to be merely Rs. 38.4, less than half of its selling price. Processing crude oil->Crude Oil -> Refining -> Petrol -> Refining margin, Transportation, vendor commission = Production cost of Petrol(1 barrel of crude oil yields 150 litre of petrol)Average value of dollar this year (Jan to May) = Rs. 53.34Average price of crude oil barrel this year = $101.46Refining, margin, transportation, commission per barrel = Rs. 672 (approx $12)*150 litre of petrol = 101.46 53.34 + 672 = Rs. 6084i.e. 1 litre of petrol = 6084 / 150 = Rs. 40.6The cost depends on factors like quality of crude oil, refinery. However changes in it would not greatly affect product price. Thus there is absolutely no subsidy on petrol either by government or OMCs. In fact exchequer mops up revenue worth billions from various taxes levied on petroleum products. Last year its contribution to tax revenue was as much as Rs. 1350 billion. Another reason cited much more often is the heavy losses incurred by OMCs. On 24th May, a day following fuel price hike OMCs like BPCL declared its annual results soon followed by IOC on 28th May and HPCL just a day after. Forget losses, these companies are among the highest profit making companies in the country. Their FY12 (Jan to March 2012) Q4 profits have in fact tripled or quadrupled from last year.
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Company IOC BPC HPCL *Figures in crore rupees

Q4 2011 3905 L935 1123

Q4 2012 12,670 3962 4630

Profit growth 224% 324% 312%

Depreciation of rupee and alleged strain on the cost is another flimsy claim. After reaching its peak at $114 in August 2008, prices of crude oil have been going down. Especially in last one month they have fallen from $104.93 (on 27th April) to $90.86 (on 25th May last week). It has offset any cost impact caused by depreciation of rupee. How come big figures of losses incurred by OMCs are being touted? Thats the crux of the matter. India import crude oil and not petrol. Latter is fully refined in the country in refineries owned by public sector OMCs while that of private OMCs is exported. However following policy change in 2002 companies baseline their prices not on production cost but on import parity. Fictitiously assuming petrol has been imported (at Singapore market rate MOPS95) and then fictitious duties, insurance and freight is levied on it. The difference between import parity price thus (fictitiously) determined and actual selling cost is termed as under-recovery. For eg., if import parity price is Rs. 90 and a liter is sold at Rs. 80 then Rs. 10 is the under-recovery! We Should Demand: 1. 2. 3. 4. 5. Immediate scrapping of import parity pricing to be replaced with production cost based model. Re-nationalisation of public sector OMCs both upstream (ONGC, GAIL, OIL) and downstream (IOC, BPCL, HPCL)with zero percent private investment, under democratic workers control and management. Nationalisation of private Oil companies including Reliance, Essar, Cairn Energy without any compensation, under democratic workers control and management. Scrapping all tax soaps extended to capitalists that creates a big hole in public revenue (worth Rs. 5.5 lakh crore last year) Building a sustainable public transport system that would considerably cut down usage of petroleum products and related air pollution. Expenses to be funded by levying heavy taxes on cars and other private vehicles Immediate 50% Tax on cash pile and corporate wealth to bring down the prices and to pay for fiscal deficit For full nationalisation of banks and key industries; for a democratic workers control and management of all the resources.

6. 7.

The Falling, FallingRupee

Understanding Falling Rupee - A Self Made Crisis and Now Aggravated By Mismanagement of Government We have been watching, like most of my countrymen, the fall of rupee with disbelief .However, in last few months I have received number of emails,phone calls wherein our members have been asking for more clarity and reasons for these sudden developments leading to huge depreciation of rupee. Thus I thought of sharing some of my knowledge on such a serious issues and make this affair simple so that many youngsters, who are not able to comprehend this difficult subject, can at least feel comfortable about their knowledge when they read about this news in daily newspaper.
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A basic question frequently asked is, what determines the exchange rate between two currencies, say USD and INR. In simple terms, the basic principle which determines the exchange rate is the market forces of Demand and Supply, like the prices of Onions. Why prices of Onion have gone up in August 2013, as there is more demand then the availability of supply. The moment supply of onions improves, the prices are likely to come down. Thus, we can say that now a days, there is greater demand for dollars as compared to INR. Foreigners who are withdrawing funds from India are demand more dollars in lieu of their INRs. Of course, there can be other reasons too for rise in prices of onions like hoarding by traders. The same is true even for USD-INR rates. Some traders may be playing the game of speculation (in currencies we do not call them hoarding, but use big jargons like speculation, arbitrage, derivatives, options, forward trading etc. etc. These words are used to ensure that a layman can be befooled like our Pandits used to recite Sanskrit salokas to show that common man is ignorant). Another factor which affects the currency rates is the market sentiments. This too is playing a major role in the August 2013 USD-INR crisis, when USD has crossed INR 65. The poor management of our current account deficit, complete paralysis of policy making, huge amount of corruption in 2G, Coal Scam, have dampened the market sentiments and foreigners are afraid to continue in this environment, let alone bring fresh investments. Thus, the fiscal deficit is increasing which further shakes the confidence of foreigners in INR. Ignoring fundamental rules earlier and now pressing panic buttons by RBI has worsened the situation. NUBE has been strongly advocating at least for last two years that banks should stop selling gold coins. Our views were rubbished by almost all CMDs, EDs & GoI. However, by the beginning of 2013, the matters have worsened and GoI wanted to ban the same. However, it failed and it was only when the water has gone above the nose that GoI admitted its mistake and put a blanket ban on import of Gold coins. However, by this time it had already damaged as billions of black money was converted into gold and country paid through nose for gold imports. I have seen an article in TOI, which talks about love of rich (I mean block money) for not only gold plated utensils but the humble toilet commodes. GoI may not admit but a majority of the funds invested in gold were black money of politicians. Now these politicians are sitting pretty on gold stock (even in toilets some of them may be sitting on gold plated commodes!) and country is on the verge of bankruptcy. Now GoI and RBI are taking immature steps which are further damaging the international market sentiments about the level of crisis. The recent ban on import of LCD / LED TV is only an immature step as it has dampened the sentiments but is likely to save only peanuts for the countrys foreign exchange. Now question arises what is the solution to the present crisis. Frankly speaking, I must admit that we have entered a volatile phase and it is likely to continue till the next Lok Sabha elections are over and a stable government takes over. We may see some temporary improvements, but it is highly unlikely that USD-INR will go back to Rs 55 level till elections. Chances are that it may even touch Rs 70. GoI has put itself in this peculiar situation towards the end of its tenure. Whatever hard steps it will take are likely to hit its election prospectus, and what are soft steps it takes will be bad for countrys economy.

What is Rupee Appreciation or Rupee Depreciation? Most of us, tend to confuse when we read that there is a Rupee Depreciation as it has moved from Rs. 50 per US$ to Rs.55 per US$. A look at this change indicates value has increased but report reads that INR has depreciated. Undoubtedly it is confusing. Let us try to remove this confusion.

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Now we will try to understand what is appreciation and depreciation refers to when we read such news on daily basis. Let us assume that in case, you go to a bank and asks the bank that you intend to buy US$100, please tell me what is the amount of INR you have to pay. Bank informs you that you need to pay Rs 5410/-. This means you can buy US$ @ Rs.54.10 per dollar. This is the selling rate of the said bank for US $ for that day. Now after one month, you go to bank and again ask the bank that you wish to buy US$ 100, and bank tells you that this time you have to pay Rs.5490. This means you have pay more to receive the same amount of US $. This means the local currency has depreciated. This will be known as Depreciation of Indian Rupee. In the above example, it is clear that value of INR has gone when compared to US$. On the other hand, if the rate quoted by bank on second occasion is say Rs. 5380/-. It will be considered as appreciation of INR as this time you have to pay less amount to buy the same amount of US$. What is the impact of Depreciation and Appreciation of Rupee on Indian living in India. We are assuming that initially the exchange rate of US$-INR is Rs.50/- and as of Sept 2013, Rs. 65.84. The above shows that INR has depreciated between January 2012, August 2012 and September 2013. At the beginning of 2012, the conversion rate was Rs51+ whereas in August 2012, it has depreciated to Rs65+ in September 2013. Thus, now Indians have to pay more for all imports like crude oil, gold etc. even if the prices of these goods in US$ had remained the same. The sliding rupee has created consternation among many in the Indian economy. In the second week of June it came close to breaching the psychological barrier of Rs 60 to the dollar, and there is fear that even this may not be a real bottoming out for its value. But this is simply not true. First of all, the rupee decline had occurred even while the US monetary policy was at is most lax, and when other countries like Brazil were complaining about the currency wars generated by US quantitative easing. More significantly, as the chart indicates, the rupees recent decline has been against all the major currencies, not just the US dollar and in fact the decline has been even sharper relative to the British pound and the Japanese yen. And in the recent past the Indian rupee has been depreciating faster than the currencies of most other emerging markets, and is the worst performer among major Asian currencies. What explains this decline in the external value of the rupee? Despite what the Finance Ministry claims, this is not the result of global forces or US monetary policy, but of domestic economic mismanagement. Indeed, in a way it is surprising that it did not happen sooner. Most of Indias balance of payments indicators are extremely fragile and the economy has looked quite vulnerable for some time now. The current account deficit is at the historically high level of around 5.5% of GDP while the trade deficit is even larger at around 7% of GDP. And these large trade and current account deficits are increasingly financed by hot money flows, which are obviously likely to leave whenever problems loom. Departing flows of portfolio capital are said to be associated with the most recent decline in the rupee (and the associated fall in the stock market) but it could just as easily be and may well be in future the reduction in external commercial borrowing or the decline in FDI in the form of private equity. But this generates a chicken-and-egg problem. Since imports are now such a significant part of Indias economy, the fall in the nominal value of the rupee generates inflationary pressures that necessarily add to inflation. And so the nominal devaluation of the exchange rate need not generate any positive effects on the trade account, because of its impact on prices. And a continued deterioration of the current account can then have a further depressing effect on expectations, generating further movement of capital out of the country and further devaluation.
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One of the more obvious reasons why the current depreciation is not to be welcomed is the effect on domestic living standards. There are several ways in which the falling rupee immediately has an inflationary impact, one of the most important of which is the price of energy. What is more, the increasing costs of imports can also affect exports, thereby wiping out any global cost advantage accruing from the devaluation. For example, important export sectors like gems and jewellery, automobiles, machinery and chemicals are all very import-dependent, and their rising costs could nullify the impact of the devaluation on their ability to sell more cheaply in export markets. This is made worse by the fact that in the current depressed global trade context, buyers are able to renegotiate contracts once the exchange rate has changed. Indeed, many global buyers even in sectors like garments and leather goods now insist on contracts and invoicing in rupee terms. This allows them to benefit completely from rupee depreciation, and force the local producers to bear the rising domestic costs. This means that the falling rupee need not generate any significant increase in exports as may be hoped. So clearly the sliding rupee should be a major concern for everyone in the country. It is surprising that those who should be most concerned of all the policy makers in charge of managing the economy seem to be the ones who are the least bothered by this. When the rupee crossed the 60-to-a-dollar barrier on June 26, 2013, official and corporate concern was palpable. This was not because everybody was a loser in this game. Exporters, especially those locked into longer-term deals struck in dollars and those looking to expand sales by holding rupee prices (and therefore reducing dollar prices) would benefit. If yet, the mood of concern was more generalised, the reason was that after slow growth, persisting consumer price inflation and a difficult balance of payments situation, this was one more indicator that the post-2003 boom was a short- term blip rather than a sustainable new trajectory of high growth. In India too, over much of the last decade capital inflows have been well in excess of the current account deficit. Like many other developing countries, India became a victim of the dollar carry trade, in which international players borrowed in dollar markets, where liquidity was ample and interest rates low, and invested in equity, debt and real estate in developing country markets, where returns were high, in order to make huge profits from the differential between the cost of debt and the return on investment. However, since July-September 2011, while the current account deficit has been high and rising, touching 6.7% of GDP during the last quarter of 2012, capital inflows have either fallen short of or just about matched current account financing requirements. This had put downward pressure on the rupee, even earlier. In fact during the second half of 2011 the rupee depreciated by as much as 19.5% vis- -vis the dollar and 14.4% vis--vis the pound.Even then, fears that capital inflows may dry up and force a reduction in reserves seems to have played a role in the rupees depreciation. Thus, if we go back to April-June 2011, the rupee was in fact at a local high vis-- vis the dollar, setting off concerns about the currencys overvaluation. The rupee had weakened during the financial crisis, when foreign portfolio investors chose to book profits and take money out of the country to cover losses they had suffered or commitments they needed to finance at home. From less than Rs. 40 to the dollar in April 2008 the rupee fell to Rs. 52 to the dollar at the beginning of March 2009. But, thereafter, once central banks in the US and elsewhere in the developed world chose to infuse cheap liquidity into the system as a response to the crisis, capital once again started flowing into emerging markets. The resulting appreciation of the rupee, many argued at that time, was adversely affecting the competitiveness of Indias exports. There was much pressure on the central bank to intervene to prevent appreciation by buying dollars and augmenting its foreign exchange reserves, and criticism that it was not doing enough on this front. The appreciating trend continued for sometime. But from around August 2011, the rupee has once again been depreciating on average, despite brief periods of appreciation in January and September 2012.
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This medium-term decline was disconcerting because this was a period when the United States, and some other central banks, continued with a policy of quantitative easing, or the infusion of cheap liquidity in the system. In the event, any trigger is enough to set off a downward spiral that also renders the currency vulnerable to a speculative attack. The rupees recent decline has been attributed to US Federal Chairman Ben Bernankes suggestion that the era of quantitative easing is nearing its end, and its effect of triggering a return flow of investments into the US and dollar-denominated assets. The fact of the matter is, the rupees depreciation has been visible with respect to other currencies as well. Over the first half of 2013, while the rupee has depreciated by 10.5% against the dollar, it has fallen by 4.1% vis--vis the pound and 8.9% vis--vis the weak euro as well. In sum, the weakness of the rupee is a result of a deterioration of Indias economic performance, especially the deterioration of its balance of payments. Such weakening in an economy that through liberalisation has made itself dependent on foreign financial only leads to heightened instability. When the rupee hit 58 to the dollar, Finance Ministry mandarins chose to appear in public to declare there is no need to panic. That may be something to tell the public, even if ineffective. But it is perhaps time they themselves panicked and did something in the short run to correct the deterioration of Indias balance of payments and in the medium term to reduce the countrys dependence on foreign finance. Who benefits from Rupee depreciation? Who benefits from all these and who losses? Crucially, is the government unaware of all this? To understand this, reference to the spiralling international crude prices and parallel increase in petrol prices in India is inevitable. Increase in crude prices implies a weak dollar. That, in turn, means higher crude cost in Rupee terms. The only way to neutralise the increased crude prices (in dollar terms) is to ensure equivalent appreciation of the Rupee. Such an appreciation would mean little or no increase in crude cost in Rupee terms. Take the petrol price hikes effectuated by the oil marketing companies over the past several months. While the first few were on account of increase in international crude prices, the latest one effectuated last week was on account of depreciating Rupee and had nothing to do with international crude prices! In short, a weakening Rupee is a double whammy in the backdrop of spiralling international crude prices for the average Indian. More specifically, to neutralise the spiralling crude prices, the government and the Reserve Bank of India must allow the Rupee to appreciate. But the question remains: who are the gainers from all these economic policies of SEZs, weakening Rupee, tax breaks and, of course, foreign investments? It does not need a seer to analyse that it would be fictitious exporters and shady foreign investors who are beneficiaries of all these.Needless to emphasise, only those who could manipulate the RBI and by extension the value of the Rupee would undertake fictional exports while encouraging policies relating to SEZs.And that is possible only by someone who controls the entire government machinery! Bewildered? Remember, while there is no economic rationale or theoretical explanation for the depreciation of Rupee, the fact remains that the government has allowed the Rupee to depreciate. Why? The answer is obvious. Let us not forget all these economic policies are well integrated and intertwined with each other wherein our political masters have enormous personal economic interest. And till they have such varied economic interests, none of these policies will benefit the common man. Neither can be rationalised by economists. Time we understand this.

Farm Suicides Soar

Suicide rates among Indian farmers were a chilling 47%t higher than they were for the rest of the population in 2011. In some of the States worst hit by the agrarian crisis, they were well over 100% higher. The new Census 2011 data reveal a shrinking farmer population. And it is on this reduced base that the farm suicides now occur.
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Five States account for two-thirds of all farm suicides in the country, as NCRB data show. These are Maharashtra, Andhra Pradesh, Karnataka, Madhya Pradesh and Chhattisgarh. The share of these Big 5 in total farm suicides was higher in 2011 than it was in 2001. At the same time, the new Census data show that four of these States have far fewer farmers than they did a decade ago. Only Maharashtra reports an increase in their numbers. Nationwide, the farmers suicide rate (FSR) was 16.3 per 100,000 farmers in 2011. Thats a lot higher than 11.1, which is the rate for the rest of the population. And slightly higher than the FSR of 15.8 in 2001. In Maharashtra, for instance, the rate is 29.1 suicides per 100,000 farmers (Main cultivators). Which is over 160 per cent higher than that for all Indians excluding farmers. Such gaps exist in other States, too. In as many as 16 of 22 major States, the farm suicide rate was higher than the rate among the rest of the population (RRP) in 2011. Karnataka, in 2011, saw a lot less of farm suicides than it did a decade ago. And so, despite having fewer farmers than it did in 2001, the State shows a lower FSR. Yet, even the lower farm suicide rates in both Maharashtra and Karnataka are way above the rate for the rest of the country. These figures are obtained by applying the new farm population totals of Census 2011 to farm suicide numbers of the NCRB. The Census records cultivators. The police count suicides. In listing suicides, the State governments and police tend to count only those with a title to land as farmers. Large numbers of farm suicides still occur, says Prof. Nagaraj. Only that seems not to be recognised, officially and politically. Is the conspiracy of silence back in action? A disturbing trend has gained ground with Chhattisgarhs declaration of zero farm suicides. (Thats despite having had 4,700 in 36 months before the zero declaration). Puducherry has followed suit. Others will doubtless do the same. Punjab and Haryana have in several years claimed zero women farmers suicides. (Though media and study reports in the same years suggest otherwise). This trend must at some point fatally corrupt the data. At least 270,940 Indian farmers have taken their lives since 1995, NCRB records show. This occurred at an annual average of 14,462 in six years, from 1995 to 2000. And at a yearly average of 16,743 in 11 years between 2001 and 2011. That is around 46 farmers suicides each day, on average. Or nearly one every half-hour since 2001 2,000 Fewer Every Day Indias Vanishing Farmers There are nearly 15 million farmers (Main cultivators) fewer than there were in 1991. Over 7.7 million less since 2001, as the latest Census data show. On average, thats about 2,035 farmers losing Main Cultivator status every single day for the last 20 years. And in a time of jobless growth, theyve had few places to go beyond the lowest, menial ends of the service sector. A December 2012 report of the Institute of Applied Manpower Research (IAMR) a part of the Planning Commission puts it this way: employment in total and in non-agricultural sectors has not been growing. This jobless growth in recent years has been accompanied by growth in casualization and informalization. It speaks of an an absolute shift in workers from agriculture of 15 million to services and industry. But many within the sector also likely moved from farmer to agricultural labourer status. Swelling the agrarian underclass. So how many farmers do we have? Census 2011 tells us we now have 95.8 million cultivators for whom farming is their main occupation. Thats less than 8% of the population. (Down from 103 million in 2001 and 110 million in 1991). Include all marginal cultivators (22.8 million) and that is still less than 10% of the population.
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Even if you count together all cultivators and agricultural labourers, the number would be around 263 million or 22% of the population. (Interestingly, this reduced figure comes after a few big states have actually reported a rise in the total number of cultivators. Since 85 per cent of all marginal workers reported more than a 100 days work, this could possibly reflect the reverse pull of MNREGA, among other factors). Between 1981 and 1991, the number of cultivators (main workers), actually went up from 92 million to 110 million. So the huge decline comes post-1991. Hold on: arent 53 per cent of the population farmers? No. Thats a common fallacy. The over 600 million Indians dependent on agriculture are not all farmers. They are deployed in an array of related activities including fisheries. This confusion is widespread and innocent. Yet, there are also a few whose colossal ignorance leads them to dismiss the countrys massive farmers suicides as trivial. For instance: at least half of the Indian workforce is engaged in farming. This fact points to a much lower suicide rate per 100,000 individuals for farmers than in the general population. Note how easily those engaged in farming become farmers! As a notion it borders on the whacko. It goes: After all, 53 out of every 100 Indians are farmers. So our 270,940 farm suicides since 1995 are a low number on a population base of over 600 million. So low that we should be agitated over how the suicide rate in the general population can be brought down to the levels prevailing amongst farmers. Never mind for now the appalling moral position that a quarter of a million human beings taking their lives is hardly alarming. The Bhopal gas tragedy, the worst industrial disaster in human terms, claimed over 20,000 lives. But in this perverse logic, since that was less than 0.003 per cent of the then population, it is rendered meaningless. That position says more about its authors than about the suicides. It shows they are clueless about who a farmer is and about what the data show. It shows even greater ignorance of who defines and counts a farmer suicide. The Census records cultivators. The police count suicides. The police do not read the Census. Not for definitions, anyway. The Census groups the population into workers and non-workers. The latter would be infants, children, students, housewives, unemployed, aged and retired people. Farmers, or cultivators come under Workers a huge category covering many varied groups . Now rural workers account for close to 70 per cent of all workers. And rural workers consist of farmers, agricultural labourers and non-farm workers. Cultivators (main workers) in the Census are barely eight per cent of the population as a whole. (Thats after a two-decade secular decline in this group). The ongoing farm suicides 184,169 of them since 2001 according to the National Crime Records Bureau are taking place on a smaller and shrinking base. Their intensity has hardly diminished. In most of the States accounting for two-thirds of all farm suicides, the intensity has likely risen. Everybody who works in the film industry is not an actor. Everyone in the educational system is not a student. And all those in the 53 per cent of the population related to the farming sector are not farmers. Even among those who are, only a limited group gets counted as such when police and governments make farmers suicide lists. Cultivators are counted by the Census. Suicides are recorded by police stations across the country. The numbers collated by State governments. Very different approaches are involved. Police and State governments run the suicide lists, not the Census. Nor does the NCRB, which has neither the vested interest nor the ability to fiddle that data. It merely collates what the State Crime Record Bureaus submit to it. Hence, the Chhattisgarh government could brazenly declare a zero farm suicides figure in 2011. That after the State saw over 7,500 of them (by its own admission) between 2006-10. With all the fiddles in the data, the numbers and intensity remain appalling.
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Maharashtra revels in such fraud. With close to 54,000 since 1995, the State has been the worst in farm suicides for over a decade. And even those numbers conceal major exclusions. Theyve invented categories like Farmers relatives suicides, or non-genuine suicides, in order to further trim the numbers. So the State governments and their police, have immense power in re-defining who a farmer is. Watch out for more and more States doing a Chhattisgarh and declaring zero farm suicides in coming months and years.

Corruption a Mere Symptom: The Disease is Unbridled Greed

The IPL scam, the CWG scam, the 2G spectrum scam, the foodgrain/BPL/NREGA scams, Adarsh housing scam, the Satna land scam, the Citibank scam, the insurance scam, the P.J. Thomas/palmolein scam, the Yediyurappa land scams, the Prasar Bharati scam, Balakrishnan/NHRC chairman scam, the IMA Modi scamthe list is endless and growing by the day. Involved are senior politicians and Ministers, top bureaucrats, top military personnel, top media moguls, top corporate housesall the pillars of the existing establishment. Involved are the ex-Chiefs of the Staff of the military, the CEO of Prasar Bharati, the head of the NHRC (Human Rights Commission), the head of the Central Vigilance Commission, the chiefs of the CII (Confederation of Indian Industries). The very topmost watchdog bodies appointedvigilance, human rights, propaganda etc.are themselves fraudsters. What protection from human rights violations and frauds can one expect from such elements? But the more the corrupt, the more servile they will be to the government, acting as a tool in their hands. How can the people of the country expect any justice with such elements at the very top? And quite obviously they will appoint only their types/cronies below themtaking the rot deep into the social fabric. But, what is getting exposed is only the tip of the iceberg of the putrified muck underneath. The garbage consists of a gigantic Rs 28 lakh crores ($ 670 billion) of illegal funds generated every yearyear in and year out. A good percentage of this is siphoned off abroad, draining the countrys wealth. During a recent Supreme Court hearing the figure stashed abroad was said to be unbelievable, that is, $ 1.4 trillion (Rs 630 lakh crores). It is estimated that the black money amounts to 40-50% of the GDP (Rs 25 lakh crores). Together with this, the illicit flow of funds from India abroad increased from 0.5% of the GDP in 2000 to 2.4% in 2004a near five fold increase in just four years. At a fraction of this rate of increase the figure would be at least five per cent todayor Rs 3 lakh crores. It is this huge mass of funds generated each year that is corrupting the entire life-line of the country, draining its enormous wealth, and an important factor for the mass impoverisation of the people. With such vast sums of money being siphoned off by the rich and powerful can one expect real development of the country? Is it then not surprising that all development, and wealth creation benefit just a few and not the country and its people. The solution is simpledemonetise all notes suddenly of Rs 500/Rs 1000 denomination and get back the illegal funds stacked in tax havens, like the Swiss banks. But, there is no will to act. The government says it has no funds; when the Supreme Court tells them to distribute grains rather than let them rot, that is the refrain; when the NAC (National Advisory Council) suggests a highly watered down Food Security Bill, that again is the refrain; when the NAC suggests a minimum wage for the NREGA linked to the Minimum Wages Act, again this is the refrain. In fact whenever any money is suggested for the poorthere is always talk of no money, growing fiscal deficit etc. But, if even a small fraction of these huge illegal funds are tapped, poverty can be removed overnight. The richness of our land, water and natural resources would see our country bloom like the Garden of Eden. But, the arrogance of power, and a pliable media to cover up the muck is destroying our rich, beautiful country bit by bit. Let alone a decrease in corruption, which was said to be a product of the licence-permit raj, it has increased by leaps and bounds since the supposed liberalisation.
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Today, dishonesty, fraud, deceit are the norm for those in power; truth is sacrificed at the altar of greed, avarice, nepotism and injustice. The mainline media TV channels have become the main vehicles of falsehood; politics is mostly hypocrisy and lies; and even religion has been corrupted beyond recognition to serve self-interest. Our leaders wish the nation on the occasion of Dusshera and other such festivals saying they symbolise the struggle of good over evil. Yet, what are practiced are the promotion of evil and the suppression of good. Gigantic scams, loot of the treasury, etc., are ignored, nay encouraged, while service to the poor and oppressed is treated as treason. While all swear by their respective religions, few follow their actual tenets. The Atharva Veda clearly says that when man, ignoring the dictum of the true Vedic religion falls in the grip of greed, he hoards more than he needs and the avarice of hoarding more and more makes him snatch the rights of othersnay his own brothersand thus he stoops to suck the blood of his brothers. It adds that avarice is at the root of all evils. Poetically put, it says: Earn with hundreds of hands And distribute with thousands. Both Jesus Christ and Prophet Mohammad fought for the poor and oppressed throughout their lives. The Bible says: The Righteous shall inherit the Earth, and adds: Blessed are they which are persecuted for righteousness sake: for theirs is the kingdom of heaven. The Koran says: Allah has enjoined justice and righteousness... And of all religions the Sikh religion is the most social; portraying the epitome of all that is good and just, in selflessness, virtuous conduct, etc. as the ideal Sikh, the Granth Saheb says: Gods riches are for all, but man tries to grab them for themselves. And Zoroastrianism stands for purity in our values practicing good thoughts, good words and good deedsthe struggle of good over evil is portrayed in the victory in the of Ahura Mazda over Angra Mainya. All religions advocate compassion for our fellow beings. While those who run this system say they stand for one or other religion, how can they be so insensitive to the mass of our people who live on a mere Rs 20 per day? How can they ignore the fact where 20,000 farmers are being forced to commit suicide every year and 1362 die every day from accidents and suicide, where malnutrition kills 56,000 children annually in our urban slums; and where crores and crores live in hunger, disease and degradation. While proclaiming religion (to fool themselves and the rest of the world), their core values are with the devil, dressed up as angels. They may maim and massacre lakhs through their evil policies; they may incarcerate thousands (and even kill) those who stand up for truth and justice; they may amass crores through illegal means; but one fine day they will meet their nemesis. Now let us turn to some of the major scams. As much has been said about the 2G spectrum, CWG etc., we will not touch on these any further, but the scams that snatch food from crores of hungry mouths and that involve those in the armed forcesthat is, those who are supposed to be most patriotic in defending our country. More Criminal than 2G The scam in foodgrain distribution to the poorest of the poor and in the MGNREGA (Mahatma Gandhi National Employment Guarantee Act) and other such poverty alleviation schemes goes well beyond the 2G scam, but little is said about it. And that in the armed forces involve the very top Chiefs of Staff. Let us take a brief look at these. Scam in Poverty Alleviation The Times of India reported that the UPAs food- grain scam could be even larger than the 2G spectrum scamanything up to Rs 2 lakh crores. The report adds: It spreads across five countries including Nepal,
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Bangladesh, Pakistan, South Africa and Bhutan. It involves 450 class I government officials and another 800 middle and lower level subordinates, apart from some 10,000 private entities. The scam comprised the sale of foodgrains meant for the PDS system and other special schemes for the BPLNREGA, Antyodaya Yojana and mid-day meal scheme to private entities while in the government records it is shown as distributed. Just two days earlier the same newspaper reported Central Scheme to feed the hungry in shambles. Based on a Supreme Court appointed commissioners survey it was found there was fraud in every aspect of the distribution of food- grains to the BPL families. It was found that less than the quota is allocated; people pay more to the ration shop than the stipulated rate; they are given less grains than their quota; and that there is fraud in the records kept (a discrepancy between the figure in the ration shop books and that on the ration card). In other words, the poor are cheated at every step. The report added that the discrepancies were so widespread and shockingly blatant, that the survey teams thought the people were making a mistake. Every month over 4.2 million tonnes of rice and wheat are allotted by the Central Govern-ment for distribution, through roughly five lakh fair price shops. In fact a survey alone by the Planning Commission in 2004 said that 58 per cent of subsidised foodgrains did not reach the BPL families and 36 per cent grains got sold in the black market. From all this it is clear that even food meant for the starving and funds meant for employ-ment amounting to thousands of crores are being siphoned off by politicians, officials, dalals, traders, etc. who make a killing off peoples deprivation. What could be more inhuman than stealing foodgrains from a starving mans house, knowing full well the children will go hungry and their very growth will be stuntedleading to malnutrition, disease and even death? But this is precisely what is happening on a mass scale. Yet there is no accountability, no action, little media coverageit is a non-issue. Probably even the CJIs scathing judgement will also have little effect. Legal Frauds The line between illegitimate loot and legitimate robbery is indeed thin. Where one ends and the other begins is difficult to tell. Take the worst ever massacre in India25,000 killed and five lakh injured, many seriously. The perpetrators got away with paying a pittance as compensation with not a single person arrested for the holocaust. In the Bhopal gas tragedy, as they call it, it is anybodys guess that Union Carbide and its new avatar, Dow Chemicals, would have bloated the government officials with money to get off so lightly. But, everything at the outset is legal, including the massacre, so much so that we have stopped calling it murder and it is commemorated every year as a tragedy. Then take the aviation sector where the scandal would be no less than the 2G spectrum. Here private airlines have been allowed to flourish while Air India has been pushed under. To make matters worse the government has used Rs 2000 crores of the taxpayers money in 2010 to help Air India survive. Also the privatisation of the major airports and their seven-star structures would result in huge flow of money from the contractors to the authorities (that too largely built by the user-development funds paid by passengers). Some of this also came to light in the Radia tapes. Then there is the case of the Punjab Government giving away Rs 20,000 crores as legitimate tax concessions to the Laxmi Mittal group for their energy projects. If the concession is of such vulgarly humungous volume, then one can possibly imagine the magnitude of the kickbacks! Further, we have the grand tax holiday of the tune of a whopping Rs 81,000 crores for Mukesh Ambanis Reliance and higher rates for their gas project, with the media (a la Vir Sanghvi) decorating up the issue as being in the national interest (as exposed in the Radia tapes). Well, this is also very much within the legal realms of loot and plunder! For the uninitiated, what Vir Sanghvi meant by national interest was high gas rates for the public and whopping profits for Mukesh Ambani.
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So also are the secret MoUs signed with mining interests by the Chhattisgarh, Orissa, Karnataka, Andhra Pradesh, Jharkhand governments supposed to be legitimate. Madhu Kodas Rs 2000-3000 crores, earned in just two years, is an indication as to how much the Chief Ministers of these States would have raked in. But all this is no scam. Only recently did the Modi Government boasted of signing away Rs 15 lakh crores in MoUs... but why are these agreements done in so much secrecy and not made public? Everyone knows that the RIL with their huge projects in Gujarat pays barely two per cent taxdepriving the Gujarat Government of revenue, but, no doubt, filling the coffers of the Modi clan. So if we put together these legal frauds and the illegal scams, one can just imagine the vast sums being diverted from benefit of the vast sections of the people into private coffers. Both results either in the generation of the black economy or in funds stacked in tax havens abroad. One would like to point at the criminal silence of the corporate media who would otherwise get hysterical against those opposing such loot in the interests of the masses of poverty stricken people. Media and Manufacture of Public Opinion Even before the Radia tapes exposed the deep nexus between the corporate bodies and politicians with their counterparts in the media, P. Sainath a creative Journalist had brought to light about the crores that flowed to the media barons during elections, where de-facto advertisements for candidates were passed off as news items. Neither did the Election Commission take any action on the candidates nor did the press bodies pull up these newspapers. Any audit of the accounts of these newspapers would throw up the discrepancies. And then the Radia tapes exploded the nexus. Not surprisingly, they were all silent on these aspects of the exposure. In the telecom scam, TV channels like Times Now were said to be working for AT & T and Sunil Mittal, while Reliance utilised channels like Headlines Today and senior editors of newspapers. For instance, the top media honcho of the Hindustan Times, Vir Sanghvi, was exposed to have written verbatim what Radia dictated (on gas pricing) on behalf of Mukesh Ambani. Also, other top journalists have been shown to be party to corporate lobbying. Not only did the newspapers black out these Radia tape exposures on their role, a newspaper like the Hindustan Times, in its December 5, 2010 issue, wrote a whole page article trivialising the corruption issue. Their argument had surpassed all sense of profundity when they made this preposterous claim that as a large section of the population was involved in corruption there was no sense in making an issue out of it! Of course, they forgot to say that the fountain-head is at the top and the trickle-down effect is to be seen in corruption, not GDP growth rates. If the same corporate media had made a song and dance earlier about corruption as a product of the license-permit raj, now they had made a full circle when they stooped to the level of shamelessly insisting that corruption is one of the rungs on the ladder of economic growth. Today, the line between paid news and real news is thin. For the common man it is difficult to make sense in the maze of sensation and hype Nature of the Disease If corruption is a mere symptom, what then is the disease? What is it that makes a man snatch a morsel of grain even from a hungry childs mouth? What is it that allows him to betray the country and its people and sell its rich natural wealth? It is nothing but unbridled greed, avarice and ruthless self-interest. The country be damned, let alone the people, not to say about my neighbours and relativesinstead I must gain, prosper, acquire more and more. And if that requires trampling over hundreds of others, nay lakhs of peopleso be it. Humanity can rest in peace, principles can take a walk, brotherhood has become pass and religion has become the tool of the crooked and the nefarious. And this insatiable appetite to accrue more and more seems to be a bottomless pit. For today money means power. And more the power, the more the money can it attracta vicious cycle of corruption, power, nepotism and greed.
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Today even ideology does not free people from this syndromewhether religious or communist. Religion has in fact itself become a source of money and power. Selfless service to the country and her people is true patriotism; serving oneself at the cost of the country and her people is at the inevitable danger of the peril of all. Robbing the treasury through commissions, cuts, tax holidays, diversion of public funds for the poor, or, outright scams, acts to destroy the great natural wealth of the country and the lives of its people. The ordinary citizen of our country is getting fed up of the rot all around and particularly in the corridors of power. Their patience is being taxed. And having to face the harassment of corrupt officials, day in and day out, their pent up anger is growing. But for a change to come about there is need for a new renaissance where the values of honesty, simplicity, straight-forwardness etc. are allowed to flower. A counter-culture needs to take wings drawing in the vast sections of the middle classes (particularly its students and youth) who are the opinion-makersthe rest of the poor masses will easily imbibe it.. Feeding Frenzy of the Kleptocracy Forbes has just added an errata to Union Finance Minister P. Chidambarams budget speech. The minister had found a mere 42,800 people in the country with a taxable income in excess of $184,000 a year. Forbes, the Oracle of Business Journalism, does not list taxable incomes. But it does put up a list each year of billionaires the world over. And in 2013, 55 Indians (up from 48 last year) figure on that list, with an average net worth of around $3.52 billion. (See: http://www.forbes.com/billionaires/ )Their total net worth is $ 193.6 billion. (Thats, Rs. 10.5 trillion). The 55 wonder-wallets give India 5th rank in the world of billionaires on the Forbes List. Behind only the US, China, Russia and Germany. Our rank in the latest United Nations Human Development Index (2013), though, is 136 out of 186 nations. With almost all of Latin America and the Caribbean, Haiti, ahead of us. (We have though. elsewhere, managed to tie with Equatorial Guinea). Well, okay, the total worth of our megabucks mob on the Forbes List comes to just over $193 billion. But a glance within reveals a grim class divide. At the bottom are the common or garden variety tycoons, barely scraping past the one billion-dollar mark. There are four of them, inches away from plutocrat penury, with only a mere billion to their names. There are 17 in all below the BPL (Billionaire Permanency Line), which seems to be $1.5 billion. Once you cross that threshold, you tend to be a permanent member of the club. One of the biggest write-offs in this years budget is the customs duty on gold, diamonds and jewellery $11.2 billion. Thats more than whats been written off on crude oil & mineral oils. Or even on machinery. The waiver on gold and diamonds in just the last 36 months is $32.3 billion. (Or what we lost in the 2G scam). I guess we shouldnt be surprised, then, that three new Indian entrants to this years Forbes Billionaires List are in the field of jewellery. Its not as if we havent been generous with them in other sectors, though. The latest write-off in corporate income tax is even higher at $12.5 billion. The total revenue foregone this year ($97 billion), as others have pointed out, is greater than the fiscal deficit. But just look at what the write-offs on corporate tax, excise and customs duties add up to since 2005-06, from when the data begins: $573 billion or well over half a trillion dollars). It also means were writing off taxes and duties for the corporate mob and rich at a rate of over $8 million every single hour on average. But the budget has almost nothing worthwhile for, say, health or education where theres a decline compared to allocations last year (in proportion to GDP). Ditto for rural development. And a micro-rise for food that will quickly be taken care of by prices. What also gets smaller is the idea of food security in a nation where the percentage of malnourished children is nearly double that of sub-Saharan Africa. How do they get past the porcine gridlock at the budget trough?

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Also getting smaller is the average per capita net availability of foodgrain. And thats despite showing an improved figure of 462.9 grams daily for 2011. (Caution: thats a provisional number). Even then, the fiveyear average for 2007-11 comes to 444.6 grams. Still lower than the 2002-06 figure of 452.4 grams. As stated earlier - Average per capita net availability of foodgrain declined in every five-year period of the reforms without exception. In the 20 years preceding the reforms 1972-1991 it rose every five-year period without exception.

India: Growing Inequality and Destructive Development

Misery for the many, benefits for the few Upon a foundation of deep spirituality and philosophical treasures, proclaiming unity, justice and service, New India, horns honking in violation of the good; is racing, no time to spare towards the Alter of Materiality and Market Fundamentalism. Under the careful guidance of the World Bank and the International Monetary Fund (IMF) The Indian government has for the last twenty years or so, (during which time the BBC 7/12/11 found inequality has doubled), embraced market liberalization and the global market; garlanded corporations with all manner of subsidies and damned the poor to greater poverty, destitution, suffering and, suicide in the case of farmers: Who by inaccurate government figures, that exclude women, Adivasi and Dalit people among others, are, in deep despair, committing suicide at a rate of two an hour. In a country of 1.2 billion and counting, all the numbers are mega. Seen through corporate tinted spectacles India is a marketplace unlike any other, and providing business doors stay open 24/7, the international community meaning America and her bedmates, will allow India to occupy Kashmir, murder, rape and displace the needy, and marginalize the marginal: Growth and profit the mantra of the times chanted hourly to the market God, headless, heartless, all consuming. Have-Nots and Billionaires There are, according to Arundhati Roy, around 450 million Indians living in dire poverty, a total equivalent to all the poor in all the countries of Africa combined. Dire poverty, meaning just existing, 12 Rupees or 30 (US) cents a day or less does not allow for anything other than bare survival. Is it possible to be healthy on such a sum: To eat nutritiously - to eat at all, to drink clean water, sleep in clean clothes, on a clean bed, brush your teeth with toothpaste, wear shoes whilst working, rummaging through waste mountains, or digging drought-ridden land, is it possible to be happy and retain ones dignity as one begs for the 12 rupees. All normal, recognizable requirements of living are regarded as luxuries, the Divine seen as a fresh loaf of bread and men women and children, shrouded in anxiety and despair, condemned to a life of drudgery and exploitation. Middlemen and Women At the same time as half a billion men women and children crawl through life on their 30 cents a day, a river of rupees flows ceaselessly into the judiciary, the body politic and corporate lakes, swelling stockholders assets. Gush up as Arandhati Roy calls it in Capitalism a ghost story, concentrating she says: wealth onto the tip of a shinning pin on which our billionaires pirouette. Thats why in a nation of 1.2 billion, Indias 100 richest people own assets equivalent to one-fourth of the GDP. Power and rupees moving unceasingly into the pockets of the wealthy and mega rich, who are boosted by what Global Research (GR) 3/9/12 state is an economic system that ensures the flow of wealth goes upwards via what academic David Harvey calls accumulation by dispossession. The overflow from Gush Up feeding a new and marvelous middle class, of credit card carriers and foreign holiday makers, estimated to be 160 million individuals, which represents only 13.1% of Indias population, according to Indias Economic Times (ET 6/2/2011).
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The population of a medium to large size country then; management, IT nerds, professional and semi professionals who have adapted very well thank you, to hallowed capitalist values. They shun the needy, shop and surf, happy to revel on their Harleys, drink overpriced coffee and i-live on their i-phones and tablets. Is it fear one wonders or greed that consumes the aspiring revelers, content to watch as their countrymen burn on the Party Pyre. Growing inequality deepening poverty Hailed as the economic miracle nation of out deficit times, blessing the very few however, India is ranked by the United Nations Development Program (UNDP) 129th of 146 countries on the adjusted Human development Index, that accommodates gender imbalance. The number of poor people in the country has barely fallen over a 30-year period, India Today (22/10/11)vii state The Human Development Report released by the Planning Commission shockingly revealed that the poor in rural India were better fed about 30 years ago. By the governments own figures 50% of the rural population (836 million) live in poverty, surviving somehow on less than 20 rupees (50 cents) a day, 20 cents more than those in dire poverty, but still not what one would call comfortable. As I said the numbers are mega, even those supplied by the Government which of course err on the side of flattery and must be taken with a generous helping of salt, however they still put child malnutrition at 46%, the highest in the world. GR state that tragically, criminally we could say, Every second child is underweight and stunted. A quarter of the population is, according to GR, hungry. India was [listed] 73rd out of 88 countries in the annual Global Hunger Index six spots lower than the previous year. The 2010 Multidimensional Poverty Index indicated that. Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and West Bengal have 421 million poor people. The miracle is that the people catching the crumbs from the 61 Club as they fall to earth survive at all. According to the Organization for Economic Cooperation and Development (OECD) India has the BBC report, the highest number of poor in the world, with the top 10% earning 12 times that of the bottom 10%, compared to six times twenty years ago, i.e. inequality under the economic miracle, a nightmare for the 99.9%, is growing and apace. A demographic democratic fact that is of course fundamentally unjust. There are sub divisions within the divisions as inequality stalks the land, the urban wealthy e.g. spending 221% more the BBC report than their rural rich cousins, the chasm between city comfortable and rural desperate is approaching cosmic proportions. Such are the contradictions (and we have barely scratched the divisive surface), in a country where a mere 1 3% unprecedented success due to economic reforms. The big growth story he maintains, is inequality: It has grown faster than any time in the last 50 years, promising to cause what Sainath describes as the death of democracy. For inequality is fundamentally (socially) unjust and democracy professes, at least in principle if not in practice that justice is a founding father, held close to its battered heart. Diluted of meaning hijacked and perverted, social democracy once idealized now married off to become corporate democracy, has failed the 99.9%, in India as in the rest of the world, her roots torn out of the social ground in which she was sewn. Democracy whos she when shes at home? asks Arundhati Roy ironically in Listening to Grasshoppers. Attempts to build local democratic movements, to resist, to protest, to articulate grievances, formulate alternatives are crushed unmercifully under the most undemocratic global frameworks, that bulldoze over demands for the observation of human rights, the manifestation of social justice and expressions of moral decency. Still its not all bad news: the richest billionaires in the world are Indian and the worlds most expensive house Antilla, a twenty-seven story residential abomination, is in Mumbai, built for Indias richest man, Mukesh Ambani, whose personal wealth is said to be $20 billion. He holds a controlling share in Reliance Industries Ltd (RIL), that has interests in businesses from oil to stem cell storage, supermarkets to schools and of course the media; utilized to create uninformed citizens conditioned into making irrational choices.

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Everything everyone everywhere Throughout India there is a systematic movement towards; the commercialization of the countryside, the raping of the land for its bounty and the commodification of each and every part of human existence, what Arundhati Roy calls the era of privatization of Everything, the hunt for profit the clarion call to action. And all impelled by government stimuli, the state happy to channel corporate propaganda, increase quarterly growth figures and expand the business model, the corporate democratic ideal into every corner of every mind in every village in India. The inevitable albeit unfortunate consequences to market fundamentalism, say M/s Tata, M/s. Vedanta and of course M/s.Ambani, being the displacement, death and destitution of obstacles: namely and mainly the Adivasi and Dalit people conveniently demonized as terrorists, by a government waging war not on terror, that it is content to cause, but its own citizens, marginalized and disadvantaged, who constitute the poorest people in the world. An unchallengeable model, beyond alternatives and utopian ideas of sharing and justice, that is bathed in a misty glow of polished yet polluted uniformity, where the individual is absorbed into the consumer collective and told: Where to shop and what to buy, how to love and in which colour, what to think and when to think it, and, if in doubt tune into your local multinational media outlet for an update on corporate global acceptability. Killing engines of economic growth The growth rate of our economy has declined from around 8 % in the mid part of decade to nearly 5.5% and is expected to be less than 5% in this fiscal year. The Government and economists ascribe this to global slowdown as well as delayed decisions in acquiring land and providing clearances for major infrastructural projects. They are right but only to some extent. The share of service sector in GDP is around 65 per cent. Whenever the term service sector is mentioned, the immediate recall is IT and companies like Infosys or Wipro. Factually, all software related activities come under business services, which itself is less than 5% of our National Income. We observe that this sector encompasses diverse activities carried on by large multinationals as well as roadside entrepreneurs. Normally, construction is included in the secondary sector along with manufacturing in developed countries. But given the labour intensive construction and major single house construction by smaller contractors, we have included it in service sector.RBI categorises Data on Bank credit of the unorganised sector under household sector. It consists of partnership, proprietorship concerns, joint families, associations, clubs, societies, trusts, groups and individuals for all accounts. Their share of bank credit which was nearly 48% during 2004 when this Government came into power and touched 33% in 2010 showing a consistent decline and a little increase in 2011. However, the share of corporate sector has gone up from around 30% to 49% and the Government from 10% to 20%. It is interesting that the corporate sector, which has less than 15% of our National Income gobbles up nearly half of the bank credit. Even though the unorganised or noncorporate sector is fastest growing its credit needs are not met by the organised banking sector but by private money lenders etc and the cost of borrowing us as high as 5 to 6% per month-namely around 70% per annum. We find that the service sector had a share of 60% in 2004-05 which increased to nearly 65% of the GDP and it has grown [CAGR] by 17% during 2004/05 to 2011-12 (current prices) which is higher than that of industry at 15% and overall growth rate of 16 per cent. We find that service sector has larger share as well as greater growth during the last seven years. Among the service sector, we find that 1)construction 2) trade 3)hotels and restaurant 4) Non-Railway transport 5)business services and 6)other services are major components and in each of them non-corporate sectors namely Partnership / Proprietorship and household enterprises dominate. The share of what is called as unorganised sectors in these activities is nearly 80 per cent in non-railway transport in 2010-11 and 77% in trade hotels and restaurant. Real estate and business services also have share of more than 65% and it has declined from around 74% in 2004-05.
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Share of Unorganised Sector in Service activities Unorganised sector is essentially part of Small- and Medium-enterprises in manufacturing and services. We find that there is a significant decline in the growth rate [CAGR] of unorganised manufacturing from 10% during 04/05 to 07/08 to 4% in 07/08 to 11/12. Similar is the case of construction from 11% to 7% trade from 10% to 8% and restaurants from 15% to 2%. Non-Railway transport fell from 9 to 7% and therefore, the total NDP growth rate fell from 9.4% to 7.4% respectively. Actually, the UPA-II has shown substantial deceleration compared to first part which benefitted due to earlier strong growth. RBI categorises Data on Bank credit of the unorganised sector under household sector. It consists of partnership, proprietorship concerns, joint families, associations, clubs, societies, trusts, groups and individuals for all accounts. Their share of bank credit which was nearly 48% during 2004 when this Government came into power and touched 33% in 2010 showing a consistent decline and a little increase in 2011. However, the share of corporate sector has gone up from around 30% to 49% and the Government from 10% to 20%. (See table-1) Table-1 Distribution of Outstanding Bank Credit by Categories [Percentage wise] Category Household sector (1) Private Corporate sector (2) Public sector (3) Total March2004 47.6 38 14.3 100 March2008 36.6 46.7 16.7 100 March2009 32.8 48.2 19 100 March2010 32.8 48.6 18.6 100 March2011 36.3 44 19.7 100

Note:(1)Household sector includes Partnership, Proprietorship concerns, joint families, associations, clubs, Societies, trusts, groups and individuals for all accounts. (2) Private Corporate sector includes private Sector and cooperative sector excluding those mentioned in (1). (3) Public Sector, that is all Government activities, includes joint sector undertakings. Source: Extracted from table 1.15;Outstanding Credit of Scheduled Commercial Banks according to Organisations; Basic statistical returns; various years; RBI In other words, the most productive and growing sectors of our economy are starved of bank credit so that they depend on money lenders and other such sources, including Saradha type enterprises! We observe from Table-1 that the share of small borrowers has drastically declined. For instance, up to Rs. 10 lakhs category, this amount outstanding to total SCB outstanding has come low on from 32% to 20% actually from 2000 to 2005, it has shown increase and then shown drastic decline. Same is the case for up to Rs. 1 crore borrowers from 45% to 32%. We find that there is something which is really problematic in our banking sector, particularly in providing credit to the sections, which not only require them the most, but are also those which are the fastest growing sectors. The performance of UPA-1 and UPA-2 in providing credit through organised banking sector is rather dismal and this has resulted in distortions in our credit markets and slowdown of economic activities where Small- and Medium-enterprises SMEs are most productive and active.
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Table 2 Outstanding Credit of SCBs Size of loan up to 1 crore Credit Limit Range Up to 10 lakhsAmount Outstanding [%] Up to 50 LakhsAmount Outstanding [%] Up to 1 crore Amount Outstanding [%] Mar 00 31.7 39.9 44.6 Mar 05 33 41.6 44.7 Mar 10 23.4 32.6 35.4 Mar 11 20.1 29.0 31.7

Source: Extracted from table 1.12"Scheduled commercial banks in India from various issues of RBI We estimate that more than 70% of retail trade needs are met by money lenders /chits in 2010/11. The crony capitalists who default bank loans get larger share for their wasteful expenditure. Also, our small entrepreneurs get credit from money lenders using gold as collateral. Because of declining credit from bank channels, they have to depend more on gold whose demand have shot up. An image has been created that FII and FDI are the Anna Lakshmi for us even though in the last decade they have only been around 6 to 8% of our investment needs. Instead of meeting the credit requirements of our kirana stores, we find that our Finance Minister is going around with a begging bowl to New York and Tokyo for FII funds. Our kiranas and Udupi restaurants and one truck operators and barbers /plumbers/masons and small-time contractors are crying for credit at reasonable rates. But we will not bother about them! They are the real engines of our economic growth. But they are not in the scheme of things of our dream team which is imported from phoren(foreign) countries. The slowdown is directly linked to the choking of these activities. The huge black money generated in our economy used to be partly financing them. Now that has also been dried up since that money is more in to real estate and gold. Bribes to Government and lack of credit are two major problems faced by our SME sector. The solutions are not in New York or Paris but have to be found out from Kottayam to Kohima and Ahmedabad to Agartala about the credit starved productive sectors. We need to understand our reality without the lens of Harvard and Wharton. The solution is to create a separate body to develop Non-banking Finance Sector [NBFS] and free it from RBI as well as the bureaucratic clutches of the State Governments. RBI hands are full, therefore, no point in complaining that it is not alert about millions of non-bank sources and uses and some time abuses. The NBFS developmental authority should primarily focus on the development of partnership and proprietorship firms in the MSME sector economy by appropriate credit and lesser strangulating regulations. Will our Mandarins and Minsters who are searching for solutions in salubrious climates abroad shift their focus to India inside? Per Capita Net Availability Of Cereals & Pulses Before Reforms: (Daily in Grams) YEAR Average 1972-76 Average 1977-81 Average 1982-86 Average 1987-91
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CEREALS 383.9 407.5 420.2 440.7

PULSES 43.8 40.4 40.6 39.6

TOTAL 427.7 447.9 460.8 480.3

REFORM YEARS 1992 2011: (Daily in Grams) YEAR Average 1992-96 Average 1997-2001 Average 2002-06 Average 2007-11 CEREALS 439.3 423.7 419.6 406.8 PULSES 35.6 33.6 32.9 37.8 TOTAL 474.9 457.3 452.5 444.6

Revenue Foregone On Gold, Diamonds & Jewellery (In Rs. Crores) 2005-06 TO 2012-13: YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 TOTAL GOLD / DIAMONDS & JEWELLARY 16935 35672 25586 27649 42440 49164 65975 61035 314456 % SHARE OF CUSTOMS DUTY EXEMPTION 13.26 18.72 16.66 12.25 20.41 28.46 27.85 24.03 20.75 % SHARE OF TOTAL REVENUE FOREGONE 7.39 9.79 8.44 6.57 9.43 11.63 13.35 11.56 10.11

The Revenue Foregone For Direct And Indirect Taxes Are As Under: (Rupees in Crores) Revenue foregone 2009-10 Corporate Income Tax Personal Income Tax Excise Duty Customs Duty TOTAL 72281 4514 169121 195288 481832 Revenue forgone 2010-11 88263 50658 198291 174418 511630

Attack On Trade Unions:

The pro-imperialist Market driven policy regime has made governance completely subservient to corporate interests and to the interests of international Finance Capital. It is but natural that labour rights and livelihood of the working people will be the target of severe attacks. The intervening period witnessed increasing attacks on the workers rights and livelihood in different ways.
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It has become a general practice to treat labour disputes as law and order problems and use the police to threaten workers and suppress their agitations. More than ninety nine percent cases of work place agitations/ disputes/conflicts throughout the country today pertain to just on the implementation of basic labour Laws and nothing more.

Social Security Measures:

The employees State Insurance Corporation has shirked its responsibility of paying post retirement medical benefits to the premature and separated workers who remained ESI subscribers throughout their service, but crossed the pay ceiling stipulations. In the ESI Act, due to crossing the ceiling towards end of their service, ESI service is not extended in case of default of remittances on the part of the Managements. As for EPF is concerned, the Finance Minister is totally determined not to increase the interest rate on the saving, but, brought down the existing interest rate from 9.5% to 8.25%. This is being done to curtail PF Trustees opposing deploying PF money is share Market. The pensioners sum/s under employees pension scheme have been reduced to a mockery, particularly for the lowest paid workers in private unorganized sector. In many cases, it is a paltry sum of Rs.50/- per month. Workers earning with Rs.20,000/- salary are given hardly around Rs.1,100/- pension. The PFRDA bill which fell through in the UPA I regime has been reintroduced in the last session of the parliament. The Swavalamban scheme is being passed by Government as a pension scheme for the unorganized sector is a ploy to invest in the share market. The neoliberal economic system trajectory inherently favours international finance capital at the expense of the Indian people. Following this the official thinking seems to suggest that this Government may seeks to stimulate growth through attracting large doses of international finance. Already there is large scale opening up of our economy to FDI-the retail trade, insurance and Banking sectors in pension funds etc. The General Anti Avoidance Rules (GAAR) have been deferred by two years. This has come as a great relief to foreign investors. This it is hoped, would lead to higher levels of investments resulting in higher growth. The politics and political system have borne the direct impact of neoliberalism. The nexus between big business and politics has become pronounced. Policies made by successive Governments openly serve the interests of the big bourgeoisie and foreign capital at the expense of the people. The unprecedented use of money power in elections is a direct outcome of this nexus. Big money is corrupting the entire system. Bourgeoisie parties are selecting candidates on the basis of their money power. Money power is now percolating down to the panchayat elections. Distribution of money to voters is becoming the norm in many States. This poses a serious danger to the democratic system. A policy of cash transfer subsidy on various Government Schemes would mean a weakening or shutting down of the PDS, ration shops, hospitals, schools and welfare programmes, so that the private sector can move in and the Government thus abdicating its social responsibility would mean that the cash transferred would land up in the hands of predating commercial interests.

Indias Refusal to Ratify Certain Core Conventions:

The guarantee provided for in conventions 87 (freedom of Association and the effective organisation) and 78 (Right to organise and collective bargaining) are by and large in conformity with the relevant provisions of the Indian Constitution, National Laws and regulations. The rights guaranteed under these two conventions are also available to industrial and other workers through laws and practices. However, there are some technical problems in ratifying these two convention s. On non-ratification of two other core conventions 138 (minimum wages) and 182 (worst form of child labour), the Governments position is that these conventions will be considered only when their provisions are fully brought out into our national law and regulations. The core conventions stress four fundamental components of trade union rights- (1) Freedom of Association and the effective recognition of the right to collective bargaining; (2) Elimination of all forms of forced or compulsory labour; (3) Effective abolition of child labour and (4) Elimination of discrimination in respect of employment and occupation.
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Contractulisation of Regular Jobs

The composition of the working class has undergone drastic changes since the advent of the neoliberal policies. The organised sector has been rapidly shrinking while the unorganized sector has been expanding. The number of workers with precarious working conditions, with no job security, no income security, no social security and no legal protection has enormously increased during the last decade of neoliberal reforms. The profile of employment relations has also vastly changed with no clearly defined and identifiable employeremployee relationship being visible for vast sections of workers, not only in the private sector, but also in the public and Government sectors. Capitalists adopt various methods to extract maximum surplus from the workers including the use of technology to increase productivity mechanism, automation, robotism, increasing working hours, lowering wages etc. Under the neoliberal regime, the state sheds its preferences of neutral character. More often it does not intervene in favour of the workers, even to protect their basic and constitutionally guaranteed rights. Policies are formulated to favour of finance capital and thereby help in the emergence of big financial corporations. Finance capital which became the dominant force during this period, particularly from the end of twentieth century, tightened its grip over the state exercising more influence on all spheres of the economy to satisfy its greed for quicker and large profits. This influence of finance capital has further aggravated the attacks on the working class by the industrial capital which seeks to maximize profits for its shareholders by shifting the burdens of the ups and downs of the markets on to the workers. This is accomplished by hiring and firing the workers according to its needs as well as through flexibility of labour which includes the smashing of the employer employee relationship by resorting to various methodscontractorisation, outsourcing casualisation getting the same work done by temporary daily wage workers or apprentices, house based work etc. As per official estimates, only 15.6% out of the total workforce in the country are in salaried employment. These estimates also indicate that the majority of the salaried workers are on contract employment with around 50% in the public sector units and more than 70% workers in the private sector including in the modern industrial units of many multinational Corporations on an average being contract workers. As per the data published by Annual Survey of Industries, the share of wages in the net value added has sharply declined from 30% in 1980 to 9.5% in 2009, while the share of profit has jumped from around 15% to 55% during the same period. Rampant contractorisation is a major factor that has contributed to this steep decline in the share of wages compared to the huge increases in the share of profits. The 43 rd session of Indian Labour Conference recommended amendment to the contract labour (R&A) Act, 1970 to ensure same wages and benefits to the contract workers for the same and similar nature of jobs as the permanent workers. However, Dr. Manmohan Singh, the Prime Minister is tightly sitting over the file.

Sixty Six Years of Indias Independence

A Golden Opportunity for all of us Why is it that we celebrated a 65years of Indias independence, when India is as ancient as China, and Egypt several millenniums old.To mark the great anti-imperialist struggle, until 65 years ago.A struggle in which the great middle class of India played a significant role. It is therefore appropriate to look at what happened to the patriotic class in India during the fifty years.We saw how the middle class all over the world are getting squeezed, eliminated, forced to join the ranks of destitutes and rebel. We shall now see what happened to them in India. Who are the middle class of India Professionals, and the organized working class. While the doctors, lawyers, teachers, and owning peasants, traders and such professionals are the true middle class of India, a large majority of the organized working
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class, the Government employees, PSU employees, Bank workers unionized workers of private sector industries form the rest of the bulk of middle class in India. The condition of Bank workers is typical. Neither rich nor poor. Take away our jobs and we are in trouble. That is, we are working class in material condition. However, by education, upbringing, and culture we are middle class. We therefore bring the untutored militancy of the working class to the conscious resolve of the middle class. Middle Class of India Becomes Market for the World While 66 years ago we were suppose to be honest, god fearing and patriotic Over the years, we are supposed to have lost our ideological moorings, 66 years is far away from 1947We are no longer burning foreign clothes, we are wearing them. Independence as a product of the middle class became middle class as a product of Independence. They(CII) claim that another 33 crore population have an income Rs.12,660 and Rs.40,000 per year. That is indirectly admitting 69 crore people are hovering around and below poverty conditions. There were other equally sobering indicesNumber of cars in private possession is less than 14 per thousand households, telephone connection only in 4% of households, Colour TV only in 5.5% of population video recorder or player just in 1.2% of households, Washing machine 1.8% in households, only one out of five in India even have a wrist watch. NCAER report admitted that there were 20 crore destitutes in the country. Most of the so called middle class appeared just that destitutes. So began installment purchase, consumer durable loans and credit cards Enjoy. Enjoy, while 25 crore other Indians go to bed without dinner. While 30 crore are illiterate, yehi hai right choice baby! Do it, buy a Nike, while every third person in the world without safe drinking water is an Indian. India, 66 years after the Anti-Imperialist Struggle So we have another India after 66 years. 10 crore children are outside schools. There is a housing shortage of 3 crore, 4 crore registered unemployedit will be 20,000 km. long if they stand in a queue, more than three times Indias 6,083 km. coastline. 70% of our population live below or around poverty line. What does that mean? It means that around 35 crore people are scourging almost the whole day just to arrange atleast one meal for the day. For 400 gm. Of rice or wheat, 120 gm, of vegetable and 40 gm. of dal. May be a cup of tea, two spoonful of edible oil. Rarely a cup of milk, an egg may be in five days, a banana or a coconut may be once in ten days. Thus an Indian they survive, so that our government could report gladly that he is not dead, may be malnourished and sanitise it by calling it poverty line No wonder, nearly half of all Indian children below five are malnourished. Three fifths of all women and three fourths of pregnant women suffer from anaemia. One out of every four mothers dying in the world is an Indian. 38% of households dont have access to safe drinking water. Water-borne diseases like diarrhea and gastro enteritis take their toll, mostly on children below five. The highest number of TB patients of Malaria deaths, of Blind people, of Hepatitis B patients, of HIVpositive cases of occupational casualties are all in India. One of the highest infant mortality rates is in India.
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The Response of the Collaborators Government of India has meanwhile reduced its health budget outlay from 3% of the budget in the First plan to 1.05% in the Eighth plan. There used to be a government slogan Health for All by 2000. Nowadays the fashion is 2020. As per education less than half of Indias children between age 6 and 14 go to school. Even the world Development Report 1998 conceded that 52% of Indian population spent less than a dollar a day and 90% of Indians less than 2 dollars. Surely we must get our priorities right. A few dollars more for the poor man is worth more than a few dollars for the rich. 40% of Indian poor are landless labourers. 45% are marginal farmers. 7.5% are rural artisans. So, to the bulk of the poor Land, water, forests make up the most important resources. Struggles around these will therefore intensify. Indias heart is bleeding. You cant fix it with a band aid. You cannot escape land reform, higher investments in education, health, housing and jobs. You cannot run away from democratizing water and forest ownership. Meanwhile, they are worried about the reaction of the middle class and therefore attacking their Indian culture. Mathlab ke liye, andhe hokar, Roti ko nahi pooja hamne Hum us desh ke vaasi hai, jis desh mein ganga behti hai What is our culture is not charitableIs it not Indian Culture not to allow fellow human being to starve? Is not sense of Community a very Indian ethos? It was and It is. That is why there is struggle over it as well. That is why the MNCs and foreigners are here, already not merely for our puny market today, not for destitutes of a middle class todaybut for the long term With every dollar giving them Rs. 45/-, they can invest and wait for long Meanwhile they can go about leisurely to destroy our culture of compassion and replace it with Greed as good. They are here to destroy the sense of community. For a fistful of dollars: The middle class which was already loosing all its idealism, morality and social sensitivity for the sake of self-interest and material well being is to be pushed completely on the other side. Dont look into India, forget the poor, Look out, globalise, consumewhether you want it or not Meri Marzi All that was vulgar suddenly became acceptable austerity was pass, flamboyance was in. Zamana badal gaya hai Tryst with destiny became dabbling in the market. Making money become the mission impossible Have money, travel abroad. Zamana Badal gaya hai! For a few dollars more This imperviousness to the travails of ones own country men, this inability to see beyond the neon lights advertising one more object of desire, this absolute conviction that there is little in common between the possibility of the good life for one self and the state of deprivation of the vast majority this attitude, this thinking is sought to be strengthened by New Economic Policy and all it represents. In simpler words, It divides Indians from each other and thereby puts them against each other Behind all attempts to divide are attempts to rule by a third party. This is how the Divide and Rule policy of British during the colonial times continues to this day practiced by imperialist nations against their own people as well as others including India. So what do we do? Well, we know what does not work. It has been proved again and again that growth alone does not eradicate poverty or even trickle down and no single class can do it alone. You have to get along, take others with you.
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The Good, Bad and the Ugly When M.S.Subbulakshmi the Queen of song, conferred with Bharat Ratna, was asked what makes her cry, she said poverty. Its heart rending to see so many people poor. May be we cannot sing, but all of us can respond to music and songs. I will tell you what I did, personally. On the eve of the Golden Jubilee of our Nations Independence, - I got together with some of my childhood friends and decided to participate in a trust proposed by them called Golden India Force Trust or GIFT and dedicate it to the people. As per my standing instructions Rs.660/gets deducted from my SB account every month for the last three years; or so as my token contribution towards the trust proposed by them. Our President, known for his munificence and generosity has been engaged in scores of social activities, organizing noble programmes of feeding the poor in orphanages, home for the aged, while observing important festivals, birthdays of his family members. He has been zealously participating in number of social welfare schemes of various welfare organisations in Tamil Nadu. I would like to hear from every one of you; what you did. Thank you, for the aside, let us proceed now. Let the middle class of India who consume according to a survey 38,000 tonnes of potato chips, spray themselves with 15,100 tonnes of talcum powder, consume 2880 million bottles of soft drinks and fly ten million times a year pause, consider and decide. Intelligentsia cannot become just a privilegentsia It is the culture which provides the values of community and caring. If the society does not supply them, the market certainty will not.. Seventy percent of the top 1660 companies dont even pay taxes A nation is more than a market. It is also care and concern for its citizens. Nothing can bridge the gap between the upwardly mobile and the pathetically deprived except an attitude. Unless the privileged change themselves, instead of a tryst with destiny, they will waste a heritage and Hindustan. Despite wide spread hunger we have over 13 million tonnes of unsold excess stock of cereals over and above 19 million tonnes of buffer stock. It shows the failure of the wage employment and self-employment mechanisms for distributing purchasing power and mitigating malnutrition. International poverty line is defined as per capita expenditure of less than Rs.1,300/- per month. According to the latest NSS consumer expenditure data for the year 1998, 87% of the rural population lives at a per capita monthly expenditure of less than Rs.560/- (less than half the international poverty level). In 1999-2000, only 0.05 percent of our population earned Rs.4,00,000 crore in the stock market while this was the income in the entire agricultural sector on which 67% of our population depend for livelihood. The ratio of average per capita income of those in the top three percent to those in the bottom 40 percent has grown 60:1. Thanks to the package of New economic policies initiated in India since 1991, about 97% of the population has suffered an economic decline. If, today, we are writing about it all instead of being written about as if we were unemployed statistics it is only because of our UNION. Only the UNION and the Union alone which stands between forces of destruction and our lives and that of our children. That is why this Golden Jubilee is equated with the Millennium, the century, and the National Golden Jubilee it is for us that important.
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As we approach 65 Years in Our Union We will be celebrating the 65 glorious years of our Union,two years from now as several crore workers all over world are being pushed into acute poverty. Never before in the history of human society have the contrast been so extreme. At the head of this great churning, a giant centrifuge churned on faster and faster by the IT revolution, i.e.. the gigantic mergers and acquisitions which is the prime factor for the growth of the monolithic TNCs. Leading these gigantic take overs are the banks and the financial institutions, which have become the biggest predators in the world economy specifically those of America, Europe and Japan. From a low level of 30-35 mergers in the late 1980s the merger announcements in India alone increased to 430 in 1995 and to as many as 553 in 1997. the number of Indian firms acquired by foreign companies rose from two or three per year to 280 in 1997. With the leading powers setting the trend, they are demanding the same of the under developed countries. In these countries the dictat is straight merge, sell-out to a TNC or liquidate. With these take overs come the gigantic lay offs. The main purpose being to cut costs by rationalising labour, and thereby increasing competitiveness in a cut throat market. So, they are asking SBI to reduce its workers from 2.5 lakh to 1.5 lakh. Blue Print For Our Unions Platinum Jubilee Celebrations IMF has already dictated its policy, Mr. Narasimham has duly echoed it and our politicians are regularly visiting various capitals and promising their speedy implementation. Even the inspector has made his visit, the Clintons of the world keep coming. India is virtually mortgaged to the imperialist powers. The slow pace of their implementation is only due to the strong resistance by our unions. Otherwise they would have finished us all long ago. Remember, people voted out Narasimha Rao Government. Inspite of all this they are announcing IPOs and voluntary retirement schemes massive retrenchment is on the cards. Today we have jobs. They may or may not last. But what is definite is that our children are not going to be able to find similar jobs. This will be the plight of the bulk of the middle and working classes. But all is not lost. If we stay united and fight, the government will not be able to implement its IMF dictated policies. If we are also able to get united will all others who face the same disastrous impact of these policies, power sector workers, government employees, private sector workers, farmers etc., we can certainly beat back the Governments traitorous policies. This has been proved by the militant struggles of the European working class, where because of these struggles the government in Europe have not been able to attack the workers as they have done n America. History has shown that while the rulers turned India into a colony of the British for 180 years, the people fought for the freedom of the country. Indian workers are the true Indian patriots who will not allow India to be sold again.

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The Way Forward For the Nation

Why has our beloved nation, after fifty years of supposed independence, become one of the poorest countries of the world? The Two major causes of our Nations agonies: The first major cause is the lack of a home market for industrial produce i.e. the quality and quantity of market for a population of our size. The continuing semi-feudal conditions of Indian agriculture is the main bottle neck. The second major cause is the enormous drain of our Countrys wealth and resources. The continuing whole sale loot by the imperialist foreign forces along with their desi collaborators including the political leaders, businessmen and bureaucrat and all those who facilitate this drain of indigenous capital are part of the second problem. The Semi-Feudal conditions of Indian agriculture: It is of course well known that nearly three fourth of our entire population is in rural areas. 60% of the rural populace are landless and poor peasants, while another 20% are marginal farmers with less than 5 acres. That is, toughly 80% of the rural population or 600 million people (sixty crore) continue to eke out a subhuman existence in Indias rural areas. Extortion of share-croppers of over half their produce, employment of bonded and attached labour and mercantile usurious exploitation are the common forms of semi-feudal exploitation. The much trumpeted green revolution by increasing the consumption of fertilizers, HYV seeds etc., on a massive scale, has led to an enormous increase in the costs of production thereby pauperizing the bulk of the peasantry and driving them further into the clutches of the usurers, merchants and landlords. The criminal nexus between these leeches has led to hundreds of suicide deaths of farmers in recent years a phenomenon that is likely to aggravate in the future. The continued backwardness of Indian agriculture is reflected in the fact that of the 329 million hectares, nearly 175 million are degraded or wasteland; and even of the cropped land only 35% is irrigated. Yields of food grains are only 1,700 kg per hectare compared to chinas 4000 kg. per hectare. Though India has one of the richest land mass (12.2% of the worlds total arable land) and water resources in the world, that is being destroyed by the rapacious plunder of agri-business companies in denudation of the forest cover and sapping of the water table. This environmental destruction is adding further to the drop in productivity and rural impoverishment. How the Imperialists and Indian Collaborators are draining India The drain of Indian capital abroad is estimated to be around a huge Rs.1,66,000 crores ($ 36 billion) a year that is 11% of our national income. Flow of FDI (Foreign Direct Investment) into the country that was roughly $ 100 million per year in the 1980s is now $ 3 billion a year. 70% of this FDI goes only to take over existing Indian industries. The financial sector too has been handed over to foreign capital. Nobody disputes today that FIIs (Foreign Institutional Investors) determine the share-price movements of the Mumbai Stock Exchange. Black money economy is estimated at Rs.40,000 crores per year. Public sector undertakings (PSUs) and nationalised industries have been misused in the patronage system of the collaborators minting fortunes in leakages, unpaid loans and profits slashed away from such misused capital.
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Finally, there is the unproductive, wasteful expenditure on an increasingly repressive state apparatus that is growing to monstrous proportions. So, what is to be done? First of all, it has to be understood that capital formed internally in our country is the savings and taxes paid by the working people of this country. The capital formed every year by the Indian people has to be retained in India, for the development of the Indian people and our country. We have to find a way to retire the $ 99 billion foreign debt in service of which we have paid back substantially. We have to take over the 40,000 crore black money. We have to stop the drain of Rs.1,66,000 crore ($ 36 billion) a year. By curtailing wasteful expenditure, we should be able to save another Rs.66,000 crore atleast. All these lakhs of crores are to be invested and distributed to the villages of India. To develop and manage water resources, improve irrigation and thereby usher in a genuine agricultural revolution. As we develop water, land and other such natural resources we should also develop the human resources by providing schools and hospitals in every village. Once agricultural revolution takes off, the rural market for Industrial products will increase and we can industrialise the country side. This will reverse flight to the urban areas which will improve the quality of life of cities as well. When the sixty crore people who are denied appropriate wages and income start to share the benefits of this rural transformation by agricultural revolution and industrialisation of the country side sixty crore new purchasers will get added to the home market. As the home market improves, industrialisation proceeds, urbanization recedes, unemployment reduces the conditions of urban workers will also improve. As everyone gets work, education and health support lumpenisation and criminalization of the population will decrease and social values and mores will get a more sustainable basis for improvement. Intolerance will recede. How can such a change be brought about? Our great nation with its great history, a galaxy of philosophers, and saints, a tradition of great princes, persons, which has made great contribution to the history of humanity, certainly has answers to all problems. We can learn from all of them and from the history of humanity. As recently as fifty years ago we were struggling against direct British rules. Gandhi taught us non-violent Satyagraha, Subhash Bose taught us by raising an army, Bhagat Singh taught us by sacrificing his life... It is for every one of us to choose our lesson, our path according to our condition and conviction. What is however clear, is that no rights are ever won without fighting for it, no drams are ever realised without struggling for it. Bhagvad Gita taught us to do our duty as per our convictions, with faith. We cannot lose faith in humanity, we cannot lose hope for the future of humanity. We have to believe in the possibility of better humanity, happy relations and therefore happy society. We have to prepare our hearts and minds for this faith and struggle.

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THE FORGOTTEN PLEDGES & THE GREAT BETRAYALS

That the basic criterion of determining the lines of advance must not be profit but social-gain, and that the pattern of development and the structure of socioeconomic relations should be planned that they result not only in appreciable increase in national income and employment but also in greater equality in incomes and wealth. Major decisions regarding production, distribution, consumption and investment, and infact all significant socio-economic relationship, must be made by agencies informed by social purpose. -Resolution of the Lok Sabha - -December 1954.

..Public ownership and control of the commanding heights of economic and its strategic sectors were considered an essential aspect of the new social order being built up in India. Financial institutions are amongst the most important levers that any society has at its command for the achievements of its social and economic objectives. The nationalization of major banks was a significant step in the process of public control over the principled institutions for the mobilization of peoples savings and canalizing them towards productive purposes. The Government believes that this step would help the most effective mobilization and deployment of national resources so that national objectives would be realized with a greater degree of success -Smt. Indira Gandhi 19-7-69

The Banking system touches the lives of millions and has to be inspired by large social purposes and has to sub-serve national priorities and objectives, such as rapid growth in agriculture, small industries and exports, raising of employment levels, encouragement of new entrepreneurs and its development of the backward areas. For this purpose, it is necessary for Government to take direct responsibility for the extension and diversification of banking services and for working of the substantial part of the Banking system. -Objectives of The Banking Companies (Acquisition and Transfer of Undertakings) Bill, 1969

Killing the Goose

"I am one of those who have always believed that on our country attaining political independence, had not our Government shouldered most of the infrastructural industries like coal, steel, rail, and air, transport, power, fertilizer and a number of other basic industries, the industrialists like Tatas, Birlas Goenkas, Kirloskars and dozens of others would have found it extremely difficult to attain the extent of industrial development they have been able to achieve.. to that extent the private sector owes a best of Gratitude to the Government for acclerating the tempo of industralization, which alone made possible our claims to be amongst the first dozen of the most industrialized countries of the world.: - Naval Tata

CHAPTER - V Consolida tion Of Pub lic Sector Bank s Consolidation Public Banks Merg Mer ger Mania
An Overview of the Move to Merge PS Banks in India
It has been widely reported about the proposal to merge some of the PSU banks (Nationalised banks). These merger has been proposed by the government, specifically our Finance Minister. In the annual banking summit, the finance minister reiterated this by saying that banks should not fear consolidation and that for being a world economic super-power or for at least being one of the three largest economies, India. The centre is nudging the capital infusion demand by the state-run banks with demands for mergers as these mergers would considerably bring down the liability on the centre for capital infusion The justification of the need for large global sized banks given by the centre was that these banks could have a larger asset base as their exposure to various sectors would be widened and their scope for financing bigger and larger projects would undoubtedly increase. Certainly the centre is adopting the policy of looking towards the west and drawing some inspiration out of their ways. In the financial debacle of 2008, the world has witnessed how the so called global banks of USA and Europe are still gasping for breath. Ultimately many of these financial institutions and banks had to be taken over by others or had to be bailed out by the government through the respective central banks by providing grants and soft loans. Even the biggest of banks in the world, Citibank, was not spared by the recession. The state of these banks were as a result of their own making and not because of circumstances that they had to bear the brunt. Indian banks have a large customer base and undoubtedly large amount of public money is involved. A larger loan exposure would only put the public money in unsafe domains. The more fragmented the banks are, the lesser will be the exposure with respect to size, thus making public money secure. We have already seen how the banks are reeling under pressure because of their exposure to the aviation, power generation, infrastructure, mining and agriculture sector. The banking sector is the pulse of the economy and decisions should be taken by keeping the long term implications in view. Even the slightest of jerks in trying times could prove fatal for the economy. Further more in this regard, these proposals are being mulled upon to create 2 or 3 global sized banks. Without doubt, the sizes of banks are being compared by keeping in view their loan books and their asset base. But what the minister is forgetting is that we got to compare apples for apples. If we are to compare the size of our banks with that of the US, converting our financials in terms of dollars and making a pie to pie comparison would be utter foolishness. With my limited knowledge of economics and with due respect to our finance minister, it isnt rocket science to understand that what 1 dollar means to an American is not what 1 rupee means to an Indian. We got to factor in the purchasing power of both the currencies in their respective economies for the corresponding average citizen of that country before making any comparison. Appropriate weightage should be given to this aspect in any exercise of comparing size of banks in each of these economies. Moreover it will be pertinent to note that the penetration of the Indian banks by their sheer enormity of the reach their customer base is something unparallel world over (SBI being the case in reference). One has to definitely give due consideration and weightage to this fact and not merely be guided by size of loan book and enormity of asset while considering the size of a bank. Thus all these points all the more make it unreasonable and unfavorable for the centre to even think about merger of banks. Apart from all this, the points being raised by the respective unions of all these banks are also to be considered before making any commitments. It would amount to nothing but digging our own grave or to put it more bluntly we would be cutting the hands and legs of the workers who
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built our very own Taj Mahals upon which our economy is sustaining and I sincerely hope that our Finance Minister wouldnt want to take the wrath of being termed as Shajahan who made all this happen. Another very important point of consideration is the proposal of divestment of the PSUs including the nationalized banks. No doubt it is impertinent that the government meets its fiscal demands and divestment of holdings is one of the most easiest and non-cumbersome ways to meet this end. But the unique, neverbefore tried out model which the centre plans to adopt in the process of divestment is alarming. From what we understood of what was reported in this end is that the centre plans to sell the stakes of these Banking and other PSU stocks to selected Asset management companies (AMC) and mutual funds, and these mutual funds AMCs in turn would create a special category of securities where in these securities would derive their value from the value of the basket of these PSU stocks. These securities thus created would be issued to the public as units of exchange traded funds (ETFs) listed in the stock market through these mutual funds in the name tradable listed ETF units. The fact that the underlying value of these securities would be derived from that of the PSU stocks which are listed in the exchanges would garner a lot of interest in the common public, who are generally unaware of the ways of the market. This would be so because it is generally understood that PSU stocks are considered to be safe havens of investment for the common man and has a huge upside as it linked to the economy. India being projected as the next big economic super-power and a force to reckon with would furthermore add to such an understanding of the public. Keeping the present proposal in mind, the only earnings out of the securities that the mutual funds and AMCs would issue would be out the dividends that the companies (underlying stock/PSUs) declare and the capital appreciation of these stocks. How often would these companies declare dividends is a question which only time can answer and whether these stocks would ever see any capital appreciation is a question which can, to a large extent be answered by us. Such a possibility is certainly shady. Because the catch is that, the stocks of these public sector undertakings most of which are already listed in the exchanges do not reflect their true price. Their values on the exchanges are not reflective of their true value which ideally should be ascertained by market forces. It was already very well seen how the market reacted to the offer for sale of a few PSUs which were divested. Even though those stocks were being offered at a discount it did not garner much interest. There was hardly any buying for the better part of the period of the trading window. Towards the fag end of the trading window, it was LIC which took a lions share of the offer for sale, thus being a saving grace for the government. Seasoned Market players probably knew about the intricacies of these stocks. And that is why it did not garner much interest even though it was being offered at a discount. Even in the case of the proposed divestment of PSUs through AMCs it would is highly doubtful that it would see an upside resulting in capital appreciation since the values are already fabricated. The reasons for such artificial prices are the low public holding or free float of many these shares. Probably the government does not want to face the same situation and that is why they have devised this new structure where in a mutual fund AMCs would act as an intermediary between the divesting government company and the common public. Ultimately the fiscal needs of the government would be satisfied, the mutual funds would have made their money but it would be the common that would have lost their hard earned money. The average middle-class and those planning for their retirement would without hesitation enter into such a fund. And after a few quarters of capital stagnation when they decide to encash out of it they are bound to face the road block of not even fetching the face value/ purchase value of the units held by them thereby leading to a downward spiral in the value of these units when these mutual funds face redemption pressure. This is the same model which was the prequel leading to the November 2008 financial debacle where the securities, which derived its value from underlying subprime loans, were being issued as highly secure and AAA rated securities to the average American. They innocently entered such funds as a lucrative substitute for pension funds and got trapped. Furthermore, the next initiative which the government plans to take in the bid to open up the economy and make reforms is the opening up of the pension sector. The dual combination of opening up of pension funds and allowing pension funds larger freedom to invest in equity and equity based securities and the so called
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seemingly innocent act of offering these ETFs which has the wide acceptance and belief of being safe simultaneously by the government is the most dangerous cocktail which has the potential of leading to catastrophic results which is likely to affect scores of millions of unassuming individuals, especially senior citizens and pensioners, the most vulnerable of any society. In order to understand the incentive driving the ministry of finance and the various interests pushing it, it is useful to distinguish between the activities of banks as seeding-cum-cultivating agents and as harvesters on the one hand, and the activities of modern banks as over-time seekers of interest from customer activities, and their activities as point-of-time earners of fees. Bank mergers, like many other types of liberalization directed at increasing the wealth of rich shareholders has been a tsunami originating in the activities of US financial corporations. Their role has been that of a harvester of fruits of other institutions seeding and nurturing activities, and of looking for product lines involving fees for point-of-time services rather than of durable customer servicing activities. They generally provide usual banking services only to an elite band of up-market customers with whom they have sought to build close relationships.

Consolidate Unity! Against Merger Mania

The goal of our dissertation in this Chapter is to enhance the awareness to generate inquiring minds, not only of bank employees, but also to galvanize peoples movements, for devising new tools of analysis and action. This is to ensure that global finance capital serves the interests of citizens and democratic states and not the avarice of owners and managers of capital .Our goal is to prepare and merge their hearts and minds to resist & defend the unique & separate identity of Public Sector Banks and defeat the ill advised moves of Consolidation which are pitfalls of a hasty decision without public debate taken by the Government. If the objective on Consolidation of Public Sector Banks as set out by the Governments latest moves and policies, it is clear that the entire institutional structures assiduously built up over the past 43 years after Bank Nationalization is being subverted to serve the interest of a small section of Indian society in the name of achieving Global Competiveness. The entire system is being turned topsy-turvy without any comprehensive study, public debates, debates in news channels and print medias, except for the reports of committees and foreign rating agencies/ consultants which are tailor made to appease multilateral agencies. While consolidation, mega mergers provide fodder for front line stories in the news papers, electronic channels, a simple fact often ignored is that mergers pose new challenges to regulatory authorities in terms of moral hazard. The complexity of big banks makes the task of managing risk more difficult. This becomes more evident as one analysis the consequences of myths of consolidation objectively without any prejudice which is being sincerely attempted by us in this chapter. Consolidation the last nail in the coffin Having struck the last nail in the coffin of the Public Sector Banks (PSBs), the Government is all set to bury them. Following IMF instructions, the Bill for the privatisation of banks was passed in the winter session of the Lok Sabha. The Banking Companies (Acquisition and Transfer of Undertaking) and Financial Institution Laws (Amendment) Bill 2000, was passed in the Lok Sabha by 209 votes to 159. The Bill provides for the drastic reduction in government equity (shares) in PSBs to a mere 33% from the existing not less than 51%. Major foreign banks have been hovering over these PSBs like vultures, waiting to swoop in for the kill. Banks like the HSBC (Hong Kong and Shanghai Corp. Bank), Standard Chartered and Citibank have openly
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expressed their intentions of acquiring Indian banks when the laws of the land permit. This is quite natural, as these PSBs, with insignificant equity capital, hold gigantic deposits of the public. So, with a small amount of funds, these TNCs can grab control of the huge savings of the Indian public. The immediate fallout was the government instruction for the removal of over 10% of the employees. It was estimated that by March 31, 2001, roughly 12% of the 9 lakh employees will accept the VRS (Voluntary Retirement Scheme) package and leave i.e., an employee reduction of 2 lakhs !! The governments claim that it will retain control even after dilution of equity to 33%, just because it will retain the power to appoint the CMD (Chairman and Managing Director), is an outright hoax. In the new establishment out of 15 directors on the board, 10 will be from the private sector. The CMD will therefore remain a mere puppet in the hands of this brute majority. So, after gaining control of these PSBs, with a few crore investment, they will take control of their vast deposits. Take an example of XYZ nationalized bank. Assuming the government at present owns 60% of the equity, if this is to be reduced to 33% through dilution of capital, it would mean an infusion of an additional Rs. 182 crores. So any big business house or TNC by investing barely Rs. 100 to Rs. 150 crore can gain control of the huge deposits of Rs. 51,306 crores. Besides with the market capitalization of these PSBs drops drastically as is the current trend banks can be taken-over at even lower rates. In the first instance, those that are likely to take control of the PSBs are those big business houses which owe the banks massive debts, euphemistically called non-performing assets (NPAs) who now become directors as per the recent amendments to the banking bills approved by the parliament on 21-12-2012. Once they take-over the banks, with their majority on the board of directors, they can write-off these loans as bad debts. The amount entailed is a gigantic Rs. 1.37lakh crores as could be seen by the pending applications for restructuring official advised by the government in the written reply to Rajya Sabha (after having already restructured Rs 43,334 crores during January to March 2012 ), of which it is estimated that one-third is owed by 15 big-business houses. Attempts to get the defaulters names public has been so far suppressed by a secrecy clause stipulated in the RBI Act, 1934. With the amendment adding of Section 20 (6) to B R Act approved it will enable the RBI to exempt Banks from the present condition which prohibits Bank Directors to be borrowers of that Bank or Bank borrowers to be Directors of that Bank, as a result of this even banks borrowers can become directors. While making a strong case in favour of final straw of banking sector liberalization thorough consolidation, its proponents claim global sized bank in the poor and developing world is highly desirable and beneficial. But recent empirical evidence suggests that the entry of big banks could lead to misallocation of credit, which in turn could negatively affect economic growth prospects as bank credit is a vital input for investment and growth. Big global sized banks are not going to lend money to small and medium-sized enterprises (SMEs), small traders, informal sector and farmer as existing well dispersed 26 public sector banks. They new global banks will tend to serve less risky businesses such as TNCs and big corporate groups to emerge a first 100 global banks. This has serious consequences for economic growth. In most countries, whether it is India, China, Japan, Germany or US, it is the SMEs (not big business) which are the backbone of economy. With a view to emerging as global sized banks, the consolidated banks will attempt to make inroads into wealth market by targeting owners of foreign exchange, including local businessmen and expatriates, who have a in liquid assets in Us $. According to banking industry estimates, the total liquid assets held by wealthy Indian households are set to nearly double by 2012. No wonder, a number of global banks, new private sector banks have lined up to tap local currency wealth business opportunities in India . Therefore, it seems likely that less credit would be available to small and medium-sized companies in future which, in turn, would have negative repercussions on the economic growth.

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At the consumer level, the fewer consolidated banks will emulate foreign banks who have a bias towards providing services to wealthy and affluent customers in the developing world to find list in the global 100. The upmarket retail business will be their primary focus. Not only foreign banks charge higher fees from customers for providing banking services but maintaining a bank account requires substantial financial resources. Take the case of Deutsche Bank which re-entered retail banking operations in seven cities of India in 2005. The Deutsche Bank opens bank accounts for those Indian citizens who could afford a minimum balance of Rs. 200000 (approx. US$5000) in their accounts with the bank. This is a princely sum by the Indian income standards which only affluent customers can afford it. The bias towards affluent customers is evident from the statement issued by Mr. Rainer Neske, a member of the Group Executive Committee of Deutsche Bank. At the launch of retail banking operations in India, Mr. Neske stated, As the leading retail banking provider in Germany and parts of Europe, we have keenly followed the developments in India - one of the most exciting growth markets in the world. The number of affluent Indian consumers is increasing, the market for consumer goods is expanding and private customers demand for excellent advisory services and high quality banking products continues to rise. This is an exciting market that Deutsche Bank seeks to serve by providing advanced value, innovation and convenience to Indian customers. Indian banking system has still not provided loans to company and farmers as an estimate Indias Bank loan to GDP ratio (around 37%) is far lower than that of China where according to IMF it has 136% loans to GDP ratios. Going by the comparative figures that are available of US even as of 2005, if we add up today figure of Nationalized Banks India with US even merger of 19 nationalized banks is not going to create a new entity of international status. Even SBI is not even one-tenth the size of the tenth largest bank in the world. But this also means that no amount of consolidation will give Indian banks a global size in the foreseeable future. The argument bigger size is needed for scale economies as being advanced by the Finance Ministry fall on four legs as scale economies are useful but beyond a certain size, the benefits of scale taper off and tend to be offset by growing complexity. Internationally, studies have shown that a size of around $ 20 billion is optimal. Indias top ten banks meet this size requirement. One outcome of the present global crisis is that large banking monsters have come to be feared. The worlds largest banking group viewed under many parameters including profitability is the Citigroup. An outstanding example of a financial services group that grew through M&As, the bank has been asked by the Federal Reserve Board to desist from further acquisitions until it refined its systems and procedures. If a bank such as the CITI , which has been a global force, could be faulted on its basics, there is clearly a message for Indian PSBs to be far more circumspect than what the Government would recommend. Some of the worlds biggest banks, the Citigroup notably, which relied heavily on mergers and acquisitions to grow phenomenally, have been rapped on the knuckles by the regulators and are realising that such stupendous inorganic growth has come at a price. But In India, there is a revival of the clamour for bank consolidation disregarding these adverse trends. Besides, universal banking itself seems to be going out of fashion. In India it is unlikely that banks will be able to impress all their customers across a variety of products. A deficiency in one area, not necessarily its main business, can affect its image disproportionately. Even more damaging is the fact that M&As can bring in disparate cultures that cannot be harmonised simply because of common ownership. India needs expansion of banking and not consolidation of banks. But a systematic and deliberate attempt of calumny, untruths is unleashed ,orchestrated by the corridors in the Ministry of Finance in India through their spokesmen , Ministers which includes FM and their sponsored appointed CEOs in Public Sector Banks, chorused through their accordions , paraded in the daily electronic and print media that Indian banks can emerge stronger only through consolidation of
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Public Sector Banks to suit their political expediencies in the wake of Election 2014. Such unwarranted moves in our opinion is a gigantic betrayal of the national interests, taking Indian banking a full circle, putting it back into the direct hands of the imperialists. The Imperial Bank of the colonial era will return, with changed names and faces, in a new form. Not only will such moves further will infringe on the sovereignty of the country, but will have a disastrous impact on the lives of the people ., The Case against Consolidation of Public Sector Banks The argument that the threat to domestic banking arising from an increase in the foreign banking presence should be dealt with through consolidation of domestic banks, which would also serve to strengthen them and make them global players is without logical or empirical basis. While the gains from consolidation are expected along greater economies of scale and scope available to bigger banks, the evidence doesnt support an automatic association between large size and profitability. On the other hand, bigger banks tend to rely much more on arms length transactions and standardised balance sheets and loan accounts, on fees based income that seek to avert credit and interest risk, and on trading risks at the securities market. These tendencies give rise to the phenomenon of financial exclusion (whereby a large segment of the population remains unbanked) at the same time that it engenders financial fragility via a greater exposure to financial markets. To advocate bank mergers as a general policy move and not as a carefully thought-out measure to consolidate the gains of two banks, would be to lend legitimacy to the above outcomes. Consolidation also amplifies the financial fragility resulting from liberalization in the form of increased exposure of banks to the sensitive sectors commodities, real estate and the capital markets, where speculation is rife and returns volatile. Private banks have increased their exposure to the stock market through acquisition of shares, advances against shares and guarantees to brokers. Once the domestic financial sector is liberalized and then linked to external capital flows through capital account convertibility, the probability of banking crisis, currency crisis and financial crisis increases manifold. Further, to restrict and reduce the fragility of the financial system it is necessary to: (i) rebuild the Chinese Walls separating the banks and the stock market and drop proposals such as permitting banks to trade in commodities exchanges; and (ii) strongly regulate the access of domestic banks to global resources, which would also help improve monetary management. However, the evidence seems to run contrary to the above view. A large number of studies have examined the impact of M&A driven consolidation on bank costs in different contexts. Contrary to popular notion that sees efficiency improving with size, academic studies find no evidence of mergers improving cost efficiency on average. Arguments For Bank Mergers? Official Push for Bank Mergers Banks were set up in most countries to mobilize savings and allocate them to productive use. David Hume made one of the classic analyses of the encouragement of thrift and industry through banks and paper credit in his essay, Of Money [Hume 1752/1985]. In India, joint-stock banks were founded under colonial rule mostly in order to create a medium through which the government and British businessmen could procure cheap loans. But from the 1840s, some Indian entrepreneurs also began founding joint-stock banks in order to extend credit to Indian traders, who were mostly ignored or shortchanged by the Europeancontrolled banks. After independence, and especially after the nationalisation of the Imperial Bank of India and the subsequent nationalisation of all the major commercial banks, developmental banking came into its own. In the postnationalisation years, the deposits mobilised and the credit extended by scheduled commercial banks in India have grown at a phenomenal rate. It is remarkable, how despite the ill-effects of many of the
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institutional changes brought about in the financial system since1991, successive governments at the centre have stuck to the vision that the rich will be continually enriched and the poor will(hopefully) reap the benefits of growth through trickle-down effects. The move to effect mergers of public sector banks is consonant with the vision of the neoliberal reformers, clearly delineated in 1991 and reiterated in numerous policy documents and policy pronouncements since that time. Successive governments in the neo-liberal era have downplayed the role of the public sector banks (PSBs) as providers of loans to small borrowers, venture capitalists, and small and marginal farmers forced them to downsize their workforce and recapitalized those PSBs whose non-performing assets were large. These methods have succeeded in raising the profitability levels of the PSBs. Some of the benefits of that improvement have been already passed on to the rich by disinvesting substantial fractions of the equity capital of the banks. Now the government wants to make the banks even more rich-and foreign investorfriendly by forcing some of the PSBs to merge. Thereafter government has announced that it will give autonomy to banks. That autonomy will include the right of the bank managements to make domestic and foreign acquisitions, exit nonviable businesses and close down unprofitable branches without the governments prior approval. The stock market responded gleefully by pushing up the shares of those PSBs including the State Bank of India, the biggest of them all which are likely to take up the offer of autonomy and pursue profit at the expense of the small borrower and economically backward regions or lagging sectors. We will now take up the issue of mergers of PSBs and leave on the one side the issue of permitting the PSBs to become purely profit-oriented organisations and ultimately go private altogether. We also leaving aside the question of whether pushing all banks to become so called universal banks and break down all barriers between banks and stock markets is a wise decision, given the increased turbulence created in stock and money markets by the full deregulation of financial markets .Thereafter we shall answer the question is there any compelling reasons for Indias public sector banks rationale for consolidation? It is the very commercial success of the Indian PSBs, the access of enormous wealth in a few hands and the greed of foreign financial institutions to rich prizes in India that have come together to prompt the central government and the Indian Banks Association (IBA) at this juncture to urge the mergers of various sets of PSBs. The IBA had set up a committee under the chairmanship of V Leeladhar and, assuming that bank mergers were on the anvil any way, in its report submitted in September 2004, had dealt with the legal and regulatory implications of bank mergers. 1) Economies of Scale in Banking?

Bank mergers are advocated by many on grounds of economies of scale and scope. Before we look into the empirical evidence bearing on that, it should be made clear that there are no obvious economies of scale in banking. Banking is not like petroleum refining so that a three-tenths law of relation between volume and surface area will automatically generate productivity gains as size increases .The move has to be internally generated and has to be accompanied by a serious exercise setting out all the pros and cons of the move. It is strange that an administration that professes to minimize government interference in economic affairs and increase the autonomy of PSUs should dream up a move without studying the situation on the ground and cavalierly dictate to banks that they must merge or incur official displeasure. 2. A Glance at the International and Indian Evidence

The international evidence on most aspects of bank performance after two or more banks have merged does not indicate that M&As in the field of banking have produced beneficial results. After a thorough examination of the issue of bank mergers in the US, Gary Dymski (1999:275) concluded: bank mergers may have effects contrary to consumer and small non-financial firms interests. To a large extent, banking markets remain local; but consolidation increases the opportunities for monopolistic pricing. Consumers
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earn lower rates of interest on deposits in more concentrated banking markets; and the evidence collected by the Federal Reserve shows that consumers pay higher fees at large banks and at banking institutions owned out-of-state. Banks fees for consumer financial services have not fallen in the last few years despite apparent gains in computer technology during this period. Large acquisition-oriented banks in particular have aggressively increased bank fees; so the increased dominance of these banks suggests banking consumers will pay higher average fees. Some of the liberalisers might argue that we need to infuse the blood of dynamic foreign banks into the Indian banking industry. One of the first acquisitions of an Indian bank by a foreign bank occurred when the ING Bank of the Netherlands took over the Vysya Bank. The ING Bank has acquired other banks in Latin America and so it is an old hand at the game. The ING VysyaBank is now classed as an old PRSB by the Reserve Bank of India. Its profitability record since 1998-99 has been consistently and considerably worse than that of the average old PRSB, and a fortiori worse than that of the PSBs. So the magic of infusion of foreign capital has done little to improve the performance of the Indian joint-stock banks. However, banks continued to be favoured areas of investment by foreign financial institutions (FIIs) until recently. The government obviously welcomes such investment since it has taken steps recently to disallow some curbs that the RBI had imposed on inflows of foreign hot money. There is no justification for that step. Research at the World Bank itself, not an enemy of global capital movements, has confirmed that not only does free capital movements increase the risks of financial crises but the entry of foreign firms and foreign banks may lead to the misallocation of resources. Small businesses are typically rationed out by foreign firms and only easily monitorable loans made to customers with high-value collateral find favour with them. There are other threats posed by the entry of firms controlled from abroad that any student of Indian banking history should know. 3. Arguments Based on Supposed Advantage in International Competition

Given this national and international background, why is the Indian Finance Ministry pushing bank mergers (and capital account convertibility as the larger goal)? One argument could be that we need big banks as national champions. But what will they do that a consortium of big PSBs cant do? Do we want them to backroll, say, $30 billion takeovers? When they can do that, they will no longer be national champions but simply another set of multinational banks treating India on the same plane as, say, Croatia. This move seems to be based on bad reasoning & poor illustrative/empirical evidence . Some Indian Evidence There is already evidence in India as well of the futility and even the dangers of consolidation. First, in the last few years, the Indian public sector banks have been able to raise their profitability substantially. While the real costs of these apparent gains in terms of the real economys needs are what this report seeks to underline, it cannot be denied that PSBs when judged by corporate performance parameters have recorded substantial improvement. Both profitability and market capitalisation at PSBs have grown consequent to deregulation with a particularly impressive performance in the last three years. Second, the Indian evidence of the post-liberalization era doesnt uphold that bigger size confers greater efficiencyi.e. consistently, higher levels of profitability. (Bagchi, 2005). The relationship of profitability of banks (defined as net profits to asset ratio) with their total asset size has been estimated for scheduled commercial banks for the period 1991-92 to 2003-04 by Bagchi and Banerjee (2005). The results indicate that the coefficient of asset size is negative insignificant even at 10% level, which leads to the conclusion that total asset size had no systematic impact on the profitability ratios of the Indian scheduled commercial banks.
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One of the aspects of mergers that is often underplayed when expecting a cost efficiency improvement is the problem of compatibility of the cultures and systems and people of the merged entity. As it were, these are going to be real problems, even if the employed workforce can be slashed heavily, a probability not unforeseen for Indian PSBs. No Amount of Consolidation Will Give Indian Banks A Global Size If we look at the worlds 10 largest banks, the comparison becomes even more glaring. Last year, Citigroups, the worlds biggest banking conglomerate, Tier I capital was $74 billion. Its asset base was $1,484 billion. Each of the banks in the global top 10 list - JP Morgan Chase & Co, HSBC Holding, Bank of America, Credit Agricole, Royal Bank of Scotland, Mitsubishi Tokyo, HBOS and BNP Paribas - has a higher capital and asset base than the entire Indian banking industry. Last year, BNP Paribas, which has the lowest capital base among the global top 10, had a Tier I capital of $35.7 billion, marginally higher than the Indian banking industrys collective Tier I capital of $35.28 billion. Similarly, HBOS, which has the lowest asset base among the global top 10 banks, is almost one-and-half times bigger than the total assets of the Indian banking industry. But this also means that no amount of consolidation will give Indian banks a global size in the foreseeable future.
G

As per Report on Trend and Progress of Banking in India 2011-12, published by RBI the total liabilities / assets of Indian banking sector was Assets Rs.71,834 billion & 82,994billion in 2011, 2012 respectively. 718340000 Indian Rupee approximately equals 13105969.6 i.e. 1.3 million US Dollar, or 0.013billion 829940000 Indian Rupee approximately equals 15142089.31, i.e. 1.5million, 0.015billion US Dollar. Central Government has been building pressure on banks to make best efforts for merger and acquisition. But I am unable to understand the motive behind it in Indian perspective. Finance Minister has said that through consolidation, financial powers of banks will improve and they will not only be able to augment efficiency and help in GDP growth but also get success in competing with International big banks. Here the million dollar question arises whether Late Indira Gandhi had nationalized banks to compete with International banks, whether banks are meant to extend credit in thousands of crores to a few hundred merchants or manufacturers only? Is it possible for a government to survive by discarding the interest of common men, farmers, small traders in India? Is it necessary for India to have bigger banks to extend credit to farmers and small traders who together constitutes 95% of population and without whose support even economic viability of large projects would be at stake? It is important to mention here that there is sharp rise in loan portfolio or visible growth in advances of banks in general is not due to financing made by banks to small traders and farmers but only due to bulk financing made to big corporate houses, to real estate developers and to infra structure developers. Does any one in the government or in RBI mean that by merger and enhancing powers of banks, there will be equitable GDP growth in country like India?

Even in America where big banks are many, one out of every seven Americans starves and struggle for earning their bread and butter for at least survival. In India the position is worse than that in USA. In India nine out of every ten Indians are unable to earn sufficient money even for respectful living. Considerable large proportion of Indian population is suffering from mal-nutrition; they die of curable diseases for want of proper medical assistance and they remain unemployed for want of adequate opportunities. This is India where even federal structure of the country is at stake due to largely growing unemployment. Besides in majority of villages, small towns and cities there is no proper sanitation facilities, acute scarcity of water
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and electricity, crisis for medical treatment and what not. This is why we reiterate that Indian environment is different from other developed nations and hence need unique treatment, O Iis worthwhile to add here that USA government have realized after fall of big banks and financial Institution during last year that management of big banks is very difficult compared to smaller ones. Still there are about 8000 smaller banks functioning in USA to serve common men. It is also true that 125 banks became bankrupt or closed their shutters during the current year in USA. O we talk of India we have less than 30 public sector banks and they are said to be in better health position. They are well scattered in every nook and corner of the country to serve Indians in general. They have to be encouraged to extend maximum help to small borrowers. They cannot extend any better help to poor person after merger of banks. Then what is the need of merger and acquisition? Why is government bent upon merger Need of the hour is to make them able to cater to the needs of common men. O Need of the hour is to strengthen the existing structure of banks, make them more and more efficient and enthusiastic. Government should make efforts for repayment of loan and for this purpose make water tight laws to ensure cent percent recovery of loan from willful defaulters so that proportion of dead money in banks balance sheet comes down and they can afford and generate will to make finance to common men. O The bitter truth is that big business houses are getting all sorts of help from the government, from the banks and from all corners but all at the cost of poor and middle family. Rich business houses are producing, hoarding and realizing maximum profit on their products and it will not exaggeration to say that the present trend of rising price is caused by these profit makers only. Government has been making promises and promises to control price, but always fail on this front because they have given undue freedom and undue privileges to these business houses. I hope government will make all best efforts to give relief to general mass who are subjected to unbearable pain on account of sharp price rise in all commodities without proportionate rise in their monthly income. O India is said to be suffering from extremism in some districts due to increasing poverty and due to the fact that they are denied their legitimate right and they are even deprived of justice in proper time. Can merger and acquisition by banks help in ameliorating their problems of poverty ridden Indians? we would like to draw the attention of learned FM and PM that late Indira Gandhi (Congress Party) had nationalized banks because private banks were hesitant to extend credit to common men, villagers were deprived of banking facilities and common men was afraid of even entering in to bank. Private Banks were exploiting not only staff working in the banks but were also exploiting business houses. It will not be exaggeration to predict and say that the same Congress Party under the banner of UPA is dragging banking industry in pre-nationalization era. O Finally one doubts the honesty and integrity of government in their efforts for merger, acquisition and consolidation of banks because they know the quantum of malady and bad assets hidden behind the rosy balance sheets of PSBs., the merger policy discussions are esoteric, technical and limited to a small number of influential public and private sector institutions leaving policy discussions vulnerable to be structured to favour the interests of large, financial firms over other interes ts. Otherwise there is no reason for providing capital infusion to various weak banks from time to time. It is their political agenda to save the banks from exposure of their reality when the misdeeds increases to such a large extent that it punctures the tyre of running banks. They are trying to divert the attention of public from inherent weaknesses of PSBs and this is why they are not agreeable to respectable wage revision of bank employees. Exodus of talented employees and non entry of well qualified person in Public Sector banks is also a vital reason behind growing weakness of Banks.
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O In contrast, the United States does not allow industrial houses to own banks. It is evident from the dispersed nature of past banking sector breakdowns that permitting industrial houses to own banks or disallowing them was not a good indicator of whether banks would need government back-stop funding assistance. The fourth, and most important, question posed in the paper is whether large industrial and business houses could be allowed to promote banks. The Indian licensing guidelines of 2001 do not allow large industrial houses to sponsor new banks. O As the RBI paper has suggested, the probability of industrial houses interfering in banks promoted by them could be reduced by restricting banking licences to companies with diversified ownership. The downside risk is that it may be practically impossible for RBI to prevent crony lending practices. Consequently, it is for RBI to assess whether, at our current stage of development, it can consistently monitor bank lending and stand up to pressures from corporate oligopolies. India was the only BRIC nation without a banking brand placing in the top 20, with the highest rated Indian Bank brand State Bank of India Placing 9th and second placed ICIC sitting at 102nd. Overall, 22 Indian banking brands made the table. Most of them in the 300s and above. Like the Chinese banks, Indian banking brands represented small fraction of their market capitalization. The Indian Overseas bank, which had the highest brand blue/market capitalization ratio among the Indian banks had a brand worth only 15% of its market capitalization. Consolidation grasses for elephants A large number of studies have examined the impact of M&A driven consolidation on bank costs in different contexts. Contrary to popular notion that sees efficiency improving with size, academic studies find no evidence of mergers improving cost efficiency on average. Efficiency effects are also weak in European bank mergers. Thus mergers automatically need not lead to lower costs, greater efficiency or create stronger banks. On the other hand, it might lead to loss of employment for many and massive adjustments for other staff members who might be relocated to another branch, a different geographic location and into a new line of banking. On papers M & A sound attractive but in real world synergies dont materialize. Since each corporation has distinct work culture it is not easy task for the board, management and workers to work cohesively in the aftermath of mergers. Often dis-synergies (such as loss of customers and difficulties in reconciling different service terms) only can be anticipated after mergers. The Japanese case is the most telling example of size failing to solve banking problems. Motivated largely by distress, Japans large banks have been engaged in a series of defensive mergers, accompanied by government assistance in unloading bad debt. These bigger is better mergers did not resolve the problems: gains in microeconomic efficiency were minimal, and these banks inability to lend compromised any possible economic recovery. A decade into the post-bubble adjustments, virtually all large Japanese banks have been merged or suggested for merger. I n a study, ASSOCHAM assumed that if all 27 public sector banks are merged, their capital base would be just $3 billion, which stands nowhere against the capital base of $20 billion of a single entity in China Industrial Commercial Bank of China. Going by the comparative figures that are available of US even as of 2005, if we add up today figure of Nationalized Banks India with US even merger of 19 nationalized banks is not going to create a new entity of international status.
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Compare this with some of the big global banks: Barclays Bank, UK UBS, Switzerland Mitsubishi, Japan HSBC, UK Citi Bank, USA Comparison with some of our Indian Banks: State Bank of India Punjab National Bank Canara Bank Bank of Baroda $ 267 billion $ 90 billion $ 75 billion $ 94 billion $ 1592 billion $ 1568 billion $ 1509 billion $ 1502 billion $ 1494 billion

Total Assets of 28 Public Sector Banks $ 1200 billion By merging our Banks, we can never become global in size. Hence merger is not going to make our Banks big or strong or global. Another argument for merger of banks is that these banks should be enabled to do International Banking. The total share of Indian Trade in the global trade is only 1.50%. So we have no big role in financing Indian Trade in global market. We are now witnessing the collapse of many so called strong International Banks because of greed for profit and unhealthy Banking Policies. Should we compete and copy them? Here also, after merger, hundreds of branches will have to be closed down which means that banking service will not be available to the common people as before. Furthermore, merger and closure of branches will render staff surplus and this would endanger the jobs of the employees. Hence, bank merger is unwarranted and undesirable. We are totally opposed to the arbitrary and unilateral proposals of mergers being projected. If the Government would choose to proceed in their own way and if any bank management also tries to proceed on those lines, we will have to come out in protest against these measures in a big way through instant struggles including strike actions. In the meantime, we should build up a national campaign to make the people appreciate our standpoints. Comparison with Chinese Banks In terms of size, Bank of China is the 11th largest bank in the world, while SBI occupies the same position in Asia. Globally, however, SBI is 93rd. In terms of asset base, Bank of China is over four and a half times bigger than SBI. Last year, it had an asset base of $516 billion against SBIs $110 billion (at an exchange rate of Rs 45.77 a dollar). When it comes to Tier I capital (that is, equity and reserves) another parameter to ascertain a banks size and its risk-taking ability Bank of China is again bigger than SBI. Last year, its Tier I capital was $34.8 billion against SBIs $5.8 billion. Bank of China is actually marginally smaller than the entire Indian banking industry. Last year, the collective Tier I capital of 77 Indian banks 26 public sector banks (2005-06 balance sheet of Punjab & Sind Bank is not yet available), 24 private banks, and 27 foreign banks operating in India was $33.7 billion. The top four banks in China, which also hold the top four slots among Asian banks, had a Tier I capital of $95 billion almost three times the capital base of the entire Indian banking industry. Similarly, the asset base of the four was $2,095 billion, almost four times that of Indian banks.
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The list could go on and on. Hence the claims of the champions of merger moves are utterly unrealistic and hallow and the same deserve to be treated contemptuously as the Top TNC banks can gobble up even if 19 banks and SBI are merged into singly entity. In Annexure I we have given the list of bank mergers in United states, so that one can gauge the gigantic magnitude of assets size after mergers and arrive at right conclusions that arguments for consolidation moves advocated by the FM are preposterous. Riding on this euphoria of upgradation of banking services, some policy makers are dreaming of evolving giant size banks by consolidation; and of making such banks globally competitive. It is a moot point whether efficiency in banking is size neutral or whether there are indeed economies of scale. There is already evidence in India as well of the futility and even the dangers of consolidation. Indian evidence In the last few years, the Indian public sector banks have been able to raise their profitability substantially. While the real costs of these apparent gains in terms of the real economys needs are what this report seeks to underline, it cannot be denied that PSBs when judged by corporate performance parameters have recorded substantial improvement. In the present circumstances, where the banks are able to book profits normally and an increasing proportion of the banks are tapping the capital markets to strengthen their equity base, most observers find it difficult to comprehend the need for PSB mergers. There are absolutely no domestic compulsions for consolidation of public sector banks. Secondly, the Indian evidence of the post-liberalization era doesnt uphold that bigger size confers greater efficiencyi.e. consistently, higher levels of profitability. One of the aspects of mergers that is often underplayed when expecting a cost efficiency improvement is the problem of compatibility of the cultures and systems and people of the merged entity. As it were, these are going to be real problems, even if the employed workforce can be slashed heavily, a probability not unforeseen for Indian PSBs. A former RBI deputy governor had rightly sounded a cautionary note in this regard: As we have seen in the past, in any merger integrating the manpower and culture of the taken over bank with manpower and culture of the host bank proves to be a great challenge. It is only when integration in these aspects is achieved successfully that the merged entities will be able to capitalize on the synergies. it will be necessary to ensure that mergers are successful in all respects, including manpower and cultural aspects which are unique in the Indian context. Therefore the present talks of merger in the banking Industry by Government is to implement the recommendations of Narsimham Committee Report, in a manner it has been suggested, i.e. merger of the Public Sector banks are expected to emanate from the managements of the banks with the Government. On shareholder playing a supportive role and to achieve the objectives laid down by this committee particularly the rightsizing of staff and closure of branches in the name of rationalization. The above quoted recommendations of Narsimham Committee report (April1998) reveal the real objective of the Govt. regarding merger of Public sector banks. Most of the Public Sector Banks are doing well in almost all parameters i.e. deposits, advances, net profits, return on assets, return on net worth, earning per share, capital adequacy ratio, net interest margin, cash income ratio, recovery of non performing assets and /or on NPA management, advance to agriculture, small-scale industry and other priority sectors. Despite that the FM has been provoking and insisting the public sector banks chiefs that pubic Sector Banks will be reduced to small entities if they do not consolidate.

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Even the series of stress tests conducted by the Reserve Bank in respect of credit, liquidity and interest rate risks showed that banks remained reasonably resilient. However, under extreme shocks, some banks could face moderate liquidity problems and their profitability could be affected, Indias central bank concludes in its annuaI report titled Trends and Progress of Banking in 2011-12. The report states that the financial system of the country remains robust, even though the risk to stability of the system is rising on the back of global and domestic macroeconomic factors. However, despite the rising impairment of asset quality, the resilience of the banking sector was manifested in an improvement in the capital base and maintenance of profitability. Since 1969, we have been witnessing Bank mergers and acquisitions, mainly because of the failure of private sector banks as quoted in the earlier paragraphs of this report. Mergers and acquisitions were done in public interest and to save depositors. Most of the private Sector banks, which could not survive, were bailed out by Public sector Banks. The following list will reveal the merger phenomena in banking Industry since 1961. Number of forced and voluntary mergers from 1961-2006 TABLE A Duration (1961-1968) Pre-nationalization (1969-1992) Nationalization (1993-2006) Post-reform Forced Mergers Market driven Mergers Convergence of Financial Institutions into Banks Regulatory Compulsions Total number of mergers
(Source: Compiled from various publications of RBI)

Number of Mergers 46 13 21 13 5 2 1 80

List of Banks in India Merged From 1961-2009 TABLE B S.No. Name of Bank Merged (Transferor Bank) 01 02 03 04 05 06 07 08 09 10 11 12 13 Prabhat Bank Ltd Indo-Commercial Bank Ltd Bank of Nagpur Ltd New Citizen Bank Ltd Travancore Forward Bank Ltd Bank of Kerala Ltd Bank of Poona Ltd Bank of New India Ltd Venadu Bank Ltd Wankaner Bank Ltd Seasia Midland Bank Ltd Kottayam Orient Bank Ltd Bank of Konkan Ltd Merged / Amalgamated with (Transferee Bank) National Bank of Lahore Ltd. Punjab National Bank Bank of Maharastra Bank of Baroda State Bank of Travancore Canara Bank Sangli Bank Ltd State Bank of Travancore South Indian Bank Ltd Dena Bank Canara Bank State Bank of Travancore Bank of Maharastra Date of Merger / Amalgamation 09/03/1961 25/03/1961 27/03/1961 29/04/1961 15/05/1961 20/05/1961 03/06/1961 17/06/1961 17/06/1961 17/06/1961 17/06/1961 17/06/1961 19/06/1961
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14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47

Poona Investors Bank Ltd Bharat Industrial Bank Ltd Rayalaseema Bank Ltd Cuttack Bank Ltd Pie Money Bank Pvt. Ltd Moolky Bank Ltd Merchants Bank Ltd Tezpur Industrial Bank Ltd G.Raghunathmull Bank Ltd Satara Swadeshi Commercial Bank Ltd Catholic Bank Ltd Phaltan Bank Jodhpur Commercial Bank Ltd Bank of Citizen Ltd Karur Mercantile Bank Ltd People Bank Ltd Pratab Bank Ltd Unity Bank Ltd Bank of Algapuri Ltd Metropolitan Bank Ltd Cochin Nayar Bank Ltd Salem Shri Kannikaparameshwari Bank Ltd. Unnao Commercial Ltd Latin Christian Bank Ltd Southern Bank Ltd Shri Jadeya Shankarling Bank Ltd Bareilly Bank Ltd Thya Bank Ltd Allahabad Trading & Bkg.Corp. Vettaikaran Padur Mahajan Bank Ltd Malnad Bank Ltd Josna Bank Ltd Amrit Bank Ltd Chawla Bank Ltd

Sangli Bank Bank of Maharastra Indian Bank United Bank of India Syndicate Bank Syndicate Bank Tanjore Permanent Bank Ltd United Bank of India Canara Bank United Western Bank Ltd Syndicate Bank Sangli Bank Ltd Central Bank of India Canara Banking Corp.Ltd Laxmi Vilas Bank Ltd Syndicate Bank Lakshmi Commer. Bank Ltd State Bank of India Indian Bank Indian Bank State Bank of Travancore Karur Vysya Bank Bareilly Corporation Ltd State Bank of Travancore United Industrial Bank Ltd Belgaum Bank Ltd Benarus State Bank Ltd Lord Krishna Bank Ltd State of India Ltd Bank of Madura Ltd State Bank of Mysore Lord Krishna Bank Ltd State Bank of Patiala New Bank of India

28/06/1961 01/07/1961 01/09/1961 04/09/1961 04/09/1961 04/09/1961 04/09/1961 04/09/1961 04/09/1961 06/06/1961 11/19/1961 11/09/1961 16/01/1961 17/10/1961 19/10/1961 14/11/1961 11/12/1961 20/08/1962 14/08/1962 14/08/1962 08/02/1964 01/06/1964 12/08/1964 17/08/1964 24/08/1964 26/10/1964 16/11/1964 16/11/1964 01/09/1965 01/09/1965 06/10/1965 13/10/1965 03/02/1965 23/04/1969

Banks Amalgamated / Merged since 48 Bank of Bihar Ltd 49 National Bank of Lahore Ltd 50 Miraj State Bank Ltd
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Nationalisation of Banks in India State Bank of India 08/11/1969 State Bank of India 20/02/1970 Union Bank of India 29/07/1985

51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77

Lakshmi Commercial Bank Ltd Bank of Cochin Ltd Hindustan Commer.Bank Ltd Traders Bank Ltd United Industrial Bank Ltd Bank of Tamilnadu Ltd Bank of Thanjavur Ltd Parur Central Bank Ltd Purbanchal Bank Ltd New Bank of India Bank of Karad Ltd Kashi Nath Seth Bank Punjab Co-op.Bank Ltd Bari Doab Bank Ltd Bareilly Corp.Bank Ltd Sikkam Bank Ltd Times Bank India Benaras State Bank Ltd Nedungadi Bank Ltd Bank of Madura Global Trust Bank Ltd Bank of Punjab United western bank Ltd. Bharat Overseas Bank Ltd Sangli Bank Ltd Lord Krishna bank Ltd Shri Suvarana Sahakari Cooperative Bank Ltd.

Canara Bank State Bank of India Punjab National Bank Bank of Baroda Allahabad Bank Indian Overseas Bank Indian Bank Bank of India Central Bank of India Punjab National Bank Bank of India State Bank of India Oriental Bank of Commerce Oriental Bank of Commerce Bank of Baroda Union Bank of India HDFC Bank Ltd Bank of Baroda Punjab National Bank ICICI Bank Oriental Bank of Commerce Centurion Bank IDBI Ltd. Indian Overseas Bank ICICI Bank Centurion bank of Punjab Ltd Indian Overseas Bank

24/08/1985 26/08/1985 19/12/1986 13/05/1988 31/10/1989 20/02/1990 20/02/1990 20/02/1990 29/08/1990 04/09/1993 1993-1994 01/01/1996 08/04/1997 08/04/1997 03/06/1999 22/12/1996 26/02/2000 20/07/2002 01/02/2003 10/03/2003 14/08/2004 29/06/2005 03/10/2006 01/04/2007 19/04/2007 29/08/2007 19/05/2009

Disregarding these historical trends of bail off of private sector banks by public sector banks and studies in support of performance and efficiency of the PSBs by experts quoted above, time and again FM through media and in person has pressurized timing with General Election to Loksabha time and again the chief of Public sector banks to create a favorable atmosphere through a dictated national debate in the media on the subject. Being inspired or to please or appease the FM, recently 3 banks during the eve of last General Election i.e. Oriental bank of commerce, Indian bank and Corporation bank, have formed an OIC association in the name of strategic alliance to share each others market, assets, business, branches, technology etc. MOI has been signed with detailed guidelines for functioning and operating as one entity. The coverage of the MOI is 1) Building a common payment system 2) Sharing IT resources 3) Sharing treasury resources 4) Foraying capital market and international and other financial ventures 5) Bank assurance
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6) Business syndications and sharing 7) Sharing training resources 8) Common procurement of IT and other assets wherever feasible etc. Now timing with election 2014 The Finance Ministry preparing the ground for consolidation among public sector banks (PSBs)? Its recent missive to the 26 PSBs seems to suggest so. The Ministry said there is a need for continuous interaction between these banks to improve their functioning. This can be achieved by sharing experiences and lessons learnt which in turn will help fine-tune internal policies and procedures. Seven large PSBs State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BoB), Bank of India (BoI), Union Bank of India, Central Bank of India and Canara Bank have been assigned the responsibility of co-ordinating the activities of 19 other PSBs in six specific areas of operation. The areas of operation with scope for functional improvement human resources, business process reengineering, e-governance, internal audit for fraud detection and protection, recovery, and asset-liability management. The 26 banks have been divided into seven groups. SBI has been given the responsibility of co-ordinating the functioning of its five associate banks. PNB is the co-ordinator for Dena Bank and Vijaya Bank, BoB for IDBI Bank and UCO Bank, BoI for Oriental Bank of Commerce and Andhra Bank, Union Bank of India for United Bank of India and Punjab & Sind Bank, Central Bank of India for Indian Bank, Allahabad Bank and Bank of Maharashtra, and Canara Bank for Indian Overseas Bank, Syndicate Bank and Corporation Bank. The group coordinators of the banks would interact with the Ministry on a quarterly basis. It may be pertinent to note that the RBI-appointed Narasimham Committee on Banking Sector Reforms had, in 1998, recommended restructuring of the domestic banking system. The committee recommended that the banking landscape should evolve in such a way that there should be three to four large banks, which could become international in character, and eight to ten national banks and local banks confined to specific regions. Rural banks, including Regional Rural Banks, are confined to rural areas. This is cartelisation in Banking Industry and to develop synergies in functioning and ultimately to take step for merger. It is a prelude to merger. Now banks have also started to explore possibility of forming such alliance. Recently Union bank of India, Bank of India and Infrastructure Development Finance Co. Ltd (IDFC) have formed Loan syndication and lending alliance. They have also committed to work together in international operations, to offer cash management, management services and in training. This is also one form of cartelisation i.e. forming an alliance to deal with a business. These moves are nothing but back door methods of ultimate merger, which will help corporate capital. Banking Consolidation Unwarranted Danger of Merger of Nationalised Banks Employees of public sector banks went on a strikes during period under review to protest against what they feel as forced merger of public sector banks. The UPA government in its earlier term had vigorously advocated consolidation but achieved very little. The only merger of consequence was the takeover by SBI of its smallest associate, the State Bank of Saurashtra. Surprisingly, despite all the talk of mergers and amalgamations, there were few policy inputs. Whatever decisions the government took to speed up individual
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mergers were ad hoc and mostly prompted by concern for the depositors of a failed institution. Although no further mergers has taken place recently, the subject has been making headlines. Only theoretical gains After a period of relative quiet, the subject of consolidation in the Indian banking industry is back in focus. Experience so far with mergers involving one or more PSBs has not been happy. Needless to add, the main prop to such mergers has come from the Government itself, to save the new generation Global Trust Bank for instance. (It was merged with the public sector Oriental Bank of Commerce). This is a merger that was not dictated by market forces .It is not even clear whether the board of OBC arrived at such a decision on their own, however much they may claim to have reached a win-win deal in hindsight. A much earlier forced merger of New Bank of India with Punjab National Bank created major problems for both. There is plenty of evidence to show that PNBs fortunes were dragged down and, what was perhaps even more damaging, its culture was corrupted. Banks, including those in the government fold, have a culture and identity of their own which no amount of standardised policy diktats could suppress over all these years. The Governments thinking seems to be conditioned by an implicit faith in the universal banking model. If PSBs can come together they can offer a variety of services besides commercial banking (or pool together their existing strengths in nice areas). They can truly reach universal banking status with all the attendant advantages in a competitive environment. The idea is deceptively simple but as recent experiences the world over shows is seriously flawed. In a conceptual sense universal banking looks good but when advocated as the end product of a consolidation exercise does not have any argument in its favour. The worlds largest banking group viewed under many parameters including profitability is the Citigroup. An outstanding example of a financial services group that grew through M&As, the bank has been asked by the Federal Reserve Board to desist from further acquisitions until it refined its systems and procedures. Elusive Synergies It is difficult to see synergies accruing from such mergers. For instance, seeking a geographical or cultural fit between two banks is only theoretically possible. All government-owned banks have acquired an all India character even though in their private sector days they have regional in character. A merger will entail duplication of branch network especially in towns and metros. Synergy in technology application will be equally elusive given that the banks are in different stages of technology absorption and use different platforms. A more difficult task is to achieve a cultural fit post-merger. Though all of them are government-owned, each has certain unique cultural strengths that cannot be retained after the merger. In their pre-nationalisation days, some of the banks had affinities with specific business activities and groups. These have continued under government ownership. For instance, Bank of India and Bank of Baroda have had a strong stock market tradition, which has flourished well into their public sector days. There is a real possibility that such strengths will be dissipated after merger with a bank with little exposure to the stock markets. Human Factor A successful merger implies a reasonably smooth integration of staff and human resources related systems. This will be, by far, the biggest challenge. By their very nature, bank or financial service entities are peoplecentric. It is not clear whether those who advocate mergers as an easy option are aware of the strengths of
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such human capital. There are many other reasons why a merger between PSBs will neither be easy nor beneficial. Bank Consolidation: Pitfalls of a Hasty Decision One outcome of the present global crisis is that large banking monsters have come to be feared. That is why the recent death anniversary of Lehman Brothers drew a barrage of comment. And Lehman wasnt even a bank, it was an investment bank. We worry now not just about large banks but about systemically large financial institutions. Some of the worlds biggest banks, the Citigroup notably, which relied heavily on mergers and acquisitions to grow phenomenally, have been rapped on the knuckles by the regulators and are realising that such stupendous inorganic growth has come at a price. That apart, the arguments typically made for bank consolidation in India lack substance: Indian banks are much smaller than global giants: True. In 2007, SBI was not even one-tenth the size of the tenth largest bank in the world. But this also means that no amount of consolidation will give Indian banks a global size in the foreseeable future. Our banks need to be bigger in order to meet the needs of large corporates: Why should one bank meet the needs of any large corporate on its own? From the point of view of risk management, consortium financing is preferable. Some large requirements of corporates, such as overseas finance, cannot be met by Indian banks, however large they may become. The Role of Foreign Capital in Consolidation Certain key banking topics are back in focus. The ownership issue figured prominently in the budget speeches, during the period under review with a strong indication therein that foreign banks will henceforth also be allowed to incorporate subsidiaries in India. Hitherto, they could only expand in India by opening branches. Only one of the two routes will be allowed but the latest announcement along with a few earlier ones clearly shows the increasing role being afforded to foreign banks and foreign direct investment (FDI). A relaxation in the existing restriction on voting rights of bank shareholders has been contemplated in the budget speech. At present, irrespective of the size of the shareholding no one can have more than 10 per cent of voting rights. Even earlier, there has been a clarification that overseas investors (FDIs) can invest up to 49% of the equity in the private banks although in the case of PSBs it has been restricted to 20%. It is, therefore, certain that foreign capital will play a role in the consolidation of the banking industry, a development widely anticipated by several experts including the Finance Minister. For the present not many structural changes are on the cards for the public sector banks. But the Government has a medium term goal of reducing its stake in the PSBs to a third. It is naive to think that the opposition to bank mergers is confined to trade unions. One should really examine whether the presumed benefits would really accrue. The idea of creating bigger banks to take on competition sounds attractive but one must realise even the biggest among Indian banks are small by global standards. A merger involving banks in the top rung say, SBI, Bank of India and Punjab National Bank will not create a world champion as the merged entity will still be small. The argument that a merged entity will be in a better position to raise capital than individual banks may not be strictly correct. Government-owned banks will have to always reckon with the condition that their majority shareholder will not let its shareholding fall below 51%. Some of the PSBs, including SBI, are near that floor. Other banks may have some leeway, but they too will be soon constrained. A merger between two such entities will not help.
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Other routes to raise capital such as divestment in India or sale to overseas investors are ruled out for now. It is futile to talk of the government any government for that matter relinquishing its majority stake in the PSBs. Privatization of banks is a discredited idea the world over at the current juncture, as could be seen in the number of forced mergers with nationalized banks . If the nationalized banks had not bailed out the private banks in moratorium in time they would be collapsed like cookies bamboozling depositors hard earned savings. The possibility of some foreign buyer acquiring an Indian bank is remote, given the current state of the financial sector abroad. A bill introduced in Parliament some years ago to bring down the government stake to 33.33 per cent in PSBs is languishing even though the then Finance Minister has said that the public sector character of these banks will be maintained post-dilution. Most importantly, the merger advocates ignore the fact that beyond a point ,size does not increase efficiency. Creating behemoths from two already large banks will not help in either facing competition or raising capital. On the other hand, several more layers will be added to the existing bureaucratic structures in governmentowned banks. Post-Merger Hurdles Inexplicably, the debate has sidestepped some crucial issues such as rationalising the manpower and branch network after bank mergers. In the reform era, the strengths of public sector banking the branch network and superbly trained manpower have been initially discounted. Yet todays urgent tasks of the financial sector social banking and financial inclusion require these strengths to be harnessed to an even greater degree than before. Bank consolidation will create redundancy, demotivate staff and make the financial sector less inclusive. There are lessons to be learnt from past mergers involving PSBs. Punjab National Bank was asked to take over New Bank of India at what turned out to be an enormous cost for the former. PNB, among the top rung banks, went down by several notches after the merger. The same fate befell government-owned Oriental Bank of Commerce after it was asked to take over the failed Global Trust Bank. Finally, it is good to remember that bank consolidation in India is very different from moves to consolidate companies in specific industries or segments. For all the excitement it evokes, consolidation is still unwarranted in Indian context. The merger of banks, as being pressurized to materialize, will further deteriorate the banking service with smaller number of branches and fewer numbers of staff.

Financial Reforms And NPAs & Scams Are Like an Object and Its Shadows!
You have an infection ... You leave it alone. You dont treat it. You diagnose it badly. Guess what? Even the strongest parts of the body will get infected. Thats whats happening in Banking in India today. The infective medicines , and obsolete, junk palliatives of the west is being prescribed by Finance ministry, such as the recent missive setting of holding companies and consequent consolidation of PSU banks under the guise of global status to cure the NPAs spreading throughout is akin to killing the patient. No drastic measures such as confiscation of the properties of willful defaulters, imprisonment, and blacklisting for all future advances and loans is attempted by the government. Although there may be some cases where for genuine reasons advances have become NPAs, in most cases as we explain in this chapter corporate borrowers turn defaulters willfully. The problem of NPAs in banks is not merely an internal problem of banks, their efficiency and what have you. That the NPA levels have risen despite Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest act is because of faulty economic policies. The suspension of the planning process, the curtailment of public expenditures, and drastic reductions in investment demand are hurting
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the growth of the manufacturing sector and breeding NPAs. The government has shown no awareness of this structural malady afflicting the economy. The measures as being in line with the governments mediumterm goal of privatising the public sector banks. It would be a disaster for the Indian economy. This is dictated by the international multilateral agencies. According to a study commissioned by industry body ASSOCHAM, the net non-performing assets (NPAs) of the banking sector in India are increasing at an alarming rate and may cross Rs 2 lakh crore for the fiscal year ending March 2013 from Rs 1.57 lakh crore as on June 30, 2012.Also, banks restructured advances would also be as high as about six per cent by March, 2013. To put it very succinctly the NPA due from Indian Industrialists is equal to economic output of 48 poor countries. The study titled Growing Heat of NPAs on Banking Sector released by RBI Deputy Governor Dr K C Chakrabarty at a function said the continuing pressures on Indian economy would result in pushing the NPA ratio from 2.94 in June, 2012 to about 3.75 by the end of the current fiscal. A plethora of issues like rising trends in stress assets, increased provisioning, issues of asset quality and challenges of requisitioning additional capital to keep growing business together with burgeoning twin deficits of fiscal and current accounts have been adduced by the protagonists of restructuring for contribution to this dismal situation of increased NPA levels and falling bottom line, according to the study. The report further states besides, the credit off take has also sharply tanked due to various issues like environment-related approvals, land acquisition and other such issues. Existing exposure of banks to poor performing sectors like power, aviation, highways, micro-finance institutions (MFIs), ports, telecommunication and others have lead to high levels of stress assets. Another reason is attributed by the captains of the industry for the burgeoning NPA is the growing inability to raise adequate equity in a time-bound manner due to high volatility and depressed condition on capital markets which is straining companies balance sheets and financial flexibility of players in vulnerable sectors like infrastructure, construction, iron and steel, textiles, engineering and others, which has resulted in increased likelihood of restructuring. They expect the government as in the past to further liberalize restructuring norms to give adequate financial support as well as reasonable time-frame to restructure the debts including concessions in interest rates and other reliefs. Further, the banks must support all reasonable restructuring proposals to enable the industries to restore their activities, the Assocham report added . So it is incumbent for us to analyze why the mechanics of this mendacious NPA menace in the banks, despite huge budgetary support in the form subsidies to corporates and why it has mounted in geometric proportions over the reform period despite restructuring, one time settlements, waivers, and actions as per SARFAESI often reported in the media by the government time and again, to expose the root cause of increase in NPAs. While the simultaneous dole packages of thousands of crores of rupees are declared by the government to save the sagging big industrialists, the vast unorganized sector is being deliberately bypassed in a state of deepening slowdown. There are about 58 million enterprises in the non-firm unorganized sector, each with investments up to Rs.25 lakh and fewer than 10 workers, contributing to about a third of the gross domestic product. This is the figure supplied by the National Commission for Enterprises in the unorganized Sector (NCEUS). While the fate of these units is intermeshed with that of large and medium industries, their credit needs in the current severe crisis are deliberately ignored with all attention focused on the big bourgeoisie caught in the maelstrom of present global crisis. According to the NCEUS, enterprises with an investment of up to Rs.5 Lakh accounted for just Rs.59, 279 crore or 2.2% of bank credit as of March 2007. Those enterprises in the Rs.5-25 lakh category accounted for another 2.1%. What is worse, only 2.4 million of the unorganized units received credit from Banks, critically throwing the
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vast unorganized small and medium sector to a dire strait. On paper however, the RBI guidelines allow banks to sanction loans up to Rs.5 lakh without collateral. Such reluctance is the outcome of banking policy under the LPG regime. Indian state and governments have so-long mimicked the capitalist centers of the world substantially fallowing speculation-based growth allowing FIIs, various toxic instruments to serve the economy for a small section of rising middle class by allowing enormous leverage to the MNCs, World Bank and other foreign institutions to control the economy. There is dominant thinking in our policy framers that relaxing interest rates, greater policy incentives to the corporate world will spur the economic growth, while it is true at some measures but it is not the whole story. The Govt should remember it may be counter productive to its goal of inclusive growth. The accumulation of riches in few billionaires of India who constantly figure on Forbes list tells it all. The pathetic social and development indices of our country, far behind many of developing countries is an alarming situation. While Finance Minister gives audience to corporate leaders before budget, why not extend the same to grass root level social activists who seek to bring changes in much needed human development in India? Disguising NPAs benefits banks in the short run as it helps them avoid making provisions out of their income for a possible default. But it only delays the inevitable as banks end up recovering lower than what they would have had they taken timely action. Even with securities, recovery becomes difficult where the borrower does not have any intent to repay. This is because borrowers still manage to get a stay order. In a published report, the RBI attributes the rise in the NPAs of both Public and Private Sector Banks to diversion of funds away from the original purpose for which they were granted, as well as willful default (or misappropriation of funds) by borrowers. That apart, adverse economic and market factors, ranging from recessionary conditions, regulatory changes and resource shortages to inefficient management and strained labour relations have impacted the health of businesses, and driven them to default on their loan repayments. In this constellation, it is OK to squash those that are even less fortunate than yourself and pay obeisance to the mai baap sitting on top. Our civilization, having survived unbroken for the last 4000 years has accentuated this problem. Moreover, the rich and powerful can and do buy any government and influence decisions. Perhaps a French Revolution every few centuries wouldnt be so bad for us! Banking Sector Reforms and its Dangerous Consequences Public sector banks in India have played a crucial role in mobilizing hundreds of thousands of crores of rupees worth of small savings from the common people and this enormous capital is expected to be disbursed by the government for priority areas like agriculture, small industries, rural electrification, development of backward areas, etc which are inevitably shown their backs by the comprador big bourgeois class or such profit grabbing institutions. The imperialist globalization programme pursued by the Indian governments since early 1990s imposed prescriptions in the name of reforms in the financial sector to allow foreign investors, speculative finance, foreign banks qualitatively changing the structure of this sector. Indian rulers have time and again sung the refrain: financial sector reforms are irreversible. The Narasimham Committee reports overturned the earlier declared policy of social objectives of public sector banks and all focus was concentrated on maximizing profits, strengthening the flurry of activities like the real estate business, speculative investments, IT sector, etc. that came to be highlighted as engine of growth story. It is little known that the countrys largest bank, the State Bank of India , 45 per cent of the shares went into the hanks of private hands, of which one-third were foreign by the end of 1998-99. This way of privatization continued in the name of restructuring of weak public sector banks. Simultaneously the quantum of NPAs (Non Performing Assets.) i.e. the loans given away to corporate houses remaining unrecoverable skyrocketed. Thanks to the modicum of democracy still operating in the country and fear of public opinion, strong resistance from bank unions, the government has found it difficult to accept the suggestion of outright privatization of
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the banking system. Therefore some of the above surreptious devices of back door denationalization have been adopted. The entire system is being turned topsy -turvy without any comprehensive study or social dialogue, except for the report of a committee which was tailor-made to secure financial sector and structural adjustment loans from multilateral agencies. The government (irrespective of who is in power) has charted out Blue print for privatization of PSU banks in tune with the above reports. Once the nationalized banks are handed over to the private sector, credit flows to the rural sector and agriculture shall be steadily choked. Similarly, small, mini and cottage industries, self-employed persons, like vendors, cobbles, rickshaw-pullers shall be thrown out of the credit delivery system. The recent bank failures in South-East Asia, including Japan, could hardly affect India or its banking system. The reasons for this contrasting situation are not difficult to understand. While India had a strong public sector banking system, more or less well regulated, these Asian Tigers were having private banks, with hardly any regulation and run on the prescriptions of World Bank and IMF. While many banks closed down, currencies collapsed, thousands lost their jobs, economy got the rudest shock, resulting, ultimately, in political instability. Taking advantage of this chaos and anarchy, foreign capital took over many banks and the financial system. Bank privatisation is hence against peoples interest. Industrial Sluggish Growth: Re visit Banking Reforms One of the reasons for the sluggish industrial growth in India is doing away with specialized development banking institutions during the period of economic reform. In this regard we compare the Indian and brazil model which were similar for development finance institution(DFCs) . We shall explain this comparing the models in vogue at Brazil an India. Two developing countries that relied heavily on development banks in their post-War industrialization effort were Brazil and India. In Brazil the principal development bank is the Brazilian Development Bank (BNDES) established in 1952. Over time the government has used various measures such as special taxes and cesses, levies on insurance and investment companies and direction of pension fund capital to mobilise resources for the industrial financing activities of the BNDES. The size of BNDES support for investment increased significantly, with a transition in 1965 when BNDES support rose from below 3 per cent of capital formation to 6.6 per cent. There was also a shift in the focus of BNDES activities. While initially sectors like transport and power overwhelmingly dominated its lending, subsequently there was considerable diversification in support, to sectors such as nonferrous metals, chemicals, petrochemicals, paper, machinery, and other industries. Further, while in its early years BNDES investments were focused on the public sector, there was a significant shift in favour of the private sector in later years. In the period 1952-66, 80-90% of financing was directed to the public sector. That figure fell to 44% during 1967-71, and then to between 20 and 30%. India adopted a more elaborate structure. Apart from setting up an Industrial Finance Department (IFD) in 1957 within the Reserve Bank of India (RBI) and administering a credit guarantee scheme for small-scale industries from July 1960, a series of industrial credit institutions were promoted, which in fact had begun earlier with the setting up of the Industrial Finance Corporation (IFC) in July 1948 for rendering termfinancing for traditional industries. In addition, State Financial Corporations (SFCs) were created under an Act that came into effect from August 1952 to encourage state-level medium-size industries with industrial credit. In January 1955, the Industrial Credit and Investment Corporation of India (ICICI), the first development finance institution in the private sector, came to be established, with encouragement and support of the World Bank in the form of a long-term foreign exchange loan and backed by a similar loan from the government of India financed out of PL 480 counterpart funds. In June 1958, the Refinance Corporation for Industry was set up. The next major step in institution building was the setting up of the Industrial Development Bank of India (IDBI) as an apex term-lending institution, which commenced operations in 1964.

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The importance of these institutions is clear from the fact that their investments (disbursals) in Net Fixed Capital Formation in India rose from less than 10% before the 1970s to around 35% in 1988-89. Over 70% of sanctions went to the private sector, and took the form of loans as well of underwriting and direct subscription of shares and debentures. The similarities between Brazil and India with respect to development banking are clear. However, a real difference between the two emerged occurred in the period since the early 1990s when the government in these two countries opted for internal and external economic liberalisation. In Brazil, reform notwithstanding, the BNDES has grown in strength. Its assets totaled Reals 277.3 billion or close to $120 billion at the end of 2008. This has served Brazil well. The banks role increased significantly, when private activity slackened in the aftermath of the financial crisis. This countercyclical role helped Brazil face the crisis much better than many other developing countries. During course of time, IDBI was merged with IDBI bank, which had earlier been set up as a subsidiary. With this creation of a universal bank as a new entity, that has multiple interests and a strong emphasis on commercial profits, it is unclear how the development banking commitment can be met. These decisions are bound to aggravate the shortage of long term capital for the manufacturing sector, especially for medium sized units seeking to grow. This makes evidently clear that the polices pursed under the guise of banking reforms have failed in our country an in the process of rectifying the same after self introspection, government is myopically aping still the policies of the west landing the economy and baking in greater trouble, like a drunken person navigating pot hole getting trapped on a huge pit. Government should be ready at all times to stand up for the truth, because truth is in the interests of the people; Government must be ready at all times to correct their mistakes, because mistakes are against the interests of the people. The adage Wise men profit more from fools than fools from wise men; for the wise men shun the mistakes of fools, but fools do not imitate the successes of the wise is equally applicable to many of the ill-advised banking reforms policies pursued by the Government . The Great Indian Bank Robbery About 8 years ago, Indian Express ran a series of articles on the systematic loot of the banking system with possible connivance of Bank Officials estimated at Rs.1.1 lakh Crore. Today the media is going crazy over NPAs of Kingfisher And Deccan Chronicle. These things have happened in the past also and conveniently forgotten. This happens as either people loose interest or get appropriated into the system by the very people who are targeted by such reports. Whatever it may be, the point is kicking up such storms is just a hobby and a way to get into limelight with ulterior motives. Even Indian Express did not follow it up. Now the media is breast beating about black money stashed away in foreign banks. It is only such ill gotten wealth which is carted away. Whatever it may be, the point is kicking up such storms is just a hobby and a way to get into limelight with ulterior motives. We rake these issues again up with the first article that appeared in December, 2002, January 2003 in the Indian Express When the parliament passed the a new law to act SARFAESI against India Incs mountain of unpaid loans the Indian express after thorough investigations ran series of five articles titled Rs 11,00,00,00,00,000: # # # # # The Great Indian Bank Robbery I The Great Indian Bank Robbery Edition II How Defaulter No 1 worked overtime to stay at top How textiles group took its banks to the cleaner Chor Machaaye Shor !
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This is the money that India Inc owes and wont pay back. Heres what it could pay for: all our defence bills for 2 yrs. Or an expressway in every state. Or A school in every village The report said Forgotten Harshad Mehta? Just as well. The scale of the scandal now threatening Indias economy is vastly greater than the 1994 stock market carnage. The numbers may seem unreal, but Rs 110,000 crore is actually a conservative government estimate of the unpaid loansofficially called nonperforming assets (NPAs)staining the books of Indias banks and financial institutions. For vast swathes of corporate India, its been an era of financial plunder. That is why then Finance Minister Jaswant Singh called NPAs loot, and not debt. To a strident demand by the Opposition to table the list of defaulters the government furnished asunder Company Total Default (Rs Cr) Mardia Group 1,450 Lloyds Group 1,012 Modern Group 846 Parasrampuria Grp 705 Core Healthcare Grp 751 Mafatlal Group 598 Nova Group 527.5 Patheja Group 547 Usha Ispat 391.7 Indian Charge Chrome Ltd 493.3 Altos India 437 Jk Group 698 Rajinder Group 620 Mesco Group 527.5 Prakash Industries Ltd 360 R S Mardia H S Ranka (Modern) Vinay Rai (Usha) Mukesh Gupta (Lloyds). And Other Problem Cases? Essar Group 7,184 Malvika Steel (For 2000-01) 2,095 Jindal Vijaynagar Steel 4,900 Spic Group 3,284 Sanghi Group 1,582 Cesc Ltd 3,300 Ig Petrochemicals Ltd 720 Ispat Industries Ltd 6,369 Ispat Metallics Ltd 1,688 Sources: Ministry of Finance, Reserve Bank of India, and financial institutions. NOTES: 1. The information is valid upto March 31, 2002, unless otherwise indicated. 2. The list is in no particular order. Some figures are estimates. 3. Companies in the first list are declared defaulters with debts converted to non-performing assets (NPAs) in the records of banks and financial institutions. Those in the second chart have not been declared defaultersthough some debts could harbour NPAs. 4. A debt is supposed to be classified as an NPA if agreed payments are not made within 180 days. The new law will reduce that to international norms: 90 days. Tthe Indian express brought out series of stories detailing how unchecked borrowing by industrialists ballooned into bad loans, how they continue with their lavish lives as their companies crumble and jobless workers fight for survival. The articled underscored the truth that The lenders should first target the largest defaulters, who have the ability to pay but have shown no willingness to do so, said then UTI Chairman M. Damodaran. The Finance Minister has assured Parliament that the new law will be enforced without fear or favour. The message may not have reached some of his colleagues in Parliament. Thats why Congress spokesman Kapil Sibal, appears for Indias worst officially listed defaulter, Ahmedabads Mardia Chemicals, which in five years hasnt paid a paisa of its debt: Rs 1,404 crore and mounting. Sibal, who says hes in favour of the new law, is fighting a suit that wants the Act struck down as unconstitutional. Thats why the Shiv Senas Balasaheb Vikhe Patil asked IDBI and SBI to call meetings in Mumbai to restructure debts of the Lloyds Group. When contacted, Patil said: I recommend people for many things, but I always say according to rules and regulations. FM & EX-FMS: ALL AGREED (This is) loot, not debt... The provisions of the Act will be enforced without fear or favour. Well start with the bigger NPAs, and then move to the others Jaswant Singh, then Finance minister If defaults continue, it will be the end of the financial system. Till now, everything was in favour of the borrowers. The lenders were being taken for a ride while the defaulting industrialists flourished Dr Manmohan Singh at that time finance minister and former RBI Governor This Act gives unreasonable discretion to the banks. What is also important at this
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stage is not to see who have been sent notices, but who have not been. Questions must be asked why these people have not been sent notices. P. Chidambaram Former Finance Minister at that time. If enforcement falters and NPAs continue their rise, it could help send India towards the kind of financial crises that ravaged the tiger economies two years ago. But South Korea, Malaysia and Singapore were better off then than India is today. The proportion of NPAs to total bank advances was at that time about 7%t in those countries in September 2000. Indias figure, as of 2001 was 11 per cent, though Ministry of Finance (MoF) officials are quick to point out that NPAs of public sector banks, at least, dropped from 24.7% in 1994 to 11.4% in 2001. The old laws were woefully inadequate. The governments other major initiative in recovering NPAssetting up Debt Recovery Tribunals (DRTs) in major citieshasnt really worked. There are 56,988 cases filed in the DRTs, involving Rs 1,08,665 crores. The amount recovered till March 2002 is a paltry Rs 4,736 crores. What has changed? Now once gain after 10 years after publishing of articles by Indian express, the eloquent statements, appellations of the ministers to hoot out this NPA menace through stringent legislations, banking sector has been in news for wrong reasons. Big borrowers from public sector banks are big loan defaulters That public sector banks are saddled with more than Rs 100,000 crore in bad loans, enough money to fund half of Indias defence budget this year, is an open secret. What has come as a surprise, though, is the fact that big borrowers-those who owe more than Rs 10 crore but have not paid up on time-make up more than three quarters of the amount in default, data obtained through an RTI application revealed. The high end loan-owners, most of whom are builders, manufacturers or managing educational or medical institutions, account for 78% of bad banking across the nation, going by statistics provided by 26 nationalised banks to an RTI query by a Thane-based chartered account. The affluent borrowers which total up to a miniscule 969 accounts, have collectively defaulted on their scheduled loan repayments exceeding Rs 78,000 crore to the lending banks as on December 2011. A vast majority of the defaulters 49.23 lakhs as on December 2011 across the nation were responsible for a gross Non Performing Asset (NPA) of just over Rs 22,000 crore or a mere 22% of the bad debts. The RTI activist Thane ( a district in Maharashtra) -based chartered account said that the bank managements have further declared that the NPA declaration by the banks does not mean that the borrowers are intending to cheat but circumstances outside their control have crippled them financially. Inflation, economic slowdown, increase in interest rates are some of the contributing factors for such a large NPA base. However, the recent switch over by public sector banks to computersied system of identifying NPA from the previous relationship banking has added to the problem. Previously, the bank manager and staff knew the borrower and would consider his request to release some part payment so as to avoid his account to be tagged as NPA. In the present system anyone who defaults on repayment of interest for more than 180 days is blacklisted as NPA. The Indian governments recent proposal to restructure debt of state-owned power distribution companies will provide them only a temporary reprieve from weakening finances. The proposal is in itself unlikely to adequately speed up the growth in Indias power capacity to meet snowballing demand. Thats according to a report titled Indias Power-Sector Debt Restructuring Proposal: A Salve, Not A Cure Proposal: A Salve, Not A Cure, that Standard & Poors Ratings Services published recently.
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According to the government proposal, a portion of loans to the power distribution companies will be restructured. About half of these loans will be transferred to the respective state governments. This could be through guarantees on bonds that the distribution companies will issue. The report analyzes the impact of the proposal on distribution companies, the sovereign, and on financial institutions that have lent to power companies. It also examines the effect of the recent power blackout on Indias industries and growth prospects. The power outage has affected 20 of Indias 28 states, but had little impact on industry. One key reason is that several Indian companies have broken away from state-supplied electricity, and now depend on their own captive power plants. Such a practice reduces the competitiveness of Indian businesses and deters investments by overseas companies. An increase in investments to the sector is possible only with transparent tariff regulations and reliable fuel supply. A reliable fuel supply, in turn, hinges on availability of timely clearances and a transparent framework for producing fuel, and the presence of adequate infrastructure for transporting fuel. Hence the government policies are the root cause of induced NPAs in this sector. Rotten Apples According to an S&P report, about 11 per cent of banks loans to the sector were restructured by FY12. it is pertinent to mention here that Indian banks do not include restructured loans as non-performing loans. State-owned banks have a larger exposure to power utilities than their private sector counterparts. According to sources, the finance ministry has asked public sector lenders to form consortiums to restructure the accounts of SEBs. The rationale behind the move is that by carrying out restructuring together, banks could pressure SEBs to agree to their terms and conditions. However, in practice, the terms put forth by banks turn out to be politically unpalatable as they involve raising tariffs and asking state governments to foot the subsidies provided to consumers. In a major shift from its earlier stand, the consortium of 13 banks that has a Rs. 7,700-crore exposure to the bleeding Kingfisher Airlines has indicated that it could agree to provide about Rs. 600 crore of additional working capital required by the carrier to tide over its financial crisis. The government is expected to move fast on allowing foreign direct investment into the cash- starved aviation sector, a move that would ease the pressure off Indian carriers. Once the FDI proposal is cleared, the situation of the countrys airline majors would be healthier a government official told Hindustan Times on the condition of anonymity. Banks are therefore not averse to providing the additional capital sought by Kingfisher. Banks exposure to the aviation sector is unsafe, as the companies in the sector are highly leveraged, face a high interest burden and also the potential rise in fuel costs, which eats up these firms profitability. A total of approximately 63500 cr of debt is seen in the airline companies like Kingfisher, Air India, Spice and Jet Airways. Kingfisher Airlines has a huge debt of Rs 7000 cr, of which approximately Rs 6200 cr has been issued by the Indian banks. For the last 7 years, Kingfisher Airlines has been reporting losses continuously. For FY11, it reported a loss of Rs 1027 cr on the back of huge interest expenses, which stood at Rs 2340 cr. Banks are worried as their exposure to the company will result in the restructuring of debt and additional provisioning, which will affect the banks profitability. SBI has the highest exposure of Rs 1410 cr in Kingfisher Airlines.
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The following table shows the exposure various banks have to Kingfisher Airlines: Bank State Bank of India IDBI Punjab National Bank Bank of India Bank of Baroda ICICI Bank United Bank Central Bank Corporation Bank UCO Bank State Bank of Mysore Indian Overseas Bank Federal Bank Oriental Bank of Commerce Punjab and Sind Bank Axis Bank IndusInd Bank Total Rs (Cr) 1410 719 702 552 532 430 395 360 305 287 139 122 100 56 51 46 6 6212

This is the position despite in 2010, the banks had got together and under the corporate debt restructuring scheme of the Reserve Bank of India restructured debt to the tune of Rs 7,720 crore owed by Kingfisher. On Wednesday, Sep 4, 2013: DNA newspaper carried this article which exposed this robbery with finer details. They have money, but wont repay - Corporate biggies gobble up Rs23,802 cr loans.

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Thousands of individuals and companies have defrauded banks by defaulting on their loans, totaling Rs23,802 crore, even though they have the money to settle their dues. Amount in question is enough to fund the countrys mid-day meal scheme for two years Maharashtra tops the list, with 737 companies and individuals owing about Rs7,000 crore to various public and private sector banks. On its heels are West Bengal and Andhra Pradesh, with dues of Rs2,080 crore and Rs1,980 crore, respectively. A borrower who fails to repay a loan despite having the capacity to do so or diverts the money or siphons it off is declared a willful defaulter. A borrower is declared willful defaulter only after many rounds of consultations and negotiations. The bank gives details of willful defaulters to the Reserve Bank of India every three months. Nationalised banks bear the brunt of such frauds. A total of 72% of the money corporates defaulted on were borrowed from these. State Bank of India alone has to recover Rs9,580 crore 41% of the total dues of all willful defaulters. Merry go round goes on So the merry round of herd mentality sanction without objective assessment , one time settlements, waivers, write-offs, of government politicians borrowers bankers nexus goes unabated even in era of deregulated banking widely talked about by the proponents of privatization. The net result is that Amount to rescue for PSU banks on account of NPAs is pegged at $1.7 billion (Press Trust of India: December 25, 2012). Gross non-performing assets (NPAs) of public sector banks have increased from 2.28% in March 2010 to 4.01% in September 2012, In the case of nationalised banks, gross NPAs have increased from 2.04% in March 2010 to 3.50% in September 2012. The Government has advised public sector banks to take a number of new initiatives to increase the pace of recovery and manage NPAs, the Minister of state for Finance said. The total bailout amount required to rescue public sector banks in case of maximum stress caused due to non-performing assets will be around $1.7 billion, a top company official of India Ratings and Research said. In a published report, the RBI attributes the rise in the NPAs of both Public and Private Sector Banks to diversion of funds away from the original purpose for which they were granted, as well as willful default (or misappropriation of funds) by borrowers. That apart, adverse economic and market factors, ranging from recessionary conditions, regulatory changes and resource shortages have impacted the health of businesses, and driven them to default on their loan repayments. Sometimes the banks themselves are to blame delay in loan disbursement can throw a project and have a cascading capacity to repay. Banks have also been known to take comfort in collateral, and hence not follow up diligently enough on loan dues. Were the market value of the collateral to drop, there is an immediate impact on the quality of the related loan asset. There are also other, less transparent reasons why NPAs are on rise. For one, the process of (non performing) asset disposal is riddled with legal impediments and delay. Secondly, highly connected corporate debtors have been known to use political pressure to get banks to waive their dues or restructure terms in their favour. Come election time, political parties make populist promises such as the credit to the Small Scale and Rural Sectors which may not yield the expected results which commercial banks are forced to honour.

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CDR: Cruel Denial of Recoveries and / or Consensus delay for recoveries?

It is now when entire exercise of recognition of assets is being done by online CBS technology, bankers are constrained to declare their decade old bad accounts as Non Performing Assets. However clever bankers continue to resort to unofficial restructure of loan to conceal bad accounts in various branches .There are many branches where more than 25% of their total loans are truly NPA and at many branches even more than 50% to 75% of their total loan portfolio is bad. Even RBI officials do not want to read the truth and they become satisfied only getting a certificate of health from corrupt bankers. This is the reason that slowly and year after year , quarter after quarter volume of NPA in public sector banks and that of restructured loan accounts in these banks have been increasing despite tall claim made by Government of India that banks in India are safe. Banks are eager to restructure because otherwise they have to take a hit on profits or provide more capital. Total loans restructured by Indian banks under the so-called corporate debt restructuring (CDR) route crossed Rs.2 trillion (2,00,000 crore). in December 2012. In the past quarter alone, banks restructured Rs.24,584 crore of loans, up from Rs.19,544 crore they recast in the previous quarter, to reach Rs.2.12 trillion of restructured loans. The actual figure for restructured loans may be around Rs.4 trillion as this estimate does not include bilateral restructuring cases that banks undertake individually with firms. Gross non-performing assets (NPAs) of 40 listed Indian banks rose to Rs.1.66 trillion in September, up 46.8% from a year-ago period. In the December quarter, gross NPAs of 28 listed banks, which have so far reported results, have together accounted forRs.93,748.07 crore. Among the large banks that have the maximum amount of NPAs are the nations largest lender SBI (5.15%) and Central Bank of India (5.64%). The central bank has sought comments on the suggestions by 28 February 2013. The guidelines, if accepted, could make it more difficult for indebted companies trying to persuade banks to restructure loans. The actual figure for restructured loans may be around Rs.4 trillion as this estimate does not include bilateral restructuring cases that banks undertake individually with firms. This increased provision will effectively put restructured loans almost on par with bad loans, according to an analyst. About 5.9% of the loan book in the banking system has been restructured as of September 2012, which is about Rs.3 trillion. Right now, at 2.75% provision, banks have to set aside just below Rs.9,000 crore; but if these norms kick in from the next fiscal, they will have to set aside another Rs.3,000 crore, going up to Rs.6,750 crore in two years. Bankers have already protested against some of the recommendations of the RBI panel earlier. The recommendations of the committee are not easy to implement. Banks have already spoken against this committees recommendations with the regulator, said a banker who requested anonymity. Profitability will be hampered and it will not allow us to restructure loans of firms that are genuinely in need. These new guidelines, if applied, will disincentivize banks from inordinate restructuring because they will have to pay a higher cost on restructured loans, another banker said. Increasing the provision to 5% will bring the cost of restructuring almost on par with bad loans because when a loan goes into CDR, banks typically take a loan-to-value hit of 10% to 15%. A 5% provision on these loans will mean the cost will be almost equal to a bad loan. It is to be understood that if new guidelines of provisioning is implemented in true spirit, banks will be required to make additional provision amounting to Rs.15000 crore as per rough estimate of CRISIL. It means there are at least Rs.300000 crore ( 5% provision is needed on restructured loans as per RBI
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guidelines ) valued bad loan account hidden in the system using restructuring or are on the verge of restructure of loan or likely to slip into NPA category. That is the reason we euphemistically define the acronym CDR as Cruel Denial of Recoveries and/ Consensus delay for recoveries? If the suggestions are accepted by RBI, Indias highly leveraged realty sector is likely to be the worst affected. Already, RBI has denied banks permission to restructure loans of companies belonging to the segment. However, they can still restructure the loans of real estate companies as with any other account, on a case-by-case basis. Any increase in provisioning will have a significant effect, especially since banks will have to recast more loans in the approaching months given the slow pace of recovery in Indias economic growth, analysts said. Under CDR, commercial banks typically stretch the repayment period to stressed companies, offer a moratorium and reduce lending rates, among other measures. Under current norms, banks are required to make 2.75% provisioning on standard restructured loans as against 0.4% for loans that are standard. In the event of a restructured loan turning bad, the provisioning liability shoots up to 15%. The current situation could turn worse as most analysts suspect that 25-30% of the restructured loans may turn bad, unless there is a significant revival in the economy. So the Finance Minister could not get his free lunch from Duvvuri Subbarao, RBI Governor, despite the fact that the latter cut both repo and cash reserve ratio on 29 January to please him. The obverse side of easier money and credit is always a higher complement of bad loans. And more bad loans means more capital. What P Chidambaram, FM gained by way of cheaper loans will have to be repaid to banks as higher capital infusion from the government. In a tail-sting to the monetary policy, the Reserve Bank of India recently announced the above discussed stringent prudential measure for banks that are restructuring bad loans with gay abandon in order to make their balance-sheets look prettier. Restructured loans are essentially loans on which the borrower has defaulted and sought the banks acquiescence in either stretching the repayment period or reducing the loan rate, or both. The Reserve Bank of Indias (RBI) draft guidelines on corporate loan restructuring, if implemented in the current form, would increase banks provisioning requirement by Rs 15,000 crore in the next two years and lower their profit around 7%. According to the draft proposals from the RBI, banks provisioning on loan restructuring has to be at 5%, a sharp increase from the present requirement of 2.75%. The deadline for the implementation is April 1,2013. Banks are eager to restructure because otherwise they have to take a hit on profits or provide more capital. Rating agency ICRA says banks bad loans are set to cross Rs 2,00,000 crore. The RBIs new prudential guidelines on provisioning for restructured loans says that banks have to write off 5% of the value of restructured assets instead of the current 2.75%. The rate was revised to 2.75% only last November, and the further hike to 5% means that banks have to provide more capital in the balance-sheet and more provisions in their P&L account. For all new restructured loans, the provisioning norm will be 5% from 1 April 2013. For the existing stock of restructured assets, the RBI has suggested a phased coverage. Provisioning in 2013-14 will rise from 2.75% to 3.75%, and in the year after from 3.75% to 5%. The crunch will thus come in 2014-15. Not surprisingly, bank shares were swooning all over, with the BSE Bankex and NSE Bank Nifty dropping by 0.7% on Friday. . A Bank of America Merrill Lynch report on the new RBI prudential norms said the
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biggest impact may hit earnings by 3-8% for some public sector banks through 2014-15, while the impact on private banks will be negligible. The real message of the RBIs prudential changes is simple: banks cannot merrily keep restructuring loans as though everything is fine. They have to provide more capital. Since the government is the largest owner of banks in India, the finance ministry will surely get a big bill for bank recapitalisation shortly, and especially in 2013-14 and 2014-15. In 2012-13, the centre provided around Rs 15,000 crore for recapitalising public sector banks, but Subbaraos new prudential guidelines for restructured loans will make the bill bigger next year and the year after that. Between prudential norms and Basel III another international capital adequacy norm that is kicking in shortly banks may have to provide over Rs 5 lakh crore of additional capital in the coming years. In its annual report for 2012, the RBI said that public sector banks would require Rs 4.5 lakh crore of equity and long-term loans to meet Basel III requirements. For private sector banks, the figures were around Rs 75,000-80,000 crore, including both equity and loans. The prudential norms on restructured assets will make public sector banks capital requirements larger than ever. Public sector banks account for nearly 70 percent of the banking sector. Perhaps aware of the likely demands for funding, the UPA government has decided that proceeds in 201314 can also be used for bank and insurance companies recapitalisation. The money may also be used to recapitalise other public sector companies outside the banking sector. This will lead us to an incongruous situation where more public sector shares will be sold in the coming years to finance reinvestment in banks and other public sector companies. Disinvestment money will go towards investment in the public sector. Money will go from one pocket to another for no reason other than budgetary convenience. One wonders whether it would not have been simpler to ask banks and public sector companies to fend for themselves by tapping the market and reducing the governments stake. Isnt the time ripe for the government to start letting go of at least the smaller public sector banks? The Finance Minister should thank Governor of RBI for bringing that day nearer by forcing him to rethink, the Government to take up part of the disinvestment offer, and then using the same proceeds to recapitalise the insurance and banking sector. If it was anybody else but for the government, it would be called a Ponzi scheme. Wonder who is fooled. Isnt it time to abandon the charade? Whey we should oppose: These gargantuan NPAs will be seen by general public with awe and there is not likely to be any backlash against these companies. A man on the street will merely talk as to how foolish were bankers but will not demand any action against the owners as they had larger than life image and are viewed with awe. And these willful defaulters are getting ready to mine the new loopholes of the new law: no clear definition of whos a wilful defaulter; no prison sentences; nothing to stop a defaulter from taking over a privatised bank (especially after the amendments to banking bill banks borrowers can become banks directors) and paying off debts; and nothing to stop their private life of luxury. If the spirit behind the new law doesnt match the letter, if this mother of all bad loans continues to grow, it will squeeze the financial system. In time, it could mean paying more for your home or car loan, and getting less interest for your savings.
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If you are just an ordinary tax-payer, the quintessential man on the street, why should you be reading the series of exposes in the media time and again Why should you be getting angry? What questions should you be asking? And what answers should you be seeking. The rich, after all, have always stolen. From the banks, from governments and, most of all, from the poor. So whats new this time? You should bother precisely because now there is a difference. The essence of free markets is fairness of opportunity and accountability. Free markets run on impartial regulation, prudential norms, protection of investors money from risks other than what an instrument of investment justifies for the returns promised. This Day Light Great Bank Robbery euphemistically called as NPA is not about companies taking legitimate market risks. Its about total subversion of the principles of free markets. So, here is the first question you should be asking. Why is it that your bank pays only 4 % or so on your fixed deposits but charges 10% on your housing loan? Why should you pay 13% on your car loan? And why is it that you so often read on the front pages of the pink papers about fresh government bailouts for your financial institutions? This money, too, comes out of your pockets, your common tax kitty. In civilized countries with free economies, banks work on spreads of no more than 2%. In India it is 4%. So, overseas, if your savings bring you 4% interest, your housing, loan would cost no more than 5.5 or 6. Here, you first pay for the inefficiency of your bank, the overheads and the bloated bureaucracy. Second, you also under-write your banks Non Performing Assets (NPAs). The big guys steal, then get write-offs or bailouts. You and I meanwhile keep the banks afloat by paying that additional spread on our borrowings. A good question to ask, before that is done, is who were the people sitting on its board when these loans were given, where are the defaulters now and do their personal wealth, lifestyles, match the bankruptcy of their lender? If it doesnt, why should we tax-payers fund its revival? But banks are always known to lose money and big banks lose big money. So, if you still think why you should bother, here is a story former Prime Minister V.P. Singh used to tell in the Allahabad parliamentary bye-election of June 1988 to explain to mostly illiterate villagers why they should be angry about the Bofors scandal. Your house has been burgled, he would say, and then explain how. When you buy a matchbox for 50 paise, five paise go to the government as tax. With this the government builds your roads, hospitals, bridges, schools, buys guns for your army. This is your money. It has been stolen. Thats why I say, your house has been burgled. What should worry us is the sheer extent of the exposure to such accounts. Losses to the tune of Rs 10,000 crores in just two accounts will shake the whole industry. Even the wage revision due from November 2012 will be affected It will be the honest , hard working who will suffer - more pressures for profits, denial of decent wage hike, no updation of bank pension etc. The total employees in the banking sector (private as well as public sector) are about 9,00,000. Do you know that how much loss of Rs 10,000 crores will work out per employee of banking industry as a whole. It is about Rs 1,11,000/-. Thus, if banks fail to recover from these companies, then each one of you (each peon, each clerk and each officer in the banking industry) will lose more than Rs 1 lakh. The cost of 45% increase in wage load demanded by NUBE will work out to mere 8% recovery of the restructured loans as on 31-03-2012 which would have been other wise classified as of NPAs without costing any additional exchequer to the banks if they have the will to recover ! Conclusion: Looking back, the sequencing of financial sector reforms indicates that the move to set up holding companies to provision NPA in balance sheets is precursor to consolidation of public sector banks in anvil. Logically,
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the next step would be the dilution of the governments stake in Institutions, or their outright sale to private and foreign banks in a strategic partnership. Seen from this perspective, the measure fits with the proposed legislation to lower the governments stake in PSBs to 33%. That, in turn, would be in tune with its game plan to withdraw the state from the banking business, leaving the field free for free-wheeling private and foreign financial entities. That is why we say that Financial Reforms and NPAs & Scams are like an Object and its Shadows! The only bright side of the 1992 scamit revolutionized the market infrastructure, Too little has been recovered and too many cases are unresolved, reducing the scam trial to a farce .Justice or Farce? What a far cry all this is from 1956, when Justice MC Chagla said after the Haridas Mundhra scandal: After very anxious consideration I have decided that this enquiry should be held in public. A public enquiry constitutes a very important safeguard for ensuring that the decision will be fair and impartial. The public is entitled to know on what evidence the decision is based. Members of the public will also be in a position to come forward at any stage to throw more light on the facts disclosed by the evidence. Justice should never be cloisteredit should be administered in broad daylight. He also decided to take evidence on oath so that those who gave evidence did so with a sense of responsibility and the knowledge of the consequences of giving false testimony. The Mundhra enquiry was wrapped up in two years, including the appeal to the Supreme Court. That record has never been repeated in the 56 years since that scandal. The sheer quantum of the NPAs, a mild euphemism for outstanding loans owed to banks by persistent defaulters, is mind-boggling. Although there may be some cases where for genuine reasons advances have become NPAs, in most cases borrowers turn defaulters willfully. Instead taking drastic and stringent action is taken against defaulters such as, confiscation of the properties of wilful defaulters, imprisonment, and blacklisting for all future advances and loans the government and bankers have resorted often to bail out packages, including this preposterous, retrograde step of setting up of holding companies as mentioned above to raise capital to provision for NPA s present and future, which is bound to cause increase in NPA time and again . Further with the supervision, autonomy, power, and control vesting with the holding company, or leader of the consolidated bank, its Board (as the case may be) will become omnipotent and the 19 nationalized banks boards will be rudderless subsidiaries, having powers of recommendatory nature to the holding company. The major fall out of this move is that the independent settlements which the union have hitherto with their respective banks on various HR- maters which will be send to archives of history and will be dictated by HR policies prescribed by the holding company, under the guise of uniform HR policies in tune with the anti-employee Khandelwal committee recommendations, virtually resulting in their de- unionization in the long run in their respective banks. Therefore it becomes clear that these massive NPAs well entrenched in the Indian Banking system is a cancerous growth that represented by unclean economy will not disappear by half hearted palliatives. It requires a sustained chemotherapy and drastic surgical operation. Frequent resorts to amnesties such as waiver, write off, etc must stop. At the fundamental level attitudinal changes to book the culprit defaulter, under criminal offence, even though they lie today under the pale of present day legality. Obviously so long as profits remain as the prime factor, such friendly attitude towards tax evaders, black marketers, and willful defaulters day light robber barons of Public Money, are likely to persist. Hence it is also essential to rearrange the hierarchy of social and economic objectives consistent with long term interest of common man otherwise, crony capitalism, and, NPA scams, era of other scams will continue to grow from strength to strength. Hence, NUBE has suggested measures for recovery such as: 1. Overhauling of banking laws making recovery easier;
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2. Attachment of personal properties of the defaulting borrowers; 3. Debarment of these defaulters from holding any public office or contesting in elections; 4. Declaring willful default in repayment of bank loans as criminal offence. If steps as suggested above were taken, the NPA position of the Public Sector Banks could have been much lower than the international standards. Because of the staggering portfolio of NPAs, the social lending activities under the priority sector credit have become the causality affecting our agrarian society. It may be mentioned, in this connection, that NPAs caused by industrial sickness are not signs of failure of banks but failure of industrial and macro-economic policies of the Government of India. The extent of such NPAs in banks should be tackled separately. With the tumble down of the global financial sector and economic melt-down, the message is clear. The imperialist globalization lobby that consistently imposes banking and insurance sectors reforms must be opposed as a part of anti-imperialist struggle in India. India is already in deep economic and financial crisis in the severe impact of economic recession in the whole capitalist economy. The struggle in the banking sector is intricately linked up with the struggle against imperialist globalization programme. The myth of globalization propagated as a savior of the people and robust growth and development has already tumbled down like nine pins in the centers of capitalism. It is time to expose, fight and unite against banking sector reforms in the interest of the country and its people. Those who take the meat from the table teach contentment. Those for whom the taxes are destined demand sacrifice. Those who eat their fill speak to the hungry of wonderful times to come. Those who lead the country into the abyss call ruling too difficult for ordinary folk -Bertolt Brecht Holding Companies for Better Hold On PSU Banks The recent brouhaha and the enthusiasm at FINMIN to create banking goliaths by merger of banks, considered as Davids seemingly unable to take on Global deep pockets and take Indian banking to heights not scaled hitherto, spells incertitude on the part of FINMIN as to the correct step to be taken to improve this state of the ailing sector. Due to the spate of experiments being undertaken with PS Banks, these national jewels and symbolization of pride and self respect of every Indian, are being treated as Guinea Pigs and kept breathing by periodic dips of fund largesse of GOI.On the contrary, they should have been allowed to function as board driven independent institutions, capable of deciding what would be good for them. The candid and no nonsense definition of a holding company is, a parent corporation that owns enough voting stock in another corporation to control its board of directors (and, therefore, controls its policies and management). Cabinet to Consider Holding Company for PSU Banks: Capital infusion with foreign funds planned, foreign participations is never thought out while thinking something big in the banking and finance arena?
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On January 16, 2013 PTI reported that the finance ministry is contemplating a holding company structure for public sector banks. This will help the banks raise capital and government can hold on to a majority stake. The holding company is likely to be a statutory entity, to be set up under the Parliaments new Act, and may come up by the end of the current financial year 2012-13, the official told the newspaper.The holding company may also be allowed to hold government shares in other financial companies, the official said, adding that this way the firm would have another stream of income as dividend.Also, the governent is contemplating letting banks hold shares in one another via the holding company, which may be permitted to be listed on the stock exchanges. Under the process of creating the holding company, the government will transfer its shares in all state-run banks to the company, which will raise capital from domestic and overseas markets, and infuse funds into the public sector banks (PSBs).The government will transfer its shares to the holding company in a cashless transaction. The company would hold shares in all PSBs (public sector banks), raise debt from the market and infuse it into its subsidiaries.Moreover, being a holding company, the fiscal burden on the government due to recapitalization of banks will also reduce.The government, in the Union Budget 2012-13, proposed to provide Rs. 145.88 billion for recapitalization of public sector banks in the current fiscal, excluding Rs 13 billion for recapitalization of regional rural banks. Once the holding company is set-up, such kind of provisioning may not be needed in the Budget and the company will be similar to other public sector units.The holding company will be permitted to tap funds at interest rates higher than the London Interbank offered rate (LIBOR) the average interest rate charged by Londons leading lenders when lending to other banks.The capacity of the holding company cannot be infinite. The companys equity would increase when it infuses capital into banks. The company will enable the government to retain its majority stake in the state-run banks, despite the strain on budgetary resources being curtailed. If banks go to the market to raise funds through the equity mode, our (government) equity would come down, an official said. The ostensible reason behind such a proposal is to use the combined equity strength to get a higher leverage in overseas borrowings for scaling up capitalization of public sector banks in line with the stringent Basel III norms on capital adequacy that are set to kick in phases from 2014, going up to 2019. Under the FHC model, the identity of the promoter of PSU banks will change from the President of India to the proposed FHC. Notwithstanding the fact that FHCs promoter shareholder will still be the President of India, and therefore, the FHC will be a government-owned company responsible to the government and taxpayers, it may well be possible to divert public attention from huge amounts of capital infusion into PSU banks under the new dispensation. While it is true that an FHC for PSU banks will be able to better access foreign loans, servicing those loans and re-paying them will still be the governments responsibility. Taxpayers have a right to be informed about the effect of foreign borrowings on the exchequer, but an FHC would only keep such liabilities hidden from the budget documents. The taxpayer deserves a better deal than that. NUBE Holding Firm Opinion That Holding Company for PSU Banks Is Not Being A Good Idea After All! The NATIONAL UNION OF BANK EMPLOYEES, the 4 th largest union in the comity of union appropriately holds firm stand that The finance ministrys proposal to transfer all government holdings in public sector banks to a single financial holding company (FHC) needs careful consideration before it heads for cabinet consideration shortly.

Indian Banks Long Way to Go .Inclusion and not Consolidation

Consolidation or inorganic growth is thought of as a way of graduating to a global size. The proposal is actually old. The Narasimham Committee II had suggested this in 1997.
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Although the Government has taken care to mention that every proposal to merge or take over has to emanate from the individual banks board but has not advocated that it should be supported equally by the employees. Very recently, the government is changing headlines each day having an eye on election 2014 announcing populist, adhoc measures. One such intuitive is consolidating the banking industry. The idea of encouraging mergers among banks to create global sized institutions sounds attractive but may not be the right way to boost capital adequacy. The merged entitys capital will be just sufficient to support the aggregate business. A merger does not necessarily free capital from either of the merging banks. Any of the existing PSBs is unlikely to have spare capital. Moreover, there are fundamental objections to the merger route. The Finance Minister has advocated gradualism, preferring individual banks to decide. The RBI feels financial inclusion is a more important objective than bank consolidation. According to the latest RBI data, as of December-end 2011, public sector banks accounted for about 74 per cent of deposits and advances in the banking sector More recently, the government has been looking at consolidating the banking industry. The idea of encouraging mergers among banks to create global sized institutions sounds attractive but may not be the right way to boost capital adequacy. The merged entitys capital will be just sufficient to support the aggregate business. A merger does not necessarily free capital from either of the merging banks. Any of the existing PSBs is unlikely to have spare capital. Moreover, there are fundamental objections to the merger route. The Finance Minister has advocated gradualism, preferring individual banks to decide. The RBI feels financial inclusion is a more important objective than bank consolidation. The two main motives for mergers and acquisitions( consolidation ) are the rationalization of costs and the diversification of growth through closure of branches and rationalization in the branch banking system which only accentuates further sectoral and regional imbalances, thus defeating the objective expansion of financial inclusion widely talked about. Hence financial inclusion and consolidation are antithesis. The number of people living on less than Rs 60 in India is significantly greater than that of the entire population of US. From the social perspective this is humanitarian pandemic. To repeat the basic objectives of Nationalisation of Banks in India are G To provide banking services in previously unbanked and under banked rural areas. G To promote substantial credit to specific activities including agriculture and cottage industries. G To provide credit to certain disadvantaged groups and weaker sections of society. The analysis of the Distribution of commercial branches in India bank group wise and population group wise -2009 vindicates there is an uneven distribution of banking services in the country. Only public sector banks and RRBs , have huge presence in rural areas and the respective share of the Private Banks And Foreign Banks is a mere 6.4 % and 1.4% while presence in metro areas is 34.8% and 79.3 The RBI chiefs remarks seemed to indicate a widening divide on policy between the finance ministry and the central bank, which have also differed over the timing of interest rate cuts to prop up sagging economic growth. We have been preparing for launching this process (of issuing new bank licences), but all the groundwork, all the enabling conditions for launching this work have to be fulfilled,Mr Subbarao told reporters in Pune soon after the BANCON 2012 conference This bears testimony for their lackadaisical concern towards social banking and over emphasis on class banking. And yet the Finance Minster is advocating granting of more licenses to new private and foreign banks? But disregarding this trend the finance minister, reiterated again in the recent BANCON 2012 conference
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We have written to RBI recently urging them to proceed to finalize the guidelines and proceed to receive applications for new banking licences in anticipation of the amendment in the Banking Regulation Act, We hope that RBI will pick up the thread and finalize the guidelines and start receiving the applications, he added. Mr. Chidambaram also said that the power or the authority that RBI wants is already available under other provisions of the law and the central banks own regulations and guidelines for handing out new banking licences. RBI hasnt licensed any new banks since 2002. But FM once again reiterated he had asked RBI to finalize the guidelines for new bank licences and start accepting applications from potential new banks without waiting for an amendment of banking rules.The RBI governors reluctance to toe the line of the finance ministry is the second instance in recent times of the central bank and the government diverging on critical policy issues this year. In the second quarterly monetary policy review in October, governor of RBI kept policy rates unchanged, citing high inflation, although. Mr. Chidambaram had been keen that the central bank pare its policy rate to prop up economic growth. In a bid to convince RBI about the governments serious intent to rein in the fiscal deficit, the finance minister laid down a five-year fiscal consolidation road map a day ahead of the monetary policy review.But the RBI governor was unmoved. While leaving interest rates unchanged, he cut the banks cash reserve ratio, or the portion of deposits that commercial banks need to keep with the central bank, and hinted at a rate cut only in January. Growth is as much a concern as inflation, a visibly upset FM said then. The government has to walk alone to face the challenge of growth. The RBI governor said inflation remains high, although the central bank is conscious about the economic slowdown. At 7.45%, inflation is certainly quite high, Mr. Subbarao told reporters, adding that the central bank is always on high alert on the inflation front. The passage of the amendments to the banking law has been one of the main preconditions of the central bank for handing out new bank licences to private sector companies. To push for early bank licences, the finance ministry is exploring if RBI can be empowered to supersede the boards through executive actions instead of amending the law. Experts opine that the shape and the form of the final policy on new bank licences calls for alignment of multiple stakeholders, regulators as well as economic interests. Does that mean that we also should not allow big houses to float banks? We will certainly take a chance, he had said. We are painfully aware of the pitfalls, but we will make sure that regulations are not subverted. RBI will ensure that banks floated by big business houses will be at an arms length from their subsidiaries through amendments in the Banking Regulation Act, Sinha had said at the seminar. RBI licensed Kotak Mahindra Bank Ltd and Yes Bank Ltd in 2002. In 1994, it opened the door for the first set of 10 new private banks, seeking to introduce greater competition in the sector. This time around, the objective is the expansion of banking services, or so-called financial inclusion. About 40% of Indias adult population does not have access to banking services as yet. The stand of RBI as per the status and esteem it holds in the international level as prudent regulator of having warded off the threat of the global financial crisis is as sound as its other policy decisions in the interest of the nation. Thereby unlike the ruling government does not harness election 2014 populist agendas the RBI is correct when it states financial inclusion is a more important objective than bank consolidation.
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In support of the stand taken by RBI in granting new licenses to new private and foreign banks we adduce further data . Of the total 611 districts in the country, 375 districts are under-banked. The total districts include 82 districts of the North-Eastern Region of which 54 districts are under-banked. The under-banked district is the district where the Average Population per Branch Office (APPBO) is more than the national average. There is a need for banks to open branches at these locations and establishing connectivity with the core banking solution.( Satellite Connectivity to facilitate penetration of banking services Need for financial incentives to banks: Discussion Paper of RBI) The achievement of financial inclusion is directly proportional to the demographic penetration of bank branches. As cited by Dr K. C. Chakrabarty, Deputy Governor, Reserve Bank of India, although the financial penetration indicators of India have improved over the years there is still much scope for improvement when compared to OECD economies as shown in Table below: Penetration of Banks in India Indicators Branches per 100,000 people ATM per 100,000 people Deposit per 1000people Loans per 1000 people Branches per 100sq. kms. 2005 6.33 1.63 432.11 71.42 22.99 2009 6.33 4.3 467.35 89.03 26 OECD Benchmark 10-69 47-167 976-1671 248.513 1-159

Source: The World Bank 2010. Getting Finance in South Asia Trend and Progress of Banking in India 2008-09, Basic Statistical Returns of SCBs in India. Note: The Benchmark Indicator ranges are for selected high-income OECD member countries (Australia, Canada, France, Germany, Italy, Japan, the Republic of Korea, New Zealand and the United States).
G

In his view, the efficiency of the banks has shown limited improvement indicating that the cost of low value transactions has not reduced.. Business from urban and big city areas accounts for more than 75% of the banks business and has been growing over the years. The size of deposits and advances per account has also increased significantly indicating that the increase in business is not due to the acquisition of additional customers at the bottom of the pyramid.

Credit coverage of adult population by region for March 2009 Region North North east East Central West South All India Source: Report on Trend and Progress of Banking in India 2008-09
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% 14.9 9.2 9.0 9.9 32.7 26.1 18.3

Note: No. of Borrowal accounts is as per place of sanction as on 31st March 2009; Adult population estimate is on the basis of Census 2001 and assuming a growth rate of 1.3% (World Bank, World Development Report ) In short building banking infrastructure reaching the nook and corner of the country, providing strength and stability to the system, mobilization of savings and an equitable distribution of bank credit with a degree of cross subsidization of interest rates are some of the avowed objectives of nationalization. But the gap between rhetoric and performance exists even today. The UNDESA data estimates that the number of Indias poor was 33.6 million higher in 2009 than would have been the case if the growth rates of the years from 2004 to 2007 had been maintained. In 2009 alone, an estimated 13.6 million more people in India became poor or remained in poverty than would have been the case at 2008 growth rates. In other words, while a dip from the 8.8% growth in GDP averaged from 2004-05 to 2006-07 to the 6.7% estimated for 2008-09 may be nothing like the recession faced by the West, its human consequences for India were probably worse. The 2.1% decline in Indias GDP growth rate has effectively translated into a 2.8% increase in the incidence of poverty though Indias NREGA National Rural Employment Guarantee Act helped to mitigate the effects of slow down . According to the UNDESAs World Economic Situation and Prospects 2010, 47 million more people globally became poor or remained in poverty in 2009 than would have been the case at 2008 growth rates, and 84 million more than would have poor at 2004-07 growth rates. Of these, 19 and 40 million respectively are in south Asia. The report uses the World Banks definition of poverty, which is people living on less than $1.25 per day in 2005 Purchasing Power Parity (PPP) dollars. The estimates assume that there has been no change in income distribution. If inequality grew in India in 2009, the number of poor would be even higher than these projections. The UNDESA report attributes this increase in poverty to a combination of reduced household incomes, rising unemployment and pressure on public services. Job losses in India were primarily in exportoriented industries like textiles while employment levels in Indian firms catering to the domestic market were largely unaffected, the report says. Monetary and fiscal policy intervention gave Indian growth some resilience, while safety nets like Indias National Rural Employment Guarantee Act (NREGA) helped to mitigate the effects of the slowdown, the report adds. Surveys conducted by the labour bureau did show big job losses through most of 2008, but a pick up by mid-2009, said economist and Planning Commission In addition to job losses, food price inflation is a major factor in a decline in poverty reduction in India, said leading Economist Amritya Sen. It is not yet clear to what extent the spike in food prices is linked to the global financial situation, the poor monsoon or other factors, he added. The report is clear that the situation is picking up, but celebrations would be premature global economic recovery is expected to remain sluggish, employment prospects will remain bleak. Job creation will lag output growth and as social protection coverage is limited, working poverty levels will rise and be difficult to reverse, the report warns. There is no agreement yet on the number of poor people in India. The last official (National Sample Survey) household expenditure figures are for 2004-05 and the next round (2009-10) is yet to be completed. Further, the definition of poverty remains disputed, the Suresh Tendulkar committees recommendation that India move away from calorific norms being the latest iteration. This committee pegged the number of poor in India at 408 million in 2005. These poor in India represent an opportunity for Public sector banks. Lending to poor, after nationalization is considered financially viable. Indian banking after nationalization has converted the poor to customers, at the same time empowering poor. It is verified that the current financial crisis in the US is not only due to complex financial engineering and poor regulatory frame work but primarily due to the quality of customers the banking had picked. Hence it is imperative PSBs evolve alternate models of credit evaluation, contract enforcement and build trust among the rural and urban poor. The micro credit and Self help groups (SHG) movements as per above data analysis are in its infancy in India, but are gathering force. More innovation in the form of business facilitators, and correspondents will
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be needed for banks to increase their outreach for banks to ensure financial inclusion. New entrants to the banking system need household at their door step. The economy is presently in a phase of extant economic activities as well as creation of new activities. Corporate profitability and consumer incomes are increasing rapidly riding on the growth momentum. All these developments suggest that the demand for financial services both for savings as well as production purposes will be greater than has been in the past and there will be many new entrants in the need of financial services, who have so far not been served. As the poverty levels decline and household have greater level of discretionary incomes, they will be first time financial savers. They will therefore need to have easy access to formal financial systems to get into the banking habit. PSBs will need to innovate and devise newer methods of including such customers from the rural areas and urban slums into their fold. Conclusion To conclude we wish to stress that with the higher economic growth the role of banking sector is poised to increase the financing pattern of economic activities within the country, to meet, the growing credit demands, banks need to mobilize resources from a wider deposit base and extend credit to activities which are so far not financed by the banks. The trend of increasing commercialization in agriculture, and focus of government of National Rural Employment Guarantee Schemes (NREG) and rural activities should generate greener pastures and public sector banks should examine the benefits of increasing penetration there in. Financial inclusion will strengthen financial deepening and provide resources to the banks to expand credit delivery. Thus financial inclusion, helps to accelerate economic growth further and achieve the avowed objectives of nationalization in letter and spirit. Financial inclusion and mergers are mutually exclusive concepts. Hence Mergers are not a solution . Even as the economic theories that the West trusted till the crisis in 2008 are being re-written by it, the current Indian reforms are based on the obsolete economic ideas of the pre-crisis West. Tectonic changes have taken place in the economic thinking of West, including the United States, since the US-led global meltdown in 2008 as the Big banks are no too big to fail but too big to save them. This caused huge, unsustainable rise in stock prices generating asset appreciation or paper wealth. The artificial asset appreciation was certified as bankable equity to extend easy credit to consumers. Americans were encouraged to buy lavishly even as the US ran huge trade deficits with China. The high stock prices, which classical economists would have dreaded as an asset bubble, was regarded as real wealth effect by modern economists. Modern economists rightly saw commodity price rise as inflation and therefore wrong, but they celebrated asset price rise as wealth and prosperity! At least twice once in 1987 and later in 2000 huge asset bubbles nearly exploded the US stock markets. On both occasions, interest rates were cut, more credit was infused into markets to lift market sentiments. The strategy succeeded. Indian households too prefer bank deposits, insurance and similar instruments. The bank deposits to gross domestic product (GDP) ratio in India in 1991 was 34 per cent; it has almost doubled to 67 per cent in 2011, according to the Economic Survey 2012. So, like in Japan and Germany, savers in India overwhelmingly prefer banks. Only some 5 per cent of Indian savings gets into stocks (Hindu Business Line, November 9, 2011). So India, with its overwhelmingly bank-based economic model, is closer to the bank-based Japan and Germany, and other Continental European nations. It is nowhere near the Anglo-Saxon United States. Yet the economic reforms of bank-based India tend to follow the market-based US economic theories, especially when the very theories threaten to become outdated in the US itself. Look at how things have changed even in India. In his previous tenure as Union Finance Minister Sri P Chidambaram dreamt of reforming the banking sector by creating four or five large banks for India by merging all medium sized banks. Would he now repeat that idea when the West itself is afraid of big banks? Never. The prime minister
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told the Indian savers not to go to banks but to Dalal Street in Mumbai and buy stocks instead. The people of India, however, did not oblige him. The government cant reform culturally defined financial habits of the people. QED: Indian reform process has to be endogenous. Not exogenous. Yet, Indian reformers are habituated to search the waste paper baskets of the market-based US for its outdated ideas to reform the Indian economy. Are the reformers listening? Success of any economic reforms is to be judged on the touchstone of all positive benefits to vast masses of our country where mounting unemployment and price rise of essential commodities constitute the worst curse of the nation. As per the statistical data published by Indian Statistical Organization (ISO), about 220 million people of our country still live below the poverty line ,whereas another large group of about 330 million populations are still well below the average international index of living with one dollar per day income criteria. Public Sector Banking is a tool in fighting against this menace whereas private banking would further escalate these problems. Public Sector Banks as strong national champions have played critical roles in saving the country from national disaster. Today the Indian Accounting Standards rank among the top five while the financial disclosures are among the top three in the world. The Government/ Reserve Bank of India could not have asked for anything more. Any reforms of the banking system should be built on the institutional structure that has created it rather than seek to destroy it as is now being done. The banking industry is in need of true reforms in pursuit of true nationalization, but the strategy for it does not have to subvert the basic goals of development nor does it have to be forced at a pace with adhoc ,arbitrary moves of mergers , tinkering of banking regulation acts ,etc without any public debate and study that will result in liquidation of the institutional structure built up over decades of faith. Thus inclusive growth though has been a priority of the Government of India (GoI) over the past decade. Progress towards this goal has been relatively limited so far and it is apparent that the governments effort to encourage the banking system to promote financial inclusion in an intensive manner needs a substantial impetus if it is to achieve adequate results. Neglecting financial inclusion and advocating consolidation with the main motive is closure of many branches, down sizing of staff, tantamount to Social exclusion of services, low income families. This will result in illiteracy, inhibition and poor physical access. It also limits awareness, ability to overcome prejudice about their bank-worthiness and enhances the transaction costs incurred these families for using the financial services available in the country and becomes breeding ground for extremists manipulations. The Indian State recognized the vital link between land and livelihood soon after independence and launched land reform measures which included three components: abolition of intermediaries such as zamindars, security of tenancy and a ceiling on agricultural holdings for distribution of the surplus to the landless. However, as time passed the commitment to land reform has weakened and it remains an unfinished agenda of governance. The poor have depended upon common property resources such as forests, pastures and water sources for the satisfaction of their basic survival needs. With the increasing tendency to see all such resources as sources of profit the poor are being deprived of whatever access they had to such resources In this situation it should not cause surprise that a large section of the people are angry and feel alienated from the polity and foundational causes lead to unrest, discontent and extremism. While the official policy documents recognize that there is a direct correlation between what is termed as extremism and poverty, or take note of the fact that the implementation of all development schemes is ineffective, or point to the deep relationship between tribals and forests, or that the tribals suffer unduly from displacement, the governments have in practice treated unrest merely as a law and order problem. It is necessary to change this mindset and bring about congruence between policy and implementation There can be no higher priority for national action and no higher claim on the national conscience than this These conclusions are equally valid in respect of the widespread rural violence that is being witnessed in India today.
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To combat and avert the same, under democratic polity there is need for the government to mount programmes on a scale equal to the dimensions of the problem; To aim these programmes for high impact in the immediate future in order to close the gap between promise and performance; To undertake new initiatives and experiments that can change the system of failure and frustration that dominates and weakens our society. These programmes will require unprecedented levels of funding, planning and performance, which can be undertaken without disturbing the regional, ethnic origins and equilibrium balance of present 20 public sector banks and the will to nationalize other private banks in pursuance of financial penetration and inclusion in the vast hinterlands of our great country to fulfill the above objectives. . There will be peace, harmony and social progress only if there is equity, justice and dignity for every one. Our system is built on distrust in people: Trust in people must be substituted for trust in bureaucracy. Public servants must be servants of the people, not its masters Mr. Allen Octavian Hume, I.C.S., 1860

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CHAPTER - VI Anw Anwar arul ar ul Huda Committee:

Similarly the Planning Commission had appointed another High-level Group Committee on Service Sector headed by Planning Commission Member Mrs. Anwarul Hoda. This Committee submitted its Report in April 2008. Some of Committees recommendations are: 1 2 3 4 5 6 7 8 9 Phase out Priority Sector lending Reduction of SLR Abolition of branch licensing Consolidation of Banks Reduction in Governments capital in Banks to less than 5% More foreign investment to be allowed in insurance sector Removal of FDI restrictions in re-insurance companies Banks, insurance and Pension Funds to invest in private equity PF and Pension Fund should be permitted to invest in equity shares

Banking Law (Amendment) Bill (2011): Features

1 2 3 4 5 6 7 Voting rights in proportion to shareholding in private Banks Investment cap of % in PSU Banks to be increased to 10% M & As will need only RBIS approval Financial Holding company needed for all financial services conglomerates Subsidization of Large Foreign Banks in the country More Private sector Banks to be allowed entry The structure and operating environment for NBFCs to be redefined

In the last two decades Indian finance has undergone major changes: What was before: Social and Development Banking Financial Inclusion Diversification of finances to various sectors with a main focus on Agri and social needs What is now: End of Social and Development Banking Growing evidence of financial exclusion Incipient process of financial consolidation and concentration
Implications

Banking Regulations Act: Section 2-A (New Clause) By this, merger of Banks will be exempted from Competition Act, 2002. This means that no permission is required from Competition Commission for merging the Banks. Merger of Banks will be undesirable for our country. Big Banks will not care for the poor people and common man. Section 12(2) proposed to be deleted:
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Presently there is a ceiling of 10% on voting rights of share-holders of Private Banks. By deleting this Clause, voting rights will be unrestricted. With unrestricted voting rights, FDI/FIIs can easily take over and control our Private Banks. Addition of New Section 12(B): This will enable RBI to permit any individual or any corporate company to invest in any Private Bank without any restrictions. With deletion of Section 12(2) to remove the ceiling on rights and addition of Section 12(B) to allow unrestricted share-holding, Private Banks in India will be easily swallowed by any corporate house or foreign investor. Addition of Section 36-ACA: This will give powers to RBI to supersede the Board of Directors of any Bank and to appoint an Administrator to run the Bank. Banks have existed in our Country for more than 100 years. Why such a drastic power to RBI now. This is unwarranted. Presently available powers of RBI are more than sufficient. Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970/80: Change in Section 2-A: To remove the existing ceiling on Authorised Capital of Banks. This is an attempt to make our Nationalized Banks more Capital dependent, Capital oriented and Capital intensive. This will lead to more Private Capital in Government Banks and also facilitate mergers. Hence it is not desirable. Addition of Section 2-B: To facilitate issuance of Right Issues and Bonus Shares in Government Banks. Government Banks will be made at par with Private Banks and Private companies. This will make Nationalised Banks more profit-oriented than on social obligations, priority sector lending, etc. Amendment to Section 2-E: To increase the ceiling on voting rights in nationalised Banks from 1% to 10%. Right from 1970, in Nationalised Banks, voting rights of private share holders is limited to 1%. Now it is being increased to 10% (10 times more). Influence of Private Capital, especially private and foreign institutions will increase in Government Banks. Present share-holding/capital of Foreign & Indian Institution and private Companies in some of the nationalised Banks Oriental Bank of Commerce 41% Corporation Bank 37% Punjab National Bank 37% Bank of Baroda 34% Andhra Bank 31% UCO Bank 29% Allahabad Bank 28% Bank of India 27% Canara Bank 21% Indian Overseas Bank 21%
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With such higher voting rights, their influence on our Banks will increase manifold. All the above amendments and changes are highly detrimental to the interests of our Banks. Hence the Bill needs to be reviewed and re-considered.

Recent Danger
RBIs Discussion Paper on Entry of New Banks in Private Sector With the introduction of new economic policies in 1991, RBI issued guidelines in 1993 and 2001 for giving licence to new private Banks with a capital induction of Rs.300 crores. 10 Banks were set up after 1993 and another 2 Banks after 2001 guidelines. Out of these 12 new private banks, 4 were promoted by financial institutions, 1 each by conversion of a co-op Bank and an NBFC into commercial banks, 5 Banks by banking professionals and 1 Bank by a media house. Out of the 4 Banks promoted by individuals, only 1 Bank is surviving now. The Global Trust Bank was merged with OBC after its debacle and 2 Banks were merged with other private Banks due to lack of financial strength and bad governance. Out of the remaining 6 Banks, Times Bank has merged with HDFC Bank. 4 Banks have merged with the parent institution or re branded. This is the track record of these new generation private sector banks started with all fanfare and open encouragement from the Government. Now the RBI wants to liberalize its licencing policy to allow industrial and business houses to float their own Banks. We know there are 100 billionaires in our country with a total net worth of $ 300 Billion. The proposed capital requirement to start a Bank is only $ 100 million. (Rs. 500 crores). The proposed new licencing policy has to be opposed tooth & nail. Should industrial houses be given bank licenses? Well, not in the first round at least. But not for the reasons that is often cited: the danger of inter-connected lending, that is, banks floated by industrial houses lending to companies within the group. This, critics, say could sink the banks if something goes wrong with the group. I happen to think otherwise. I doubt that the reputed industrial houses would let banks floated by them sink: they have too much at stake. They will go all out to make a success of their banking ventures. However, while their banks will prosper, this will come at the expense of existing players, mainly public sector banks (PSBs). Does this matter? Yes, because it will create systemic risk in India banking. PSBs are in the forefront of financing infrastructure and agriculture, areas that badly need credit. Private banks, including those set up by industrial houses, will focus on a narrow set of corporates and high net worth individuals. This does little for the cause of financial inclusion. How much would a new bank license cost? The RBI will soon receive applications for bank licenses. Industrial houses will be vying with pure financial firms to get a license. The Economist quotes a CEO as saying that the asking price for a license is $75 mn (approx Rs 350 crore). Such talk may be entirely speculative but it tells you why, in scam-ridden India, it is not sensible to allow industrial houses to get into banking (as the Economist itself argues). There will be attempts to influence the award of licenses and there will be attempts to influence regulation once industrial houses get into banking. Large industrial houses represent a concentration of economic power by themselves; add to these a banking activity and they begin to acquire a degree of clout that is unwholesome.
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Its not prudential to bank on discretion The RBIs licensing guidelines for private banks may open the door to influence peddling and corporate lobbying Following the Reserve Bank of Indias (RBI) guidelines for issuance of new bank licences, the shares of corporates like Birla, M&M, Reliance, and others surged up by eight per cent on the back of speculation that one or many of them could emerge as front runners for a coveted licence. There is good reason for such speculation. There is a major financial value attached to the licence while the selection criterion for new banks is opaque, with a high degree of discretionary decision making On Rural Banking Lastly the guidelines require applicants under Section (F)(a) and (b) to submit business plans to achieve financial inclusion that should be realistic and viable. The RBI warns that a deviation at a later stage may invite penal measures including a change in management, etc. But unless the rural banking rollout is finely defined, the viability will vary in each case and it is virtually impossible to choose one application over the other, since the criteria have been kept vague in the first place. Similarly, companies can achieve financial inclusion in multiple ways mobile banking or physical spaces or linking with existing rural Non-bank financial companies (NBFC) by acquiring assets for distribution. What weightage do these get? And is a physical bank more important than technological access to banking for consumers? Would a mobile operator get higher weightage since it has millions of subscribers including rural or will a company which makes and sells tractors through one of its subsidiaries and may have a brick and mortar presence at district and rural level? And what of someone who has neither but knows how to use these extremely well? The RBI has further failed to define who would constitute high level advisory committee except as eminent persons with experience in banking, financial sector and other relevant areas. When will the committee be announced? And why, as the RBI claims, should the committee set up its own procedures for screening applications? Shouldnt these criteria be made known to the applicants beforehand to meet the very basic tenets of transparency and good governance? The guidelines proudly announce that RBI decision in this regard will be final. Not true since any government decision is open to judicial scrutiny, even if the decision is approved by the Cabinet, leave alone the high level advisory committee. And what of influence peddling by lobbying corporates, former bureaucrats (looking to be incorporated as independent board members) and other political influence peddlers in an election year? The RBIs decision could well be final, but would it be transparent and well defined? Coming in the backdrop of the 2G spectrum scam, which was the outcome of a clearly stated and far more detailed set of guidelines than what the RBI has released after three years of consultation, one can only infer that the central bank has either learnt nothing from the unfolding and explosive governance challenges in India or it somehow believes that its reputation and influence over large corporates through the banking relationships that it oversees will force unsuccessful applicants to remain silent even if they have been dealt with unjustly. Even if banking licences are not a scarce natural resource, the limited numbers attach a massive financial value to the permission to operate. There is, therefore, every reason for corporates to exploit those portions of the decision-making procedure that are open to discretion, influence and interpretation. Go Slow On Opening Banking Flood Gates By Joseph Stflitz The FINMIN has been exhorting RBI for issuing new licenses to industrial and business house, which employees unions deterring with all their might and in all sorts of avenues.
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We have been coming across all sorts of tutoring by FINMIN, in favor of opening of the banking sector further, to industrial and business houses and they have been extending all sorts of logic, i.e. better competition, better customer service an blah blah blah. Till now, the government has been rejective to all those hue and cry from employees unions, but, what happens now? Joseph Stiglitz the nobel laureate on Economics comes out, in the open, against the opening of banking flood gates further, to those corporates. His excellent views are reproduced below: Nobel laureate economist Joseph Stiglitz has expressed discomfort at the idea of allowing corporate houses to own banks, saying this amounted to conflict of interest. Stiglitzs statement comes at a time when the corporate sector is gearing up to foray into the banking sector, with the Reserve Bank of India (RBI) set to release the final guidelines in this regard. Earlier, the government had said the central bank would consider giving banking licenses to non-banking financial companies and industry houses. Delivering the 15th C D Deshmukh Memorial Lecture today, Stiglitz said, One of the real problems in the financial sector is there are issues of conflict of interest. And, when you have corporates opening their own banks, you are opening up a venue for corporate conflict of interest. If you want to take your own money, that is one thing. If you take depositors money, you became a part of public responsibility. Stressing the need for strong regulation of the financial sector, Stiglitz said the model followed by RBI had helped the country weather the adverse fallout of the global financial crisis effectively. The regulations and regulators may be imperfect. But the track record of success in India and even in the United States in the decades after the last great crisis, the Great Depression, shows good regulation is possible and can make a difference, he said. Regulation in the sector was vital, as the sector was characterized by large market failures, he said, adding there were systemic consequences (large externalities) arising from these market failures. Debunking the notion of self-regulation, he said financial markets had repeatedly been prone to bubbles. When these burst, they left havoc in their wake. Conflicts of interest and predatory and abusive practices had repeatedly marked financial markets. These were among the reasons the sector had become highly regulated, he added. NUBE hopes our government lends its ears to this expert opinion and gives a little bit of pause to its relentless pursuit of concepts like, deregulation, divestments, opening up etc. considering that, these vary concepts brought FINANCIAL TSUNAMI to those US and UK banks, who, later on had to straighten their backs riding piggyback on governmental support.

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CHAPTER VII Chit Fund Scandal

The Saradha Group financial scandal is a financial scam which was caused by the collapse of a Ponzi scheme run by Saradha Group, a consortium of Indian companies which was believed to be running a wide variety of collective investment schemes (popularly but incorrectly referred to as chit fund) in Eastern India. The group collapsed in April 2013, causing an estimated loss of INR 200300 billion (US$46 billion) to over 1.7 million depositors In the aftermath of the financial scandal, the State government of West Bengal set up an inquiry commission to investigate the collapse] and also set up a fund of INR 5 billion (92 million USD) to ensure that low income investors are not bankrupted. The Union Government also launched a multi-agency probe to investigate the Saradha scam, as well as other similar Ponzi schemes. Chit Fund Scam It is absolutely wrong and self deceptive to say and believe that chit funds are growing only because there is absence of other financial systems like banks. Bitter truth is that Chit funds are in operation in all metros, all big towns and cities and in all villages and panchayats. There are hundreds of chit fund companies which are freely working in Kolkata and Mumbai where branches of a nationalized bank are available in plenty and in almost all roads, all streets and all mohallas. It is only due to greed for quick growth of money that a person keeps his or her hard earned money in Chit funds. Secondly there is no control of the government or RBI or Ministry of Finance or SEBI to monitor their activities and to ensure that money of investors is safe in the hands of promoters of chit funds. Thirdly there are lacs of such chit fund or non banking companies working as chit funds but not having any permission from government. Chit funds keep the name of their company as if they are dealing in real estate, or any consumer product or in jewel to mislead the investors. None of the departments are aware of what is happening in their area and what precaution they have to take to safeguard public money. Fourth, majority of chit funds are getting patronage by leading politicians or reputed film actors or reputed rich business houses. It is not wrong to say that public money in unsafe not only chit funds but also in state run banks or private banks. Banks are unsafe due to political exploitation and rampant corruption at all level of banks and the most astonishing is that most of corrupt bankers have blessings of some key politician in the country. Flattery or bribe based promotion and posting, bribe based recruitment, bribe based lending and bribe based mobilization of deposits etc have all killed the uprooted all safety valves built in the past. CVC and CBI or Anti corruption bureau are not getting time and do not have will to stop unhealthy growth of chit fund companies or increasing trend in bad debts and frauds in banks. Banks are unsafe due to rising bad assets and rising number of frauds taking place in banks. It is only the common men who are always victim of lack of control and monitoring .All top ranked leaders in the country are cheating, not only banks but all departments.Indian judiciary is unable to dispose off cases even in one or two decades which are filed by aggrieved person. Majority of Media men are also puppets in the hands of rich people and powerful leaders. Then who will protect the interest of common men. Person like Arvind kejriwal or Anna Hazare who come forward voluntarily to expose the evil works of government servants and politicians are taken to task by person sitting at powerful posts including police, IT,ED,CVC,CBI and all. This is why even after lapse of more than 65 years after freedom Indian government has failed to protect the interest of common men. Government is unable to eradicate the evils of dowry, rape, corruption and terrorism. Government has failed to keep price rise in control , failed to provide even essentials like water, nutritious food, minimum health care ,electricity ,road and minimum sanitary services to common men.Only GOD can help India and Indians.
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CHAPTER - VIII
BANKING: On W rong Priorities & P olicies Wr Policies
Why Public Fund Is Parked In Private Banks
Business Standard, Sunday, September 8, 2013 covered an article that a parliamentary panel raised objections on Coal Mines Provident Fund Organisation (CMPFO) not parking a huge Rs.45,886.45 crore with the public sector banks and also said the issue of deviation from norms should have been referred to a central investigating agency. CMPFO has invested Rs 29,363.95 crore in ICICI Securities Primary Dealership Ltd besides Rs 16,522.5 crore in the Special Deposit Scheme of the Ministry of Finance, which does not seem appropriate, the Standing Committee on Coal and Steel said in its report tabled in Parliament. The Committee have failed to understand why these funds were not invested in public sector banks, the panel, headed by Trinamool Congress MP Kalyan Banerjee said. Raising questions on the role of the Coal Ministry to protect workers interests, it said it was dismayed that there was no monitoring mechanism and the Commissioner has neglected the most important duty assigned to him and the investment decisions are left to the wisdom of portfolio managers. The Committee felt that besides taking strict departmental action against all those who were responsible for flouting rules and procedures, the matter should have been referred to a Central Investigating Agency in the first instance, it said. Asking Coal Ministry to take adequate safeguards to secure the safety of investments that are vested with fund managers, it also demanded to know about the deficit of Rs 1,947 crore in Pension Fund Corpus as on March 31, 2005. How banks and funds are gaming money markets in India - Business Standard They are breaching RBI rules forbidding forward trades, multiple people involved in the practice Banks and mutual funds in India are earning abnormally high returns in money markets by breaching central bank rules forbidding forward trades, multiple people involved in the practice said, undermining the effectiveness of monetary policy in the process. The widespread practice, known as river crossing, involves three-way trades in certificates of deposit (CDs) between banks and mutual funds and typically takes place at the end of every financial year in march when cash conditions in the banking system are tight. The trades, which artificially push up short-term interest rates for a short period before they return to normal, have made it harder for the Central Banks most recent cut in policy interest rates to have an impact on borrowing rates and in turn stimulate credit as economic growth languishes at a decade low. The Reserve Bank of India (RBI) is already hamstrung by sluggish monetary policy transmission, meaning its interest rate decisions take six to 12 months to have an impact on the real economy, given relatively low credit penetration. The trades have taken place as India considers forming a unified regulatory authority that would assume oversight of trading in currency, bond and derivatives markets from the central bank. The proposal does not address regulation of money markets, handled by RBI. It was unclear whether RBI is aware of the practices. A spokeswoman for the Central Bank declined to comment after being provided detailed verbal and emailed queries from Reuters.

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The trades mostly take place at the end of the financial year, when companies make tax payments and government spending slows, creating a liquidity shortage that drives up rates. Also during March, banks aggressively look to raise deposits to bolster year-end balance sheets, sucking more cash out of the market. After a bank agrees to issue a CD to a mutual fund, the fund then approaches a second bank to pay for that CD on its behalf. The second bank holds the CD, earning holding period interest as high as 20 per cent on an annualised basis, but agrees to sell the CD to the fund at a higher pre-determined rate at a future date. The mutual funds tap the second banks to hold the CDs on their behalf as they are cash-constrained due to year-end redemption pressure. However, the last leg of the trade breaches rules forbidding CDs to be booked at a forward rate. In a legal trade, the second bank would have to sell the CD back to the fund at the prevailing market rate, instead of the higher agreed rate. In a more recent means of breaching rules, mutual funds and banks are entering into banned forward contracts by breaking up CDs with maturities of two months or more in order to skirt a regulation that came in to effect late last year that they must mark-to-market investments of over 60 days. The deals between banks and funds are done verbally instead of the typical contracts involved in the sale and purchases of CDs, thus evading regulatory scrutiny, the sources said. RBI had previously expressed interest in starting a primary reporting platform for CD sales to improve transparency in this market, one official with direct knowledge said. Some bankers said they saw no harm in the trades. Earlier, a Firstpost report had criticised the Reserve Bank of Indias failure to act in the face of revelations resulting from a Cobrapost sting which exposed gaping holes in how Indias three top private sector banks HDFC Bank, Axis Bank and ICICI Bank offer red carpet welcomes to those with money to invest never mind its colour. KYC norms seem to be routinely flouted by Indian Banks in India let alone in Nassau when the rich and powerful are involved. Last year, the United States senate investigations sub-committee slammed HSBC for dealings with terror and organised crime-tainted entities, including banks in Saudi Arabia, Iran and Mexico. None of the entitles HSBC dealt with were illegal. The senates investigators, though, said HSBC just hadnt done enough to make sure terrorists and criminals didnt have access to the financial system. It is also holding separate hearings on tax-evasion through offshore banks. In India, the tragedy is that no-one is even willing to ask questions, let alone investigate. For years now, its been clear that organised crime uses offshore banking and that banks dont want to do anything about it. Gretchen Peters, a transnational crimes expert, told Firstpost that things wouldnt change until we see some bankers in Ferragamo suits perp-walked into court and put away for long jail sentences. That sentiment is going to grow until banks start acting.These are exposures of Bad Money in Bank and NUBE calls for stopping such unhealthy , unethical practices by banks.

Operation Red Spider Cobra Sting Operations

Operation Red Spider is a code name of sting operation of an online magazine, Cobrapost in which it released video footage, recorded largely by hidden cameras, showing high-ranking officials and some employees of top three Indian banks suggesting to an undercover reporter methods to launder money and offering safe deposit lockers to stash away the black money and offered to open accounts without adhering to Reserve Bank of India guidelines and use benami (false) accounts to facilitate the conversion of the black money and keep the identity of the depositor a secret. The editor of Cobrapost.com Mr. Aniruddha Bahal brought these video footage into the public domain on March 14, 2013.
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According to Mr. Rajiv Takru, Secretary of Financial Services, Government of India, all Indian government agencies and regulators are working together to probe charges. On March 14, 2013 Reserve Bank of India conducted an inquiry into possible violation of its KYC (Know Your Customer) and AML (anti-money laundering) guidelines by ICICI Bank, HDFC Bank and Axis Bank. Following the enquiry, penalty of Rs 50 million on Axis Bank, Rs 45 million on HDFC Bank and Rs 10 million on ICICI Bank was imposed by RBI. On March 15, 2013 ICICI Bank suspended 18 employees. On March 16, 2013 HDFC Bank appointed Deloitte Touche Tohmatsu to carry out an independent forensic inquiry of bank employees who are encouraging customers to evade income tax. Lapses in adherence to the know-your-customer guidelines and sales staff encouraging customers to buy gold, mutual fund and insurance products in cash are believed to be among the findings of a central bank scrutiny of Indias top three private sector banks. Based on the findings of the scrutiny, which covered the head-office and branches of ICICI Bank, HDFC Bank and Axis Bank, the central bank may penalise these banks. Following its findings, the RBI, at the systemic level, is likely to tighten know-your-customer (KYC) guidelines and put in place norms to curb sales-driven incentives to bank sales staff to push third-party products. Besides lacunae in adherence to KYC norms, authentication of permanent account number details in cash transactions were unsatisfactory, said a senior central bank official. Further, the central bank has flagged the issue of drafts for large sums issued by co-operative banks being accepted by bigger banks without carrying out the usual KYC-PAN authentication. The view is that a bank cannot depend on the verification of documents done by other banks. Apart from the scrutiny, the Reserve Bank had also undertaken a thematic study in respect of banks that are active in selling gold coins/wealth management products to examine whether there are systemic issues and to plug deficiencies and legal loopholes, if any. The Central Bank has taken stock of the KYC implementation across the banking system, including the public sector banks. The RBI wants banks to eliminate multiple accounts held by customers in a bank by giving them unique customer identification number. Cobra post rubbishes RBI deputy governors clean chit to private banks Investigative website Cobrapost on Saturday said RBI deputy governor KC Chakrabartys clean chit to private banks on allegations of money laundering was premature and preposterous aimed at sweeping under carpet the alleged involvement of the banking majors in money laundering. The recent undercover operation by the website showing executives of three major private banks ICICI, HDFC, and Axis willing to wash black money into the banking system. The manner in which the RBI deputy governor has rushed to issue the statement, even before the central bank could complete the inquest it has initiated into money laundering practices by the three banks, even before these banks could complete their own investigations into the alleged misdemeanour of their officials, and even before the income tax department could come up with its own finding, is tantamount to be selfserving and is a brazen attempt on the part of the deputy governor to not only give these banks a clean chit but also mask the miserable failure of the banking regulatory mechanism of the RBI, the website said. In its expose, executives of the three private banks offered alleged assistance in investing black money in the banking channel through various means. Some of them offered to accept huge amounts of cash and invest it in insurance products and gold, open an account to route the cash into various investment
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schemes of the bank, and do it all without even PAN card or adhering to the KYC norms of the banks. NUBE would like to know why RBI is keeping the report on actions and finding on investigation as secret. It is worthwhile to mention here that last year when well known and reputed figure like Rajat Gupta was punished by USA court on the issue of insider trading, entire world was informed and all newspaper published it. There is doubt however that RBI will take any action against any erring top officials of the bank involved in money laundering case exposed after sting operation conducted by Cobrapost. Some of junior officials may be scapegoat as usually done in case related to top bosses. This is Indian culture. Government of India is maintaining complete silence because all of the important Chief Executive Officers CEOs like Executive Director, Managing Director, Chairman and Managing Directors of these banks are stage sharer on the functions headed by Finance Minister. Rather CEOs of alleged private banks are called as path decider, policy makers and best bankers. It is only USA government which treats all guilty on same footing irrespective of their stature and posts, national or foreigners. They decide on the merit and demerit of the case but Indian officials decide the case on the act of closeness of the guilty with powerful lobby. In India if an officer has backing of strong lobby at higher levels he can commit any blunder he is excused and on the contrary if an honest officer commit a petty mistake, heaven may fall on the earth. This philosophy of governance applies at all levels in India. Bank Branch Like Paan Shop - One-Man ATM Size Branch -Will It Suit Bank Employees? Now the shape of Bank Branches will be Like Pan Shop or Tea Shop - New Branches will be One-Man ATM Size Branch -Will It Suit Bank Employees? If not -Will Union leaders try to nip in the bud? Bitter truth is that even now there are more than fifty percent of branches which are manned by hardly two or three persons and the employees working there are unable to get sanction for leave and unable to even meet their family members. Bank workman and officers come to office early in the morning and go back to home late in night. Neither spouse nor children find any interest in talking to such tired family head. Many employees working in banks have to sit late and perform on Sundays and holidays to complete their day -to- day work. This is because of huge work load to be completed on the same day and due to the fact that nature of work is such which cannot be kept pending for following day. Future of bank employees therefore does not lie in respectable wage revision but in respectful living and comfortable family life. If family is unhappy, the employee cannot perform with pleasure in bank and the quality of work done will invariably be below the mark. Is bank management bent upon earning profit only by exploitation of employees and only by saving staff cost? Banks Resort to Opening One-Man Branches For most the mental image of an HDFC Bank branch is that of a high street air-conditioned office, bustling with customers. But the dozens of one or two-man branches the bank has been recently opening in distant outposts are a far cry from this popular perception. With RBI linking opening of new branches to opening
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one in an unbanked area banks have no choice but to go to far out places. Although now a compulsion, lenders are making a business proposition of it by leveraging technology to reach the last unbanked mile and offer most of their products with minimal additional costs. For banks which are constantly looking to raise funds through the low cost route, such one man branches can help achieve the right product mix. Deposits would be one of our major offerings. Technology apart, costs of operations are another determining factor in many banks opting for single, dual or triple man branches. As per estimates, nearly one-third of a branch cost is salaries with rentals, electricity and other expenses accounting for the remainder. The cost (salaries and rental) of operating a full fledged branch (having six officers and area ranging from 700 square feet to 1,000 square feet) works out around Rs. 27 lakh annually. In comparison, the cost of operating a single man branch in the same area works out Rs.three lakh annually for the bank. NUBE deprecates such moves to open branches in unhealthy environment and states that good work can be wrought only in good working environment.

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CHAPTER - IX
FDI On Retail Trade Mirages And Modest Truths
Government won FDI vote in Lok Sabha and Rajyasabha scripted by slippery arithmetic of political parties. The protagonists project FDI as boom and antagonists as doom. the goal of our dissertation in this article is to enhance the awareness to generate inquiring minds on FDI in retail, of not only the bank employees, but also to galvanize peoples movements for devising new tools of analysis and action without any political overtones, leanings and moorings to ensure that global finance capital serves the interests of citizens and democratic states and not the avarice of owners and managers of capital. With this above perspective a modest attempt ahs been made by me in unveiling the mirages and modest truths of implications of FDI on retail trade. If you examine the realities, it will spell a death knell for farming and millions of people engaged in retail trade it will be the beginning of an end for them Mirages and Modest Truths Having paved the way for MNCs to penetrate the economies of the global South, the globalization of the regions retail sector is rapidly underway with mega retailers vying with each other for the choicest markets. Their recent forays have been in China, and now India. Retailers, as brands, are already supplanting many of the small local business enterprises and traditional manufacturer brands of India. Partnership and trade deals are being worked out between TNCs and local firms. Fid: Holder In Due Course As the latest hub of FDI investment on retailing, India is on the verge of being captured by the corporate giant, Wal-Mart and other foreign retailers like Tesco (UK), Carrefour (France), Metro (Germany). As the worlds largest retailer, Wal-Mart has already launched its wholesale store, Sams Club, in India. (In 2004, Wal-Mart clocked annual sales of $288 b. with 5,332 stores under its control). According to corporates, India represents a $250 b. retail market, growing (at) 7.2 per cent a year, but modern retailing is just starting to emerge. This shows us that India is a huge organic growth opportunity.. A.T.Kearney 2005 Global Retail Development Index describes India virtually a gold mine for retail trade owing to the rising wealth of the consumer (middle) class, with close to a quarter of the population being in the 20-34 age group considered prime game for global marketing agencies. It has listed India as the 6th largest FDI beneficiary, up from 15th position recorded in 2004. Little wonder then, for investors, both MNCs and Indian corporates alike, this reality translates into a market value estimated to be around Rs.9,00,000 crore. Currently, the organised retail trade is estimated around Rs.28, 000 crore and expected to grow to Rs.1, 10,000 crore. The Indian Consumerist Class The reality indicates the threat Indian retailing faces from organized retailers keen on capturing Indias middle and higher-income consumer-class, risen rapidly over the last decade to over 10% per annum even as the large low-income base has shrunk. During the reform period the top most income class has been around 19%. The middle classes have also risen with a population around 300m.active consumers which is higher than the entire population of Europe orthe US. On the other hand the low income class has shrunk considerably .reports confirm that there has been a decline of 15% points in the share of low-income households in Karnataka, Punjab, Haryana , Kerala and Tamilnadu. This consumer class evolution is characterized by some major structural changes such as increased, product availability (in terms of both quality and quantity) increased competition, increased media penetration and control and high profile impact
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advertising. The propensity to consume is facilitated by the surge in finance products owing to steady financial sector reforms in the economy and innovative marketing. Other social and demographic changes and macro economic factors such as rising income level, a large segment of the younger generation, a nuclear family structure, increased media penetration and entry of global consumer products are also responsible for this change. The increased globalization of economy which has led to growing exposure to foreign markets through business and commercial travel and tourism sparking a yearning for global shopping experience. With the rate of interest reduced to over 500 basic points the saving spending pattern underwent a major change. Since then there has been unprecedented housing and automobile boom fuelled through finance or credit. Car sales rose by 16.6% since 2003. The retail trade has become a biggest industry in the world with sales of $7.2t. This rising class of consumers aptly dubbed the consumerist (Seabrook) is naturally considered highly critical to the growth of organized retailing in India. (In a CIlMcKinsey report, this class represents households with an annual income of over Rs.60,000) that a WalMart representative in Delhi corroborated as also roughly in line with China with the Indian consuming class growing from 35 m. families in 1996 to an expected 80 m. in 2005.Thats roughly in line with the US...This is a big opportunity for us. The rise of this class is embedded in the deliberate strategy in the 80s to cater to their affluence, a part of the overall effort to induce growth by and for the affluent. Indian Retailing Indian retailing is largely unorganized representing 98%, spread out unevenly across the country. It affects every type of product of daily consumption - ranging from vegetables to electronics and from stationery items to textiles - with elaborate well-established supply chains, starting from the village level and ending up to the city. It is the largest industry - the fourth largest in the world - contributing 10% to the GDP. It is second largest employer after agriculture employing over 40 m. people (about 7% of total employment) with the highest density of retail outlets. At least 3 crore people are engaged in this retail workforce both in rural and urban areas. This includes small traders in Kiranas, pan/beedi shops, hardware stores, convenience stores and bazaars numbering around 15m, making up the 98 percent. The entry of foreign retailers has affected the Indian grocery trade too. At $90 b. the grocery trade is a big business constituting 50 per cent of Indias retail market that global retailers are desperate to tap. (See table below). (Source opening the Retail trade for FDI by R.Dutta Mainstream weekly Delhi) Year 1996 1997 1998 1999 2000 2001 Source:FICCI The rationale is that the economy would not grow unless the better-off sections were permitted and encouraged to consume more that foreign retailers are in position to provide Indian consumers with a wide variety of products services etc. Little wonder, then, that institutions like the ICICI and IL & FS are also now favoring the extension of loans to retailers. The Government too is opening up this sector to foreign investors. Department of Consumer Affairs commissioned the Indian Council for Research on International Economic Relations (ICRIER) to carry out a study on retail trade for it to make a final decision. In its report, FDI in Retail Sector: India, ICRIER virtually endorsed FDI in the retail trade with merely a few cosmetic cautionary notes. FDI in retailing has however adverse implications. It substitutes domestic investment, displacing local industry and domestic entrepreneurship.
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Growth of Outlets in Retail Trade(million)3 FoodRetailers Non-Food Retailers 2.77 2.94 3.12 3.30 3.48 3.68 5.77 6.04 6.33 6.67 7.05 7.48

Total 8.54 8.98 9.45 9.97 10.53 11.16

This is particularly disturbing as much of the FDIs are by MNCs. Other concerns are for the long-term balance of payment effects of FDIs when profit repatriation begins to outweigh new capital inflows. There is also the fear that a high level of dependence on FDIs by MNCs could lead to erosion of national sovereignty. Known for its anti-unionism and anti-labour practices Wal-Mart and the other mega retailers and their control over small retailers represents a serious threat to Indias food sovereignty. That is, its control over food resources and peoples health. Recently, Wal-Mart workers on four continents united and sued this mega retailer in California, in failing to pay them their due wages and denying them their other labour rights. The entry of corporate giants and expansion of their business ventures in the region will also be at a high social cost. The MNCs introduce their own systems of managerial skills, trading ethics and other extraneous inputs that collide with local traditions and way of life of trading communities in particular and to the people generally. The reach and influence of these foreign firms on the shopping habits for their products with all their associated values of shopping, lifestyles, etc., results in a convergence of and consumerist attitudes among the middle classes, and youth seduced into high spending binges (Shop Till You Drop) and conspicuous consumption. Such rapidly changing consumer habits, tastes and lifestyles that Wal-Martization induces among the middle classes has also serious environmental implication. Gradually, the MNCs will fuel rapid internationalization of the retail trade. Once they establish themselves in the South, mega retailers like Wal-Mart, as is their practice in other countries, will remake shopping in India in its own image, building giant 100,000 sq.ft shopping malls. It is already demanding changes in Indian planning laws to accommodate its future ambitions. The internationalization of the retailing industry and opening up of protectionist barriers to trade are the work of global institutions the WTO, World Bank and IMF. The subsequent implementation of new foreign investment policies has allowed Foreign International Institutions (FIls) to operate in Indian capital markets. The FDI on retailing, however, facing tremendous opposition with public dissent against organised retailing by foreign investors. A number of countries including those in the industrial North have placed severe restrictions on FDI in retail trade. Among the many objections is that these retailers do not source their supplies from local suppliers; indulge in unethical practices, predatory pricing and other monopolistic measures motivated mainly to grab a chunk of the local market. The concern over the so-called WalMartisation of India is, thus, real; its entry will sound the death knell of unorganized retailers to a large extent. The need therefore is to prioritize food security for the majority poor and low income groups food that is nutritious, accessible and culturally acceptable rather than a food culture based on the wants of the middle and rich class that Wal-Mart and corporate retailers generate and promote. The experience of protest movements in other countries against these mega retailers opposing their predatory practices and their human rights abuses is a major guide in the demand to prioritise food security. It is however necessary to first dispel claims on the so called benefits of the retailing practices of the mega retailers - unlimited choice of products they offer consumers with the illusion of the Good Life and the so-called Happy Consumer. With this perspective we give below the corporate mirages and our modest truth on food retailing .Our aim, objective and focus is food security for the people and not Wal Mart culture for the rich. MIRAGE: The entry of the foreign retailers into India in the long run benefits not only consumers but even small retailers providing them with a positive impact on the supply chain in different sectors of the economy.

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MODEST TRUTH: Not so! Local suppliers and traders forming part of the traditional supply chain in countries of the South have to face a number of problems of adjustment. For instance in Thailand they continued to fade dislocation. The foreign owned retailers grabbed a big share of the retail market, often through unethical means. Reportedly, small retailers demonstrated against the unfair trading practices by these mega retailers. The Thai Government was forced to impose restrictions on their expansion and promised the protesters to take up their cause with the WTO at the coming Hong Kong meet. It further introduced a package of safety nets consisting of measures to strengthen the marketing of the products sold by small retailers, provision of easy loans and a state funded agency, Allied Retail Trade Co., (ART) to moderate on behalf of the small retailers. Another case is that of Indonesia where riots (in Jakarta) against the mega retailer in 1997-98 had erupted.. Contrary to the assurance given to the small local retailers that they would gain a great deal by linking themselves to the global markets only a handful of such traders short listed and selected from among these by the mega firms-derived any benefit. The majority of the local suppliers, on the other hand, were rejected as they failed to quickly adjust to the strict quality standards and specifications laid down by these mega retailers. A study by the FAO showed that foreign mega retailers were often blind and insensitive to the transitional problems that small retail shops experience when forced to link up with these foreign retailers. These problems include rejection of their supplies, difficulties in disposing of rejected quantities, inability to invest in the risky forms of supplies, delayed payments, denial of loans or credit facilities by the organized retailers, etc. Furthermore, due to its adverse implications, FDI in the retail trade is a highly problematic. As such, even the developed industrial North have imposed restrictions on FDI retailing and not merely by countries in the South: France enacted the Raffairins Act of France in 1996 that regulated the growth of hypearmarkets larger than 300 sq.ft. Germany has introduced more stringent regulations; On May 6, 2005 in the town of Jonquiere, Quebec, Canada, Wal-Mart employees forced the closure of a Wal-Mart store following its victory to form a union. At this same time hundreds of Canadians demonstrated against this mega retailer for sacking its 200 employees under a false pretext. China has restricted FDI in retailing to only joint ventures and at specified locations subject to a ceiling on the number, limiting foreign equity holding to less than 49 percent, etc. Malaysia demands that FDI should be routed through joint ventures, with a minimum of 30 percent of the equity held by the bhumiputras. There are minimum capital requirements for foreign retailers in Sri Lanka. The Philippines has imposed sourcing and reciprocity requirements on foreign retailers; Thailand has zoning restrictions for mega retail shops. Apart from restrictions being imposed on these organised retailers, there have been widespread protests and demonstrations against Wal-Mart. For instance, September 2005, at Peterdam, Holland, residents rallied in protest against Wal-Mart setting up shop in the Burdeck Street Route 7 corridor that will involve a rezoning of a plot of land for the purpose. In 1994 in a number of States of the US a decade-old campaign against Wal-Mart exploded. Demonstrators chanted One, Two, Three, Four we dont want your Wal-Mart Store opposing the opening of new mega stores;
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In China, our international affiliates UNI(union Network International)report that the Wal-Mart factory employing 10,000 mostly young girls went on strike in an attempt to form a union. Issues at the factoryincluded lack of sick leave and medical care, child labour, long work hours and lack of enforcement of minimum wage laws. Nearly 7 months later these workers still do not have a union and the same issues prevail.

In recent years, citizens groups and some governments are beginning to wake up to some of the malpractices of these mega retailers. In 2000, the UK Governments Office of Fair Trading launched at) inquiry, the Competition Inquiry, info the price competition among 24 supermarkets within its terms of reference. The Commission questioned whether price trends in the UK compared with abroad and if fall in wholesale prices were fully reflected in prices charged to consumers. The Commission identified 27 practices by supermarkets that were against the public interest. (It recommended that a code of practice between retailers and suppliers be enforced). These business practices, it stated gave the UKs mega supermarkets substantial advantages over other smaller retailers whose competitiveness would suffer as a result. Exposed regular selling, by all the 5 mega supermarkets, has some regularly purchased products below cost: the so-called Known Value Items (KVls). Price flexing (that is the way supermarkets sell the same product, but at different prices depending on the location in the UK) was found to practiced by the MNCs Safeway, Sainsbury and Tesco, thus distorting competition in the supply of groceries); Over-ordering goods at a promotion price from a supplier which are then sold into retail at a higher price without compensating the supplier; Charging compensation from a supplier when the multiples profit on a product is less than it expects; Seeking discounts from supplier retrospectively which reduce the price of the product agreed at the time of sale. requiring suppliers to purchase good for services from designated companies, such as labeling companies from whom the supermarkets often also received a commission.

Further, in 2005, two American1nvestigative reporters using a hidden camera in a garment factory doing business with a number of American firms like Wal-Mart, Kohls in Bangladesh producing Sara Lee brand of sports pants exposed how these firms employed cheap Bangladeshi labour to produce these branded garments (* in http://msqbc.msn.co}ll/id/8243331/) Finally, whatever benefit consumers will acquire, it is at best a short-term measure. In the long run they will be forced to pay dearly as a result of the creation of monopoly. The former director of the mega retailer; TESCO, warned Indian retail business should not be fooled by partnership offers by global retail giants because they want 100 percent control and eventual ownership. Their strategy is in tune with the infamous 3 Cs marketing ethics; convince, confuse corrupt .In the Initial stages they keep their prices low, offer free gifts to consumers so as to drive out competitors. This may continue even for 2-3 years, since these retail giants have high financial reserves. Once, the local retailers are forced to close their shops, these mega retailers raise the prices. In the UK retail firms operated by MNCs, charged 40 percent higher prices, but in the absence of any alternative, the consumers have to pay higher prices. Once a monopoly or an oligopoly situation is created; -these MNCs buy cheap and sell dear. A similar situation prevails in the agriculture sector. These retailers are encouraging contract farming and a s a consequence, they will be able to force farmers to sell cheap to the MNCs, which will in turn sell them at higher prices to consumers. This is generally referred to as predatory pricing which the retailers claim benefits the consumer - but the interests of the farm producer, small groceries, etc. are cast aside. In short, opening of the retail trade to FDI will not benefit the consumer. Thus, India does not need Wal-Marts! It has a business model so dependent upon squeezing workers and suppliers that it is inimical to economic well-being.
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MIRAGE: The current worldwide retail revolution will certainly lead to some retailers losing out but this is nothing serious as this is just the normal operation of economic forces unleashed due to the introduction of innovative shopping culture that global retailers like Wal-Mart, J. P. Penny contribute to the economy of the South along with such advantages of consumer choice, etc. MODEST TRUTH: However, in business and trade there are other interested groups that get affected. Consumers and suppliers are the most closely involved stakeholders, but there is also the question of the wider environment, and of people as citizens. Firstly, however, is the question: Are shoppers completely happy with everything? The response from these mega retailers is: True! Nothing is perfect! So, why expect mega stores to be providing consumers with the perfect shopping experience! However, one study identified over 150 possible problems with the total shopping experience. These range from the existential (what do I actually need?) to the closely operational (Aisles too narrow), and the like. Apart from wiping out small grocery shops who fail to match the standards or services provided by mega shopping malls like Shoppers Stop, etc., there is the pertinent question: How genuine is consumers choice? When the range of goods and the general price level are very similar across the main competitors, there is really very little to choose from, except location. More importantly, once the shopper is inside the store, the switching costs become very high for that trip. The MODEST TRUTH is that a favorite brand or variety is not in stock may be a nuisance, but most consumers will not abort the trip with the shopping half-completed, and commute, or drive to another store to go through the process again. Consumers may argue about whether to shop at Shoppers Stop or at D-Mart because one stocks Sri Lankan Tea and the other does not, but they are unusual. Again, though these super stores offer consumers an astonishing range of choice, this comes at considerable environment cost -long-distance trucking, excessive energy use. In urban India in especially cities like Mumbai where land is at a premium, the construction of such mega stores are already leading to the destruction of mangrove forests in certain parts of this city already threatened by local land sharks appropriating this scarce property resource to construct mega housing estates for the middle classes. In short, the freedom of choice that drives people into these excesses actually abridges peoples choice, for the predation on the resource-base extinguishes biodiversity. The imagery of effortless luxury through money spreads, not richness and variety, but a true monoculture, in which the pluralism, tolerance and diversity which the West flaunts as its proudest gifts to the world, are increasingly difficult to discern. Do the new shopping culture that these mega stores introduce and created by the out-of-center superstores contribute to increased road traffic and pollution? According to one US study of estimated additional driving costs of Super centers in the San Francisco Bay area concluded that there would be up to an additional 238 m. miles traveled per year. This could cost communities in the Bay area up $256 m. in additional costs for infrastructure repair and environmental degradation. Thus, the question: who bears the costs of the externalities, as economists call them, created by increased road use - by trucks carrying goods to central warehouses and to stores, and by cars traveling and to and from these stores? Further monocropping on intensive farms - as well as the health costs of obesity, diabetes and other degenerative diseases. Are the poor and the old disadvantaged? Have the mega superstores and supermarkets, etc., helped to kill off the age-old, traditional town centres which in the North is well documented and attributed, at least in part, to the growth of such centres? The big retailers claims to efficiency in transport are bogus. Much freight transport is unnecessary- produce could be sold locally. Over a third of the rise in freight transport since the late 70s has been for food, drink and tobacco - which together account for less than 1/10th of the economy. No wonder the mega retailers are such lavish supporters of the British Road Federation. This same problem applies to packaging! According the British Government the stocking policies of supermarkets, largely contributed to non-returnable (packaging) attaining (its) present share of
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the market, while another report states that an EU directive to reduce packaging was the most lobbied issue in the (EU) Parliaments history MIRAGE: The Wal-Mart is a job creation retailer. In the US it creates 100,000 jobs per year. In India, it will generate employment for atleast 10,000 persons at a turnover of Rs. 80325m. MODEST TRUTH: Not so! Adding 100,000 people to Wal-Marts work force does not in any way mean adding 100,000 jobs to the US economy. On the contrary, as and when Wal-Mart expands it also destroys at least as many jobs as it creates and drives down even workers wages. As and when it opens its giant shopping malls, it takes away sales from shops that are already in the local area resulting in these shops having to layoff workers and even closing down. Since this mega giant employs fewer workers per dollar of sales than the smaller shops it replaces workers and overall retailing employment goes down. A recent study, (sited by Klugman) by D. Neumark of the University of California at Irvine and researcher from the Public Policy Institute of California, The effects of Wal-Mart on Local Labour Markets concluded that average wages indeed fell and workers .. ..earn less following the opening of Wal-Mart... , in the area. Thus this claim is no big deal! Even if Wal-Mart open its stores in each of the 35 cities of India it plans, with this turnover, employing 10,000 persons (assuming that the per employee turnover is $1 ,75,000. In a Wal-Mart store in India, each store with a turnover of $51 m). It has been estimated that even if mega retailers were to cover 20 per cent of Indias retail trade, which is not an over-estimate, they will employ only 1.8 lakh persons, driving nearly 8 m. persons out of the unorganised retail sector. The employmentdisplacing effects-on retail trade is clearly very high. To sum up the implications of FDI on retail trade is outlined as under: O It has happened in the United States. Ever since big retail - dominated by multi-brand retailers like WalMart - entered the market, farmers have disappeared, and poverty has increased. So has hunger. Today, not more than 700,000 farmers remain on the farm in America. Poverty has grown, and hunger has broken past 14-years record. O In Europe, despite the dominance of the big retail, every minute one farmer quits agriculture. This is because farmers income across US/EU is on a downslide. O According to a report, farmers income in France has come down by 39% in 2009, having already slumped by 20% in 2008. More recently, in Scotland, low supermarket prices are being cited as the reason for the exodus of dairy farmers. Low supermarket prices in Scotland have forced irate farmers to form a coalition called Fair Deal Food to seek better price for their farm produce. O Studies have shown that Tesco has paid producers 4 per cent less price than the average prevailing in the open market. It is therefore futile to expect the supermarkets rescuing farmers in India. O Despite the destruction of farming globally by the supermarkets, the Ministry for Commerce & Industry is gung-ho about the virtues of foreign direct investment in multi-brand retailing, which means allowing the big players like Wal-Mart & Tesco to swamp the Indian market. O The agriculture sector needs well functioning markets to drive growth, employment and economic prosperity in rural areas, says a discussion paper drafted by the Department of Industrial Policy and Promotion. O I find a number of economists and researchers singing chorus of praise for the role the supermarkets can play. But the entire hypothesis is based on a deliberately prepared flawed basis. O Do the supermarkets really benefit? Since 2006, India has allowed a partial opening up of the retail sector. Has these retail units benefited the Indian farmers and for that the consumers? The answer is
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no. The argument is that the supermarket chains will squeeze out the middlemen thereby providing higher prices to farmers and at the same time provide large investments for the development of postharvest and cold chain infrastructure. O All these claims are untrue, and the big retail has not helped farmers anywhere in the world. O Even in Latin American countries, including Brazil, Argentina, Uruguay and Colombia, where supermarkets, most of them owned by multinational giants, now control 65 to 95 per cent of supermarket sales, farmers have been forced to quit agriculture. O If the supermarkets were so efficient and provided dynamism, I would like to know why the US is providing a massive subsidy for agriculture. O After all, the world biggest retail giant Wal-Mart is based in America and it should have helped American farmers to become economically viable. O But it did not. American farmers have instead been bailed out by the government, providing a subsidy of Rs 12.50 lakh-crore between 1995 and 2009, and this includes direct income support. O And that is why the American farmers are being supported in the form of direct income support by the American government. O It is the massive farm subsidy that supports agriculture in the US. If this subsidy, classified under Green Box for WTO calculations, is withdrawn (as analysed by UNCTAD-India), US agriculture collapses. O A latest 2010 report by the Organisation for Economic Cooperation and Development (OECD), a group comprising the richest 30 countries in the world, states explicitly that farm subsidies rose by 22 per cent in 2009, up from 21 per cent in 2008. O In just one year in 2009, these industrialised countries provided a subsidy of Rs 12.60 lakh crore to agriculture. And it is primarily for this reason that the farm incomes appear lucrative. O Left to big retail alone, European farmers would have packed up by now. O In India, it is markets that sustain the farmers and not subsidies. We are therefore importing a failed model from America. Regarding farm incomes, let me illustrate. Till 1950, a farmer in America used to receive about 70 per cent of every dollar spent on food. In 2005, it had come down to not more than 3 to 4 per cent. If the middlemen have been squeezed out, as is being made out, farmers income should be increased. O Why it has instead gone down drastically is because farmers income is being devoured by the new battery of middlemen swamping on him like a vulture. O That is why the US/EU governments are providing subsidy support to keep farmers alive. O Big fish is known to eat the smaller ones. Supermarkets exactly perform that function. They replace the plethora of small middle-men. O The arhtiya (commission agent) clad in a dhoti-curta, is replaced by a smartly dressed up middlemen. An illusion is therefore created as if the supermarkets have removed the middlemen from trading. O But in reality, the big boys now share the commission between them. The new battery of middle-men, who replaces the traditional middle-men, are the quality controller, certification agencies, packaging industry, processors, wholesalers etc.

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Do supermarkets help remove poverty? Based on biased studies by the consultancy firms and some institutes, the government believes that supermarkets will create employment and therefore help in ameliorating poverty. O This too is flawed assumption. Lessons need to be drawn from a 2004 study done by Stephen J Goetz and Hema Swaminathan of the Department of Agricultural Economics and Rural Sociology, at Pennsylvania State University in the United States. O The authors measured the impact of Wal-Marts massive retail boom on poverty in various American states. O In the past two years, Tesco had promised to create 11,000 jobs and Sainsbury another 13,000. O Tesco had created only 726 jobs, while Sainsbury actually terminated the services of 1600 of its existing employees, leaving 874 people unemployed. O How do we expect Tesco/Sainsbury to create additional employment in India when they have failed to stand up to their commitment back home? O Big retail does not create additional employment but actually destroys the existing employment. Here is a comparison which should help remove the wool from your eyes. The Indian retail market is estimated to be around $ 400 billion with more than 120 million retailers and employing over 400 million people. O On the contrary, the US-based giant Wal-Mart, a global leader in big retail, also has a turnover of US $400 billion and employs only 2.1 million people. Which one of these retail systems provides employment is crystal clear. O If one thinks Wal-mart is here to create employment opportunities it is rather otherwise. Simply put, they are investing in India to make money. FDI in retail: Whom are they kidding Prime Minister Manmohan Singh projects FDI in retail as a boon for the agricultural sector. Unfortunately, if you examine the realities, it will spell a death knell for farming. It will be the beginning of an end for Indian farmers. Despite the destruction of farming globally by the supermarkets, the Ministry for Commerce & Industry is gung-ho about the virtues of foreign direct investment in multi-brand retailing, which means allowing the big players like Wal-Mart & Tesco to swamp the Indian market. The agriculture sector needs well functioning markets to drive growth, employment and economic prosperity in rural areas, says a discussion paper drafted by the Department of Industrial Policy and Promotion. I find a number of economists and researchers singing chorus of praise for the role the supermarkets can play. But the entire hypothesis is based on a deliberately prepared flawed basis. Are we not deceiving the nation by presenting wrong facts? At stake is the livelihood security of tens of millions of hawkers, small traders and farmers. How can any sensible government that claims to work for the aam aadmi actually bring in massive destruction of livelihoods in the name of foreign direct investment? Why is our government so keen to pull out the US/EU economy from recession and in turn push India into a headlong depression?

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I dont know how therefore economist, policy makers and the ministers can think that big retail will provide employment while the evidence from across the world shows that big retail has displaced millions who are already employed. Are we not deceiving the nation by presenting wrong facts? At stake is the livelihood security of tens of millions of hawkers, small traders and farmers. How can any sensible government that claims to work for the aam aadmi actually bring in massive destruction of livelihoods in the name of foreign direct investment? Why is our government so keen to pull out the US/EU economy from recession and in turn push India into a headlong depression? When we see what is happening in our country now days, we stand confused. Sometimes as to which direction the country is heading to. One is being reminded of the last stanza of an anonymous poem about a perennial sea farer. Sailor! Sailor! Where do you come from From a distant land, I do not recall, Sailor! Sailor! Where are you headed to To a distant land, I do not know, This is perhaps the story of globalization which will be narrated to future generation in similar fashion some decades later.

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CHAPTER X
The Crisis Is Upon Us
Maruti Suzuki and Its Workers When workers rise up to demand their legitimate rights as guaranteed in the Indian Constitution and protest against a corporate entity like Maruti Suzuki, they become criminals and cease to be bona fide citizens in the eyes of the State; they even cease to be voters for the otherwise vote- hungry politicians. It is no longer a matter of the state and its administration being in perpetual limbo; they wield their power to criminalize the working class to aid global capital. Workers and their struggles and the brutal repression by the state even cease to be a news story for the corporate media as such events are blacked out. What happened at Kaithal bears testimony to this and is the reason for this commentary. The long and intense struggle of the workers of the Maruti Suzuki plant in Manesar, Haryana was the assertion of collective bargaining for the right to register a trade union fulfilling all norms as stipulated by the Trade Union Act. Moreover, last years conflict of 18 July happened right in the middle of discussions on wage revisions that the Maruti Suzuki Workers Union (MSWU) was holding with the management. The incident led to the termination of 546 permanent and 1,800 contract workers by the com any, confinement of 147 workers in the Bhondsi jail in Haryana and 66 non- bailable warrants. The management and the Haryana police and administration squarely blamed the workers for the death of the human resources (HR) manager much before investigations were over. Therefore, it is only the workers who have been demanding an independent inquiry into the death of the manager. Eversince this death, the vibrant struggle of the MSWU gathered support across Haryana and the country . One reason is that the union adopted a wide range of democratic and peaceful means of protest such as appeals, petitions, litigation, marches, cycle rallies, sending of delegations and hunger strikes. All these means of protest form the basic democratic right of workers as guaranteed in the Constitution. However, in an act of brazen cowardice and use of authority, a democratically elected government resorted to brutal repression. What was being planned in Kaithal with much hard work and labour of the MSWU and the local panchayats and what was done to scuttle it by the State has grave implications not only for the rights of the Maruti workers but also for the entire working class movement in this country.The ingenuity of capital and state in the neo-liberal paradigm is manifest in the series of swift and sure undemocratic actions against workers across the Manesar-Gurgaon industrial belt and in the entire national capital region. An Awakening The struggle of the MSWU is not simply a revival of the trade union movement at one of its bleakest moments in history. It is an awakening of an entire new generation of workers that dares to question the coercion and violence of capitalist development. The Haryana governments response to these just demands with such brutal violence and arrests has made criminals of workers who make the cars the privileged drive and whose back-breaking labour contributes to the national hysteria of growth. It is precisely at this time that the Constitution can be shaken and rattled to see if there remains today any vestige of rights for workers and citizens who question global capital. And the states cowardice is actually the response of corporate India in sheer panic. There is no impending macroeconomic crisis; this is the crisis.

The Public and the Private: Time to Introspect!

Dare To Struggle Dare To Win! In the early 1950s, workers led a famous struggle against the increase in tram fares in Calcutta by one paisa, and had succeeded in rescinding the increase. In the sixties, leaders like Ahilya Rangnekar and
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Mrinal Gore had led a remarkable struggle against price rise in Bombay when housewives came out to the streets beating their metal utensils. This period of price rise had also seen a wave of strike struggles, as inflation eroded the real wages of the workers, culminating in the great railway strike of 1974. From the mid seventies onwards there were impressive kisan struggles for remunerative prices, as the terms of trade got tilted against the peasantry as a means of combating inflation, culminating in mammoth rallies at the Boat Club in Delhi. In short, for many decades after independence, the expression of popular anger and resentment through public protests was a perfectly normal practice, and was accepted as an integral part of our democratic polity. The contrast with the present cannot be greater. Prices are galloping now: the price of tur dal has increased to Rs.90 or more per kg.The open market price of rice has increased in leaps and bounds and further increases are predicted. And yet, there is hardly any street protest over this galloping inflation. For many years now, strikes have been confined, with a few exceptions, to just one-day or two-day token strikes, even though the working class has suffered greatly in the recent period. And the great peasant movements and rallies are largely a thing of the past (except occasionally against local SEZs, or a few other localized movements). The entire period of the agrarian crisis has been marked by an enormous wave of peasant suicides rather than peasant struggles . Of course, protest movements are there, but they no longer acquire, or even threaten to acquire, the dimensions that such movements used to acquire in the past. The question that obviously arises is: why this difference? Three possible explanations can be immediately advanced, each of which has some validity, but is insufficient, either on its own or conjointly with the others, to explain this difference. The first is the weakening of the socialist project that has followed the collapse of the Soviet Union. This explanation may be objected to on the grounds that the Communists, inspired by the socialist vision enshrined in the Soviet Union, were not the only ones who led such struggles, so that the collapse of the Soviet Union should not make that much of a difference. But it is only fair to say that the collapse of the Soviet Union has led to a collapse of socialist visions of all descriptions. It has been accompanied, if not strictly followed, by what has been called a collapse of the utopian energies of the nineteenth century. And since protest within any society always derives nourishment from a vision of a possible beyond, this setback to the socialist project has had the effect of stifling protest. The second explanation focuses on the changed role of the middle class. The middle class has traditionally played a crucial role in highlighting peoples distress, in carrying the message of struggle to the distressed, in making one group of the distressed aware of others like them, through its use of the pen and the media, and in providing leadership to protests and movements. In the neo-liberal era however, even as the other segments of the working population, such as the peasants, the workers, the agricultural labourers, the artisans and the petty producers, have suffered, the middle class, especially the upper segments of it, have benefited from the new dispensation. The message of protest that comes to the working people therefore is feeble and muted, which restricts the scope of such protests. The problem with this explanation too is that, while containing an element of truth, it is inadequate. Leadership, either from middle class origins, or from peasant origins but with close contact with the middle class intelligentsia and substantial exposure to the world of theory, was undoubtedly crucial for the radical movements of the forties and the fifties. But the peasant mobilizations during the late seventies on the price issue, which were far from having any revolutionary agenda, were often led by persons from the peasant stock itself, with little contact with the middle class intelligentsia and little exposure to the world of theory. Why have such movements not come up in response to the agrarian crisis? The third explanation would see the great protest movements of the post-independence period as a sort of natural historical sequel to the freedom struggle and the variety of uprisings it had unleashed. It would see the current quietude as an inevitable phenomenon that ultimately ensues, when a major social upsurge and the waves that come in its wake have finally subsided, and society has got back to normalcy. It would see social revolutions as ultimately giving way to a settled society under the new order; likewise it would see
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the freedom struggle as ultimately creating a settled new order, where its reverberations in the form of protests have finally come to an end and business as usual takes over, though in an altogether new setting. In short, it would see the transition from contestation to routinization, from collective popular assertiveness to an empirical atomism of individual quotidian* (*daily or everyday ) existence, as inevitable, and a world of permanent contestations as unnatural. The fact of such a transition having followed major revolutions, including successful liberation struggles, cannot be denied. But why it happens needs to be explained; it cannot just be brushed aside as inevitable. What we wish to argue is that the transition from a world of protests to a world marked by their relative absence is linked to another transition, namely from a dirigisme*(*a policy of state intervention and control in economic and social matters) to a neo-liberal economic regime. The transition to a neo-liberal economic regime has often been viewed as entailing a loss of sovereignty on the part of the nation-State. The perspective underlying this view however is erroneous: it takes the Nation-State as a given, and examines the degree of its autonomy vis-vis metropolitan States. But the real issue relates to a fracturing of the nation itself, and hence to a change in the character of the State that presides over it. It is not that the Indian State presiding over a given Indian nation loses its assertiveness vis--vis the metropolis; but, rather, a hiatus develops within the Indian nation itself, or what was hitherto the Indian nation, with the bourgeoisie increasingly seceding from it to form a strategic alliance with the metropolitan bourgeoisie, as Indian capital becomes increasingly integrated with global financial capital, and the State increasingly representing the exclusive interests of the bourgeoisie, and thereby also becoming a strategically of the metropolitan State-system. What this leads to is an increasing political exclusion of the masses from even such power as they enjoyed in the period after independence, a coming to an end of the apparently inclusive nature of the post-colonial State, where it appeared responsive to the needs of all sections of the population (even while building capitalism under the umbrella of dirigisme). From being a State that appears to represent the interests of all, it becomes increasingly a State that represents the exclusive interests of the bourgeoisie, especially the big bourgeoisie, that is itself getting integrated with global capitalism, under the plea that the interests of all are served by the promotion of the interests of the big bourgeoisie. We do not have to go far to seek an example of this changed perspective of the State: the Prime Minister of India himself stated that the two Ambani brothers, currently at loggerheads, should make up in the interests of the nation, and even offered to mediate between the two. The Ambanis interest in short is the nations interest! Of course, this disempowerment of the people, their political exclusion, occurs within a framework of democracy, and is therefore constrained by this fact; it is nonetheless a real phenomenon. An obvious consequence of it is to see all strikes, all resistance, all protests by the working people, which are directed either against big capital directly, or even against the State but raising demands whose satisfaction would undermine the States ability to serve the interests of big capital, as being ipso facto against the nation. This is not necessarily expressed directly in these terms. The usual expression it takes is to say that such strikes and resistance will undermine the growth performance of the economy; by the same token, serving the interests of big capital is justified in the name of bolstering such growth performance. In short, promotion of the growth performance becomes a euphemism for serving the interests of big capital, and is apotheosized as such. When the so-called growth performance is impressive, then that is supposed to justify the States promotion of the interests of big capital; and when it is not, then the usual argument advanced is that more needs to be done by way of promoting these interests. The relevance of growth performance for an improvement in the lives of the ordinary working people is scarcely ever discussed. What is more, the focus on growth performance itself increasingly gets justified not with reference to any improvement it brings in peoples lives, but with reference to Indias status and power in the emerging world. The need for the country to emerge as an economic superpower, which is increasingly taken as both self-evident and overriding everything else, is supposed to justify the emphasis on growth performance. This we-must-emerge-as-an-economic superpower discourse is intrinsic to the ideology of finance capital and has always been so. Even as the nation, as it emerged from the freedom struggle, gets fractured, even as the bourgeoisie gets increasingly integrated
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with the metropolitan bourgeoisie, it justifies this fracturing of the nation in the name of the nation! Or putting it differently, it surreptitiously substitutes one concept of nation for another, pretending all the time that the two are identical: it moves from the concept of the nation as a unified entity against imperialism to the concept of the nation as a hegemonic entity, both vis--vis the domestic working people and vis--vis other smaller or neighbouring nations, under the umbrella of an overall strategic alliance with imperialism. The promotion of the interests of big capital is justified in the name of the nation in this latter sense, of an entity allied with imperialism exercising hegemony in the neighbourhood. The fact that the interests of the people needs to be sacrificed for the sake of the nations emergence as an economic power is increasingly taken for granted. An example will illustrate the point. The Indo-ASEAN Treaty which has been criticized as being harmful to the interests of the petty producers, has been defended by the government, and the bourgeois media, not on the argument that such claims are invalid, but on the grounds that this treaty is essential for Indias emergence as a big power, that without it China would steal a march over India in the big power race! Intrinsic to this change which comes in the wake of neoliberalism is a growing intolerance of protests by the people, which is symptomatic of their political exclusion. This intolerance is expressed by banning bandhs altogether; banning strikes in a whole range of activities which are not confined only to essential services; pushing the venue of mass rallies far away from the city-centres; and withholding permission for demonstrations inside city limits. In all these moves, a crucial role is played by the judiciary. Since unlike the other organs of the State it is not accountable to anyone and does not have to win the support of the people, it has the advantage of being able to take measures, with impunity, to curb the assertiveness of the people, an advantage that was amply demonstrated when a judge of Calcutta High Court simply decreed a ban on demonstrations during certain specific hours, just because his car got held up by one! But then, it may be asked: political disempowerment of the people may be ingrained in the structure of a neo-liberal economy; but why do the people accept it? How does this disempowerment get thrust on them without evoking massive resistance? This is because the capacity for resistance is closely linked in our society to the balance between the public and private sectors which undergoes a fundamental shift under neo-liberalism. The argument can be stated as follows: The degree to which protests and resistance are common in any society is intimately linked to the degree to which the working class is effective in its strikes and industrial action... The second of these assertions derives its validity from the fact that in a society with a substantial public sector, and hence with an ideological commitment to the existence of a public sector, the private sector itself feels constrained by this very fact in its dealings with the workers. And the workers even in the private sector get emboldened by this fact: in a crunch situation if it is established that private employers are disregarding the legitimate demands of the workers, then the State can always be asked to step in; and a State with an ideology of commitment to the public sector, will not hesitate to do so. Thus the capacity to resist on the part of the workers, and hence by implication, of the other sections of society, is greater in a dirigiste regime than in a neo-liberal one. The transition to neo-liberalism is associated with a decline in the capacity to resist on the part of the workers and other sections of the working people at the economic level, and hence at the political level too. This general decline in the capacity to resist at all levels fits in well with the objective of the neo-liberal project, which is to fracture the earlier nation, to redefine the nation, and to harness the State for the promotion, exclusively, of the interests of big capital allied to global finance capital. Superimposed on this general decline in the capacity to resist that arises from the structural changes taking place in the economy is the set of specific hurdles set up by the judiciary and the executive against any form of resistance. It is interesting that the same judiciary that sets up barriers against resistance by the people by banning strikes and bandhs is very humane when it comes to directing the government to provide food security and other welfare measures to the people. The idea is to do good to the people, but deny them any subject role in the process of good being done to them.
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There is yet another major contributory factor in a neo-liberal economy to the process of undermining of the peoples capacity to resist. This exists in the process of globalization itself. Centralization of capital always plays the role of weakening working class resistance. If a capitalist owns ten factories producing cloth, say, then the workers in any one factory will have more difficulty in taking action, since the capitalist can shift production to other factories, than if the capitalist owned only that one factory. Likewise, since workers are organized nationally, globalization tends to undermine their resistance. The free movement of goods across countries means that the possibility of imports replacing domestic production puts a limit to working class action. Likewise, the fact of globalization of capital means that workers militancy in any one country threatens to make capital relocate elsewhere, and hence curbs itself. Most importantly, however, the process of globalization of finance forces the State to take actions that maintain the confidence of investors, a euphemism for speculators, in the economy. The State under neoliberalism, we noted above, acts in the exclusive interests of the big capitalists who are integrated with globalized finance capital. But this is not just out of volition; even if the State had other intentions, unless it imposed controls on cross border financial movements, it would willy-nilly act in a manner that conformed to the caprices of globalized finance capital, and these necessarily are such as to prevent the capacity for resistance among the people. In short, the neo-liberal regime does not just victimize the people; it has automatic mechanisms to ensure that the people cannot resist their victimization. By contrast the preceding dirigiste regime was more conducive to popular resistance; and judging by that experience one may generalize that dirigiste regimes within a democratic polity are in general intrinsically more conducive to the creation of an ambience of workers, and hence peoples, resistance. There is a further consideration, namely a dialectics of political exclusion that is in some ways the very opposite of what is usually believed. Such exclusion, far from evoking resistance as is often imagined, has usually the very opposite effect of sapping the capacity to resist on the part of the people. Just as a state of starvation, at an individuals level, reduces the capacity to garner food; or a state of unemployment, at a social level, reduces the bargaining strength of the working class, likewise a state of political disempowerment, within and despite the formal framework of a parliamentary democracy, reduces the capacity for resistance on the part of the people, including the capacity for resistance against economic distress. In short, empowerment feeds upon itself, just as disempowerment feeds upon itself. This disempowerment of the people has a mirror image in the dialectics of empowerment of the big bourgeoisie. The intervention capacity of the big bourgeoisie progressively increases as we move away from dirigisme to neo-liberalism. The greater power of the big bourgeoisie under neo-liberalism that we mentioned earlier has a concrete counterpart in greater direct corporate control over society and the State. The current scene in the United States, where corporate entities opposed to the new healthcare plan of President Obama, are systematically creating mass disturbances at meetings ostensibly called to discuss these plans in small towns across the country, to a point where some are even talking about the U.S. being on the verge of fascism is instructive. Two caveats are needed here. First, to say that political disempowerment of the people facilitates further disempowerment should not be taken to imply that the class distribution of political power at any time, even within the confines of a bourgeois State, is a mere unstable equilibrium which may move one way or another depending upon chance factors; i.e. a chance displacement of the equilibrium at any moment would give rise to a cumulative movement away from it. Such is not the case. The proposition about disempowerment of the people feeding on itself does not refer to chance disturbances from some initial equilibrium; it refers to a context where structural changes are being undertaken in the economic regime, with adverse implications for the people which become apparent not necessarily immediately but only over a period of time. In other words, if privatization of public sector units is occurring, which increases the workers insecurity, if employment in the public sector is declining because natural attrition occurs against the background of no fresh recruitment, if public sector work is being outsourced to the private sector, i.e.
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if in general the balance between the public and the private sectors is changing against the former, where the workers enjoy more power because their economic employer also happens to be open to political pressure because of its political accountability, then in such a context the political disempowerment of the people would have a cumulative effect. The proposition about disempowerment being cumulative (under circumstances just referred to) is the opposite of what is usually believed, namely that as far as the workers and peasants are concerned, their political exclusion leads to protest and resistance, instead of precluding it. The issue here is one of temporal frame. Political exclusion does call forth strong resistance but only after a long period of time. The classic example of this was the resistance against the oppression of the erstwhile feudal rulers that got built up in the 1930s and the 40s all over the country, which had immense force precisely because it had been suppressed for so long. Such resistance, when it comes, therefore has the force of a tidal wave; but it takes much longer to build up. But political inclusion has the effect of producing greater assertiveness and resistance among the people as part of an ongoing dialectic. The two contexts therefore must be distinguished. The foregoing has a number of important implications. The first concerns the entire issue of the private versus the public. The need for a public sector has been discussed in the past on the basis of the social goal of self-reliance, for keeping metropolitan capital at bay, since the scale and nature of investment required for this task can be undertaken in an underdeveloped economy only under the aegis of the State. The need for a public sector has been discussed in terms of the fact that social objectives cannot be met, in the sphere of banking for instance, by relying on a private sector propelled by the profit motive. The need for a public sector has been argued on the grounds of responsible decision making, not motivated by speculative considerations, an argument that has been revived strongly of late in the wake of the global financial crisis. The preference for a public sector has also been articulated on the grounds that it is accountable to society at large, not just to its shareholders (which private units are supposed to be, though they rarely are even this). But in addition to all these arguments, there is another powerful one that emerges from the foregoing, namely the public sector is an important means of maintaining the capacity to resist of the working class, and hence by implication of the people as a whole. Since such capacity is the essence of democracy, the public sector is needed above all for the preservation of democracy. It is no accident that France has seen some of the most determined resistance in recent years against neoliberal policies: this has been inspired largely by the strike struggles of workers in the public sector which, in France, continues to remain very important. The second implication is equally far-reaching. Since the objective of the welfare state is to improve the conditions of the people, not just in the sense of making them materially better off, but of enabling them to capture the subject role in history instead of remaining mere objects, must strive towards this end, for which the promotion of the public sector as a major engine of growth must be an important means. Private sector-led growth not only does not improve the material conditions of the people, accompanied as it is by a process of primitive accumulation of capital, but it actually saps the capacity of the people to resist this primitive accumulation. The public sector therefore must play a leading role for growth and industrialization even within the present order. But the very property of the public sector that we have listed as its virtue would be seen by many, including some on the Left, as its biggest vice. We have argued that public sector workers, precisely because they can combine economic struggle with putting political pressure upon the State, have a greater capacity to mount struggles than private sector workers. But this, it would be argued, constitutes precisely the weakness of the public sector, since in a competitive environment, public sector products will get out-competed by the private sectors, because the former is more prone to working class militancy and arm-twisting. This is certainly a valid point, but what it implies is the very opposite of what its proponents advocate. What it shows is that success, under capitalist conditions and in terms of capitalist criteria, is incompatible with assertiveness on the part of the workers, and hence with authentic democracy.
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This is a perfectly valid proposition. Capitalism is fundamentally anti-democratic. If democracy is to be preserved and promoted, then not only should capitalism be restrained by having a weighty public sector, and for that purpose having an economic regime that is different from neo-liberalism, involving for instance control over cross-border capital flows, but the public sector itself must be run differently from the way the private sector is run. Instead of bowing to the logic of neo-liberal capitalism and making the public sector a clone of the private sector, and for that purpose snuffing out the possibilities of protest and resistance that exist for workers in the public sector, it is necessary to alter the neo-liberal regime itself in order to preserve a public sector that is not a clone of the private sector. This is essential for democracy. To be sure, the nurturing of the capacity for resistance by the people must be accompanied by the development of an alternative work culture and work ethic. The public sector if it is to serve the needs of democracy must be different from the private sector, by being the location both of resistance and of an alternative work motivation. Under feudalism the motivation for work came from the use of force, or reliance on tradition which again was backed up by force. In capitalism such motivation comes from coercion in another form, namely the threat of the sack which is always dangled over the workers head, and which entails his or her being thrown to the reserve army and hence destitution. Authentic democracy requires an overcoming of all such coercion; it requires an alternative motivation for work. This motivation can only be working for the common good. And this motivation must find expression even within bourgeois societies in the work culture and work ethic of the public sector workers. Political awareness, class consciousness, not only expresses itself through resistance; it also expresses itself through an alternative work motivation. Hence, instead of acquiescing in their rights being truncated for the sake of competition within a capitalist universe, and hence in an abridgement of democracy, the workers in the public sector, and indeed the workers as a whole, have to struggle for a regime change, away from neo-liberalism, to preserve their own rights, their own capacity to resist, and hence that of the people as a whole. We do not believe that capitalism will tolerate this state of affairs where a public sector continues to exist and remain a beacon for resistance for society as a whole. But that is only another way of saying that we do not believe authentic democracy to be compatible with capitalism. But whether or not this is compatible with capitalism, the duty of the welfare state must be to prevent the subservience of the workers to the logic of capitalism. There is a tendency even within the Left to apotheosize the so called growth performance, in whose name the State becomes an unabashed servitor of the interests of the big bourgeoisie. Sections of the Left often do so, despite their diametrically opposite class orientation, because of a belief that the development of the productive forces is historically progressive and hence a task that necessarily has to be carried forward. And the growth rate is seen as an index of the pace of development of the productive forces. This belief on the part of sections of the Left however is wrong.. There are no productive forces independent of the strength, motivation and consciousness of the proletariat. The obvious sphere where the revolutionary nature of the proletariat will manifest itself in developing productive forces in a socialist economy is in work motivation. This alternative work motivation can be already incorporated into the functioning of the public sector in a bourgeois underdeveloped economy, provided that this public sector is not tied down with the logic of capitalism. Of course, it becomes a base for launching the struggle for socialism. Three all-India strikes during the period under review was given by the National Convention of Workers. In the last one year, there has been one immense and virtually non-stop price rise. The raising of petrol, diesel and LPG price has meant raising the state deciding to go in for raising the cost of living. The argument that the state cannot afford such subsidies is a class statement. This same state has been reducing income tax levels even as incomes of the upper layers shoot up. It has reduced corporate taxation in a number of ways. That such practices existed in the past is not because Jawaharlal Nehru and Indira Gandhi had introduced socialism, as present day advocates of total free market and pushing the burden on the exploited claim. That some measures of welfare, however limited, had existed is a function of the class struggle. To gain and retain hegemony at an earlier stage, the Indian capitalist class had been compelled to accept the bitter pill of some welfare measures, the creation of a large public sector and the creation of jobs, the expansion of a public distribution system, the creation of some very minimal health care measures for
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sections of the workers, and so on. None of this had been done because of any largeness of heart of the capitalist class, and their response often had been that of a person whose tooth was being pulled out without anesthetics. The defeat of the Railway strike and the Bombay Textile strike were major events that tilted the balance against labour. The collapse of the Soviet Union, the capitalist transformation of China, also disoriented many. As a result, the capitalist offensive was widened in the 1990s. This has had tremendous negative effects for large sections. Without doubt, sustained working class action, carrying behind it all the other toilers, is the only way to halt and reverse this process. It is therefore heartening to see such an all-encompassing effort. This is an indication that the pressure and the anger is so great that even unions affiliated to ruling parties feel compelled to take some distance from the terribly anti-people measures of the regime. Supporting the strike, and taking part in all union where our comrades are active, we however note that one off actions, called from the top, do not constitute an adequate response. Of course, mass actions do need to be called by trade union federations, and we do not claim that general strikes will emerge spontaneously from below. The general strike can develop from concrete class struggles, and the task of Marxists is not to make an untimely general strike cum insurrection, but to assist the process of its development. This means a constant struggle. This means linking the general demands to particular struggles, raising demands that push the consciousness of workers forward. In that sense struggles and victories like the defeat of Vedanta are significant pointers. Specifically, it means that general strikes can be effective most when they emerge from major ongoing struggles, linking the large economic battles involved in such strikes, with the political battle, since a general strike is not directed against individual capitalists, but over their heads, against the capitalist state itself. To defeat the ruling class offensive, we need greater unity, we need a strategy of militant struggles, not making mass struggles the adjunct of parliamentary struggles but reversing the relationship, and we need widest internal democracy within the working class movement, the maximum pluralism to ensure that all voices of all sectors, dalits, adivasis, women and men, are heard and their demands incorporated in the struggles, their participation ensured. But anyone who cherishes authentic democracy, even if he or she does not believe in socialism and has nothing to do with the Left, must see the value not only of the public sector but also of its not being reduced to the level of the private sector.

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CHAPTER XI
Na tional Union of Bank Emplo yees (NUBE) National Employ The Only Hope
As it happens in the life of individuals, at a rare moment during its long existence, an organization is compelled by the forces of time and events, to part ways with long held relationships and to continue its glorious journey by making a new beginning merging it hearts and minds with like minded organizations. Such a rare moment is bestowed on the like minded organizations in the banking industry, who are in search of genuine trade union banner, unpolluted by frills and foibles, which upholds their dignity and democratic traditions. Our organization, National Union Of Bank Employees ( NUBE ), one of the oldest unions in the banking industry was revived on 19-06-2011 at Chennai , the birth place or the cradle of trade union movement where , Tiru Vi Ka - Tiruvarur Vi Kalyanasundaram most visible face of the Madras Labour Union formed the first confederation of trade union in 1923. NUBE was formed to rebuild a strong, cohesive and coordinated movement of employees in the banking sector. On this historic day we deem it appropriate to bring it the notice of the members the historic evolution & metamorphosis of NUBE. All India Overseas Bank Employees Union ,on of the oldest trade union in the Banking Industry delinking from political persuasions right form its inception in the trade union movement in its 16th annual conference at Karaikal in Pondicherry State on 14th and 15th September 1969 resolved that an appeal should be made like minded unions functioning in public sector Banking industry urging upon them to form an organization with the sole object of providing a common platform exclusively for all the employees in the Nationalised Banks enabling them to be the makers their own destiny. In response to the appeal made of like minded unions, sequel to the initiative taken by AIOBEU mentioned above the following 5 organisations, All India State Bank of India Staff Federation. All India Bank Employees Federation,.All India Bank of Baroda Employees Federation, All India Indian Overseas Bank Employees Union,. Canara Bank Staff Union met at Bombay on the 26th, 27 th, 28th January 1970, and on the 26th January, 1970 National Union of Bank Employees (NUBE) is born. The Principal Objects of NUBE are as under: # To organize on trade union lines the employees in public sector Banks throughout India and outside wherever such bank or banks have their office and to foster a spirit co-operation & comradeship among all the classes of employees in such banks To co-ordinate the activities of the Federations, Unions and Associations operating within public sector banks within Indian Unions and the Federating Units located outside and initiate policies conductive to the progress and benefit of such Federation, Unions, Associations of federating units and their members To Secure Improvement of the status and service conditions of every member of the Federations, Unions / Association or such other Federating Units of NUBE Equality of rights and privileges for all the employees in public sector banks engaged to perform the same kind of jobs

The dominant characters of NUBE as envisaged by the founding members are as under #
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Each constituent-member can deal with their concerned management in the manner that it thinks fit, while keeping in view the national perspective of NUBE

# # #

Full participation of the rank and file in the functioning of their unions Development of Trade Union Cadre on a big scale Decentralization of decision making process and development of the trade unions

The guiding principle of NUBE: NUBE decided to guide itself and confine its activities solely within the well-defined principles of collective bargaining and in matters connected with labour welfare alone. NUBE decided not to dabble in or associate itself with political affairs having no bearing on the labour and not to allow itself to be influenced or dominated by any political ideologies NUBE elected its office bearers in the First Convention held on 2nd and 23rd March 1970, Bombay. On 3rd august 1973, at a mammoth gathering of NUBE, at Calcutta Leaders, delegates and members of different constituents of NUBE attended a General body meeting held at Calcutta Main.. This meeting gave a clarion call to one and all for their whole hearted and unstinted support for the formation and activisation of NUBE at different parts of the country for the growth of a healthy and better trade-unionism in Banking sector. In the meanwhile, there was a big revolt in U.P and a new state body of Bank employees in the name of UP Bank Employees Congress emerged there. There were tremors in Punjab also, where the PNB Bank employees Union, revolted and joined AIBEF. In Central Bank of India, the General Secretary of AIBEA union in Punjab and Haryana quit the AIBEA with a large chunk of members and joined AIBEF. Revolts on the same pattern in one or the other way developed in other states too, which were symptomatic of the growing dissatisfaction of the bank employees with the antics and policies of the monopoly unions. The efforts at Co-ordination among like minded organizations having apolitical ideology continued in one or other form. In the year 1972, a Coordination Committee or NUBE, AIBEF was formed at Bhopal, but, the attacks of UPBEA management axis had become so intensive that this loose coordination was found insufficient to provide an answer to such attacks, and the necessity of protection of some large organisation was strongly felt. It was at this critical juncture that a conference was held at Delhi on 23.7.1973. The Unions thus assembled to form themselves into a new organisation of Bank employees in the name of Indian National Bank Employees Congress and it was further resolved to coordinate the activities of INBEC with NUBE and, if possible, to bring about a merger of the two in order to provide a strong viable alternative . The first task to which INBEC/NUBE coordination set itself was to expose the various ills and evils which were plaguing the banking industry and swiftly eating into the vitals of its very structure. A number of memorandum were submitted to the Government listing the cases of corruption, malpractices and frauds. Memorandum were also submitted on numerous cases of victimization, unfair labour practices and discrimination against individual employees, Demands were raised upon the Ministry of Labour to institute court of enquiry against the defaulting managements under provisions of I.D Act. The Government and Ministry of Labour had to move on these unions (NUBE/INBEC) sustained intervention and initiative to deal with situations in many cases. When leaders of NUBE and INBEC were busy creating a powerful lobby, com.M.Rajagopal, Asst. General Secretary of NUBE and Gen.Secretary of All India Bank of Baroda Employees Federation was suspended by the Bank of Baroda management. This came as a rude shock to the Bank employees movement and NUBE. It was a sinister conspiracy to divert the attention of NUBE from the task of mobilizing public opinion regarding bipartite talks. This suspension is also a case of victimization for legitimate trade union activity. The federation launched a fight and was supported by all the NUBE units.
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A mammoth demonstration was also held before the Banking Department, New Delhi to press the demand for reinstatement of Com. M.Rajagopal. Ultimately, the Finance Minister intervened in the matter and ordered unconditional reinstatement of Shri M.Rajagopal. This singular but significant victory gained by the INBEC strengthened bank employees confidence in INBEC and hastened the pace of unity between INBEC and NUBE. At the Tripartite Conference held on 26.7.75 the Ministry of Labour did not invite NUBE and NOBW, though the All India State Bank of India Staff Federation, which was a constituent of NUBE was invited. However the constituents of NUBE i.e. the All India Bank of Baroda Employees Federation. All India Overseas Bank Employees union and Canara Bank Staff Union joined at the same time for discussions with the representatives of All India State Bank of India Staff Federation and efforts for unity continued and meetings with them were held at Hyderabad, Mumbai and Delhi. The discussions were fruitful and ultimately the All India State Bank of India Staff Federation also decided to join INBEC, which fulfilled the long cherished goal of bank employees to build up a strong, free democratic trade union of bank employees. Our then President Late Com.O.P.Gupta took courageous lead and played a vital role in formation of INBEC by inspiring several bank employees organisations. With subsequent affiliation of three out of four unions of NUBE and with the affiliation of the All India State Bank of India Staff Federation with INBEC, it was felt that the Charter of Demands submitted in 1974 should be suitably revised to conform to the new situation and taking into account the economic changes in the intervening period. The INBEC therefore, constituted a Committee to go into all aspects of the matter. In the meantime, a memorandum on CDS, bonus and wage revision was submitted to Honble Labour and Finance Ministers, copies of which were sent to all MPs During dark days national emergency in the period 1975-76, much to its chagrin and hesitation of other constituents, particularly AIOBEU, All India State Bank of India Staff Federation which confederated with INBEC and took affiliation of INTUC and constituents of NUBE were in disarray. NUBE remain non functional temporarily. Immediately after national emergency during 1977 it was also felt that in the changed political context, it would be more prudent to free the INBEC of any impression of its being the appendage of any political party and to carry on its activities on purely independent lines, which was the principle on which the INBEC was founded. It was in the context of these cumulative circumstances and with the larger objective of broad basing the activities of INBEC that the decision to dissociate INBEC from INTUC was taken in Delhi. Accordingly INBEC disaffiliated itself from INTUC. Constituents of NUBE reunited under the banner of INBEC now an independent organization In this year 1979 during the closing stages of the third bipartite INBEC fought a legal battle in Calcutta High Court regarding a dispute challenging the authority to use the name of the organization INBEC even after being disaffiliated from INTUC. The constituents of INBEC then changed the name INBEC to NCBE As in the past a historic duty was once gain cast on AIOBEU. Disenchanted with the functioning of certain unions in the banking industry the National Executive of All India Overseas Bank Employees Union , one of the oldest and vibrant union in the banking industry serving the and espousing the cause of not only IOB employees but also the banking fraternity for over six and decades resolved on 19-6-2011 to revive NUBE (National Union Of Bank Employees) - a independent apolitical union to bring various like minded unions in the industry level under its umbrella. The All India Overseas Bank Employees Union, one of the oldest and vibrant union in the banking industry serving the and espousing the cause of not only IOB employees but also the banking fraternity for over six and decades resolved on 19-6-2011 to form a national level forum NUBE (National Union Of Bank Employees) - an independent apolitical union to bring various like minded unions in the industry level under its umbrella. On the very same day Pandian Grama Bank Workers Union announced its affiliation with
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NUBE. In the aforesaid meeting where first affiliate from regional rural banks participated. Com.L. Balsubramanian was unanimously elected as the General Secretary of NUBE. In response to appeal made by the General Secretary of NUBE presenting NUBE vision for the future as a free community of trade union , independent but inter- dependent , apolitical , uniting one great family of working class ,outgrowing and transcending the hates and fears that rend our age , The General Secretaries, Presidents and the central committee of the following unions a) PNB Progressive Employees Union b) Central Bank of India Staff Congress (West Bengal, Sikkim & U.P) c) Allahabad Bank Staff Association d) All India UCO Bank Staff Federation met at Kolkata and unanimously decided to affiliate with NUBE on 21-05-2012. NUBE in its communique highlighted the impending danger that awaits Bank employees and the hamhanded manner in which the Government. continues to dilute public sector banking, further liberalize our Banks, encourage private sector and foreign banks, opening banking sector to more and more private and foreign capital, amending the Banking Regulations Act and Banking Companies (Acquisition and Transfer of Undertakings) Act, Licences sought to be given to corporate sector to open their own banks, and closure of loss making branches etc. and above all thrusting of anti employees recommendations of the Khandelwal committee. NUBE further highlighted that indications are there that their eyes now fall on the Bank employees whose service conditions do urgently require upward revisions and their machineries are gearing up for early commencement of 10th Bipartite. Having regard to the political climate NUBE appealed to the leaders and rank and file of the above unions to undergo a heart search and organize themselves with us on the sounder basis, attuned to the needs and aspiration of working class in general and bank employees in particular. The General Secretary also brought to fore the bare facts of the last wage revisions. There was a grave danger of second option for pension slipping away from our hands. It was the foresight and pragmatic approach of the undersigned, as the then President of NCBE, signed the MOU, in spite of oppositions from within and outside, that 9th Bipartite Settlement could see the light of the day which was the best in the given reality and framework. Moreover, another option on pension was the crying need of the hour, through which entire industry is covered under social security net. The pension option has brought in nearly three lakh families spread over all Nationalised Banks under the umbrella of social security net in the form of defined pension. It may be noted that the global trend today, including in Europe known for its social security measures, is to have defined contribution from employees for uncertain return. This was a historical task needed to be done without fear or favour. Today we all can take pride in the irrefutable fact that our union stands on a very firm footing and those who were denied option for pension including lacs of retired employee can bask on comfort that their dreams of achieving pension has now become a reality. The General Secretary in the aforesaid appeal also brought to fore the bare facts of the last wage revisions wherein SBI hegemony was allowed to operated not only other Banks but also on other unions, rubbishing the agreed Golden principle of one Industry one cadre one pay ultimately diluting Bipartite machinery. In affirmation of the above NUBE quoted the under mentioned irrefutable facts: State Bank of India workforce is entitled to have provident fund contributions of Employees and Employers, Gratuity applicable under act + Pension i.e.; Three retrial benefits. Against the achievement of pension to Nationalized Bank work force in 1993, sequel to the 6th Bipartite to workforce, SBI gave a benefit of Rupees one hundred crores as an additional benefit facilitating the State Bank workforce to draw special compensatory allowance of Rs375 to 550 to begin with introduced w.e.f. 01.11.1993. This amount was outside the Bipartite settlement. This allowance was demanded by other Banks through their respective
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unions but has not seen the light till date .In the 7th bipartite, an amount of Rs. 60 crores was granted by the Government to State Bank workforce in lieu of their agreeing for total computerization and to equalize the pay parity of 12.25%. In the 8th Bipartite, there was no demand neither raised by SBI unions nor considered by Govt. of India to State Bank workforce. It was categorically agreed by the IBA and the Negotiating unions during the IX bipartite that the balancing cost of pension will be credited to the pension fund only. When this being the case, in the last wage revision exercises, the amount allocated towards SBI pension fund was diverted to the its employees as special balancing amount which was calculated at 6.5% of the basic pay as an additional consolidated amount . Such an appropriation of pension amount for special allowance is a flagrant violation of the trade union cardinal principle same work same pay. Once again hegemony of unions and associations in SBI triumphed and bank employees in other banks were subjected to the story of deceit. To that extent the employees in other banks have lost the benefit of 17.5% increase in the general increase otherwise was eligible to be paid / included. This has not only vitiated the Bipartite settlement of 17.5% increase in Banks the industry level settlement but its sanctity stands affected. The employees of nationalized banks and other member banks of IBA are already aggrieved that there is an abject disparity in important aspects of emoluments and entitlements between both the sections and the recent discriminatory treatment has perpetuated and widened the gulf between the employees of SBI and Non-SBI. It is indeed unfortunate that the unions in the banking industries, barring one officer organization have not initiated steps to correct this disparity when separate earmarking is done in Bipartite. Since such discriminations time and again in every settlements has crossed limits of endurance , liberating from hegemonic control, All India Overseas Bank Employees Union, one of the oldest and vibrant union in the banking industry serving the and espousing the cause of not only IOB employees but also the banking fraternity for over six and half decades resolved on 19-6-2011 to form a national level forum NUBE (National Union Of Bank Employees) - a independent apolitical union to bring various like minded unions in the industry level under its umbrella. The General secretary of NUBE concluded the aforesaid appeal emphasizing To us, Serving genuine interest of bank employees and contributing to the developments of a free democratic trade union in the country is the goal that we had fixed to ourselves. This is our guide for the present and vision for future a free community of trade unions; independent but interdependent, non political but politically critical, uniting one great family of working class, outgrowing and transcending the hates and fears that rend our age. This is kernel essence of NUBE ideology. The representatives of the aforesaid unions had detailed deliberations on the matter and all members participated in the deliberations. After careful consideration the participants passed the following historic resolutions. 1. Whereas the recent events that have taken place in the banking trade union scene have been prompting us to make serious and immediate application of our minds in the vital matter of closing up our ranks in National Union of Bank Employees (NUBE) Whereas the meeting has addressed and places on record the role played by Com.L.Balasubramanian as the President of NCBE in wresting one more option by taking pragmatic stand in signing the MOU under extenuating circumstances , but for whose conviction, bold stand , and efforts the demand of second pension option would have slipped away and lacs of retirees and bank employees waiting of one more option for pension in the country would have been still groping in the dark. Whereas the National Union Of Bank Employees have vide their appeal extended their invitation to us to merge under their independent banner for the sole purpose of serving still better the cause of Bank employees and for setting phase for the Bank Employees to read the writing on the wall;

2.

3.

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4.

And whereas this meeting having taken note of these trends and developments for establishment of a healthy trade union movement in the Banking Industry is of the firm opinion that opportune moment is at the hand for them to forge ahead and affiliate their respective organizations under one banner NUBE.

They also resolved to join NUBE with immediate effect, and NUBE shall be their sole spokesman at the industry level. In terms of the above resolution, aforesaid union in their respective banks have unanimously decided to affiliate with NUBE and declared that a sense of oneness that pervaded in arriving at this decision in the meeting. The leadership of NUBE whole heartedly welcoming the decision of the affiliates have convened a meeting at Kolkata on 16-6-2012 to further fortify our strength. NUBE, as the fourth largest Union of Bank employees, assures all the affiliates that it will render their service to its members without bias, fear or favour and uphold justice and fairplay. The affiliates of NUBE with view of fortifying its strength once again met at Kolkata and established formation of West Bengal State Unit of NUBE ON 16-6-2012. The meeting deliberated in length the ill advised steps of the Government particularly pushing Banking reforms in a breakneck speed impending danger that awaits Bank Employees ham handed manner in which the Government continues to dilute Public Sector Banking, encourage Private Sector and Foreign Banks, opening of banking sector to private and foreign sharks, amendments to Banking Regulations Act and Banking Companies (Acquisition and Transfer of Undertaking Act). Closure of loss making branches and above all thrusting of anti-employee recommendations of the Khandelwal Committee. After live discussion it was unanimously resolved to protest against the above moves of the Government and decided to observe All India Bank Strike on 25th July 2012, followed by Dharna near Parliament on 25-07-2012, proceeded by demonstrations, rallies, processions, mass meetings, badge wearing and submission of memorandum in all districts and towns. The Central Committee also decided to seek the support of various leaders of political parties, Members of Parliament in pursuance of above demands and struggle. Taking into account that 9th Bipartite Settlement expires on 31-10-2012 and need has arisen to revise the same having regard to the all-round increase in the cost of living, erosion in wages of the employees, spiralling price rise, increased work load on the employee, freezing of recruitment, contribution of the employees in improving the business of the Bank, deliberated and finalized the CHARTER OF DEMANDS for the 10th Bipartite demanding on overall increase of 45% in wage load. To trigger further take off it was unanimously decided in the meeting to hold the first conference of NUBE at Chennai with all the splendor it deserves very shortly. The General Secretary, NUBE concluding the meeting appealed to all the affiliates and rank and file to fight for the multiple tasks before us and the attacks and challenges on the anvil. The General Secretary urged IBA and Government to consider all the pending issues including Compassionate Appointment without further delay. Our future tasks, from now on should be focused on organization building at bank level, state level and district level. On this historic foundation day of NUBE, Let us pledge to take this message to every nook and corner of the Country so as to build a strong organization to continue to play its due role with more energy and enthusiasm acting as sword and shield, of the bank employees. We have enhance confidence that NUBE shall blossom embracing more and more bank employees in the days ahead. We are delighted to inform our ranks that we are receiving encouraging messages and enthusiastic response from various trade unions from banking industry in India. NUBE has always provided a space and feeling
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for every one. With this renewed accession to our strength NUBEs future is put forward with imagination and hope, that in not too distant a future we have confidence that we shall emerge as the vanguard of bank employees. It is therefore incumbent on our part to build up our movement in the individual banks vibrantly and ensure the unity and solidarity of our ranks. NUBE expresses its reciprocal gratitude to all the above affiliates for their thoughtful actions.. We are confident that with perfect unity in our ranks we can usher in a better life to our rank and file. Collectively we could make NUBE a better instrument of service to the nation. Collectively we could enrich our selfesteem, pride and life of each and every one of our members by strengthening NUBE. Strengthening NUBE and improving the co-ordination in our activities and struggles is a common task of all of us from now onwards. Our Unions under NUBE should take more and more steps to build up strong NUBE Unions in every Bank. NUBE Emerges as A RAINBOW IN THE HORIZON in the Negotiating Table The Indian Banks Association after due verification in accordance with the procedure for verification of membership of Unions operating in the banking industry has certified National Union Of Bank Employees as the fourth largest bank union and has bestowed negotiating status for NUBE This is indeed, by any standards, our finest hour. That we are the fourth largest Union of Bank Employees has been a fact recognised long long ago. We convey you with verve and gusto that IBA in tune with the traditions in vogue has invited us for discussions to the ensuing 10th Bipartite in definite terms bespeaks our unchallenged and unchallengeable status. It is exactly two and half years ago NUBE came legally into existence. NUBE was revived as a result of the conscious decision of our major affiliate AIOBEU at its National Executive meeting on 19.06.2011. A new direction to Bank employees movement was enjoined on it, in its chequred history of many battles through sacrifices by countless warriors, NUBE never compromised or gave up even momentarily its objective of rendering lead and initiatives to every section of Bank employees. Soon after reviving NUBE, it exposed the hegemonic machinations of a union to cut into the vitals of collective bargaining and is a significant response to the challenge of bank-wise settlements being propounded in the industry today by profit making banks demanding pay parity for all Bank employees. We deem it good augur six new affiliates embraced NUBE in large numbers which has further fortified our strength and unity. Equally with a sense of pride we convey to you that in appreciation of our publications, articles in the blogs, social networking sites particularly booklet on 10th Bipartite Charter, 5-Day Banking which evoked response from media. Three more Bank Unions have assured to join our mainstream. Our union has always provided a sense of spaciousness and feeling for every one. Our future is put forward with imagination and hope, that in not too distant a future we have confidence that we shall be holding our banner still higher like a soaring falcon, as earnestly and spiritedly as we do. But it is simultaneously conscious that it has vital strength of 6 affiliates, PSU banks, having a substantial following, it has emerged as the fourth largest union in the comity of bank unions even as per IBA records. It has been bold enough to initiate national debate on its role and future and has not hesitated to state its position on vital issue no matter whatever may be the reaction in its genuine bid to revive trade union spirit amongst employees and to inculcate the elimination of subservient attitudes that stultify initiatives as could be seen by the Firsts it has to the credit, in the process carving out a niche for itself among the community of bank employees and in many social networking sites in the internet through its informative regular publications from time to time . Today your beloved organisation N U B E is emotionally, morally and in strength is a match to bear any burden, to discharge any obligations, with your spirit of cooperation and participation in its affairs. For two and half long years we have ventured, striven, struggled, suffered and succeeded for the causes that were just. Many a battle was won to add dignity and decency to our lives, to bring better sustenance to our wives and children. Looking back we are proud of our battles which bespeak the mettle of our organisation and the spirit of our membership.
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Here you must kindly pardon me if I succumb to some personal sentiments. I remember how we in the Union started our movement for a national identity two years ago. I remember the days when along with our president com , Com.L.Balsubramanain and others, we were standing in the cold December nights at the gates of the Delhi Central Secretariat & IBA at Mumbai for several days, braving fair and foul weather, rain and sunshine enduring the test of time, knocking the doors for justice. My mind also took me to the days of bitter struggle where certain monopoly houses in the trade union field tried to deter us by acts of betrayal scuttling our sincere attempts to forge unity among bank unions throughout letters and appeals oral and/or other wise. Even our best friends in the other banking union could not help us. The lure of attractive offers and anchor baits made by some politically fettered unions in the banking industry and at the central level to us to join their mainstream were rejected by us upholding our apolitical convictions. We can be rightfully proud that against mounting odds we stood with fortitude without wilting. The unflinching and unswerving loyalty of our rank and file provided the impetus to us to be equal to this noble but arduous task of seeking equal status to our organisation in the negotiating table of IBA. We even met a number of parliamentarians and explained to them our position. Being circumscribed by political pulls that prevails we found them also helpless. After several letters to Finance Ministry, IBA, we called on many officials at the Finance Department. We thank our Honourable Finance Minister Sri.P.Chidambaram for his insight, encouragement to our representations. Thereafter with a sense of satisfaction we inform our rank and file that the undersigned had the privilege to meet Sri.Namo Narain Meena, Honble Minister of State and submit our representation along with Sri.D.Napoleon, Former Honble Minister of State for Social Justice and Empowerment on 04-09-2012. We were overwhelmed with his objective response and express our gratitude for the same. Honble Minsters insightful understanding and positive response to our issues has provided impetus to our hope and faith on just and equal treatment. Particularly we thank Sri.K.R.Kamath, Chairman, Indian Banks Association, Sri.M.Narendra, Chairman & Managing Director of IOB, member of the Managing Committee of IBA and Sri.T.M.Bhasin, Chairman, 10th Bipartite Negotiating Committee who were well versed with our representations for negotiating status for their patient, humane, realistic stand that they took in the Management Committee Discussions of IBA and in bringing out this honorable status to our beloved organisation NUBE to the complex situations created by interested elements. We must record here our deep sense of gratitude to the efforts of Dr.K.Ramakrishnan, Chief Executive, Sri.K.Unnikrishnan, Deputy Chief Executive, IBA, Mumbai and other officials and staff of IBA, officials in finance ministry, present and past members of Managing Committee of IBA, for their encouraging response whenever we had called on them and for their depth and understanding of legitimate, reasonable requests. We wish to underscore here the requisite, true trade union solidarity expressed to our cause by AIBOA who played a lone furrow for our just inclusion in the meetings of the united forum and through their circulars from time to time. In doing so they did not expect any individual favours, excepting the warmth of our convictions, the experience and role of the undersigned in the past negotiations in bipartite talks with IBA. They have placed us in our debt. On this day of abundant joy, the IBA &Government has rightly chosen to propose this toast to every one of us. Two and half years of our struggles and successes have been well-crowned with the IBA sending us communication to be a party for negotiations and settlement of the 10th Bipartite, on 22nd April 2013. This is a moment of our glory, our triumph and our burden. Barring a few discordant notes here and there, our Union has been orchestrating the symphony of events so splendidly with the rhythm of moments matching it that it is today ever-vibrant and ever-young and ever-potent with all faculties intact and growing., With new responsibilities, we have fresh obligations to discharge and increased burden to bear. Let all of us be tireless in our pursuit to fulfill the tasks, we have taken unto ourselves. Our shoulders, though small, should always rub each others, in our inexorable march into the future of progress and prosperity.

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We have many achievements to our cap during the interregnum, but we have also pains of many unsolved problems. Our task therefore is continuous and never-ending, writing in the process, pages of our glorious history. Our future tasks, from now on should be focused on organization building at bank level, state level and district level. On this historic RED LETTER DAY of NUBE, let us pledge to take this message to every nook and corner of the Country so as to build a strong organization to continue to play its due role with more energy and enthusiasm acting as sword and shield, of the bank employees. We have enhanced confidence that NUBE shall blossom embracing more and more bank employees in the days ahead and will strain its every sinew to achieve an honorable 10th Bipartite salary revision, improvements in service conditions, better allowances, updation of pension, etc. etc.. Concluding I confess that I am unable to resist the temptations of indulging in certain musings over the days we have passed; the days we have preserved together through good and evil fortunes; without slightest weakening our will power, faith & division of our strength; over the days which we entered into without doubting the cause and upon a single spontaneous impulse at the call of the honour; over the days we strove and suffered thereby. Looking at the insurmountable perils which we passed through; and at the mighty as well as measly foes we have met, fought and laid low, we are at brim of confidence that we have no fear of future. The future before us is chalice of opportunity, it beckons us. Let us march forward without flagging, flinching or swerving. We shall in our march to the negotiating table hereafter expect no reward, seek no profit and accept no compromise. Let us be judged by our conscience and then by posterity. We are tempted again to quote here summing up our arduous voyage to the negotiating table of IBA, the immortal words of Charles Dickens:It was the best of times It was the age of wisdom It was the epoch of belief It was the Spring of Hope it was the worst of times. it was the age of foolishness. it was the season of darkness. it was the winter of despair.

Our union has always provided a sense of spaciousness and feeling for every one. Our future is put forward with imagination and hope, that in not too distant a future we have confidence that we will be liquidating our rivals holding our banner as earnestly and spiritedly as we do. . But it is simultaneously conscious that it has vital strength of 6 affiliates PSU banks , having a substantial following ,it has emerged as the fourth largest union in the comity of bank unions even as per IBA records. It has been bold enough to initiate national debate on its role and future and has not hesitated to state its position on vital issue no matter whatever may be the reaction in its genuine bid to revive trade union spirit amongst employees and to inculcate the elimination of subservient attitudes that stultify initiatives as could be seen by the first it has to the credit as under: $ NUBE was the first to strike to the bell first with its 102 page well researched comprehensive charter of demands for the 10 bipartite demanding 45 % increase in wage load with rationale justifications which was widely covered in 28 social networking sites and media $ NUBE was the first lead the way demanding 5 day charter with its exhaustive memorandum to government of 133 pages with its well researched justifications which was covered in 38 social networking sites and recognized and appreciated in media $ NUBE was the first once again demanding increase in retirement age for well with its once gain well researched memorandum within 24 hours after the news papers published report that the government is planning to increase the retirement age for whole time directors, which was once again covered in 39 social networking sites and media.
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$ NUBE s researched article titled Mirages And Modest Truth Of FDI On Retail Trade, exposing its implications in a reader style when the bill was in motion evoked wide appreciation response form social networking sites and media $ NUBEs informative article to impose Ban On Loan For Gold, Efforts To Reduce Import Of Gold., conserve the foreign exchange reserves was considered by even the RBI , issuing direction on lines with our demand to the banks . Once gain NUBE articles which left its imprints was published by 3 social networking sites. $ NUBE path breaking article What Constitutes A Reasonable and Justifiable Hike in Basic Pay in the 10th BPS in tune with our 10 bipartite charter of pay scales: $ Revision of Basic pay by merger of DA, at 115% of the highest index for the quarter July, August, September 2012 points of CPI (1960=100) is formulated. After such merger, new pay scales to be arrived at by adding minimum of 30% for clerks and 35% for Sub staff, With fitment stage to stage basis $ Neutralization of 130% for sub staff and 120%for clerical staff in view of higher neutralization given from JMG to Executive Grades was uploaded by 2 popular sites as on date evoking encouraging response and appreciation form viewer. $ NUBE was the first union to beautifully explain the pitfalls in CTC, demystifying the concept of CTC vide it informative circular which was covered in 8 social networking sites. The topic of merger is a really important matter and Government has been shifting its goal poles from time to time. $ NUBE with its eight are long articles exposed nefarious design of the government with regard to merger of banks which was published in 8 social networking sites.

$ The concept of holding companies as perceived by FINMIN pertaining to banking companies. In this regard, excerpts from a very enlightening write up NUBE to be much informative in shedding light on the concept called holding company was published in5 social networking sites We can draw great satisfaction throughout this period under review ever since NUBE was established as per communication of social networking sites to our above articles have been downloaded by thousands of viewers Reports confirm that the hits in the above websites have crossed 200,000 which include both bank employees and general public which has influence of scores of bank employees through the power of internet. In other words NUBE has 2 lac virtual supporters as confirmed by the comments, their hits , likes and views are very encouraging. The undersigned informs you with vigour and zest that our office is inundated with letters of appreciation from scores of bank employees. Equally with a sense of pride and satisfaction we inform you that many leaders including some leaders in UFBU in the bank employees movement have telephonically conveyed their appreciation to NUBEs efforts in disseminating information buttressing trade union education. In short NUBE is the NEWS in the internet. Yes! We have miles to go, as new problems come up, new challenges arise, new solutions have to be found, new advances have to be registered, and new facts and even new statistical material have to be taken note of and to be able to keep pace with it, NUBE will Continue embark on the exciting journey of continuous and additional change in study and trade union education, which 2 lakhs virtual members eagerly expect e very day, every moment. So as we look back to the events of the year 2012 there is much of which we can be grateful, there is much of which we can take pride also, pride in our action we have taken, pride in the stands we have made, pride in the things we have done, not only for the bank employees but for the entire labour movement , people of this country in general and Bank employees in particular. This was no accident. The unity of our
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beloved organisation, the consciousness of our members, the calm determination and faith of our rank and file, these qualities may be tested many more times in the days ahead. But we have increased reason to be confident that they will continue toserve the cause of the movement with distinction in the years to come. Let new year 2013 slogan of WE SHALL OVER COME AND HUM HONGE KAMIYAB EK DIN in all our activities to spell a new dimension to the trade union movement of Banks in its original concept and present day context. Strengthening NUBE in all states , forming new unit in many banks and improving the coordination in our activities, particpating in joint struggles irespective of any hidden chareres and borders is a common task of all of us at all levels. Our Unions under NUBE should take more and more steps to build up strong NUBE Unions in every Bank in new year 2013 . We earnestly trust and hope in the coming new year we earnestly trust and hope in the coming new year NUBEs foresighted vision towards broad based unity among all the unions in the banking industry the present context of joint which will not allow the IBA and Government to play negatively in the 10 bipartite negotiations will be taken note of by all constituents by UFBU in the process embarking as role model of militant cohesion of unity in word and deed as unity and solidarity is raison detre to face squarely the challenges and tasks and the days of catastrophe that lie ahead before the bank unions in deference to wishes of over 2 lakh virtual supporters of NUBE stand on burning issues in the social networking sites. . End nor a beginning, but a continued march on, with all the wisdom that experience can instill in us. With hopes of a better and bright future for all of us we have to move hand in hand together as disciplined soldiers to achieve our goals and aspirations. We have the confidence that with a firm and steely resolve to achieve all our legitimate demands, the entire officers force in the banking Industry will stand as one man behind NUBE which has spearheaded many campaigns and battles to achieve an honorable salary revision, improvements in service conditions, better allowances, updation of pension etc. We have to run faster and faster to reach our goals, We have to grow stronger and stronger to meet the challenges We have to march on unitedly shoulder to shoulder to realise our dreams. No Rest, No Haste, Onward for Ever; Consolidate Your gains of yester years And forge ahead for a dynamic future Let us unite as workers still, The Union is our Heritage, To her we make our Solemn pledge; Today, Tomorrow, Forever George Meany NUBE NUBE NUBE NUBE NUBE NUBE stands for constructive trade-unionism stands for non-political, internal leadership of trade-unions stands for peace and prosperity in the industry stands for negotiated settlement of problems stands for cordial staff-management, staff-customer relation stands for unity of bank employees

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Khandelwal Committee Recommendations

The history of our movement is replete with various attempts of the Government on various occasions to foist anti-employee measures to the detriment of bank employees. Every time, these attempts have been fought back with determination and conviction. We have overcome all such attacks in the past. But a few years ago the Government had appointed yet another Committee under the Chairmanship of Mr. A.K. Khandelwal (former CMD of Bank of Baroda) to deal with the HR issues in the banks and to suggest recommendations. The Committee invited the unions and solicited their viewpoints on the points of reference made to them by the Government. But totally brushing aside the views of the unions, the Khandelwal Committee has submitted its recommendations on expected lines. The broad recommendations of the Committee are as under: G G G G G G G G G G G G To outsource all non-core jobs Direct Recruitment of Officers upto 50% Qualification for entry level recruitment For Clerks: Graduation For Substaff: 10th Std. Officer: Clerk Ratio 2 : 1 in metro / urban & 2 : 1.5 in rural / semi-urban areas. Fresh Recruitmets to be only in Rural and Semi Urban areas and not in metro / urban branches. Appointment of exclusive Executive Director (H R) Bankwise wage revision based on capacity to pay, profitability, producivity, etc. instad of industry level agreements. Introduction of Variable Pay as a major component of wages and introduction of cost to company concept. Review all internal settlements on mobility HR Professionals to be recruited at senior / junior levels. HR adminstration to be automated through web-based system

It is very obvious that these recommendations are meant to destablize the trade unions and our hard-won rights and to deunionise the employees. Not surprisingly, the Government has accepted most of the recommendations and has also advised the banks to mvoe ahead with the impelmentation. Some of the recommendations which are related to industry-level wage revision would be obviously taken up by the IBA in the ensuring negotiaitons. We have to build up a very strong opposition to these retograde recommendations and thwart these attempts from being foisted on the bank employees.

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CHAPTER - XII
10th Bipartite Settlement
To, utter astonishment and dismay of bank employees of the country, while, the tenure for 10th Bipartite negotiations, is to start from 01-12-2012, i.e. less than 3 months away, all major unions are in deep slumber in respect of formulating-circulating and submitting of their respective charter of demands. It certainly, does not augur well, in respect of the so called transparency, which the unions, so vauntingly claim to be vying for. NUBE sounded the bell first, by first circulating its comprehensive charter of demands, regarding 10th bipartite, which, nearly 22 social networking sites duly published for perusal of its readers. Now, another link to the entire charter of demands is provided here, which can be viewed as well as downloaded by readers: NUBE becomes the earliest caller on the charter of demands, for the 10th bipartite and provided the template for 10th bipartite which others submitted only the penultimate day of expiry of 9 bipartite. . NUBE STRIKES THE BELL FIRST WITH ITS CHARTER OF DEMANDS FOR 10 TH BIPARTITE! NUBE IS THE NEWS IN INTERNET! NUBE LEADS THE WAY! Yes! Comrades these are not mere captions of this circular but sub headings in print media and internet to our charter of demands for the 10th Bipartite demanding 45 % increase in wage load. We are glad to inform our members that the informative booklet on the comprehensive charter of demands with justifications published by NUBE has received wide coverage in the social networking sites. We give below the links of sites which have published our charter in full with their valuable, encouraging comments. We reproduce herewith the response and their valuable comments to our charter by one of the leading website http://www.allbankingsolutions.com which is self explicit. A few days back we received an email from Mr.S.Srinivasan, President of National Union of Bank Employees (NUBE), wherein we have been sent a draft copy of the Charter of Demands for 10th Bipartite as finalized by NUBE a few weeks back. A review of the draft indicates that the team of NUBE have put in good efforts in creating this document. We along with many other readers may disagree with certain demands considering them either to be too meager or to be on higher side. However, we have to remember that it requires a lot of hard work and efforts to create a sensible document. We welcome this move by NUBE and hope others will also take a clue from this and while issuing their own Charter of Demands will give the rationale for the same. We give below the link for downloading the whole Draft Document. Readers are requested to read the same in the light of the Justification of Demand given by the team of NUBE. We also like the discussions in the document about Wages of Employees in PSB and Central Government for May 2012 at the entry stage. The document is placed for perusal of our readers, who can freely and frankly give their views on this document, which we hope will be read by the team of NUBE and help them in finalizing the same. Bankers must have noticed that certain unions do not believe in transparency and never come up with draft documents to get the feedback of common banker. They submit the final documents of their demands in secretive manner and also do not want any discussions on those demands. All talks with IBA are kept under wraps. Therefore, we appreciate this initiative on the part of NUBE and hope it will be a right move towards bringing transparency. We hope other union leaders will also soon put up their charter of demands in public domain at their websites and / or send the same to our website for wider circulation. Let us move towards transparency in wage negotiations.
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We are pleased to inform our members that our Charter of Demand has been downloaded by thousands of viewers in social networking sites. Reports confirm that the daily hits in the above websites have crossed 100,000 which include both bank employees and general public which has influence of scores of bank employees through the power of internet. The comments from the viewers are very encouraging. The undersigned informs you with vigour and zest that our office is inundated with letters of appreciation from scores of bank employees. Equally with a sense of pride and satisfaction we inform you that many leaders including some leaders in UFBU in the bank employees movement have telephonically conveyed their appreciation to NUBEs efforts in coming with comprehensive, innovative charter for the 10th Bipartite. A brief chronicle of reasons of justification of the 45% hike and pioneering steps taken by NUBE is being provided in the following lines, which should be of immense interest to bank employees, throughout the length and breadth of this country. It is a matter of satisfaction that, this time too, certain basic common parameters have been agreed upon amongst the Unions and a common Charter of Demands has been submitted to the IBA by the workmen unions and officers associations respectively. The details of the charter of demands have been separately provided in the Information Documents annexed to this report. However, the main emphasis and approach of the charter are given herein: Improved health coverage reimbursement system Catering to increased cost of education of children Housing facility for all employees Increasing of transportation costs Further improvements in post-retirement benefits Protection against health hazards on account of increased exposure to computer operations. Improvement in DA scheme to off-set the alarming price spiral Better emoluments to retain skills and talents

A fair and adequate wage revision has become more important this time than in the past because of the unending price rise and uncontrolled inflation that have diminished the value of wages in the recent years. There is no sign of any halt to the menacing rise in prices which is alarmingly threatening to further erode the value of our wages. The pursuit of the neo-liberal economic policies at the behest of the profit greedy corporate houses, are bound to further escalate prices of all essential commodities and daily needs of livelihood. In this background, to offset the unprecedented spurt in prices which will further aggravate in the months to come, a very substantial increase in wages is a necessity. In addition, the job profile of the bank employees has undergone a change over the years and employees today are required to undertake new job roles and responsibilities. Furthermore, employees are also vulnerable to unknown and undue risks in view of the implementation of technology in carrying out the routine work. It also cannot be lost sight of that the profits and profitability of the banks have improved over the years notwithstanding the multiple challenges that they are facing. As on 31.12.2012 the gross profits of the banks are more than Rs.1.00 lakh crore and hence lack of profits cannot be made out as an excuse to deny us reasonable wages. In fact, the ratio of wages to total expenses has come down in the recent years. Hence, there is a case for an adequate wage revision for the bank employees. While preparing the charter of demands NUBE has kept certain priorities in mind. In fact, every time when NUBE submits its charter of demands it had its priorities relevant to the particular point of time Justification of the Rationale Demand of Increase of 45 % In Wage Load
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Performance Highlights Of Public Sector Banks For The Period 2006-2007 & 2011-2012
2006-2007 (in Rs.Cr.) Deposits Investments Advances Total Business Int.income Int. expended Net int. income Business per employee( in Rs.lakhs) Profit per employee ( in Rs. Lakhs) Source R.B.I 1994200 664856 1440146 3434346 164185 101960 62225 471.18 2.76 2011-12 (in Rs.Cr.) 4372985 1328534 3305632 7678617 366318 231153 135165 1013.63 5.93 Increase in % 119.28 99.82 129.53 123.58 223.11 126.70 117.21 115.12 114.85 CAGR % 21.7% 18.9 23.1 22.2 22.7 21.4 21.1 21.1

O O

If we look at 5 years historical performance of Public Sector Banks as per above table Public Sector Bank has grown its deposits, advances and business per employee by the highest rate 119.28 % 129.53 % ,- 115.12 % (measured in terms of CAGR-Compound Annual Growth Rate - by 21.7%, 23% and 21.1%) respectively. As far as net interest income is concerned it has grown in Pubic Sector Banks by 117.21%.and profit per employee by 114.85% The total business has grown by 123.58% The growth in the business per employee and profit per employee has been the highest for public sector banks, in absolute terms, and has almost doubled. The average business per employee of all PSBs taken together increased from Rs. 47.84 in 1992-93 to Rs. 215.60 lac in 2002-03 to Rs. 1013.63 in 2006-07 i.e. 21.55 times when compared with 1992-93 , 4.70 times when compared with 2002-03 and 2.16 times when compared with 2006-07

O O O

Staff strength in Public Sector Banks O O O The staff strength of public sector banks which stood at 8,83,648 in 1998-99 has reduced to 7,57,535 as on 2010-11 a drastic reduction of 1,26,111- a reduction of around 17% Where as the number of branches in public sector banks increased from 42301 to 64673 an increase of 52.88% during the period 1998- 2011. Whereas during the same period private sector banks staff strength increased from 60,777 in 199899 to 2,18 679 an increase of 1,57,902 underscoring a vital point that Public Sector Banks are no longer the major employment provider in the financial market. This in other words means there is an increase in pressure of work on public sector bank employees, increased work load due reduced staff strength and disproportionate increase in branches , and as a result additional of other auxiliary works instructed by Government like collection of tax, electric bills, telephone bills, other miscellaneous government department work at state and central level from time to time such as disbursement of pension to unorganised, rojgar yojnas, NREG schemes and etc in addition to routine bank work.

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A study on Productivity and Cost, a comparative study of banks in India during 1997 to 2008 by Sharad Kumar and M Sreeramulu, published by the Reserve Bank of India (RBI) as one of its occasional papers reveals the following ( source The Financial Express, Tuesday June 12,2012) Business per employee for traditional bankspublic sector and old private sector bankshas continuously improved during the past 12 years by nearly 7.29 times. Employees Productivity and cost, a comparative study of banks in India during 1997 to 2008 and business per employee for traditional banks has gone up from Rs 75.28 lakh to Rs 549.21 lakh between 1997 and 2008 In case of modern banks new generation private sector banks and foreign banks the business per employee has increased only 3.06 times, less than half compared to the increase for traditional banks during the same period. It has, however, marginally declined during 1999, 2001, 2002, 2005 and 2007 compared with the previous years for the modern banks. The ratios of business per employee between modern and traditional banks have decreased drastically from 5.28 times in 1997 to 2.21 times in 2008, indicating that the gap in business per employee between modern banks and traditional banks is consistently reducing due to the efforts made by the traditional banks, said the study. Talking about the profit per employee, the study revealed that this parameter has increased both for traditional and modern banks from 1997 to 2008. However, this increase has been significantly higher for traditional banks (6.79 times) compared to modern banks (2.73 times) during the period of 12 years. There has been decline of profit per employee during 1999, 2001and 2005 compared with the previous year both for traditional and modern banks, indicating effect of some external factors impacting profitability of banks during these years. The employee cost as a ratio of operating expenses in traditional banks has remained more or less constant from 1997 to 2002, and reduced gradually thereafter. In case of modern banks, the ratio fluctuated within a narrow range and reduced marginally up to the year 2006, before showing an upward trend during 2007 and 2008. The employee cost to operating expenses for traditional banks remained more than double for modern banks till 2006. This ratio, however, decreased significantly during 2007 and 2008 (1.77 and 1.65 times, respectively), indicating that efforts made by the traditional banks to reduce the wage bills in relation to operating cost made an impact during recent period, said the study. As regards employee cost to total business, it has been consistently reducing for traditional banks from 1.45% in 1997 to 0.68% in 2008. On the other hand, it has been increasing for modern banks in a very narrow range from 0.57% to 0.64% up to 2004, thereafter increased drastically to 1.23% in 2005 and again reduced to 0.88% in 2008. This trend clearly indicates that the traditional banks have reached the level where they can very well compete with the modern banks as regards to the marginal cost of expanding new business (deposits plus advances). The gap between the performance of modern and traditional banks on all the five variables has shown a decreasing trend, which, has significantly reduced during the period of 12 years under study. . It is interesting to observe the reduced gap in business per employee owing to improved performance of traditional banks. This gap is likely to be reduced further due to certain measures taken by the traditional banks recently. In case of modern banks new generation of private sector banks & foreign bank the business per employee has increased only 3.06 times during 1997 to 2008, less than half compared to increase for traditional banks; It has, however, marginally declined during 1999, 2001, 2002, 2005 and 2007 compared to the previous years in respect of modern banks.
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The employee cost as a ratio of operating expenses in respect of traditional banks has remained more or less constant from 1997 to 2002 and thereafter reduced gradually In case of modern banks, the ratio fluctuated within a narrow range and reduced marginally up to the year 2006 before showing upward trend during 2007 and 2008

Conclusion: < If the influx of new recruitment continues in the same trend not commensurate with the vacancies arising due huge retirements as result of superannuation and voluntary retirement under pension regulations, and other wastages, increase in volume of business, rapid branch expansion, the workload on the existing employees has increased manifold. It is estimated that 75,000 bank employees are set to retire by 2015. Taking into account the present trend of huge attrition rate among the new recruits mainly due to better salary packages and perks privileges offered by comparable peers in pubic and private sector there is need for better compensation package to retain young employees in future. In the context of all-round increase in the cost of living, erosion in wages of the employees, spiraling price rise, increased work load on the employee, freezing of recruitment, contribution of the employees in improving the business of the Bank, present wage structure with comparable peers, NUBE demand of overall increase of 45% in wage load in the 10th Bipartite is fair , just & right In a written reply to Rajya Sabha the Finance Minster said the gross NPA of nationalized banks stood at Rs. 59397 crores by the end of December 2011 while banks have written off Rs 12043.21 Crores. Another article in the Financial Express points out that banks have restructured Rs. 43334 crores of loans during January March 2012 quarter. Even after restructuring there are pending applications for Rs.1,37,442 crores. Taking into account the average NPA without provisions even as Rs1.5 lakh cr., 45 % increase which as per traditional distributions 54 % for award staff and 46% for officers will work out to Rs. 29285 crores for officers and Rs. 24946 crores for award staff. Therefore 45% increase will be just 8.75% of the NPA. In other words if the banks recover just 8.75% of the NPA without provisions it will be enough to foot the wage bill for award staff of 45% increase without incurring any increase in the present exchequer for banks. Taking into account Establishment expenditure for 2011 is Rs 54232.88cr. the increase of 45% sought by us to award staff as per conventional distribution will work out to Rs.13140 cr. which when measured as a percentage of business mix for 2011-2012 it will work out a mere 0.17% which is not only fair but just and right.

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The benefits given to Central Govt. employees but not available to Public Sector Bank Employees is summarized as under
Central govt. employees (as per VI pay commission) Basic pay has been fixed approx Old BP + 50% DA x 1.86 Which is around 2.79 times Grade pay considered as a part of Basic Pay and attract all allowance HRA 20%-30% No stagnation ( 3% increase every year to all employees on stagnation) Public Sector Bank employees Approx. 41%. This 41% revision in basic pay also include merger of DA about 32%. Thus only 9% effective increase in basic pay. No grade pay Officers: 6.5% to 8.5%Clerks: 7.0 to 10% Stagnation (No Annual increment).

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Transport Allowance Officer: 3200 +DA (presently 4320) Group C: 1600 + DA (presently 2160) Group D: 600 + DA: (presently 810) Transport allowance will increase on every increase of DA which is presently 35%

Officer: Different banks give different meager transport allowance and that too is for official purpose works Clerk: 225 Sub-staff: 225(NO DA payable on transport allowance)

Educational Allowance No Education Allowance Rs.1000 per child per month (Max. for 2 children) from the earlier 50/= p.m. 10 fold increase in hostel subsidy to Rs.3000/= p.m. PENSION: Govt. pays the entire amount Pension scheme for bank employees is a contributory scheme. Every time a bipartite settlement takes place, a hefty sum is earmarked from the amount offered to existing staff for payment of pension to retired employees. No revision of pension. Once fixed it will remain same for entire life Full pension is given only on completion of 33 years of service. Only pension once fixed

Pension is revised whenever a new pay commission report is implemented Condition of 33 years of service to get full pension is abolished Additional pension On attaining the age80 yrs 20% addl.90 yrs 30% addl.95 yrs 50% addl.100 yrs 100% addl. Accumulation of Earned Leave for 300 days Compassionate appointment facility available In pursuance of recommendations of VIth Central Pay Commission, the Govt. of India approved merger of 50% DA into Basic Pay w.e.f. 01.04.2004. VIth Central Pay Commission also recommended 50% merger of DA into basic pay No pre condition imposed on Pay Commission to restrict its recommendations within a certain limit. Pay Commission fixes pay scales scientifically keeping in view the cost of living, medical, housing, health, education etc. Interest on Provident Fund

240 days Compassionate appointment facility abolished

No such benefit made available No benefit proposed IBA imposes precondition of additional load percent age in advance

Rate of interest on EPF of govt. employee is 8.5% whereas many banks have been paying much less to their employees for last few years.

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Comparative salary for 01-08-2013 payables to Govt. Employees as per VIth Pay Commission and to Bank Employees under 9th Bipartite Settlement between Bank Unions and IBA
Various Componentsof Monthly Pay Central Govt. Staff(Minimum in Pay Band 1) 5,200 1,800 Sub-staff in Banks Central Govt. Central Govt. Clerical staff Clerical Staff ClericalStaff in Banks (Minimum in (Minimum in Pay Pay Band 1) Band 2) 7510 2400 9,300 4,200 7,200 NIL

Basic Pay Grade Pay Special Pay (at the minimum for bank staff) Total Dearness Allowance H.R.A. C.C.A. Education Allowance (maximum for 2 children) Transport Allowance

5,850 NIL

NIL 7,000 6,300 (@90%) 2,100(@30%) NIL 2,500 1,140 (600+90% DA) NIL 100 19,040 1,330[10% of (Basic+Grade Pay+DA)]

340 6,190 5,506 (@88.95%) 619(@10%) NIL 500 225

NIL 9910 8,919 2,973 NIL 2,500 3,040 (1,600+90% DA) NIL NIL 27,342 1,883

NIL 13,500 12,150 4,050 NIL 2,500 3,040 (1,600+90% DA) NIL 100 35,240 2,565

500 7,700 6,849 770 NIL 500 225

Staff Welfare/Provisions NewspaperN I L Gross Monthly salary Cen. Govt. Contribution towards CPF Tier-I [for New Pension Scheme employees ] Total Expenditure per Employee

500 NIL 13,640 NIL

500

16,644 NIL

20,370

13,640

29,225

37,805

16,644

Conclusion After the implementation VI pay commission, Bank Employees have lagged behind in comparison to Central Government Employees. This is because Average Bank employee has not been given increase equal to Grade pay, Education and Transport Allowance given by Central Govt. to its employees, leave alone HRA, Basic Pay, etc.

Talks Of X Bipartite Settlement

In the third meeting on the Charter of Demands between the negotiating ELEVEN unions and IBA on 22-04-2013in which NUBE participated. IBA furnished the data is total establishment cost / wage bill of the public sectors banks as on 31.03.2012 which works out to nearly Rs.56,292 crores for workmen and officers put together. Further, IBA submitted the management issues for discussion to NUBE as briefly enumerated below:
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For Workmen: 1. 2. 3. 4. 5. 6. 7. Introduction of Cost to Company. Introduction of performance linked variable pay. Redeployment of staff superseding the 8th Bipartite and invoking Para 536 of Sastri Award. To continue departmental disciplinary actions even after retirement. Rationalisation of Special Pay. Retirement of workmen employees in Public interest (i.e.) Premature Retirement after 55 years of age or 30 years of service if they are found unfit. Departmental enquiry as well as judicial proceedings can be done simultaneously.

On 07-06-2013 IBA once again pitched on for Cost to Company (CTC) concept. IBA further insisted Performance related wage, restricting the wage revision, increased mobility to award staff, and rationalization of Special Pay, etc NUBE expressing reservation about introduction of CTC, variable pay, etc has suggested that the concept of CTC further transparently packaged and other issues raised by IBA have to discuss objectively in next round of discussions as it has wider ramifications. To our demand that there should be a time bound programme to complete the negotiations without much delay to arrive at the wage revision settlement at the earliest, IBA had informed negotiating unions that the same can be worked out by mutual discussions. To our demand that the wage revision should be effective from 1st November 2012 and that the new pay scale should be constructed by merging the DA at 4876 points i.e. the DA applicable to July- September 2012 quarter, IBA suggested that the pay scales could be constructed by merging the DA applicable up to 2009. In view of the fact higher merger leads to higher Basic, which in turn increases the linked benefits like HRA, CCA, PF, Pension and Gratuity etc., we have rejected this proposal. Further the eleven negotiating unions have equivocally demanded that IBA should make their offer on the percentage of wage load acceptable to them. For this, IBA informed us that they would consult the higher authorities in the Government and inform us in the next round of discussions. The unions further submitted that in the proposed wage revision, the hike in wage load should be exclusive of the cost on pension and other superannuation benefits and also the cost of hospitalization expenses reimbursement. IBA informed that this would be kept in mind by them. At that time of this report sent to press for printing. IBA informed that they will shortly inform us the date for the next round of negotiations as, 11.10.13. We shall apprise you of further developments form time to time NUBE explained and exposed the pitfalls of CTC concept as under to the rank file. NUBE apriori is apprehensive about CTC concept in view of the following reasons: (just illustrative but not exhaustive). That CTC concept is a piece of financial engineering whereby the compensation appears attractive on paper but when it comes to in-hand salary, it could be as much as 30 to 40 % less than what is promised. Broadly CTC consists of following components: (i) Salary including Basic Pay, DA, HRA and other Allowances. (ii) Perquisites and Reimbursement given to employees. This includes incentives, reimbursement of conveyance, medical benefits, leave encashment etc.

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(iii) Contributions made by organizations to employee for Provident Fund, Gratuity, Medical Insurance, etc. (iv) Determination of CTC is a professional method adopted by a corporate and employees are appointed with a fixed CTC so that there will be no hidden or variable cost of hiring an employee. CTC is nothing but the cost that the company incurs to employ you and keep you employed. It includes your pay and anything else that the company may incur to keep you in employment. Its important because a lot of components of your CTC may not translate into actual take-home cash every month. We fear that employees may actually be worse off as Bank managements could push variable pay through the backdoor, thereby undermining the cardinal principle of labour rights equal pay for equal work. At present, a raise to Bank employees is given on gross salary, which primarily includes Basic Pay, Dearness Allowance, City Compensatory Allowance and House Rent Allowance (HRA) in some cases. Besides, there are various allowances for travel, newspapers, leased house rent (if HRA is not availed) and medical expenses, among others. But CTC concept encompasses, every paisa the Bank spends on an employee, from concessional rates of interest on loans to the employers share in the provident fund, might be shown as part of CTC/salary. Taking into account there is already significant difference in the perks of small and large-size Bank employees and if the wage rise is given on the CTC, it would widen the gap in pay packages. Needless to underscore here Salaries of State Bank of India employees are, for instance, higher than other PSB peers. For e.g. in the Software Sector where the CTC salary concept is in vogue, it is ridiculous, as a sandwich given at the Software Company to the employee is considered as costing Rs.800/- and a cup of coffee as Rs.300/-. As a broad thumb rule, what you get in hand will be 70% of your CTC. So if your annual CTC is Rs.5 lakh, you can expect to get an annual take home of Rs.3.5 lakh or Rs.29,000/- per month. CTC concept only will inflate Bank employees salary on papers. On 29th May, 2013 there was advertisement for recruitment in Navy, they have advertised that CTC for a Sub-Lieutenant would be approximately Rs.65,000/- per month (excluding the free medical facilities, LTC, canteen facilities, entitled rations, government accommodation, loans at subsidized rates. We would like to add here that Sub-Lieutenant is the lowest ranked in Navy and his Basic Pay is Rs15,600/with grade pay of Rs.5,400/-.

Demystifying CTC Here Are Lies, Damned Lies And CTCS NUBE circular 03 / 2013 dated: 11-06-2013 rightly explained what is Cost to the Company, net salary and gross salary which are some of the key components that form part of any individuals salary structure. a transparent effort by a negotiating union. Cost to the company is the figure what companies generally like or prefer to quote when they offer salary packages to potential job aspirants. The cost to the company figures can be quite misleading for new job aspirants while seasoned or experienced individuals usually are quite obviously aware of the differences after a couple of bitter experiences. At the end of it, the amount the person actually gets in hand can turn out to be significantly lower than what he/she would have originally imagined.
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Eg: 1 Ravi, a fresh software graduate, joined a top notch IT Company. For his first job, he was extremely happy with the total CTC of Rs 6,00,000. On the basis of this CTC, Ravi made lavish plans with his first months salary. Expensive gifts for family, a swanky new bike and the latest mobile phone. But with the first salary, he realized some of his plans had to wait. His take home salary was nowhere close to his estimation of his salary. He approached his HR, who then explained the breakup of his CTC, which he had just glanced over at the time of joining. The Cost to Company refers to the total expenditure a company would have to incur to employ you. It includes monetary and non-monetary benefits, such as monthly pay, training costs, accommodation, telephone, medical reimbursements or other expenses, borne by the company to keep you employed. The total CTC need not be the actual salary in hand at the end of the month. It is simply a sum of various components put together. Eg: 2 Lets take a live example to understand this better. Arjun Malhotra recently got selected as an Assistant Manager in one of the leading Mumbai-based BPOs. It was his first job and he was offered an annual CTC package of Rs. 501624/- Wow that sounds cool he thought. He immediately did some rough calculations and estimated that his monthly salary would turn out to be Rs. 41,802/-. His happiness didnt last long when he was provided the offer letter and then it dawned on him what a cost to the company or CTC package meant. Basically a CTC package includes all of the cost factors (well almost) that a company spends on an individual. This primarily includes Employers contribution of provident funds, Gratuity, Mediclaim Insurance, Food Coupons, Loyalty bonus, and performance linked bonuses to name a few. When companies include all these factors naturally the salary has to look bloated. From an employees perspective the inclusion of the aforementioned factors doesnt reflect directly in his net salary or his take home salary. Net salary or take home salary basically means what you get in hand post the standard deductions such as PF, gratuity, and professional tax if applicable, etc. The other major factor that impacts your net salary other than the standard deductions is the income tax. Now that we have explained you what a CTC and net salary means, let us try and explain you the meaning of gross salary. Gross salary is basically the salary that is quoted on your pay slip. Gross salary doesnt include the additional components that form part of your CTC. Now lets go back to Arjuns example. Below is an extract from Arjuns offer letter. Gross and CTC Salary Breakup Components Basic HRA Transportation Education Meal Coupons LTA Medical CCA Total Gross Amount Per Month 13200 7260 800 200 1100 990 1250 8200 33000 Components Employers PF Gratuity Fixed Bonus Mediclaim Canteen Amount Per Month 1797 635 5500 250 620

Total CTC Annual CTC

41802 501624
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The above table has been divided into two segments. The components on the left are the ones that are accounted for in his gross salary while the components on the right are the CTC components which dont directly reflect in his take home pay. Most of these components such as performance bonus, gratuity, employers contribution of PF and canteen facilities do not get accounted for in his monthly take home but benefits he can derive in the long run. So if we all want to know what Arjuns actual salary is well it turns out to be just Rs. 33,000/- (Gross salary) which is approximately Rs. 8000/- less than his CTC. Once again there are also some additional components included in Arjuns gross salary such as LTA that would be paid out to him at the end of the year or the food coupons (Sodhexo meal passes) paid monthly but in the form of coupons. This again differs or varies from company to company. Most companies offer Sodhexos as a tax saving gesture where the employees get to save a certain amount annually on income tax as the deducted amount is not taken into consideration for calculating income tax. Other than what you get to see in Arjuns offer letter, different companies have a variety of components that are considered under CTC. For instance most leading banks provide home loans to their employees on a heavily discounted rate of interest. The entire benefit the employees gain from the discounted rate is added to their CTC package which hugely inflates their overall package.
INFLATION OF SALARY PACKAGE BY APPLYING CTC CONCEPT OF CALCULATION
BASIC PAY DEARNESS ALLOWANCE@36.75%, as on Aprill 2010 . HOUSE RENT ALLOWANCE@6.5% AT OTHER PLACES SPECIAL AREA ALLOWANCE@Rs400 CITY COMPENSATORY ALLOWANCE,@4% OF BP MAX. Rs540 pm. . PF CONTRIBUTION BY EMPLOYER @10% of BP(though There shall be no Provident Fund to officers joining the services of Banks on or after 01.04.2010. They shall be covered by a Defined Contributory Pension Scheme). RENT FREE ACCOMODATION (minus recover @1.20% of starting BP, ie.Rs174 pm . Furniture Facility(less, recovery @.25% of starting BP ie Rs. 36.25 pm from Rs. 80000, as admissible FIXED PERSONAL PAY at minimum. PROFESSIONAL QUALIFICATION PAY FOR CAIIB@ Rs410 pm, 2 years after reaching top of the scale. . PROFESSIONAL QUALIFICATION PAY FOR CAIIB@ Rs1030 pm. 2 years a fter reaching top of the scale. HALTING ALLOWANCE, w.e.f. 01.05.2010Grade / Scales of Officers Major A Class Cities (Rs.) Area I(Rs.) Other Places (Rs.)Officers in Scale - IV & above 1000 800 700Officers in Scale - I / II / III 800 700 600 MID ACADEMIC YEAR TR. ALL. w.e.f 01.05.2010 Rs.700/- p.m. MEDICAL AID @Rs5100 pm PETROLL REIMBURSEMENT@30 litres in a month in area III places. NEWSPAPER EXPENSES REIMBURSEMENT(@ Rs150pm..) . MOBILE BILL REIMBURSEMENT(@Rs1200pm,) ENTERTAINMENT EXPENSES(@Rs4800 pa.) . . CANTEEN FACILITY(@Rs50 per employee, in mid sized branches, KEROSENE/FUEL CHARGES FOR CANTEEN (on actual basis). cylinder pm for an office with 5 staff. @Rs50 for 12 months @Rs73 per litres for 12 months @Rs150 for 12 months @Rs1200 pm for 12 months 26280 1800 14400 4800 600 At an assumed consumption of one LPG 1032 For an assumed asset life of 10 years, (80000-(36.25*120)) Rs858 pm*12 Rs410 pm*12 Rs1030 pm*12 Rs14500 pm*12 Rs5328.75 pm*12 Rs942.50 pm*12 Rs400 pm*12 Rs540 pm*12 174000 63945 11310 4800 6480

Rs1450 pm*12

1450 1740

75650 10296 4920 1030

12360 700 5100

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 LIBRARY FACILITIES (@Rs625 p.a.) CLOSING ALL.FOR 2 CLOSINGS IN A YEAR@Rs250,per closing, BRIEF CASE COST REIMBURSEMENT(@Rs150,.). CHILDRENS SCHOLARSHIP SCHEME. EX-GRATIA SILVER JUBILEE/ MILE STONE AWARDS MEMENTO TO RETIRING EMPLOYEES. GRATUITY Compensation on Transfer Officers in Scale - IV & above Rs.12,000/Officers in Scale - I, II & III Rs.9,000/ LEAVE FARE CONCESSION, w.e.f 01.05.2010 An officer in JMG Scale - I is entitled to travel on duty by 1st Class or AC 2-Tier Sleeper by train. He may, however, travel by air (economy class) if so permitted by the Competent Authority having regard to the exigencies of business or public interest. DEPUTATION OUTSIDE BANK@7.75% of pay max.Rs2300 pm DEPUTATION INSIDE BANK@4% of pay, max.Rs1200 pm HILL AND FULE ALLOWANCE, w.e.f 01.11.2007Places with an altitude of 1000 meters & above but less than 1500 metres & Mercara Town 2% of pay subject to a maximum of Rs.550/- p.m.Places with an altitude of 1500 meters & above but less than 3000 metres 2.50% of pay subject to a maximum of Rs.680/- p.m. Places with an altitude of 3000 meters & above 5% of pay subject to a maximum of Rs.1,570/- p.m. CTC Per Year CTC Per Month,as on 01-04-2010 ACTUAL STARTING SALARY OF A JMG SC-I, AS ON 01-04-2010 PM SALARY PACKAGE INFLATED BY CTC CONCEPT: CTC FOR PERSONS MAY BE ADJUSTED FOR CC ALL AND NON CC ALL. RECEIPENTS.

At an assumed staff strength of 5

125 500 150 4000 100000 4000 5000

Not included as contingent upon it happening.

9000

Not taken into calculation as not admissible to all.

438978 36,581.50 21171.25 73% 15410.25

CTC emerged as a new and novel way to window dress salary packages to project them more than what one gets in his/her hand. Beware, the CTC concept is being toyed with, by FINMIN and IBA, to create a feeling that, bank employees are already getting more than what they deserve, so, there is no need for any further hike. But, it defies logic, why, government employees are kept untouched from this seemingly novel concept and pay commission structured pay and facilities are continued for them inspite of the stark disparity between pay of government employees and bank employees. Even State Govt employees get more than what we get. Let the Finance Ministry lead from the front and show it to the Nation how the CTC structure be implemented by moving all the MPs, MLAs, Ministers, PM, President etc etc as well as the Govt Employees to the CTC Model first. Lets not forget Charity begins at home first. So please preach what you Practice Negotiations on 12-08-2013 IBAs Negotiating Committee headed by Shri.T.M.Bhasin met the Eleven (11) negotiating unions on 12-08-2013 at IBA office in Mumbai.We reiterated our demand raised in the meeting on 7th June, 2013 meeting with IBA as under 1 There should be a time bound programme to complete the negotiations without much delay to arrive at the wage revision settlement at the earliest.
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1 1 1

the wage revision should be effective from 1st November 2012 that new pay scale should be constructed by merging the DA at 4876 points i.e. the DA applicable to July- September, 2012 quarter we also submitted that in the proposed wage revision, the hike in wage load should be exclusive of the cost on pension and other superannuation benefits and also the cost of hospitalization expenses reimbursement

The IBA was gracious enough to consider our demand as below; ' The new wage settlement would be effective from 1st November, 2012, i.e. the date from which the 10th Bipartite Settlement is due. ' IBA agreed and conceded to merge Dearness Allowance upto 4440 Consumer Price Index i.e. 401 slabs (against actual 4953 points at the end of October 2012) and construct new pay scales accordingly. ' recommendations for introduction of compassionate appointment scheme on similar lines prevailing in Central Government for its employees has been sent to Ministry of Finance, Govt. of India for its approval. However in respect of increase in wage load while responding our demand, IBA indicated that the same would be kept in mind by them and wanted to study the cost impact of the merger before responding. In respect of Reimbursement of Hospitalization Expenses IBA offered introduction of Mediclaim policy facility under which hospitalization expenses would be reimbursed by the insurance company upto Rs. 2 lacs for sub-staff, Rs. 3 lacs for clerical staff and Rs. 4 lacs for officers per year. Taking into account that hitherto the distribution of wage load under this scheme is only a fraction of total wage load, and that the industry wide scheme has been improved by many banks under the staff welfare fund which has stood the test of time, we contended that an objective study is required on the contents of the scheme offered before responding. The managements issues like introduction of cost to company method, Fixed Pay and Variable Pay concept were discussed. We once again reiterated our opposite views against the same as per tenor our earlier circular 3/13. However, the matter remained inconclusive. IBA informed that they will shortly inform us the date for the next round of negotiations. We shall apprise you of further developments form time to time. Comrades , we have been receiving suggestions with insight from our readers in social networking sites and as well as our rank and file though out the country as how the 10th bipartite should proceed further so that costly mistakes of the past and historic distortions which occurred does not repeat . NUBE is abreast of these suggestions and will endevaour to ensure that bank employees have just 10th bipartite wage revision no holds barred , no stones unturned While our demands are logical and reasonable and we have our own priorities, it is obvious that the bankers and the Government also have their priorities. That is why we are faced with the retrograde recommendations of Khandelwal Committee report. While the entire details of the report and the recommendations are annexed to this report in the exclusive Information Document, all of us know that basically the attempt is to scuttle Industry-level bilateralism and collective bargaining and to dilute our hard-won rights and benefits. It is nothing but a targeted attempt to weaken the trade unions and to deunionise the employees who are today putting up a valiant battle against the banking reforms in our country. Hence, these are the diabolical game plans of the Bankers. As we undertake the negotiations, all these attempts will unfold. Hence, achieving our demand for 10th Bipartite wage settlement would be a Herculean task. Of course, all of us know that every Bipartite Settlement has been achieved after bitter struggles and this time too it will be no exception. Hence, while popularizing our charter of demands amongst the rank and file and the justification for our adequate wage revision, we must also prepare our members for bitter struggles against the Governmentbankers combine to achieve our demands. In the months ahead this will be an important task because wage revision demands cannot be ignored. The more effective our preparation for the struggles, it would make the achievement easier and any complacency in this regard would be only at our own peril.
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CHAPTER - XIII
Other Just Demands of NUBE
Ex-Gratia Pension For Pre-1986 Retirees Since the Pension Scheme was implemented with effect from 1.1.1986, the employees who had retired prior to that cut-off date were not covered by the pension scheme. However, there have been representations from these retirees that they must also be extended some pensionary benefits. In RBI an Ex-gratia Pension Scheme was introduced for those pre-1986 retirees. Based on this the Government has provided a scheme for banks for payment of Ex-gratia Pension for the pre-1986 retirees in all other banks. Such retirees are being paid an ex-gratia of Rs.300/- + DA thereon over 600 points (688.9% at present). In addition, the spouse, of these pre-1986 retirees upon their death, are paid a lumpsum ex-gratia pension of RS.1000/per month (without DA thereon). Since these amounts are fixed long back, looking to the increasing medical needs of these very senior citizens, from NUBE we have taken up the matter with the Government for suitable enhancement in the Ex-gratia pension. The Government has agreed to consider our requet sympathetically and has advised the IBA to submit their recommendations to them whereafter the decision will be taken by the Government in this regard. It is reported that some improvements in the ex-gratia pension would be achieved in the months to come. Improvements In Pension Scheme We are aware that as a unique acheivement of NUBE we could secure the introduction of defined benefit Pension Scheme for the bank employees in 1993 with coverage to all employees retired from 1.1.1986. The odds against which NUBE had to fight to achieve this social security benefit for the employees is a matter of history reflecting the foresighted vision of NUBE. Even those who had reservations about the benefit of the scheme and those who were opposed to the Pension benefits had later changed their opinion and today it is a single opinion of every one that pension benefits all. We are aware that the bank employees pension scheme has been achieved on the lines of the scheme applicable to RBI employees and Central Government employees. In the last nearly 2 decades the Pension scheme in the Central Government has been improved upon in many ways. But these improvements have not yet been extended to the bank employees. The recommendations of the 5th and 6 th Pay Commission for the Government employees have been by and large accepted by the Government. Hence, there is a case and need for improving the Pension Scheme for the bank employees. The improvements relate to periodical updation of pension at the time of wage revision, even for the past retirees, uniform indexation of the pension at the same index at which the pay scales are based upon, uniform DA rates for all pensioners, improvements in commutation and family pension, improvements in eligibility criteria, calculation of pension, higher quantum of pension with increasing age, etc. All these are vital improvements and hence the same need to be incorporated in the bank employees pension scheme. These are also the genuine expectations of the bank retirees. From NUBE we have been pursuing these issues with the IBA and Government and all the demands have also been incorporated in the current charter of demands. With the increase in the longevity of life of the people, the payment of pension would be for a longer period than in the past. The quality of life in the post-retirement period has to be endured and improved upon. This is possible only if the pension benefit, which is the main source of financial back up for the retired employees,is adequately improved and periodically updated. In the last 10 years we had the main task of fighting for one more option to extend this social cover to all the remaining employees who remained in the PF. Now with the achievement of Pension Option Settlement whereby all the employees have been covered by the Pension Scheme, we have to focus our efforts on improving the Pension scheme. In the coming years this will be one of the priority issues of the NUBE.
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Uniform Housing Loan For Bank Staff As per earlier uniform Government guidelines the housing loan quantum for bank employees was fixed at Rs.3.00 lacs for sub-staff and Rs.4.50 lacs for clerical staff. Since this was found to be totally inadequate with the steep rise in housing costs, from NUBE we represented to the Government and the IBA, for revising the guidelines and increasing the housing loan limits. However, instead of formulating uniform guidelines, the housing loan limits have been revised upwardly be some of the banks to around Rs.8.00 lacs and Rs.12.00 lacs for Sub-staff and Clerical staff respectively. The rate of interest is neither uniform nor subsidized. Hence, NUBE has been pusuing the issue for a revised uniform guideline in this regard. The issue needs to be further pursued in the days to come. Outsourcing of regular jobs a serious threat Our 8th Bipartite Settlement provides as under: Clause 31 (h): While it shall be the endeavour to re-train / re-skill staff and to develop in-house competencies, they may outsource IT and its related activities in respect of specialized areas where in-house capability is not available. This clearly means that no other area of banking work can be outsourced. However, in the recent years, in the name of Government and RBI policy on outsourcing, the bank managements are moving with impunity in the matter of outsourcing our regular perennial, permanent jobs in the banks, thus threatening and endangering the jobs and job security of the existing employees and scuttling the employment potential for the unemployed youth in our country. The issue was brought as demand of the IBA during the 9th Bipartite negotiations but the same was rejected by us. Ultimately, the IBA retraced their steps and the settlement was signed without any further provisions on outsourcing. But there are instances in the variouis banks where various types of jobs are being outsourced and are sought to be outsourced to contract employees and also to contractual agencies. Business Correspondents: This is another area where in the name of reaching out banking service to the villages, normal activates and banking jobs are being outsourced. Under the Governments scheme Swabhiman Banks are increasingly resorting to Business Correspondent model. As per RBI Report-2012, so far Banks have implemented this scheme in reaching the villages of above 2000 population as under: No. of villagescovered Central Region Eastern Region Southern Region Northern Region Western Region North Eastern Region All India 27,217 26,809 20,536 12,539 11,282 4,277 1,02,600

From NUBE we stongly feel and demand that while banking services must reach the rural areas more and more, it should be undertaken by the Banks by opening more and more branches and not through this private outsourcing method. Hence we are opposed to the same. We must draw out proper campaign to focus our views and demands and build it up more effectively in the days to come.

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Ultra Small Branches This is another hoodwinking method of outsourcig the rural banking operations. These are neither small nor any kind of branch. These are simply privately handed over outlets to do banking business by private agencies. Hence, there are multiple ways by which regular banking jobs and banking operations are being outsourced. . . . . . Outsourcing is a serious menace and will out-grow if the same is not checked and fought out resolutely. Outsourcing, if allowed unchecked, will surely endanger the jobs and job security in the Banks sooner or later. Outsourcing, if allowed unchecked, will permeate exploitation of employees working in the Banks. Outsourcing, if allowed unchecked, will curtail permanent employment opportunities. Outsourcing, if allowed unchecked, will result in differential wage payments for the same job done one for the permanent employees and the other and lesser wage for the outsourced workers. Outsourcing, if allowed unchecked, will weaken our trade unions, since the outsourced workers will not be part of our Union, rather they would nurse grievances and grudge against the permanent employees who would be enjoying all benefits and job protection unlike them. Outsourcing, if allowed unchecked, would also blunt the effectiveness of our struggles, since the outsourced employees would always be available to the management to offset our strikes.

Of late it has become the fad on any employer to opt for outsourcing in the name of cost curtailment. But for our vigilant follow up the menace of outsourcing would have had its hold in many areas of routine duties even ultimately affecting the employment opportunity itself. Even then in certain areas like house keeping, guarding the ATM etc, the duties have been outsourced notwithstanding our resistance. In the Bipartite regarding outsourcing it has unequivocally stated that only in certain specialized areas it can be resorted to as below. While it shall be the Banks endeavour to retain / re-skill staff and to develop in-house competencies, they may outsource IT and its related activities in respect of specialized areas where in-house capability is not available. Even then our administration took steps to outsource the responsibility of funding the ATMs to certain private agencies. Vide our communication, we made it clear that bank should forthwith dispense with the move. We also put in explicit terms that our nominee in the Board would resist any such efforts by the Board. Properly realizing the serious implications, the management did not proceed further. Hitherto the bank staffs were carrying out all the responsibilities related to ATM deployment, site work, cash replenishment, reconciliation and settlement to consortium members. Recently the bank under instructions from Ministry of Finance had come out with a policy on installation and managed services of cash dispensers on totally outsourced basis. The Ministry has proposed installation of cash dispensers CD (ATMs) for Public Sector Banks including RRBs under Opex model on totally outsourced basis. Under this model the identified vendor is responsible for procurement, installation and maintenance of the cash dispensers besides ambience of the CD, maintenance of UPS and other fixtures in the CD site. Since it involves the entire banking industry, we await the response from the national organisation. Organising The Contract Employees While it is necessary to fight and stop outsourcing of our jobs in the banks, we cannot close our eyes to the outsourced employees and contract workers who have already come into our banks in the recent years. It
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is our duty to organize them and integrate them in our trade unions. They and their exploitation cannot be and should ot be ignored by us. We must organise them in our trade unions and fight for the amelioration of the job condition and to ultimately absorb them as permanent and regular employees of our banks. In the recent charter of demands submitted to the IBA we have raised the following demands: a) b) c) All types of outsourcing of regular permanent jobs are to be withdrawn which are not covered by existing settlement provisions. All temporary / contract / casual / outsourced employees should be absorbed. Equal pay for equal work for contract workers.

The Central Committee of NUBE has also decided to organise these contract workers under our Unions in all the banks and in all the States and this task should also be taken by our unions with all seriousness.

NUBE Demands
Increase Retirement Age to All
Few years ago the Government rolled out handsome cash incentive scheme (Statement of Intent) for CMDs and EDs commensurate with the performance of the Banks. During November 2006 the Government considered social security bonanza of reimbursement of full hospitalization expenses to whole time Directors and their surviving eligible dependents for their entire life period. Close on the heels of these incentives, on December 5, 2012 there appeared a news in all the leading dailies that the Government is set to overhaul the process of appointing the top management of two dozen public sector Banks and financial institutions, including an increase in the retirement age to 64 years in a phased manner. It further stated that the Finance Ministry has moved a proposal to the Appointments Committee of Cabinet, suggesting that Banking being a specialized activity, it needed Chairman and Executive Directors with at least a five-year term instead of the average tenure of one-two years at present. In fact, it pointed out that in technical departments, the retirement age was already increased to 64 years and argued for a similar dispensation for Bank Chairman and Managing Directors, a move which is being seen as a precursor to raise the superannuation age in Government-owned Banks over the next few years. NUBE appreciates and welcomes these favourable developments to the custodians of the PSU Banks which is in tune with global trends. NUBE makes it pellucid that the unions in the Banking Industry have been demanding increase in retirement age to all employees right from the fifth Bipartite Settlement and are eagerly expecting similar stand of the Government to increase their retirement age. In support of the same we give below the following justifications. A large number of people joined the Banking Sector in 1972-73 following the Nationalisation of Banks. The next wave of recruitment came in 1980-81, and then there was a lull in activity. Due to a legacy of ban of recruitments for two decades, the public sector Banks are witnessing unprecedented loss of skills and competencies in form of massive retirement over the next few years. Indias Public Sector Banks have employed some 7,00,000 people, many of whom are to retire in the next few years. The business has grown manifold in the past decade, but employees strength has dwindled. At the start of the last decade, at least 100,000 employees left the industry, responding to the first ever golden handshake scheme in the sector. Since then, there have not been too many recruitment drives. Banks have embraced technology, but that has not been enough.

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Thus Banks are going through an unusual manpower crunch. There are reports of experts that in the next 10 years, they will have to hire around one million people to keep their branches running and account for retirement and natural attrition. Finding the right candidate for a leadership position will be even tougher. So many people leaving at the same time has prompted the Reserve Bank of India to call the 10 years from 2010 to 2020 as the decade of retirement. This peculiar situation facing state owned Banks is as much an outcome of the slowdown in recruitment in the 1990s due to lack of retirement planning. A report by Boston Consulting Group endorsed the above fact that PSU Banks will need to employ 9 to 11 lakh employees over the next five years, The report, which includes a survey of about 14,000 customers, 50,000 Bank employees and analysis of data obtained from about 35 Banks in the country, said about half of the employment will be due to attrition. Even The Khandelwal committee, which was set up to address the human resource challenges of state-owned Banks, while acknowledging the manpower shortage Banks are facing, said: The leadership gaps in public sector Banks are palpable. In the next five years, 80 per cent of general managers, 65 per cent of deputy general managers, 58 per cent of assistant general managers and 44 per cent of chief managers would be retiring. Retirements in public sector Banks will continue to increase and peak by 2017. In total, 1.8 lakh employees will retire and will be replaced. Depending upon the productivity growth, the industry will need 2.5 4.5 lakh additional people for growth in business. Today Banking has become increasingly relationship driven in order to get the best value out of the customers. Banks are also not certain whether the prospective candidates are serious in pursuing Banking as a career. It is also the fact that since the salary package is not attractive to attract new talents, there is huge attrition rate of over 30% among the new recruits in all cadres and Banks are unable to retain them with over 100,000 experienced employees of PSBs retiring on superannuation in the next 5 years, Many PSBs are also facing the problem of employee turnover and Public sector Banks will edge out in competitive edge to give the best value out of the customers if the management of the Banks are not quite alive to initiate various measures to contain it. A study states during the period 2004-2011, the number of branches of all Nationalised Banks grew from 34,469 in 2003-04 to 45,850 in 2010-2011. It registered an annual growth of 3.99 per cent, with an average of 38,387 branches functioning every year. The number of employees of all Nationalised Banks decreased from 570951 in 2003-2004 to 473041 in 2010-2011. It registered negative annual growth of -1.59 percent, with an average of 477428 employees working every year. But the deposits of all Nationalised Banks grew from 7, 94,427 crores in 2003-2004 to 29, 46,636 crores in 20102011. It registered an annual growth of 20.22 percent, with an average of 15,94,500.25 crores deposits every year. The advances of all Nationalised Banks grew from 412521 crores in 2003-2004 to 2154380 crores in 2010-2011. It registered an annual growth of 25.89 per cent, with an average of 1114018.63 crores advances every year. The investments of all Nationalised Banks grew from 378873 crores in 2003-04 to 877326 crores in 2010-2011. It registered an annual growth of 12.20 per cent, with an average of 5,41,486.63 crores investments every year. The total business of all Nationalised Banks grew from 12, 00,454 crores in 2003-04 to 51, 01,016 crores in 2010-2011. It registered an annual growth of 23.02 per cent, with an average of 2745561.25 crores business every year. At a glance it is evidenced that the growth rate of deposits, advances and total business is more than the growth of branch expansion and employee recruitment. It shows that the business performance of Nationalised Banks has improved during the study period. But the co-efficient of variation of branch expansion and employees recruitments are relatively low. The group which has less co-efficient of variation is said to be more stable. The co-efficient of variation of other variables such as deposits, advances, investments and total business are high. A high co-efficient of variation indicates less consistency or less homogeneity.

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It is found that branch expansion, deposits, advances, investments and business performance are positively correlated to other variables, whereas employee recruitments negatively correlated to all other variables. It shows that even with a decline in number of employees, the business performance of Nationalised Banks is not affected. Public Sector Banks are required to perform all types of non productive work such as payment of pension, old age pension, MANREGA payment, teacher salary payment, tax collection, selling of gold, mutual fund and insurance products etc which Private Sector Banks are not doing. It is Public Sector Banks which have to shoulder the responsibility of target for Financial Inclusion fixed by the Government. Similarly Public Sector Banks have to lend for agriculture development, distribute UGC and take part on all KVC projects recommended by District Industry centers. In other words it correlates to the additional work pressures and responsibilities which, dedicated, hard working Bank employees are shouldering and has reached a stage of break down if the vacancies arising out of envisaged massive retirements in another 5 years stated above are not addressed through visionary manpower planning, pragmatic salary structures and service condition in the 10th bipartite. While we have often heard of people leaving Banks to join finance, legal, accounting firms, etc. seldom have we heard of people leaving these professions to join Banks? This needs to change. The right people will come only if they are paid competitive salaries. In this context NUBEs pragmatic demand for 45 % increase in wage load in the Charter of Demands submitted to IBA assumes significance than ever before. The Banking sector is expected to grow at approximately 20 per cent over the next decade and will need major induction of talent, a significant part of which is to replace vacancies arising due to retirements in Public Sector Banks. At the current rate of attrition, the industry will need to employ over four lakh more people. Employment can be announced through news papers by IBPS but retaining them on account non attractive salary package, long hours of work, no defined working hours, slow career progressions etc. the gap between the actual need and attritions pointed above is going to be tough task to be bridged. As the economy grows at a steady rate of around 7-8%, incomes rise and demographic dividends start accruing, the Banking industry is expected to take a quantum leap forward. But this growth will need a large number of people and considering that there are retirements in lakhs, a defining moment is being presented before the Nationalized Banks to transform. So in tune with this defining moment increasing retirement age is a thoughtful move and is the only alternative which will result in better use of retaining the knowledge and experience of the existing Bank employees to sub serve targets and goals of the Banks to face a host of HR challenges, effectively recovering the rising non performing assets (NPAs), right manpower retaining, training, retaining existing talent, leadership development, credit appraisals , recovery, risk management and augment succession planning of fresh recruitments Planning, Acquiring the right people, Retaining/ Developing the people, Managing people separation / exit. The Central Government has already increased the retirement age of professors in all the Central Universities from 62 to 65 years, two years back. It was not just a matter of filling the ranks of teachers, but imparting quality teaching. On August 18, 2012, The Prime Minister Dr.Manmohan Singh, speaking at the 150th year celebrations of the Bombay High Court, said the Government was in favour of raising the age of retirement of High Court judges. Presently, Supreme Court judges retire at 65 and High Court judges at 62. The Prime Minister was referring to the Constitution (114th Amendment) Bill 2010 to raise the retirement age of only the High Court judges from 62 to 65, which was tabled in Parliament for the working of the

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superior judiciary which require far-reaching changes and to secure the quality of judges is tune with the global trends. In leading Supreme Courts abroad, the retirement age is above 65. In the High Court of Australia (which is the apex court there) it is 70, in the Supreme Court of Canada 75, in the Supreme Court of Ireland 70, in the Supreme Court of Israel 70, in the Supreme Court of New Zealand 68, in the Constitutional Court of South Africa 70 or after 12 years of service, and in the U.K. Supreme Court 75 and no retirements in U S. Describing shortage of doctors as a global problem, many States Governments have tried to solve this by increasing the retirement age of doctors. Whether it is true or not but it is believed that Railway gave its consensus to raise the retirement age of its employees, as it is already re-engaging their retired employee for daily remuneration after their retirement till the age of 62. It was followed from 1998 with the reference of Railway Board Letter No.E (NG) II/97/RC-4/8 dated 03.02.98. In 2009 the rates of Daily Allowances also revised for engagement of retired employees on daily remuneration basis. The National Democratic Alliance Government had raised the retirement age from 58 to 60, in 1998, a move that benefited 90,000 Government servants and 50,000 Defence personnel. At the time, the logic was: the retirement of 140,000 employees would have costed Rs.5200 crore whereas paying salaries cost only Rs.1493 crore. And there were many reports after introduction of sixth pay commission that the Central Government is keen on extending the retirement age of civil servants to 62, on fiscal grounds, to curb expenditure on pensions as had happened when the retirement age was raised from 58 to 60 in 1998. Over the last three years there were further reports in newspapers that the Board for Reconstruction of Public Sector Enterprises (BRPSE) had recommended to the department for increasing the retirement age of employees of loss-making Central Public Sector Enterprises (CPSEs). For one thing, life expectancy in India has gone up. According to UNICEF, in 2007 it was 64 years, and this is a figure that the average Bank employee would have pulled upwards. Thus, when a civil servant or Bank employee retires at 60, she or he is still at their mental peak, and each acts as an institutional storehouse of Government/Banks policy and programme implementation. Retaining them for another two years would possibly enrich functioning of the Government/ Government Banks. Global Scenario of Retirement Age : The increase in retirement age and year it was introduced given in the parentheses (brackets) for males in many countries are as under : Albania (64.5) (2011), Armenia (63) (2011), Austria (65) (2011), Azerbaijan (62.5) (2011), Belgium (65) (2009), Bosnia and Herzegovina (65) (2011), Bulgaria (63) (2011), Croatia (65) (2011), Cyprus (65) (2011), Czech Republic (62.5) (2012), Denmark (65-67) (2008), Estonia (63) (2011), Finland (62-68) (2008), France (62) (2011), Georgia (65) (2011), Germany(65) (2008), Greece (67) (2012), Hungary (62) (2011), Iceland (67) (2007), Ireland (65-66) (2008), Israel (67) (2011), Italy (66) (in the 2011-2013 budget), Kazakhstan (63) (2011), Kosovo (65) (2011), Kyrgyzstan (63) (2011), Latvia (62) (2011), Liechtenstein (64) (2007), Lithuania (62.5) (2011), Luxembourg (65) (2011), Macedonia (64) (2011), Malta (61) (2008), Moldova (65) (2011), Montenegro (64) (2011) , Netherlands (65) (2011) , Norway (65) (2011) , Poland (65) (2011), Portugal (65), Romania (63) (2008), Serbia (63) (2011), Singapore (62) (2012), Slovakia (62) (2012), Slovenia (63) (2008), Spain (65) (2011), Sweden (61-67) (2011), Switzerland (65) (2007), Tajikistan (63) (2011) Turkmenistan (62) (2011) & United Kingdom (65) (2011). The retirement age in the US is 65; in Japan it is 60 and the Government is gradually raising it to 65 by 2013, but people anyway continue working till 65 on reduced wages. By 2011, Austrias retirement
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age will be 65. In Denmark it will be 67 years by 2008. Hungary plans to make it 69 years by 2013. Israel is already raising it to 67 years for men. French Senate house voted and passed the core article of the pension reform bill to prolong the minimum retirement age to 62 on October 9, 2009. Retirement in Germany may rise to age 69.All these countries and many others are increasing the retirement age because of an increasingly alarming problem their ageing populations. By 2020, a quarter of Japans population will be 65 and over. Life expectancy in the US is about 77, and by 2050 is expected to go up to 83. Japans is already 82.4 years. Indeed, the life expectancy in some of the advanced countries, according to 2009 OECD data, are: France 80.9 years, Canada 80.4 years, Sweden 80.8 years, Italy 80.9 years and Spain 81.1 years. An UNDP report states in India in 2010, 5.3 percent was aged 65 or older. This percentage is estimated to increase, and at an increasing rate. By 2025, these numbers will be 7.7 percent in India and by 2035 they will be 10.2 percent and will be termed as country of good, grey haired people. As India gets wealthier which it undoubtedly is our populations life expectancy will similarly increase. Imagine a person retiring at 60, but living till at least 80 (if not more), perhaps physically weakened as she or he passes 75, but still mentally at the top of his or her game. What do they do with such a long retirement? And besides the fact that the increase in life expectancy leaves retirees with too much time on their hands and their skills unutilized, it also places a great burden on the working population, which has to finance the social security and health benefits that the elderly need. In the West it costs much more to maintain an elderly person than it does to raise a child; and health care costs in the rich world are projected to be those countries biggest finance headache (much more than the costs of the stimulus to end the current economic crisis). Thus it is not surprising that there are an increasing number of voices in the West and Japan who are talking of increasing the retirement age to 75. Increasing the retirement age will engage the older citizens, contribute to the state exchequer in terms of taxes from older workers, and reduce the social security burden on the young. In a move that will benefit hundreds of bureaucrats across the country, even the federal Government of Pakistan has announced a two-year increase in the retirement age of all civil servants. The decision came into effect from 1, November 2012. The change has been made through a presidential approval by amending the Civil Services Act 1973, instead of the usual parliamentary amendment. Finally Private Sector Employees, Public Sector Employees, Government Employees, Bureaucrats, Judges - all have a retirement age. Individuals running their own businesses hand over the baton to the next generation at some point of time. But what are our Parliamentarians doing? Once they get elected to Parliament they find ways not to retire. A Times of India data states The 1st LS had 112 MPs in the age group 25-40 and the 14th LS have just 63 MPs in the same age group. On the other hand, the 1st LS had just 1MP in the age group 71-90 and the 14th LS have 38 MPs in the same age group. Is this truly representative of the youth of India, given that half of India was born after 1983? The above table is definitely not encouraging. Interestingly, these are the same MPs who decide the retirement age of an average Indian and a well qualified professional Indian heading a prestigious Institute. Tony Blair was 43 when he became the Prime Minister of Britain, Barack Obama is 47. But in India Sexagenarian is now touted as the young face of his party. Even our would be young leaders are old.

Taking into account that life expectancy in India has increased consistently over the last decades. Keeping in view of the entire above aspects, NUBEs demand for enhancement of retirement age is just and right. News papers are agog with reports that the Centre has not really discarded the move to increase retirement age altogether. But economically speaking, the Government with a large fiscal deficit, could lessen the
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burden by raising the retirement age as it may save more money by not paying the retirement benefits such as gratuity etc. for two years though the Governments salary budget would immediately be inflated. NUBE hopes that the Government will soon enough have the political wind and will to back our just demand of increase in retirement age as per global trends and justifications cited above for it is an eminently sensible one.

Let Us Push Forward Our Demand 5-Day Week! Aggressively Pitch For Our 5-Day Week Charter! Mobilize Support Of Wider Society!
We can draw pride that NUBE was the first to strike the bell first with its 102 page well researched comprehensive charter of demands for the 10th Bipartite demanding 45 % increase in wage load with rationale justifications which was widely covered in 28 social networking sites and media. Thereafter NUBE was the first once again demanding increase in retirement age. With its well researched memorandum within 24 hours after the news papers published report that the government is planning to increase the retirement age for whole time directors, which was again covered in 39 social networking sites and media. Now spearheading the bank employees cause, NUBE has taken the lead to push for 5 day Banking with the enclosed exhaustive memorandum to government with its well researched justifications. NUBE continues to be the news in the internet as could be seen once again this memorandum is covered in 38 social networking sites as on date and recognized and appreciated in the Financial Express of 13th December 2012, and Dinamani a leading Tamil newspaper. Today NUBE has 2 lac virtual supporters as confirmed by the comments, their hits, likes and views which are very encouraging. The undersigned informs you with vigour and zest that our office is inundated with letters of appreciation from scores of bank employees. Equally with a sense of pride and satisfaction we inform you that many leaders including some leaders in UFBU in the bank employees movement have telephonically conveyed their appreciation to NUBEs efforts in disseminating information buttressing trade union education. In short NUBE is the NEWS in the internet. In its memorandum, the union said the demand for a 5-day week was in tune with global trends. Even Pakistan did not shy away from the implementation of a 5-dayworking week in banks and now reaping the benefits ADDUCING AND AADUMBRATING RATIONALE AS UNDER. We had vide our letter dated 23-02-2012 had requested the Government and IBA to consider our demand for 5 day week in tune with global 5days scenario and taking into account Banks in India, are moving towards the trends prevalent in the developed part of the world, where, customers are encouraged to do their routine banking chores, through alternate banking channels, like, net banking, ATMs, mobile bankings etc. and visiting brick and mortar bank branches are discouraged barring urgent situations and compliance to this is achieved by imposing charges for transactions done at bank branches, after few free transactions. We adduce the following additional justifications in pursuance of this just demand. O Today Banks in India have a lot of technological banking delivery channel at all the place in India. It shall be productive both for bank and their employees in the form of saving of expenditure etc if 5 day week is introduced. Further even now Citi Bank in India has 5 days banking for their employees although bank remains open for 6 days. Further our financial market has completed integrated with International Fin market which remains open for 5 days. In India also other than bank all financial market are open for 5 days and they are doing quite well. In our rural areas still we are practicing one day as NBWD thus rendering 5 days banking. Hence Government may increase banking hours for public to have a 5 days work in a Week
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Syed Wasimuddin, chief spokesman of the Central Bank of Pakistan has said that Pakistans central bank will remain closed on Saturdays as part of the governments plan to ease its power crisis. This decision was made after the government decided to observe a five-day working week for all federal offices. The country is facing a gas shortage of nearly 2.0 billion cubic feet per day. Total electricity demand in summer months outstrips supply by 22 percent - or about 6,000 megawatts - during peak hours. India is not an exception to power and fuel crisis and many state power/ fuel crisis is getting accentuated day by day. The 5 day week introduction in banks will conserve power and energy. A study made by a reputed research organization states that The estimated savings if state government offices across Karnataka switch over to a five-day week, can save Govt. Rs 960 cr and that savings could be used to construct 30 flyovers, each estimated at Rs 32 crore. The estimate was arrived at by the authorities based on three factors: average annual spending on office overheads, a comparison with the percentage saving recorded in 1983 when the fiveday week was introduced for a few months and an estimated saving prepared as part of the budget proposals of 2002-03 ( http://articles.timesofindia.indiatimes.com/2008-02-08/ bangalore/27780130_1_5-day-week-salary-expense) Hence 5 day week in banks all over India can substantially save exchequer for the Nation. Five days in a week system, is prevalent in United States Of America and other developed countries of the world whom we always try to emulate. We give a peep into some of the interesting insights below: In India the average person works 11 hour day six days a week = 66 hours a week !! Compare that to France where a 35 hour week is mandatory. The Japanese are renowned workaholics and have been working themselves into the ground for decades hence the word karoshi or death by overwork. Maybe Indian companies should look at Japan and take lessons of what not to do from them. It is not enough to have a colorful office with balloons hanging around to ensure the work environment is stress-free, says Sharit Bhowmick, sociologist with Tata Institute of Social Sciences (TISS), who writes about workplace pressures. He has a point. The solution is that the Indian Government migrates the whole nation to a fiveday working week, as France has done, and also makes a seven day working week illegal. Advocacy for five days a week system also sport big names in international business, like Ford, Henry Ford declared the five days work-week with a pay of six days. The concept was to pay the employees and workers more and create time away from work. The Leisure time, as described by him was quintessential for productivity. The extra cash would be spent on consumerism hence add on to the GDP. His concept was, a well managed business pay higher wages and sell at low prices. Five days work week concept seems to be rolling post recession for obvious reason. As the demand for the business increase, the hiring has been aggressive. Hence the talent shortages have been balanced. The retention strategies now designed, no longer includes growth and benefit but work-life balance. Hence offering a longer weekend works as a benefit to the employees. The Organization for Economic Co-Operation and Development just released their study on average annual hours worked per worker in 2008, also reveals that, throughout world, most of the countries have adopted less than 40 hours a week working system. In India too, the new general places including regulators like Reserve Bank Of India, are having five days in a week working schedules. Moreover, State Bank Of Pakistan as mentioned above following suit, has already adopted five days in a week, working system and benefitted immensely as evidenced in this news report: The five-day week system adopted by the government has

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saved millions of rupees in fuel and energy costs, besides enhancing efficiency and improving social life of the people, a survey said. The government initially adopted the five-working day week to cut down by 33% or 500 MW of electricity in April this year and the results were soon evident. O Moreover, a shutdown of banks for one more day will result in conservation of valuable resources like, power, fuel etc. and above all, replenishment in working ability of bank employees, resulting in better services to banks clientele. Bank employees in India, today, are achieved lot, most of them have to work till late at night, thanks to increasing workload due to adoption of CBS platform and dwindling employee strength due to ongoing problem of attrition plaguing banking sector mostly PS banks, thanks to the regressive manner of functioning of HRDDs at PS Banks. So, there is an immediate need for migration into five days in a week working schedule for saving the employees of this sector from burnouts and resultant ailments. Supreme court of India have given succour, by declaring sleep to be a right, on par with constitutionally guaranteed right to life, giving newer meaning the Y.B Yeats famous lines tread softly for your tread on my dreams the Honorable Justices observation that sleep is essential for a human being to maintain the delicate balance of health, necessary for its very existence and survival is unexceptionable. It is certainly, added a new dimension because nobody can idle fellow human beings from right to have a good life. the recent supreme court observation about right to sleep added another dimension to this glaring need 5 days week In addition, the advent of alternative channels of banking, like ATMs, Net Banking, mobile banking, cash deposit facility through ATMs etc. making branch visits redundant for customers, more so, some banks have also implemented deduction of charges for customers for enjoying ambiance of branches, in a bid to discourage physical visits to bank branches. So, when banks themselves, albeit with consent from FINMIN are trying to make branch visits and banking through visit to brick and mortar branches, redundant, by imposing levies for such visits, the logic that, increasing one more weekly holiday, will create ripples in the business and economy arena of the country and effectuate the bank depositors in an adverse way, does not cut much ice either. At present, in India, all Central government establishments, RBI, Forex Department, Parliament, State Assemblies, Treasury, IT/BT industries and Western Countries observe 5 day week. Majority of State government offices remain closed on Second Saturday of the month. Therefore Banking Industry switching over to 5 day week will not have any adverse effects. contrary to what the mandarins of FINMIN and representatives of Indian trade and industry say With the technology savvy not sparing the Banks and banking services at the counter within the premises etc., being replaced by anytime Banking, internet banking, anywhere Banking etc., and important clientele adopting 5 days week, there is a strong urge for introduction of 5 days week in banks for all. In fact with growing ATM networks of nearly 50000, CBS network in all banks and on line facilities and customer terminals lot of petrol/diesel will be saved by 5 days week, which may otherwise be put to use. The Central Government itself has decided to reduce the working days and enhance the working hours of banks. It would have been better for the government to have consulted the Reserve Bank of India and the Indian Banks Association (IBA) in this matter. The Government has decided that instead of 6 day per week working it will work as 5 days only. Saturdays and Sundays will be off days. But daily working hours now will be one hour more. Instead of 10 to 5 now it will be 10 to 6 O clock.
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These days customer services are provided upto 4 pm. These days the working pattern in India is based package and contract system. Instead of fixing working hours it based on target working. The bank staff have been demanding fixed working hours. In target working they have to carry on the work much longer even upto 7 or 8 O clock. The Commerce and Industrial Sectors were against the 5-day working week. During the bank staff strike it is revealed that the banks suffered losses of crores of rupees and business and industry suffered loss of millions of rupees causing hardship of the whole nation. It shows that one day more closure of banks will affect all the financial activities. In the era of computers and mobiles economic activities are going on in a speedy ways. It also accelerated the banks working and reduced physical pressures as staff by way of ATC and online services. The decision the government will be judged in its implementation and impact. Hence our demand is genuine as they have long hours of working and need two days off to meet their social obligations and family need. + Our country which take great pride in emulating the west in myriad of matters, be it financial liberalization, nuclear initiatives etc. blindfolded, simply develop cold feet when it comes to migration to five day working weeks so prevalent in greater part of the western world? As stated above Even Pakistan did not shy away from the implementation of 5 day working weeks in banks and now reaping the benefits, in the form of A rejuvenated work force, raring to start work on Mondays. Considerable savings in fuel, electricity, bandwidth etc. Above all, a contented social scenario, with, employees finding more time with families. Boosting up spending as lakhs of bank employees and their families, now find more time to visit shopping malls, bazaars, multiplexes etc. thus, boosting consumption and growth. Even in India, while regulators are enjoying 5 days working weeks and government employees too enjoying the same, bank employees have been singled out for toiling at their offices for 9 to 10 hours daily, six days in a week, thus, exposing this particular class of employees, to: Mental and physical burnouts resulting in petulant at work syndrome. Physical complications in forms of cardiac ailments, high blood pressures, diabetes etc. Disturbed and stretched social fabric, as bank employees are left with lesser opportunities of unwinding with families. Bank employees, restrained from frequenting shopping joints as they remain fatigued on weekends, thus, not exploiting their spending power to contribute to creating demands and thus boost consumption and growth. Above all the purchasing power of lakhs of bank employees and their families could contribute to creating a demand pull to bring out the economy from poor capacity utilization and growth. Just imagine, how, Rs 1000 splurge per week, in shopping malls, multiplexes etc per bank employees family of 800000 bank employees of this country, could translate to a whooping weekly outlay of Rs 800000000 (Rs1000 *800000).This is called demand pull impetus to consumption and growth and higher capacity utilization.

+ 1. 2. 3. 4. +

India remained untouched by the Global recession which hit the world in 2008 and our economists articulated the resilience possessed by our banking industry in this hard time. Kudos to Indian banking industry! Indian banking tree consists of RBI as central regulatory body with commercial banks and cooperative banks.
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Cooperative banks in turn are divided into urban and rural. Rural cooperative banks take care of agriculture, the foundation of Indian economy. The countrys banking sector has made progress over the last five years, as is evident from many parameters, like annual credit growth, profitability, and trend in gross non-performing assets (NPAs). But when alone our public sector banks own 65% in the credit portfolio, its responsibility becomes crucial in the future and progress of India. Emergence of IT has changed the entirely the stereotype banking. From net banking to mobile banking, we have plethora of such services which have revolutionized the way we live. Our public sector banks are major foundation of our economy and with changing times they need to rejuvenate themselves like the private or foreign counterparts, thus giving India a new momentum. So we genuinely believe healthy and professional work culture is the utmost requirement for public sector banks today. Inspiring bank employees to be productive and tech savvy will be far more fruitful. Periodical appraisals and recognition for good work will lead to greater returns rather than making it a typical slow growing, takefor-granted government job. Its a dismal picture that once a job of reputation is losing its value. So nowadays there is a huge change in career priorities of youngsters, they prefer to experiment with their careers rather than settling and languishing in conventional government jobs. It is in this context that NUBE has demanded five day banking with rationale logic and justifications in this memorandum to Government and IBA Hence our demand of 5 day week in banks in pursuance of establishing this work life balance, which reduce the stress of the bank employees which in turn will enhance productivity and business. Our demand is also in tune with the directions of the Supreme Court of India. Supreme Court of India which has given succor, by declaring sleep to be a right, on par with constitutionally guaranteed right to life. Further the following are the positive benefits of a 5 day work week culture: Reduced fuel costs Decreased absenteeism Increased productivity Improved job satisfaction and morale Reduced personnel turnover Reduced energy costs. Improved work-life balance Less Disability Claims. As stress falls, so might disability claims Reduced traffic congestion Savings in Banks and Nations exchequer Hence our request of introduction of 5day week has force of logic rationale and just and right. We request the government to consider the same. NUBEs 5 day week memorandum to government gains momentum igniting imagination of many activists, social networking sites and media, NUBE was the first union to start a sustained campaign demanding 5 day week. It is covered in 22 sites, Splendid response in the net indeed with one site recommending it as a good e- book, which paves way for global recognition. Proud moments for NUBE Taking cue from NUBEs charter recently economic times has published an interesting article which is given below. Be rest assured that NUBE is determined to intensify the campaign. Popularize this demand to other bank employees Enlist their support to our campaign We are bound to succeed!

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CHAPTER - XIV
Our Achievements and Activities
Staff Welfare Fund We reiterate while salary is a contractual payment for the contribution of the staff members in singular, welfare measures are a measure of thanks given for the contributions of the staff members and their family in plural. So let us ensure that the profitable trend of the Bank continues which will profit us with more welfare measures. Created on 23-04-1993, our Welfare Fund sings the saga of Indian Overseas Banks unmatched empathy and caring for employees. Defying accepted norms of (so called) corporate wisdom and treading uncharted waters, Indian Overseas Bank took the plunge to create this fund at a time when Banks performance was not healthy infact we were the first Bank to decide a transparent, credible Balance Sheet which showed incredible loss. A journey of 1000 miles must begin with a single step, says an old Chinese proverb. We were confident that the modest seedlings of the Welfare Fund we had sown will motivate employees towards better productivity, which in return beef up the profitability and growth of Indian Overseas Bank. The Welfare scheme arising out of Staff Welfare Fund tries to complement the existing salary package out of funds apportioned from profits, thus increasing our sense of belonging and strengthening the bond with our beloved institution. As you sow, so you reap! Our Banks philosophy has always been one of transparency and participation. And where employee welfare measures are contemplated, our union has always shared their ideal views, convictions and suggestions. Comrades, with the view of expanding and diversifying the resources available in the fund for further constructive activities, we had submitted our exhaustive charter of Welfare Schemes with rationale, cost analysis - viability study, which was approved by the Bank. This makes us feel extraordinarily special and cared-for. But first you have to treat your own people the way you want them to treat your best customers, Stephen Covey may have said this, but Indian Overseas Bank has been practicing this long since. Is it any wonder then, that Indian Overseas Banks name has been synonymous with exemplary customer service! Our Welfare Fund has been the source of many a scholarship awarded to meritorious student-wards of our members. This time round, the focus has been on increasing the beneficiary base so that as many staff as possible enjoy the fruits. The emphasis, rightly, has been on education, health and assistance in times of crisis. Whilst hitherto the welfare scheme could reach only a limited number of members, owing to constraints of funds, its scope has been widened to benefit a significant percentage practically all members in some way or the other commensurate with interest earned on the corpus, with some significant inclusion such as, various scholarship schemes, reimbursement of education fees, payment of exgratia for adjustment of staff housing loan of deceased employees, reimbursement of lodging expenses while availing LFC, etc. Comrades, we do not believe in empty words. We have always believed in synergising our thought through actions. We are glad that the first fruit of hope of scholarship scheme is followed with larger harvest with the members continuing to benefit from many value additions to our existing welfare measures during the period under review. The bank has brought to our notice that that some of the schemes in vogue in our bank are reported, to be outside the purview of notified purposes as per CBDT guidelines to obviate the same we had suggested the following modifications. 1. 2. Reimbursement of Additional Medical Aid to All-Domiciliary treatments of common ailments not included in Bipartite Settlements. Reimbursement of expenses incurred in connection with prenatal medical checkup of lady employees / spouse of male employees.

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3. 4.

Scholarship to meritorious children of employees. Incentive for excellence in education.

In tune with our above suggestions shall meet the notified purposes mentioned in CBDT guidelines and can be managed with the interest earned in the corpus plus additional influx of Rs.15 Crores p.a. to fund, from the profits corpus remaining intact. However, the Committee has decided to introduce a new scheme for reimbursement of additional medical expenses. Under the new scheme an amount of Rs.500/- per month will be reimbursed to the staff towards medical expenses incurred for self and dependent on declaration basis at Regional Office/Central Office level Espousing the Cause of Retirees and Senior Citizens The Government of India have recently issued revised guidelines in this regard. As per the revised guidelines received from the Government our Bank falls in the category of those banks which can contribute 3 percent of their declared Net Profit subject to a maximum of Rs.20 Crores to Staff Welfare Fund. This ceiling was Rs.15 Crores for our Bank as per pre-revised guidelines. Out of the eligible amount, we have been earmarking a sum of Rs.14 Crores for the Staff Welfare Fund and the balance amount of Rs.1 Crore towards Retired Employees Medical Assistance Scheme (REMAS). Consequent to the revision of ceiling to Rs.20 Crores, the Staff Welfare Fund Committee in its meeting held on 26th June 2012 agreed to modify some of the schemes to ensure maximum welfare of the staffs and the retired IOBians. Accordingly, the Committee in its wisdom felt that out of Rs.20 Crores a sum of Rs.17 Crores should be transferred to the Staff Welfare Fund and Rs.3 Crores to REMAS. The Committee also agreed to improve various welfare schemes as under:Retired Employees Medical Assistance Scheme (REMAS) At present, reimbursement under Medical Welfare Scheme is available to the retirees who are the members of REMAS. As per the scheme in force, an amount of Rs.2,000/-per annum is payable on declaration basis and a life time hospitalization reimbursement of Rs.1,00,000/- is payable towards reimbursement of hospitalization expenses subject to a ceiling of Rs.50,000/- per occasion. Alternatively, reimbursement of premium amount of Rs.4,000/- is made to the REMAS members who have taken Mediclaim Policy. The eligible reimbursement amount was highly inadequate and all our retired IOBians were finding it difficult to meet health care expenses in a cost effective manner. We have been demanding introduction of an improved health care scheme for all the retired IOBians so that the benefit of medical expenses reimbursement is made available to them. It is observed that many retirees could not join the REMAS in time for various reasons and they have been requesting us to arrange for one more option to enable them to join the scheme. The request was discussed and deliberated in the meeting of the Staff Welfare Fund Committee and the Committee decided that the scope of REMAS may be expanded by allowing non members to join the Scheme. The details of the scheme approved by the Committee was circulated vide our circulars and members are aware of the same 1. The Staff Welfare Fund Committee has decided to extend one more option to all the categories of retirees who are not the members of REMAS. Such one time option can be exercised within three months from the date of issuance of circular by the Bank. To become a member of REMAS, the non-members will be required to pay one time entry subscription fee equal to five times of last months PF contribution as applicable to the cadre in which the member retired. However Part time sweepers are eligible to join the scheme under one time option by paying the subscription of Rs.2,500/- or five time of last months PF contribution whichever is higher.
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2.

3.

The new members will be eligible to claim a sum of Rs.2,000/- p.a., on declaration basis towards domiciliary medical needs from the forthcoming financial year commencing 1st April 2013. A new special group medical insurance scheme shall be introduced to all the members of REMAS in lieu of reimbursement of annual premium to those members of REMAS who have been claiming such reimbursement and the existing scheme of reimbursement of hospitalization expenses upto Rs.1 lakh in life time shall be discontinued. All the members of REMAS will be covered for a per family limit of Rs.1,50,000/- on family floater basis every year. The members of REMAS will be benefitted under the scheme under a cashless facility for treatments in the hospitals/nursing homes throughout the country subject to 20% of co-payment clause. The special feature of this scheme / policy will be as under:a) Pre-existing diseases will be covered b) Waiting period of 30 days will be waived c) Exclusion of first year for the purpose of claim will be waived d) The policy shall cover the members in the age group of 50 to 90 years e) Group Personal Accident Insurance (PAI) for the retired employee (not for spouse) for Rs. 2 lakhs

4.

5.

The scheme will initially cover existing members of REMAS with effect from 01.07.2012 and will be extended to all categories of retirees on their joining the scheme. The members joining under one time option will be eligible for insurance cover after the cut of date to be specified in the circular, which will be issued by the Bank shortly. Comrades, this insurance cover is a unique scheme and we are the FIRST BANK to arrange this Group Insurance Policy for our retired employees. Ex-Gratia Pension to Pre-1.1.1986 Retirees / Spouses The pre-1.1.1986 retirees, who had built this Bank brick by brick, were denied the benefit of pension scheme, which was introduced in 1993. Even before Government advised the Bank to grant exgratia pension to surviving pre-1.1.1986 retirees, our Bank had introduced payment of ex-gratia pension to pre-1.1.1986 retirees from the Staff Welfare Fund and continued to pay pension amount of Rs.3,268/- per month which is higher than the ex-gratia to be paid. As per the revised understanding this quantum was increased to Rs 6500 for clerks and Rs 5000 for sub staff . Reimbursement of Educational Expenses The reimbursement of educational expenses for the wards of serving IOBians for the years 2011-12 has not yet been done. The issue was discussed in the Staff Welfare Fund Committee meeting. We are glad to inform you that an understanding has been reached in the Welfare Committee Meeting held on 18-03-2013, in respect of the under mentioned schemes. 1. Reimbursement of Educational Expenses for the period 2011-12: The details of existing scheme for reimbursement of educational expenses is as under: S.No. 01. 02. 03. Category School College Professional Limit of Reimbursement Rs.1,700/Rs.3,500/Rs.5,500/-

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The scheme also provides for additional reimbursement of Rs.200/- to subordinate staff / Part time Sweepers towards cost of purchase of educational accessories like school bag, compuss box, slide ruler etc., All other terms and conditions of the existing reimbursement of educational expenses scheme will remain unchanged including the scheme for Award for excellence in Language Test / Award for securing higher marks / honorarium to IOBIANS YOUNG. 2. Modification in membership of REMAS Scheme: As per the existing Scheme, enrolment of membership under the scheme is accepted up to 90 days from the date of retirement. However, for the benefit to retirees who have retired on or before 31st July 2012, but not become members of the REMAS Scheme, an onetime option was given to be exercised on or before 30th September 2012, subject to payment of onetime subscription fee equal to 50% of present maximum of the Basic Pay in the time scale of pay as applicable to the cadre in which they retired. We have been receiving requests from many retirees to extend the time limit to enable them to join the REMAS Scheme since they have not received the communication in time and more number of retirees are still outside REMAS Scheme. Also, we have received requests to include resigned but temporarily engaged with or without monetary benefits and Compulsorily Retired Employees. The Welfare Committee in the meeting has reached the following understanding: a. b. To include employees retired under CRS as on date only, provided they have completed minimum of 20 years of service, as one time measure. PF Optees who have resigned under medical grounds on completion of minimum 20 years of service but temporarily engaged. Also he should not have taken a permanent employment elsewhere. c. To keep the Scheme as Open ended one without stipulating 90 days norms for joining the Scheme, subject to payment of enrolment fees as follows:

For Members who have retired on or after 31st July 2012 one time subscription fee to be paid will be five times of PF of last drawn pay of actual last drawn Basic Pay inclusive of all components which form part of Basic Pay with a minimum of Rs.2,500/- for Part Time Sweepers. 3. Enhancement in funeral expense reimbursement: We have been paying Rs.5,000/- as funeral expenses from the year 2000 and the scheme was extended to retirees (retired on superannuation only) from 2006. Considering the escalation in cost, we may revise the same and enhance the amount to Rs.7,500/- as funeral expenses to serving and retired employees including VRS, CRS, Resigned, etc. 4. Payment of Ex-gratia pension to surviving spouse of pre 01-01-1986 retirees from the date of inception of the scheme: Ex-gratia pension is paid to the surviving spouse of pre 01-01-1986 retirees from the date of application of the beneficiary. We have received many requests from the surviving spouse who are aged more than 80 to pay arrears from the date of inception of the scheme, i.e. from 01-04-2005 and not from the date of application as they are not aware of the scheme. As per data available, around 47 pensioners (26 officers and 21 award staff) of the above nature only need to be considered as on date and if considered favourably, the outlay of arrears will work out to Rs.34 lacs only, the committee decided to extend the payment to the surviving spouse. We assure our members that

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we shall continue our endeavours to enhance the value of the schemes under Staff Welfare Fund to ensure maximum benefit. Since the contribution to the Staff Welfare Fund are dependent on our Banks declared Net Profit, we request our members to put in their best efforts for the growth of the Bank, improvement in customer service and CASA, maintaining high quality of assets and recover the NPAs while preventing further slippages. These efforts on the part of our members shall go a long way to help us to get more and more benefits. We assure our members that we shall continue our endeavours to enhance the value of the schemes under Staff Welfare Fund to ensure maximum benefit. Since the contribution to the Staff Welfare Fund are dependent on our Banks declared Net Profit, we request our members to put in their best efforts for the growth of the Bank, improvement in customer service and CASA, maintaining high quality of assets and recover the NPAs while preventing further slippages. These efforts on the part of our members shall go a long way to help us to get more and more benefits.

We Shelter Your Hopes

Staff Housing Loan Enhancement In Quantum Staff Housing Loan is provided not merely to shelter the worker and ensure regeneration of his labour but also establish a home for reproducing and nurturing quality labour for future society. We as a Union are conscious that human resource approach is development. It is always concerned with growth and development of members towards higher levels of competency, creativity and fulfillment. It is with this objective that our Union took up this issue of Staff Housing Loan during early seventies which successfully culminated as a historic settlement on 30/11/1972, revising Misc. Circular 7(f) 95 of 1968 dated 7.11.68 different from others paving way for further innovations and chequered value ADDITIONS. Needless to underscore that from a quantum fixed in 1972 of Rs.25,000/- for Clerks, Rs.12,500/- for substaff, the SHL component has increased to 4.5 lacs for Clerks and Rs.3 lacs for sub-staff in 2001 which by any standards is a transition of unparalleled significance. Therefore SHL in our considered opinion is not only a smart Industrial Relations and intelligent HRD but also civilization committed where life is understood as continuity of creativity. Modern economics has provided as many answers as modern science to our problem of modernity. A trade union like ours always adapts after analyzing the problems for the benefit of majority. For an employee after career progression the issue assuming prime importance is acquiring a decent dwelling of his own. In the recent years the overall limit prescribed under SHL is governed by the Government guidelines uniformly implemented in all Banks. The spiraling increase in the cost of constructions / building materials has made our existing quantum of Staff Housing Loan fixed in March 2001 quite insufficient. Further, due to steep increase in cost of real estate and owing to inadequacy of the pre-revised quantum of Banks SHL, a number of employees are constrained to resort to outside borrowings at exorbitant rate of interest, some of them have raised loan from approved and verifiable sources after obtaining Banks permission, viz., LIC, Housing Finance, HDFC, Staff Co-operative Credit Society and any other Government / Semi-Government / Public Sector, Financial institutions etc. In order to obviate their difficulties taking into consideration the existing low ceiling amount, pending finalization of enhancement of SHL considering the phenomenal rate in the cost of building materials / construction, We requested the Bank to grant Supplementary Housing Loan for housing purposes to employees over and above the loans sanctioned under Staff Housing Loan scheme. We had further requested the Bank that at a later date when SHL at the industry level is suitably enhanced this Term Loan might be allowed to be converted into SHL up to the overall enhanced limit as per the tenor of that scheme.
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We were getting representations from our holistic membership that due to escalation in real estate price even the existing limits is not enough to purchase a modest dwelling. Accordingly we had submitted a proposal commensurate with the staff repayment capacity and taking into account the salary drawn as per recent 9th Bipartite Wage Revision. Further we reiterated during our discussions that our suggestions for consideration of the enhanced Staff Housing Loan Scheme will augment credit expansion target fixed by the Bank for this financial year. Further we had emphasized that human assets of our Bank are performing as well as secured and trusted assets. After protracted and prolonged negotiations, thanks to the keen understanding of our problem, Bank conceded to this important demand of ours during discussion, the details of which is given below. Through this achievement our union can claim with pride that we shelter members aspirations always. This is yet another feather in the cap of AIOBEU which is second to none in fulfilling members aspirations. With the Bank sheltering our dreams with aforesaid gains it is our profound duty to reciprocate in ample measures, that we build our Banks future with our renewed commitment to its growth. The name board, decorating our house is a reminder that we are in debt to this great institution IOB. A trade union like ours always adapts after analyzing the problems for the benefit of majority. The search engine of AIOBEU, worked overtime to supplement your aspirations with this further value additions in our Housing loan scheme. We hold the firm conviction that Fair Housing Is Our Right. We Protect Your Right Always. We trust that this enhanced Housing Loanof Rs.4.50 lacs for substaff and Rs 12 lacs for clerical staff, approved by the bank would provide the necessary motivational impetus to staff members and bolster the human capital. Comrades, the soothsayers and rumormongers who manufacture rumors that the above improvements will not see the light of the day stood totally exposed. The demand placed by our 33rd General Council members for enhancement in the quantum of SHL has come to reality today. Please be rest assured that the authentic voice representing the aspirations, hopes and sheltering all IOBIANS are in safe hands of the leadership of our Union. Supplemental Term Loan:Staff members who have availed Term Loan in terms of Banks Circular 7(f) 90 dated 14/11/2006 can now apply to Central Office for conversion of Term Loan to Staff Housing Loan and rescheduling of the repayment. The rate of interest is as applicable to the Staff Housing Loan. Additional Loan For Further Constructions: Staff members who have already availed Staff Housing Loan and now wish to carryout further construction on the existing Staff Housing Loan property, resulting in increased built up area with approved plan, can apply for the difference between the enhanced maximum loan and the loan quantum already availed by them or the proposed estimate whichever is less. Additional Loan For Repairs / Renovations:Staff members who have already availed Staff Housing Loan can now apply for additional loan for repairs / renovations as per the quantum given under: Clerical Sub-Staff Part-Time-Sweepers Wages Part-Time-Sweepers Wages Rs.3.00 lacs Rs.2.00 lacs Rs.1.50 lacs Rs.1.00 lac

Note : The repairs and renovation works proposed to be undertaken should not have been done in the past five years by availing any additional loan under SHL or supplemental term loan.
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All other norms of existing Staff Housing Loan Scheme remain unaltered. Enhancement of DPN loan quantum Our DPN Loan scheme is an invaluable, precious jewel in our crown. There have been a growing Demand from our membership that the scope under this facility be widened and the scheme be made user friendly. Accordingly we submitted to the Bank for enhancement of existing quantum. We inform our members that the scheme submitted by us to the Bank suggesting increase in limits of advance is approved by the Bank as under: We thank the Bank for considering our request to extend enhancement of limits to all staff members who are not otherwise eligible under the existing scheme. Quantum: One month gross salary for every completed year of service with a maximum of 15 months subject to a maximum loan of Existing in Lacs Clerks Sub-Staff Ex-Servicemen Working as Sub-Staff Part Time Sweepers Wages Wages 1/3 Wages 1. 2. 1.25 1.00 0.75 1.40 1.15 0.90 3.00 2.00 1.00 Enhanced in Lacs 3.50 2.30 1.30

The staff members will be permitted to avail enhanced limit only as DPN Loan with repayment scheme and not as cash credit limit. Staff members who have availed the loan as cash credit limit will also be permitted to avail the enhanced maximum limit of Rs.50,000/- Rs.30,000/- and Rs.15,000/- only as DPN Loan with repayment schedule and not as an enhancement in the cash credit limit. Repayment DPN Loan: - 120 EMI. Rate of interest 10 percent per annum compounded monthly.

3.

As a one time measure all those staff members who have not completed three years from the date of last availment of DPN loan will be permitted to avail the enhancement only as a 2nd DPN Loan to the extent their eligibility.

DPN Cash Credit Limsit: As per the existing scheme the amount of eligibility for sanction: (i) (ii) for Clerks, one month gross salary for each completed year of service subject to a maximum of 15 months or Rs.3 lacs whichever is lower. for Sub staff, one month gross salary for each completed year of service subject to a maximum of 15 months or Rs.2 lacs whichever is lower.

There has been continuous demand from sub staff promotees to avail the difference in loan eligibility dispensing the lock in period of three years. On our taking up with Bank we are glad to inform you that the Bank has agreed to sanction the difference amount of eligibility between the sub staff and clerical cadre dispensing the lock-in period of three years, and all other terms and conditions remain unchanged.
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Yes - We Care More - From Womb To Tomb Under Dharam Scheme Births and Deaths are generally not under our control. More so with the latter. Death of an employee while in service has serious repercussions to his or her family. Our Union is here not only to share happiness and achievements with our members but also to share the grief. Taking into account the mortality projections, we have great satisfaction in informing our members that from the available funds of our Union under our innovative noble DHARAM scheme, we have enhanced the lump sum payment of Rs.1000/- hitherto being made to Rs.10000/- (Rupees ten thousand only) to the family of the deceased member with effect from July 2010. A unique ten fold increase. This will be paid to the legal heir of the deceased member declared by the Bank, by way of Bank Demand Draft upon she / he making an application to the Union. Comrades, this above gesture of our Union will go a long way to prove that our Union in its 61 years of existence not only shares the happiness and achievements of our members but also stands by the deceased members family at the need of the hour. We are widening the benefits under our DHARAM scheme to make the existing welfare measures broad based. We have proved that we are not merely here to secure economic gains but to be with the members at times of crisis always. Comrades, we have plans to widen the scope of the welfare schemes of the Union in the years to come. Thus right from the inception to the scintillating journey of 61 years we have been a distinct organisation that could survive all environmental pressures and uncertainties of time, by adding up regular value additions in our welfare measures even in adverse situations. Comrades, let us brighten our welfare schemes and in the process ensure unhindered benefits to our members all along. Joining Time on Transfer for Award Staff We had vide our various representations to the Bank have been demanding to the Bank to implement provisions pertaining to joining time as per Para 550, 551, 552 of the Sastri Award which is reproduced below: 1. 2. 3. No joining time shall be admissible when the transfer does not involve a change in the situation of his office. A joining time of not more than one day (inclusive of a holiday or Sunday) is permissible when the new posting takes place in the same town on station. In all other cases where the member is transferred to a branch outside the town / station / urban agglomeration / Municipal limit / Panchayat limit, the member is eligible for joining time not exceeding 6 days exclusive of the number of days spent on traveling. In calculating joining time admissible to an employee, the day on which he is relieved from his old post shall be excluded but public holidays following the day of his relief shall be included in the joining time. Joining time should be availed within 3 months from the date of reporting.

4.

We are glad to inform you that after protracted discussions, Bank has agreed to consider our demand. Central Office has issued suitable instructions to respective Regional Offices.

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Please take note of the same and ensure that all the members of award staff transferred at the Bank instance avail this joining time facility. In other words, member on 10 year transfers are also eligible to avail this joining time. In future, while implementing 10 years transfers ensure that all the members transferred at the Banks instance are eligible to avail this joining time facility.

We Build Your Dreams Celestial Settlement

A Mighty Achievement Members are aware that for quite a number of years we have been taking up with the Bank the issue regarding Regularisation of temporary employees engaged by the Bank. We had requested the Bank to resolve the issue bilaterally in due recognition of the plight of these temporary employees who have been engaged for long number of years. We once again took up the matter with Bank vide our Letter dated 08-10-2010, 09-10-2010 requesting the Bank to consider absorption of temporary messengers / sweepers engaged in branches on humanitarian grounds. These temporary employees have been working with a fond hope that one day or the other they would be absorbed by the Bank. In our experience, whenever we visit the regions, the concerned office bearers would introduce this set of temporary / casual employees and request for their absorption in the Bank. We, in the Union, felt that their request was genuine and the Bank was not conceding to the reasonable demand. Hence, once again we took up the matter rightfully asking the management to absorb these temporary messengers / sweepers / casual employees, so that they get what is due to them. Pursuant to the request of the Union to absorb these temporary employees negotiations were held on various dates between the Bank and the Union. As there were some differences of opinion between the parties in arriving at a consensus, the parties requested for intervention of Assistant Labour Commissioner (Central)-I, Accordingly during the course of conciliation proceedings on 17-02-2011 the parties upon constant persuasion by the Conciliation Officer came closer and settled the dispute amicably, the salient features of which is given below: Salient Features 1. The Bank has agreed for absorption of all casual/temporary messengers/sweepers engaged in branches / offices of the Bank located in India in phases and will be subject to the following conditions. (a) The casual/temporary messengers / sweepers should fulfill the eligibility criteria viz., age fixed by the bank for recruitment of messengers/sweepers as on the first date of their engagement in the Bank and qualification as per norms 2. The Bank further agreed that subject to Clause 1, above Casual / temporary messengers/sweepers shall be absorbed in Banks service in phased manner as under: Phase I : Casual/temporary messengers/sweepers who have worked for more than 5 years in any of the branches/offices in permanent vacancies and completed 240 or more days continuously in a calendar year as on 15.11.10 and are still working shall be absorbed in Phase I before 30.06.2011 subject to their completing/submitting the required information/certificates.

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Phase II: Casual/temporary messengers/sweepers who have worked for more than 3 years but less than 5 years in any of the branches/offices in permanent vacancies and completed 240 or more days continuously in a calendar year as on 15.11.2010 and are still working shall be absorbed in Phase II once the absorption under Phase I is completed, subject to their submitting the required information/certificates. Phase III: Casual/temporary messengers/sweepers who have completed 240 or more days continuously in a calendar year and have been engaged by branches/offices in permanent vacancies for less than 3 years as on 15-11-2010 and are still working shall be absorbed in Phase III once the absorption in Phase II is completed, subject to their submitting the required information/certificates. Central office issued the circular specifying the terms of the settlement with Annexure A to be filled by eligible temporary employees. (3) All future vacancies identified by the Bank in Messengers cadre will be filled up through approved procedure and/or as per recruitment policy of the Bank. Any arbitrary engagement of messengers / sweepers at the branch level irrespective of the nature of the vacancies without obtaining permission from Central Office in future will not be considered by Central Office. (4) In the event of proposed branches, where initial staff arrangement in messengers cadre cannot be considered through transfers, Bank will intimate Regional Offices to fill up the vacancies in any category through the approved procedure only. (5) It is mutually agreed between the parties to endeavor to complete the process within 18 months from the date of signing of the settlement subject to compliance of all the terms and conditions mentioned in the settlement. We are glad that for these employees many hailing from weaker /downtrodden society, it is an end of a sob story and feeling of real freedom. With fresh breath of security and dignity pervading in their life, because of their Regularisation of jobs, it also bestows on them the right to chart a career graph with Good People to Grow with, right to choose their life partners and settle in life and above all fulfill duties and obligations to their elderly dependents who have nurtured them with this enhanced status, the status of being an IOBIAN. From the effective date of Regularisation, in their files, the word Temporary will be erased and it will be embellished with a permanent inscription of their Roll Numbers, is a pride moment in their life. To us in the Union it is a spectacular achievement truly a unique and a celestial achievement. Viewed in the context of growing unemployment and in the era of melting of recruitments the Regularisation of jobs of all temporary employees engaged as temporary sweepers / messengers for 240 days and more in a calendar year as mentioned above in our Bank is a diamond lining to our efforts and to our Banks Platinum existence. We are confident that sequel to this historic settlement 951 temporary employees regularized will continue to serve the Bank zealously and always strive to contribute their mite by discharging the duties honestly, diligently, upholding highest integrity and thereby bring glory and fame to the Bank and our Union. Needless to emphasize that ours is the only organisation in the Bank which looks after the welfare of all award staff members irrespective of caste, creed, religion or nationality. Our only aim is striving continuously for the upliftment of the downtrodden. Our Bank which is our southern pride is full of realms and focus of our dream. It is the cradle of our memories and our enhanced social status. We are confident that emboldened with the share of prosperity we have achieved through sheer hard work, we shall in the coming years strive hard to make the Bank as No.1 in the industry.

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Recruitments in Clerical Cadre The changing Banking scenario and the working environment of the Banking operations have caused varied demands in the Banks and its resources. With the focus of our Bank fine tuned to business plan target of Rs. 3 lac crores business mix and massive branch expansion. The need for infusion of young & energetic clerks through direct recruitments has assumed relevance and importance. Having regard to the increase in attrition rate in the direct recruits in the Supervisory Cadre, JM-1, and assessment of business growth, emerging business components, staff attrition etc. Bank and the Union have been involving in a series of discussions on recruitment of clerical staff. We had submitted our approach paper taking into account recruitments till 2012, lateral filling of vacancies in each cadre attrition in the recent recruitments and arrive at a residual vacancies in Clerical Cadre as 1200 for the current year. We had submitted need-based manpower planning in clerical cadre after objective analysis of the following data: 1 2 3 4 5 Retired from bank from 2004 to 2013 Voluntary retirement under pension regulation form 2004-2013 Voluntary retirements from 2004-2013 Resignations from 2004-2013 Deceased from 2004-2013 Total wastages Clerical to officers JM 1 cadre promotions from 2004-2013 Therefore total vacancies in clerical cadre from 2004-2013 Clerical recruitments form 2004-2013 Sub staff to clerical promotions from 2004-2013 Therefore net vacancies in clerical cadre as on 2013 Branch expansion from 2004-2013 is 1445 minimum additional base strength of clerical staff @2 per branch required Retirements in 2013-2015 Recruitment under process Increase in business mix from 2004 2013 (Rs.3,05,847) Crores Therefore Need based clerical staff required as above 5. 9764 Further we observe that only 15.22% of clerks in our Bank are below 35 years of age and 53.10% of clerical staff is above 51 years In other words majority of clerical workforce by 2011 will be a group of grey people, nevertheless good people. In view of the ban on recruitments between 1989 2004, the vacancies in clerical staff were met through promotion of sub staff to clerical cadre and record keepers and recruitments of sports personnels. In the process 35% of clerical staff as on date is sub staff promotees. The strength of officers and clerks as on date is 13943 and 12837 respectively. Accordingly ratio of officers: clerks which stood at 1:2.45 in 1981, 1:2.80 in 1990, 1:1.50 in 2006, has now reached 1.09:1 (After the proposed recruitment officer strength and clerical strength as on date is 13943 and 12837, respectively. The retirement projections of clerical staff members after 2006 is given below: 5294 751 34 1672 1034 8785 3368 12153 4549 1621 5983 2890 2391 1500

6.

7.
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Year No

2006 2007 2008 77 109 153

2009 2010 82 272

2011 2012 340 552

2013 625

2014 817

2015 949

2016 995

2017 887

2018 2019 2020 829 742 676

This means that around 7412 clerical staff shall be retiring between 2010 and 2020. In other words a significant number of 64.24% clerical staff members shall be retiring in another 10 years. Around 3930, i.e. 34.13% of clerical staff shall be retiring in the next five years. 8. An analysis of trends in the last 5 promotion process to officer cadre indicates that 5% may be promoted every year as per existing policies. This means in 5 years time the clerical staff strength will further shrink by 25%. Need for Clerical Recruitment Regular intake of recruitment on clerical cadre is essential for: 1. Infusion of computer savvy younger blood to enhance the speed of service at the counters. 2. Customer relations of same younger age group can enhance bond of customer relationship. 3. For effectively marketing the Banks Deposit / Credit and new products at the counters. 4. Maintaining proper age profile and increase present percentage of 6.69% in the age group of 18-25, considerably as per the need of the hour. 5. Maintaining quality of service. 6. Addressing the large outflow of clerical in the next five years. 7. Make available good, young, dynamic clerical members for promotions to officer cadre.

9.

The future growth rate plan envisages that the Bank would attain a business volume of minimum 4 lac crores by 2013 and the total number of branches and extension counters shall be 4000. 10. An overstretched business plan and over exerting pressure on clerical strength due to continuous depletion, if the present trend continuous, will naturally reach a breakpoint. If we take into consideration that 80% of staff are above 45 years, marketing of business strategies, may get affected under the weight of work pressures due to age related problems. Needless to underscore that the difference between a highly successful organization and those lagging behind is due to how efficiently and effectively the human resources are planned, developed and utilised. The huge retirement likely to incur from 2013 onwards may result in the following: a. Overexerted workforce in managing higher volume of business; b. Huge mismatch between numerator and denominator management in clerical cadre (Business mix/staff strength); c. With no replacement to skilled staff retiring, service may suffer; d. Successive planning to other cadres through motivational promotions may reach stagnation e. Stagnation of motivation in quintessence means stagnation of business growth. 13. This suggestion in our opinion will augment quality human resources, as the need of hour to have young, talented, hardworking, knowledgeable employees having dynamism and enthusiasm to shoulder higher responsibilities as well as mixed bag of experienced staff in various cadres which are essential for future competitive strength. With the sweeping developments taking place in various aspects of Banking, as an ideal resourceful investment, which will appreciate, repay itself through performance, and increased productivity, injecting dynamism and youthfulness in workforce, we request the Bank to consider our request of minimum 9000 clerks for the year 2013-15 favourably.
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11.

12.

14.

15.

A sliver lining in the balance sheet of FY 2012-13 of the Bank is increase in business and profit per employee. Here again productivity in measured in terms of denominator management which in our opinion is not correct indicator. There are various methods of measuring Labour Productivity and various indexes are being used to suit the requirements of different industries. In the absence of a single index to measure Labour Productivity in all industries, what has been attempted in this table is to relate Value Added to Manpower Cost i.e. Value Added content per rupee of Labour Cost. This ratio would indicate the Labour Productivity in terms of Value Added. We explain this concept with the following is a statement showing the Manpower, Value Added, and Value Added per rupee of Manpower Cost.

For example:
Sl No. 1. Sl No. Name of industry xyz Name of industry xyz 1981-82 39973 1982-83 47417 1983-84 59716 1984-85 59911 1985-86 66177 1986-87 73319 1987-88 85307

1981-82 55339

1982-83 62854

Value Added (Rs. In Lakhs ) 1983-84 1984-85 1985-86 74071 111907 163827

1986-87 146719

1987-88 170787

1.

Value added divided by Manpower Cost Sl No. 1. Name of industry xyz 1981-82 1.38 Value Added ( Per Rupee of Manpower Cost ) 1982-83 1983-84 1984-85 1985-86 1.33 1.24 1.87 2.48 1986-87 2.00 1987-88 2.00

16. Having regard to the above taking into consideration relative attrition in new recruits in officer cadre , their postings in face book which bespeaks their level of Esprit de corps (Refers to solidarity, pride, devotion and honor of each member with respect to the group), the relative expected increase in wage cost in the X bipartite in anvil, with view to retain quality committed manpower we suggest the following a) Stop recruiting probationary officers other than specialist officers b) Recruit only clerks c) Ensure promotion form clerical officer JM cadre every year to fill up vacancies in officer cadre d) If necessary consider exclusive special fast track promotion as per settlement to induct young recruits as officers In view of the above, we requested bank consider our manpower planning suggestion mentioned in para-1, (A) as the manpower planning Clerks in two phases for the period 2013 2014 and 2014 2015 respectively. After protracted discussions bank agreed to consider our demand for need based recruitments form time to time. Enhancement of SSBS Subscription Members are aware that majority of employees opted for one more option for Pension as per 9th Bipartite Settlement. While this has brought hope and cheers to serving employees, in the event of employees dying in harness, the only eligible lump sum benefit viz. gratuity goes for settling liabilities left by the deceased employee. Further they are not eligible for commutation amount and are only eligible for family pension of regular or special rates which is far less than the monthly pension accruable to surviving employees.
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With a view to offer substantial relief to family of the deceased employee, we had requested the Bank that the amount of deduction under SSB scheme optees may be enhanced to Rs.20/- per employee under check-off with immediate effect. We are glad to advise our members that the Bank has agreed to our reasonable request. We appeal to all members, to enroll in this noble scheme at the earliest. Conveyance Loan for Purchase of Two Wheelers As per the existing guidelines, one of the eligibility criteria for availing Conveyance Loan (two wheeler) for Clerical staff is, they should be confirmed employees of minimum 3 years of service including probationary period from the date of joining and for sub staff, and they should be confirmed employees of minimum of 5 years of service from the date of joining. We have received several requests from our members for relaxation of the above condition. We are glad to inform you that on our taking up with the Bank, Bank has agreed that conveyance loans to award staff for purchase of two wheeler will be considered on confirmation of their service subject to compliance of 50% of take home pay and complying of other eligibility norms. All other terms and conditions prescribed in earlier circulars relating to conveyance loan remain unchanged.

Staff Motivation Share of Prosperity of Growth

Revision of Reimbursement Of Petrol Expenses As Conveyance Allowance: Our principal demand for enhancement in existing limits of reimbursement of petrol expenses has been favourably considered by the Bank. We reiterate like our unique out of pocket expenses allowance, which is in addition to halting allowance our Union once again has ensured that conveyance allowance is revised, in addition to travel allowance paid as per Bipartite Settlement. Comrades, this is not a small achievement, we would like to remind you that there are only one or two Banks in the industry who are reimbursing petrol expenses and ours is one. We thank the top management for their pragmatic approach and reciprocal good will. For Award Staff Owning Vehicles: Designation Clerical Messengers and Full Time Sweepers Existing Limit 10 Litres per month 7 Litres per month Revised Limit 15 Litres per month 10 Litres per month Increase 5 Litres per month 3 Litres per month

For Award Staff Not Owning Vehicles On Declaration: Designation Clerical Messengers and Full Time Sweepers Part Time Sweepers 1/3 Wages Wages Wages Existing Limit Rs.350/- per month Rs.250/- per month Rs. 85/- per month Rs.125/- per month Rs.190/- per month Revised Limit Rs.500/- per month Rs.350/- per month Rs.110/- per month Rs.165/- per month Rs.245/- per month Increase Rs.150/- per month Rs.100/- per month Rs. 25/- per month Rs. 40/- per month Rs. 55/- per month

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Increase in Canteen Subsidy: As per clause 9 of Minutes of Understanding dated 19-12-1997 between our Union and the Bank modifying the settlement on computerisation and mechanization dated 17-06-1991, an amount of Rs.35/- per employee per month is being paid to staff members in a branch where the staff strength is 15 and above. We felt that this benefit of canteen subsidy should go to all the employees irrespective of the numerical strength of the branch. It has been the primary concern of our Union to look after the staff in rural areas since this benefit was not extended to them. We took up the matter vociferously and we are glad to inform that after protracted negotiations our Bank has agreed to increase the canteen subsidy from Rs.35/- to Rs.40/- per employee for branch having a strength of 15 and above and to pay Rs.30/- per month to all other branches which were hitherto not paid. Reimbursement of Medical Expenses under Master Health Checkup Scheme: Bank has been reimbursing medical expenses incurred towards Master Health Checkup with a ceiling of Rs.1,000/- since the inception of the scheme from 01-06-2002. Though the average cost charged by the hospitals / labs towards Master Health Checkup is much more, the amount reimbursed is not sufficient to cover all the important tests. To create more health consciousness among our comrades and to utilize the scheme fully, we urged upon the Bank to increase the quantum from Rs.1,000/-. We are happy to inform that the Master Health Checkup expenses reimbursement is increased to Rs.2,000/- to the debit of Banks Profit and Loss Account instead of debit of Staff Welfare Fund. All other terms and conditions remain unchanged. Ex-Gratia Scheme for Major Ailments Widened Once Again Over the years there have been massive resurgence on most of the diseases, for the disease control expenditure is naturally reduced by the state. Such a policy has made the drug companies, ecstatic and they reap a bonanza in sales. But on the other side we find that 5,760 people in our country die each day and 240 each hour and 4 persons every minute. In every case the severe illness preceding death results in massive expenditure on medicines, doctors fees, hospital charges which completely devastates families, finishes their savings and most often pushes them in severe debts. This is not only traumatic but also agonising for the survivors and those who are fortunate to survive after treatment, remark, operation is successful but I am broke after that, the diagnosis is okay but it has come with a heavy bill. Desire, Disease, Death and Debt are the four deadly Ds that do not spare anyone. Further unhealthy practices in the medical field have increased expenditure on our health. In genuine appreciation of this background our Bank has considered the reimbursement of hospitalisation under our ex-gratia scheme, in accordance with spirit and tenor of the clause 10.1 and 10.2 of our computerisation settlement dated 17-06-1991 to alleviate their sufferings. As a model employer, the management of our Bank have reinforced the science of motivation while salary is a contractual payment to an employee for his endeavour in singular, sharing concern to employees health is a measure of appreciation and thanks giving by the Bank to its employees and their families for their collective endeavour in plural. With a view of providing succor to employees who have incurred hospitalisation expenses towards certain major ailments, we requested the Bank to widen the scope of the scheme taking into account, spiraling increase in cost of medicines and treatments during the interregnum once again in 2006. We thank the Bank for approving the scheme, in the Board Meeting dated 22-12-2006 which has gone a long way in ameliorating the problems encountered by staff to meet the huge expenses incurred in connection with hospitalisation of major ailments of self and dependents. Our benevolent Board members while
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approving the above agenda directed the Bank that some more major ailments may be included in the scheme which was recorded as Resolution No.523 pertaining to Agenda S-3 of the Board Meeting dated 22-12-2006. In accordance with the spirit of the above resolution, we submitted 22 additional treatments to the existing scheme which we inform you with verve and gusto is approved by the Bank in toto on 28-01-2012 the details of which were conveyed by our cirular. The salient features of the scheme are given below: Existing Eligibility 1. Maximum ceiling of Ex-gratia amount is Rs.1,50,000/2. Percentage of reimbursement For Self 85% (on disallowed portion) For Dependents 70% (on disallowed portion) Revised Eligibility 1. Maximum ceiling of Ex-gratia amount is Rs.2,00,000/2. Percentage of reimbursement For Self 100% (on disallowed portion) For Dependents 85% (on disallowed portion)

Besides Investigations prescribed by a Cardiologist / Oncologist / Gastroenterologist / Gynecologist and other specialists on a definite clinical evidence of the concerned ailment, with or without hospitalisation will be also reimbursed. The minimum amount incurred should be above Rs.1,000/- towards the below mentioned investigations. Considering the prevailing cost of various new tests prescribed by the specialists for various ailments / diseases, the above scheme is improved as given below by adding some more investigations. Existing investigations covered under the Scheme a) Investigations for Coronary Artery Disease (CAD) (except angiogram which is already covered under ex-gratia scheme b) Investigations to rule out breast cancer / mammography / biopsy c) Investigations to rule out Gynecological related cancer, cervical cancer, pap smear, ovarian cancer etc. d) High tech diagnostic investigation for Hepatitis B to J e) MRI / CT Scan for any diagnostic purpose Bone density f) Medical expenses involving normal delivery Expenses incurred towards Endoscopy, Colonoscopy, Oesophagoscopy, Bronchoscopy Enhanced Proposed scheme for reimbursement underEx-gratia (for investigation charges)
201

Additional investigations to be covered under the Scheme 64 / 128 Slice CT Angio, Doppler Test

Pet Scan, Nuclear Scan, Whole body scan, study, Doppler study

Present Eligibility for reimbursement under Ex-gratia (for investigation charges)

1. Maximum ceiling of Ex-gratia amount is Rs.7,500/2. Percentage of reimbursement For Self 85% (on disallowed portion) For Dependents 70% (on disallowed portion) Other terms and conditions remain unaltered.

1.Maximum ceiling of Ex-gratia amount is Rs.10,000/2. Percentage of reimbursement For Self 100% (on disallowed portion) For Dependents 85% (on disallowed portion)

This spectacular of achievements made by the Union once again underscores our conviction that we do not tell the world what we do, we show it, for, we believe the best compensation for doing so is the ability to do more. We trust the above improvements to the existing scheme will alleviate the financial burden due to rising cost of health care and treatments. May all employees be happy, May all be without disease, May all see and obtain good things, May no one suffer misery Modification In The Scheme For Payment Of Ex-Gratia Lump Sum Amount In Lieu Of Compassionate Appointment NUBE submitted its innovative, well researched, rationale, Memorandum on Compassionate Appointment and payment of Exgratia scheme in this regard to Ministry of finance and IBA. After analyzing schemes of many banks, which have liberal and flexible norms compared to our scheme, having regard to the developments and justifications mentioned above we had submitted our holistic proposal for relaxation in prevalent penury norms, minimum exgratia for those who cannot conform to the stipulated penury norms, pending settlement of the demand of unions to IBA on compassionate appointment, retaining the perspective of the object of the scheme in vogue in our Bank We are glad that, the Board of Directors of our Bank at its meeting held on 08-12-2012 has approved the above relaxation in penury norms as under. While the stipulation of monthly income of family less than 60% may remain, the following relaxation in primary calculation may be made: a. b. c. For calculating monthly income of the family from all sources, with regard to pension, ordinary pension payable is to be taken. For calculation of monthly income, income from personal savings including group insurance is excluded. For calculating monthly income notional interest at the Banks maximum term deposit rate applicable to Public on 80% amount of the net corpus available, to be taken, Comrades, we are extremely happy that, one of the long pending issues has been resolved. Scheme is widened to include employees above 58 years of age also. We hope that, dependent family members of deceased employees will get a sigh of relief. We request our branch units to inform our members the revised norms, take efforts to bring it to the notice of all dependents of deceased employees in future.

d.

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I think the purpose of life is to be useful, to be responsible, to be honourable, to be compassionate. It is, after all, to matter: to count, to stand for something, to have made some difference that you lived at all - Leo C. Rosten Flood Relief Loan Consequent to our representing to the Bank for sanction of flood relief loans to the staff members affected by unprecedented rainfall and floods in the states, Bank agreed to sanction the same and advised the Regional Offices / Branches, accordingly. Utilisation of Apprentices at Branches It was brought to our notice that the services of apprentices are utilized by certain branches for performing regular routine works of permanent staff. Since such practice exposes the Bank and staff to control risks, as they are not accountable as permanent staff members, we had taken up this issue with Bank, and sought their intervention to stop this practice. We had stressed during our discussion that the very object of the apprentice act is to train apprentices in various sections to enable them to equip themselves for future employment elsewhere and that branch should serve only as a training ground for these trainees. Responding positively to our demands, Central Office has instructed the Regional Offices that under no circumstances, branches should engage apprentice to perform routine works of permanent staff. Branch Secretaries were put to note that service of apprentice cannot substitute the work of permanent staff. Further we directed the Branch Secretaries to bring to our notice in case any branch contravenes the directions of Central Office. . But we regret that this unethical practice continues clandestinely at some of branches. We regret to note the Bank has not initiated steps to arrest the practice of utilizing the services of apprentices to perform branch routine including attending to all clerical work with passwords, filling up of documents, scanning of specimen signatures, etc., is going on unabated in many of our branches more so in southern regions. This is in total negation and blatant violation of Central Office instruction contained in C.O circular letter No.HRD/122/400/2006-07 dated 07/11/2006 which reads as under: We have been clearly advising that the apprentices should be engaged only for imparting training with usual terms and conditions and not for utilising their services for official work in the Bank and also under no circumstances should apprentices be allowed to use the password of branch officials. Any instructions emanating from Central Office on any aspects of the bank, if not implemented by the branches/regions, the Central Office takes appropriate actions. Despite the fact that specific instructions as quoted above was clearly given, we are unable to discern as to why Central Office has not taken any action to arrest the trend. In view of the same, we urge the bank to grant immunity from attendant risks to permanent staff members in branches where apprentices are using passwords of permanent staff members. The risks of exposing banks systems and operations to strangers who are not employees of the bank thereby making the institution vulnerable to frauds, hi-jack of confidential information like high value customers, etc., need not be over emphasised. We also urge the bank to recruit adequate number of clerical staff to fill up vacancies where apprentices have been engaged and dispense away with the services of apprentices. We, therefore, request bank to issue stern instructions to all regions and ensure to abort this practice forthwith. Branch Secretaries were put to note that service of apprentice cannot substitute the work of permanent staff. We once again direct the Branch Secretaries to bring to our notice in case any branch contravenes the directions of Central Office.
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Recruitment/ redesignation of Clerical Staff as Customer Relations and Marketing Associates Todays customer in our country is a well-informed person thanks to globalisation, impact of media and rising standards of living. The younger generation, Indian or the affluent class looks for value for his money and time. Customers expect that staff at the frontline particularly will provide accurate and latest information on the products, their implications in terms of tax benefits, adequacy of return of investment, advising services on various options available for investments, structuring of products to suit his/her individual needs etc. It is the quality of these value additions that customer looks for while choosing a Bank or a Financial Institution. In order that customer coming to our premises derive satisfaction through interaction with operating staff, there is imperative need to post young, energetic Customer Relations and Marketing Associates who will be trained and empowered to provide one point solution to Financial / Banking needs of customer. In the course of the last few years Bank has made significant improvements in the area of technology, marketing of its products etc. In view of the need to carryout these initiatives forward in order to meet the competition we are confident, our above suggestion will meet the changing times and needs of the Bank. It is our sincere view that our objective suggestion will go a long way in bolstering our brand image with our clientele, as the First Nationalised Bank, to try this innovative experiment. Regularisation of Personal Drivers This is yet another section of our workforce deserving our sincere and sympathetic considerations. Members may recall that after 1994 when the Bank declared a loss in the Balance sheet, the bank took a conscious decision to clamp range of austerity measures. In the background many cars provided to branches and Executives were withdrawn. As the position of the bank improved, bank agreed to provide cars to branches /Executives without Permanent Drivers. Under the circumstances the concept of Personal drivers came into vogue in our bank. Unlike regular employees they are being paid only consolidated wages without any attendant benefits and are not granted workmen status. To protect their interests as per practice in vogue we have been hitherto entering into a informal understanding with administration to consider them in a phased manner under the temporary sub staff panel. We have been requesting the Bank to continue this practice in the light of dearth of sub staff in branches /offices. While we thank the Bank for considering absorption of personal drivers attached to General Managers and Deputy General Managers we brought it to the notice of the bank that there are many personal drivers who have put in longer period of service than those who have been absorbed recently. Accordingly we had suggested the policy to the Bank to consider absorption of personal driver engaged by Executives grade- Scale V and above as under: Taking into consideration the plight of the personal drivers engaged by the Bank for a period of time, particularly with regard the air of suspense and uncertainty as to whether they would get a job in the Bank and unlike other recruitments, the Bank has to be selective in engaging personal drivers, because of inherent attendant, additional responsibilities attached to the nature of work, we had once again requested the Bank to consider our demand favourably. During the period under review as a result of efforts of the union 65 personal drivers were regularized. Recruitment of Watchman/Armed Guards We would like to draw your attention to the fact that in many branches the vacancies in Watchman/Armed Guards cadre arising out of promotion/retirement/death/resignation remain unfilled. Needless to say that the bank is taking a grave risk by stripping branches of watchman/armed guard and diluting the security environment. Apart from the risk exposure, this tends to have a negative impact on customer confidence. A bank without a Guard impression does not go well with the existing/prospective customers. They become
204

uneasy and uncomfortable and would be tempted to look out for alternatives with better security system. Besides, the news goes around, from petty thieves to profession gangsters may dare make a try. We therefore took up with the bank to bestow their immediate attention to this issue and arrange for recruitment of watchman/armed guards on an urgent basis. Further, we requested the bank to effect request transfers registered and fill up the end vacancies with freshers. We are glad to inform the house that during the period under review as result of our efforts bank has recruited need based watchmen/armguards. After prolonged talks bank issued instructions to ROs not to outsource armedguards but to place their indent for permanent armedguards /watchman to the identified vacancies or their recruitments through approved procedures and many armed guards/ watchmen were recruited in needy branches during the period under review. Transfer of Physically Challenged Staff Members on Compassionate Grounds The bank, to conform to the reservation criteria on recruitments, and / or as a social endeavour have been appointing blind telephone operators, spastics, deaf and dumb, and orthopaedically handicapped employees. Consequent to automation, the PBX system of telephone boards have paved way for electronic boards. In mega/ metro centers, these blind telephone operators and other physically challenged staff members have been taking overcrowded train travel, some of them travelling nearly 80 kms. to and from their dwelling units to office. Their offices are located far away from their dwelling units. Crossing the arterial roads of minimum four lanes in these metro centers is a herculean task even for normal persons. They have been requesting for change of designation and transfer to nearby branches. Having regard to the fact that many of them are around 50 years of age and the overcrowded train/ bus travel has become extremely difficult in metro centres even for ordinary healthy persons, we requested the bank to consider request transfers of blind employees to nearby branches and utilise their services as public relations clerks. In case of other categories of physically challenged employees their services can be utilised for normal banking routine, which any way they are performing, by considering their request transfers on compassionate grounds as a special case. Day in and day out there are news items of passengers being bumped off in overcrowded trains/ buses in metro centres. Hence with a view to alleviate the sufferings of physically challenged employees, we have requested the bank to consider our request favourably. We are glad to inform our members that the response of the bank is humane and healthy, and we hope this matter will be settled in the coming days. Pre-Retirement 2 Days Counselling Programme It was brought to our notice that a pre-retirement counselling for two days is being conducted at our Staff Collge for all retiring Officers, Excutives only by persons of eminence from the respective fields. The programme is meant to offer counselling to enable retired staff members to lead a peaceful and healthy living in their post retirement phase of life. Having regard to the fact that the retirement phase is a transition process for all individuals in any organisation. We conveyed our anguish and disappointment to the bank that the pre-retirement counselling programme is offered to Supervisory Staff only, and for adopting different yardsticks for a common retirement programme. We requested the bank to take necessary steps to extend the training programme to Award Staff also. As a result of our intervention bank had started arranging pre retirement training to award staff also. Comprehensive Transfer Policy As desired by the Bank, we placed our suggestions on comprehensive transfer policy for award staff members. We look forward to objective discussion and entering a MOU, once it is finalised after mutual discussions.
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It will further ensure that the Bank has comprehensive, transparent, transfer policy, which will form the basis for effecting request transfer. we inform the house that Discussions are under progress in this regard. AIOBEUs Global Recoginition: In response to invitation extended by UNI, the undersigned attended the 3rd UNI APRO FINANCIAL SECTOR CONFERENCE at Bangkok 0n 29, 30 August 2013 in Bangkok, Thailand. The conference was attended by your President also. The paper on Decent Work And Indian experience and suggestions on a Social contract for an inclusive Asia and Pacific presented by your General secretary was translated by the South Korean, Chinese and Japanese delegate interpreters. The paper was widely appreciated by the delegates representing Financial Sector, from different parts of the world, for its valuable information, contents, inputs, thought provoking information and contents. It is a proud moment for our union with your General Secretary being elected as titular member to UNI steering committee at the world level. During the conference we met the General Secretaries of NUBE Malaysia, NUBE Philippines and mooted the idea of forming international confederation of NUBE which was well received and responded by them. Efforts are on to give to effect this noble proposal. Re-Designation of Sweepers as Messengers We preach what we do and do what we preach. That is the tradition of our union. We acted as precursors in this singular achievement to these poorest section of the employees. We are glad to inform you after protracted and prolonged negotiations, Bank had agreed to redesignate Sweepers as Messengers in the 25% of the vacancies arising in the Messengers cadre w.e.f 2009 during this period. It is a matter of great satisfaction to all of us that we have honoured our commitment to redesignate all eligible part times/fulltime sweepers and today it stands as a reality. It is indeed, a feather in the cap of the Union, for it has not only proved that we are efficacious, but we are able to bring joy and upbeat social ramification in the domestic life and career of the entire spectrum of all the PTE comrades in the Bank, We have lived upto our philosophy and brought about real, constructive and lasting transformation in the life and career of all the Part time sweeper comrades who are the last in the pyramid. Thus we have effected a stark contrast in the given national situation by elevating the last category of the employees. Our philosophy and approach to life has been vindicated yet again. This unique achievement has been effected in the context of confusing formulations and suggestions being floated by the unconcerned bafflers .They excelled in their role as the dooms day soothsayers. We do not find fault with them. Let them be vested with the joy of being wild speculators. It is only our collective wisdom and strength that decided matters in our favour and we ensured that it happens. We greet and congratulate our sweeper comrades for reposing their faith and confidence on the Union despite the motivated false campaigns resorted to by those who always thrive by it, albeit momentarily and assure them our pragmatic proposal to convert all sweepers and sweeper cum peon outlined below, for which discussions are on will become a reality in the days to come. We once again reiterate, because of profound job satisfaction as representatives of the mighty organisation AIOBEU due to our efforts, even before the recent IX bipartite settlement, only in our Bank, part time sweepers who were drawing consolidated wages were paid 1/3 scale wages. In the 9 th bipartite settlement with this clause being applicable to other banks we emerged as trendsetters once again This singular achievement of redesignation as messengers, abolition of adhoc wages added a silver lining to the hovering dark clouds in the movement, that we champion the cause of social and economic equality as majority of the sweepers who hail from the backward strata of society can look forward today with pride that our union has provided them equal opportunities to them to grow with good people. A victory is not an end itself. Rather, it is an impetus or a stepping stone and a reinforcement for further
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victory. With this achievement in our armory, we are determined to move forward with added vigor to seek further improvements. As a Union it is always our endeavor that we strive for the best of service conditions and benefits to the membership. We are confident that with our collective strength we shall surge forward to reap in more benefits to our members in the days to come. Conversion of Services Of Existing Permanent Part-Time Sweepers Drawing Scale Wages as Sweepers Cum Sub staff In Full Time In The Bank. We append below our representation to the bank on this vital subject. 1. As you are aware due to natural wastages and promotions, with no corresponding recruitments to meet such gap, the strength of subordinate staff has been steadily depleting. On the other hand as a sustained business strategy, of late Bank has been embarking upon increasing the branch network by opening large number of new branches. This has led to a situation where the shortage of sub staff is being increasingly felt in the field. To obviate the same it is reported that branches have been resorting to casual and temporary engagement in sub staff vacancies who on a future claim for permanent status as per law. At another level with increasing absorption of information technology and Core Banking Solutions (CBS) the concept of virtual premises / branches is since emerged as a contemporary business strategy thereby the area of the branch premises are considerably shrinking leaving little possibility for elevation for Part-time Sweepers to higher / full scale wages, inasmuch as at present the elevation is based on increase in the area of premises to be cleaned by Part-time Sweepers. In order, therefore to overcome the deficit position of sub staff to some extent and also with an objective to improve the financial strata of the existing Part-time Sweepers our Union vide our Letters No. 30/2008 dated 30-05-2008, 38/2008 dated 20-06-2008, 67-2008 dated 23-10-2008, 80/2008 dated 17-12-2008, 86/2008 dated 23-12-2008, 68/2009 dated 20-06-2009, 30/2011 dated 08-072011, 38/2011 dated 26-07-02011, 43/2011 dated 20-07-2011, 41/2012 dated 07-07-2012 represented with rationale and logic, the captioned demand for an amicable solution to the problems faced by Part-time Sweepers drawing less than full scale wages on account of their continued existence in part-time capacity impacting their career growth as well as superannuation and other benefits. In almost all the meetings we had with the Bank on this subject, Bank had expressed their desire to solve this matter amicably. Further the matter was raised by the Parliamentary Committee for redressal of grievances pertaining to Safai Karamcharis in all the meetings, including the recently held meeting wherein our representatives were present. Bank had agreed to re-look into the matter objectively. Further we had brought to the notice of the Bank that the request made by us is supplemented by Government Notifications F.No.6/79/80 SCT(B) dated 21-11-1980, F.No.6/79/80/SCT(B) dated 3003-1981, F.No.102/21/17/84-SCT (B) dated 14/19-01-1985, F.No.102/4/1/90-SCT(B) dated 16-041990, F.No.F1/9/96-SCT (B) dated 17-06-1996, F.No.1/1/97-SCT(B) dated 31-03-1997 and F.No.1/ 1/97-SCT(B) dated 04-08-1998 as appended in the Book on Brochure on reservation for SC/ST and OBC in posts/services in Public Sector Banks by IBA (a copy of extract is enclosed). We had requested the Bank to give fillip to the existing Part-time Sweepers and also ensure that there shall be no Part-time Sweepers drawing scale wages in the Bank, in tune with the Platinum Jubilee maxim Touching hearts and Spreading smiles to Part-time Sweepers who eke out sub-human living drawing abysmally low scale wages, some even minimum wages as envisaged in the acts. As per extant Government guidelines F/1/1/97-SCT(B) dated 04-08-1998 mentioned above Bank should have reserved 25% of the vacancies accordingly in the Peons cadre to be filled up by
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2.

3.

4.

5.

6.

Part-time Sweepers. Needless to underscore that the above Government guidelines as per brochure for SC/ST/OBC employees is mandatory like any another Government guidelines. 7. Since giving effect to these Government guidelines from the date of guidelines every year commencing from 21-11-1980 or 04-08-1998, i.e. with retrospective effect as the case may be is cumbersome we had submitted our alternative demand conversion of Part-time Sweepers as Sweepers-cum-Peon. Accordingly we place the following modalities to give effect to this demand for entering into a settlement with the Bank as under. In supercession of the settlement dated 13-04-1993, (i) All Part-time Sweepers drawing scale wages shall be converted to full time and designated as sweeper cum peon in three phases with effect from the date of understanding. 1st phase: Redesignation as sweeper cum peon for those who have completed 10 years. 2nd phase: Redesignation as sweeper cum peon for those who have completed 5 years. 3rd phase: Redesignation as sweeper cum peon for those who have completed 4 years. (ii) After full time conversion as sweeper cum-peon they will perform messengerial jobs in addition to their original duties as per their original designation as Part-time Sweepers within the normal daily working hours as sub staff. (iii) The fitment of the converted sweeper-cum-peon shall be as per provisions under paragraph 18(3) of the Bipartite Settlement dated 10-04-2009 pertaining to fitment. (iv) They will be adjusted in the posts within the same centre/region also keeping in view their social and family convenience, administrative convenience, availability of vacancies and exigencies of the Bank. (v) Where more than one full time sweeper cum peon is there he will be transferred to any other branch / office in the same centre in place of Part-time Sweepers as sweeper-cum-peon. 9. Further we wish to bring to your notice that in tune with the observation of the matters pertaining to Safai Karamcharis and as per spirit of the brochure / Government guidelines mentioned above State Bank of India, Central Bank of India, Union Bank of India, Canara Bank have entered into a settlement with their Union on above lines.

8.

We look forward to a similar understanding and amicable solution of this long pending demand of ours at the earliest, which will invoke eternal good will for this unfortunate category majority of whom are from downtrodden, who retire unsung hitherto. Discussions are on. No finality is reached. However we trust and hope that we can convey some handsome information on the above matter to our members in the days to come, we shall leave no stone unturned and all our efforts for the past four years will result in the culmination of this settlement. Promotions from Sub staff to Clerical cadre and Record Keeper cum Shroff Upholding our rich traditions of competence, after fruitful negotiations we had with the Bank, we inform you with pride that Bank graciously considered 415 Promotions during the period under review. This is indeed a great achievement of our Union, in 64 glorious years of our purposeful existence We have always believed in the philosophy of symmetric growth. We as a Union hold the conviction that human resource in the only asset and the career growth of every aspiring employee, right from the subordinate staff to the level of top management should be fulfilled.
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Keeping these rich traditions, we could negotiate with the Bank and achieve the record number of Sub staff promotions, once again. Union Programs Your Career There is always room at the top Upholding our rich traditions of competence, we are glad to inform our members that the Bank after discussions with our Union, have been effecting all-round promotions, special promotions from and Clerical to JMG-I cadre, Sub-Staff to Clerical cadre and sweeper to messenger cadre by resignations, sweepers to clerical cadre periodically notwithstanding the erosion in our strength in these cadres as we believe that career motivations cannot be emasculated. Viewed in the context of rumours and carping by vested interests who envy human progress, and had unleashed calumny and slanders, paraded through accordions that promotions from Sub-staff to Clerical cadre, and Clerical to JMG-I cadre, will not see the immediate light of the day, as it erodes the quantitative strength of the Union, the number of promotions secured by your beloved organisation during the period under review not only vindicate our quantitative organizational mettle, acumen and foresight, but also the irrefutable fact that only our union webs career growth of the members - reaffirmation of the faith of our members. Our successful negotiations on this important aspect encompassing career growth, is yet another landmark which our Union is renowned for. It is pertinent to mention here that out of officers in our bank more than 85% are from our ranks. Today as result of our IX9 bipartite settlement cent percent of staff draw one Special Allowance or another. The union has done the best possible to see that its members have a reasonably good career progression. Not withstanding reduction in our ranks, I assure you that our union will continue its efforts to see that the present frustration is brought down by assuring a definite career path. These settlements ensure that there is a continuous career progression for clerks in our Bank. That is, selection of Clerical to Special assistants as per the innovative special assistant settlement, Special Assistant to officer as per this settlement and regular promotions from time to time as per the existing settlement comprising of A and B process and special promotions and consequent filling up of Special Assistant vacancies as per Special Assistant Settlement, whereas the sub staff promotion policy ensures career progression to sub staff as clerk and sweeper as sub staff. Thus our union has taken care of safety, security, social needs, esteem and status and self-actualisation, fulfillment and attainment, the quintessence of overall growth of any individual. The foresight and vision of the union towards resource motivation stands vindicated, as the career progression takes our members to greener pastures and better palmier days. To achieve the near impossible, we have to burn the mid night oil. Yes, Comrades, we were for quite sometime exercised over the space available for career upliftment to staff in our Bank. Hence we decided to go in for a phased promotion opportunities for staff, in the hope that, their latent talent will be best harnessed by the Bank, for its growth. We are happy that we have been able to provide more promotion opportunities through our innovative Flow Chart of promotion policies, to our staff than the industry could, in the last 3 years. The statistics given below speaks for themselves. The Special Assistant settlement in our Bank has been a major watershed and is a veritable jewel in our crown. Truly innovative, we were able to create uninterrupted promotional opportunity for aspiring candidates, year after year. This would form the bedrock of any future settlement on career growth for award staff in our Bank. Hopefully something may merge through the resolution of this conference. I give below the data with regard to promotions in all layers of award staff, during the period under review our stress has been growth, in tune with the emphasis of the Bank Good People to Grow With which by any standards is sterling, peerless performance by the union .

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Clerical to Officers including Special Promotions Promotions from sub-staff to Clerical Cadre including special promotions Redesignation of sweepers as messengers Members assigned with Special assistant duties Members assigned with Head messenger duties Members promoted from sweeper to clerical cadre

1214 415 749 223 17

The path we had tread all these years, the independent bold stands on this vital issue promotion stands vindicated with these spectacular achievements. We advise the promotees that Promotions is not going through motions, but conferment of additional responsibility at every additional layer; contributing to their overall growth both vertically and horizontally. Hence it is incumbent on the promotees that they ingrain in themselves this concept of growth, and understand, grasp the difference between ageing (often mistaken as growth) and real growth. Promotions From Clerical To Officer Jm-1 Cadre As Official Language Officers As per our settlement dated 05-02-1992 between the Union and Bank, the Bank has identified 24 vacancies at various regions and eligible members were promoted as officers JM1. Pre-Promotion Classes Reports confirm that in almost all the regions faculty of staff training college in particular, and few officer friends in general, have undertaken the task of conducting the classes for both sub-staff to clerical promotion and clerical to JM-1 cadre promotions, beyond the mere call of duty, with missionary zeal. We place on record the sincere efforts made by these officers, particularly the faculty at Staff Training Centre, Chennai who had assisted us in the preparation of study material for promotion espousing the cause of education, without any axe to grind, in this competitive commodified new world order - where food, clothing, shelter, education, exercise and love have unfortunately become commodities. Reports also confirm that responses to these classes from both sub-staff and clerks as overwhelming. We congratulate our Regional officebearers for upholding this rich tradition. Request Transfers During the period under review, we had set another ineffaceable record in clearing record number of request transfers. During the period under review, the total number of transfers effected from Central Office to places of members choice was above 2756 which by any standards is a spectacular achievement of the union . We place on record the commendable job done by Com. R. Sampth Kumar, our Vice President, who took enormous effort in this regard, in coining mutual chains and ensuring that end vacancies are filled up by posting fresh recruitments and sub staff promotees to the extent possible, in soft landings while effecting these record number of transfers. It is not enough to set tasks; we must also solve the problem of method of carrying them out. This is the path we had followed when we agreed to post sub-staff promotes/ fresh recruits in end vacancies with a view to facilitating clearance of pending transfer requests. We answer to the dictate of what we judge is fair and reasonable and what we do is in the interest of majority. By this policy we had ensured that it is end of sob story- for many comrades who were awaiting transfers and for the union its fulfillment of the confidence and faith of our membership, With this background, let there be no doubt as to the attempts being made by union to secure relief for as many employees as possible and if this fact is appreciated, I am confident that the unfortunate misgivings if any will disappear and pave way for better understanding of the situation.

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We thank the GM (PAD) and able band of officers and our dedicated staff members, attached to PAD, for the cooperation extended, and in the process they have won the heart of transferees, who will remain obliged to them and our union forever. Release of Stagnation Increments to Award Staff Members It is observed that some of the staff members belatedly submit their representations for grant of stagnation increment/s. We were given to understand from these members that Regional Offices were sanctioning stagnation increments only from the date of application for monetary purpose, as advised by IR Department, Central Office. We took up this matter with the Bank and after protracted discussions, Bank had agreed to extend the monetary benefit from the date of eligibility for those members who were denied hitherto. We request our members, in future, to represent for stagnation increments, well in advance. We also advise Branch Secretaries to maintain stagnation increment eligibility date register of their members at unit level, and guide them to apply in time Computer Training to Sub-Staff Members know that we are in computer era with most of our Bank functions are computerised and Bank has been awarded ISO Certificate for its excellence in-house computer management. In the above circumstances, we demanded that all the Sub-Staff promotees be provided a training so that they get acclimatized with basics in computer literacy. The Bank welcomed our good suggestion and saw to it that training is imparted to all Sub-staff promotees at respective Staff Training Colleges. All the Substaff promotees have been the beneficiaries of the programme. Uniform and Liveries To Subordinate Staff / Sweepers: We had demanded to the bank to enhance the existing maximum limit fixed for supply of shoes to Watchman, Armed Guard, Drivers, A/c plant operators, Lift operators. Having regard to the fact that the existing rate for summer uniform and winter uniform fixed long ago, commensurate with the prevalent market price per meter of terry cotton and woolen clothes, and also to increase the cost including stitching charges of summer uniform. For Lady staff members, we have demanded to the Bank that the Uniform set should includes saree, petticoat and blouse. Further in addition to the usual uniform, in some selected centres/hill station in Northern India, the lady sub-staff members shall be supplied with 3 sets of Salvar and Kurta wherever applicable within the overall cost maximum stipulated for summer uniform/ winter uniform and two duppattas once in three years. Bank in principle have accepted to our above demand. Our Branch Visit Hugging mother earth has given strength to Hercules. So is the case with organisations. In this context of reaching to rank and file central unit office bearers along with members of Regional Committee visited number of branches/Regions during the period. In the Interaction and Roll call meetings conducted on all these regions, live participation, large turn out of women activists was the trend through out. Let us keep up the trend. Home Coming We deem it good augur that many members from other unions in recognition of good work done by us have embraced us in Behrampur, Bihar, Orissa , West Bengal & North-East regions which has further fortified our strength and unity. Our union has always provided a sense of spaciousness and feeling for every one. Our future is put forward with imagination and hope, that in not too distant a future we have confidence that we will be liquidating our rivals holding our banner as earnestly and spiritedly as we do.
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AIOBEU Diamond Scholarships Scheme For quiet sometime we have been planning to diversify the concept of existing Welfare Scheme DHARAM from the funds of the Union. We have been seriously considering how best to expand and widen the scope of our constructive activities to improve the general welfare of our members. With this end point in view, commemorating the Diamond Jubilee of Union, we finalized the Diamond Scholarship Scheme to wards of our members redefining our popular DHARAM scheme as under: Objective: To recognize the skills, merits of wards of members for their excellence in Education, Sports, Cultural and Fine Arts and enable them to achieve still better results in their chosen field. Eligibility Norms:
For Sweepers Specific Qualification X Std or Equivalent XII Std or Equivalent Minimum Aggregate Marks 60% 60% Eligible Amt Per Member (Rs.) 1000 1000 1000 For Sub staff Minimum Aggregate Marks 70% 70% 70% Eligible Amt Per Member (Rs.) 1000 1000 1000 For Clerical Minimum Aggregate Marks 80% 80% 80% Number of Eligible Amt Scholarships Per Member per region (Rs.) (**) 1000 1000 1000 1 2 1

Graduation or Equivalent 60%

In addition to this we had also called for applications for: 1. Young Union Achievers 2. Union Youth 3. Young Union Ranks We are overwhelmed with the response from our members to the above Diamond Scholarship Scheme of the Union during the period under review around 1500 wards of the employees have been awarded scholarship as per the eligibility norms laid down in the scheme. Union Injects Fresh Blood We are happy that many members have come forward during the period under review to donate blood. In some cases our staff members were recipients of blood donated by IOBIAN. We thank the donors for their help. We also request our office bearers in region who had conducted periodical blood donations, to send us list of donors, so that we can update IOB Life Line Directory the copies of which can be handed over to our well wishers and customers Guest Houses And Holiday Homes During the period under review, we have added to the string of rest houses managed bys us at Mysore, Ernakulam, in addition our existing guest house at Kodaikanal. Further we had acquired land at Royapettah Chennai, a central location in the heart of city at Chennai , equidistant form both Madras Central and Egmore are in process of completing the construction of huge rest house complex which will have more rooms. Members have started utilizing the rest house and the schemes as such has been quite successful though some preliminary expenses and incidental losses have incurred for setting up and maintenance of these rest houses . We have intention to open a few more guest houses at various other places. The details of our holiday home s are given below once again with the fond hope and expectation that our members will avail the opportunity for rest and recuperation with their families and enjoy the pleasant holidays.

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Holiday Homes Addresses:

KODAIKANAL T.S.No.1, Green Valley Road, (Near St.Peters Residency School), Pambarpuram, Kodaikanal 624 103 Dindigul District, Tamil Nadu Phone : 04542-246382 Tariff :Rs.250/- per day / per room MYSORE KOCHI

Brigade Elite 2No.103, Flat 3 - C,Seiken East End properties First Floor, Princes Road ***KALOOR,ERNAKULAM*** Devaraja Mohalla Mysore, Karnataka Phone : 08212515789 Tariff :Rs.550/- per day / per room

Two Additional Increments to Graduate Ex-service Men The graduate ex-servicemen were deprived of two additional increments as in the case of any other workmen as per Bipartite Settlement provisions. There was no difference in pay fixation between graduate exservicemen and non graduate ex-servicemen. We took up the matter with Bank to redress this anomaly and render justice. After protracted negotiations we are able to achieve success in this issue. We wish to inform that Bank have agreed to sanction two additional increments to the graduate /post graduate Exservicemen in their pay scales. The new fixation for the eligible members will be advised by PAD soon. Inclusion of Grade Pay for Salary Fixation: VI Pay Commission in its recommendations to Central Government Employees has introduced a new concept called Grade Pay and was implemented with effect from 1.1.2006. Those Ex-servicemen who left their army service after 1.1.2006 and joined our Bank were deprived of inclusion of grade pay for their salary fixation in our Bank. On taking up the matter with Bank it was agreed to include grade pay for the salary fixation of ex-service men joining our Bank. Accordingly, the eligible members were given the benefit and their salary was revised and communication was sent to them by PAD Central Office. Our Union is always ahead in championing the cause of ex-servicemen expeditiously. This is a token of our gratitude for ex-servicemen who saved our country in the frontiers when they were in army service. Inclusion of Military Service Pay (MSP) for pay fixation: You are aware that recently the Grade Pay in the Military Service was also included in the pay fixed on re-employment. Consequent to our taking up the matter two increments for graduates were also given and their pay got revised. But the MSP (Military Service Pay) was not taken into consideration for the purposes of pay fixation on re-employment. Now a ruling has come from the Department of Personnel & Training, Government of India, that the post 2006 retirees whose pension contains an element of MSP, it will not be deducted from the pay fixed on reemployment. Hence, we are glad to inform you that the pay of all those who come under the above category will be further revised and for those salary already fixed without MSP, they are requested to represent to PAD/CO for the refixation. Dual Family Pension for the Family of Deceased Ex-Servicemen Hitherto, the families of ex-servicemen upon death of ex-servicemen were given an option to avail Family Pension either from Military or from the civil employer whichever is higher. They were not eligible to avail both the Pensions. But we have been demanding Dual Family Pension both from Military and also from the Civil Employer upon death of Ex-servicemen. Consequent to the revised guidelines by the Defence Ministry, recently Ministry of Finance, Government of India, vide their communication dated 08/05/2013 to all the CMDs of all Public Sector Banks directed for the implementation of the Government Decision on the Grant of Dual Family Pension from Military as well as Civil employment. The Financial Benefit is effective from 24/09/2012 even for past cases. Hence we request our comrades particularly Branch Secretaries to put extra efforts and contact the family of ex-servicemen who were employed in our bank and expired and ask them to apply for Family Pension
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immediately to Pension Cell, PAD, Central Office for process and sanction. As the family members of the deceased may not be aware of the latest development, it is our bounden duty and responsibility to appraise them to avail the Dual Pension. Payment of Gratuity Eligible Wage Components: In the Bipartite, it is very clearly provided that pay for the purpose of DA, HRA and super annuation benefits shall mean basic pay, stagnation increment, special pay, graduation pay, professional qualification ay and officiating pay if any. However, it was brought to our notice that for calculating the gratuity, the special pay drawn by award staff members namely SWO B, Daftly etc. and the DA thereon were not included. This anomaly was brought to the notice of the administration by our communication dated 14.01.2011. Initially the management tried to brush away our views on the plea that only such special pay drawn on permanent basis would be taken into account. Further to our follow up such amount are taken into account. Ensuring the Safety Measures at the Branches: Of late daring robbery attempts at branches in the various parts of the country have almost become a menace to be countered with effectively. In many cases it becomes difficult to find out the identity of the culprits in the absence of any trace to proceed with. The police too have been urging upon that appreciating the vulnerability all branches should be fitted with CCTV cameras close on the heels of the Keelkattalai Branch incident, our President rushed to the branch and thereafter submitted a memorendum to the Commissioner of Police and issued a press statement regarding safety in work place which received wide coverage in the media. Our concern is that no harm should be carried out to the safety of our staff / clientele or the property of the Bank. In the light of the above development the Bank has installed the facility in quite a large number of branches. Members may take it up with the administration wherever such facility has not been put in place since the administration has taken a policy decision to extend the facility to all the branches. The Menace of Counterfeit Currency: The problem has acquired serious proportions of late. Setting aside the primitive printing methods criminals involved I the racket of fake currency now use sophisticated gadgets to manufacture fake India currency notes which conform to almost all security parameters. Hence differentiating between the fake and genuine ones is rendered very much difficult. More so in the midst of our preoccupation with our routine duties extending precautionary measures beyond a certain level is rendered not possible. The quality of counterfeiting has scaled new heights that only a close scrutiny and that too by an expert alone can detect the discrepancy. In Chennai in one instance the police referred two wads of Rs.500/- denomination to a Nationalised Bank which was passed by them for genuine. However further verification sought through the Reserve Bank of India proved that it was fake. Under such a serious risk only we are constrained to carry out our duty across the counter in the Currency Chests. It is ascertained that the number of cases registered has been increasing year after year. The Govt. itself has conceded that through some District in Jharkhand and West Bengal State placed near the border with Bangladesh, the fake currency is pumped into the country by Pakistan based Agencies. While so putting the blame on the employees working in the chests and branches handling sorting and counting machines when something goes wrong is to say the least unjustified. We have been impressing upon the administration that when such notes escape the scrutiny of he machines it has to be treated as a risk inherent in the system itself. Further all the branches are fitted with the CCTV cameras and the entire goings on inside the branches are duly recorded. Through this we can have it verified if the needle of doubt points towards any of the employees. Quite frequently our members are directed to compensate for the fame amount brought out in the course of subsequent close scrutiny. To arrive at an amicable solution which will safeguard the interest of the Institution as well as the individual we have been impressing upon the administration to arrange for a meeting with the administration. Unfortunately not withstanding the repeated assurances from the administration such a meeting is yet to take place.
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In certain cases it is ascertained that rash work coupled with a degree of negligence results in sneaking of fake notes. In the light of the above, we impress upon the rank and file to be more vigilance and put in all the prescribed norms diligently in their own interest. On Vigilance. Be Vigilant!: The importance of the vigilance mechanism put in place in the bank cannot be undermined in the back ground of banking being a highly sensitive institution since it deals with hot cash and valuables. In the wake of CVC guidelines on vigilance aspects. The department has become proactive of late. The reality obtaining is that the moral ethos and values among the public is at its lowest ebb. Hence, the necessity for preventive vigilance assumes more significance. It is quite true that the administration very often comes out with extensive guidelines and instructions regarding the precaution and the vigilance to be ensured while working across the counter. However due to various practical constrains and more so in the background of ever increasing the work load contrasted with diminishing work force, the staff across the counter are rendered helpless and find it difficult and impossible to scrupulously follow and adhere to the laid down norms and procedures. For such deviations the staff cannot be faulted with. Putting in place the elaborate guidelines naturally requires considerable time. Unfortunately todays clientele is found to exhibit utmost impatience and they cant brooke even the justified delay. In the fast moving world, they want to get things done in no time. Under such situation the staff find themselves placed in a critical situation of between the devil and the deep sea. Hence out of compulsion and necessity and not out of ignorance or negligence, they are compelled to compromise on certain aspects so that the customer dissatisfaction is avoided. In all fairness any mishap that occurs under such situations is to be treated as risk inherent in the system itself rather than lapses on the part of the employee warranting disciplinary proceedings. Unfortunately taking a stiff stand and applying a straight jacket approach it is always dubbed as gross negligence and the employees are subjected to disciplinary action and inflicted with cruel punishment also. In the background of dealing with cash and securities the judiciary too has on many occasions ruled that highest order of integrity and honesty is the watch word while discharging ones responsibilities in the bank. Hence, even the slightest aberration involving misappropriation is viewed seriously by the administration and disproportionate punishment and in most of the cases capital in nature is inflicted. The justification given out by the administration is that their hands are tied and they have to necessarily follow the CVC guidelines and court rulings. Under such a hard reality we find it extremely difficult to put up effective defense since it is summarily brushed aside pointing out that the intention alone matters and not the quantum. Hence the best way to defend ourselves from such cruel and draconian proceedings is not to fall a prey to the least temptation even. We have to exhibit total honesty and keep away from the slightest misdeed even. There cannot be two opinions on the view that those who involve in frauds should not be spared. At the same time the established tenet is that it should always be ensured that the punished should match the misdeed and that the innocent are not punished. The authority dealing with disciplinary matters is adorning a quasi judicial role and hence is expected to conduct himself devoid of any prejudice or preconceived notion. Applying the same yardstick equally to all they should measure with the same cup. Victimization and discrimination should be an anathema. While so unfortunately on many occasions we have come across instances of such acts of prejudice, discrimination and even hate. The more disheartening aspect has been one of discrimination on cadre bias. The tendency is found to be extend a liberal approach when it concerns those placed at the higher echelon. The lower the cadre the harsh the punishment seems to be the approach. There are cases where the supervisory cadre staff and the award staff were proceeded with simultaneously for the same allegations.
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However while concluding the proceedings, the supervisory staff have been let off lightly but the award staff had been sacked. We have been opposing such partisan attitude. On certain occasions due to such discrimination, we have been able to get favourable orders from the court. In cases referred to the Labour Court or pursued in the High Courts, the earlier harsh punishments inflicted by the administration without any rhyme or reason have been reversed or reduced. This evidences that the managements dispensation of justice is harsh and unjustified. Of late in the course of the departmental proceedings, the prosecuting official presents the recordings by the CCTV installed inside the branch as material evidence to establish the charge. Members should remember that the big brother has been watching thoroughly with indelible recording the entire goings on inside the branch premises. It should not be forgotten that such arrangements have been put in place not only to have an eye on those indulging in misdeeds from outside but also from within our own rank and file. In many cases when something amiss takes place, the entire staff irrespective of cadre are taken to task. The reason adduced by the administration is that the shortcomings on the part of the staff handling the various sections like not following set norms or negligence contribute in perpetrating the misdeed by the fraudster. It is a reality that quite often the wrong doer emerges from within. Reposing undue confidence on known people coupled with taking light of the procedures is found to be villain of the piece. Hence it reiterated that whatever be the personal rapport one should not fail to scrupulously follow the guidelines and instructions. Quite often the lapses on the part of the staff members have been due to not maintaining the password secrecy, failure to save he cashiers teller scroll, non verification of teller scroll with the days vouchers etc. such things tend to sneak in due to our hurriedness. A little cautious approach would have gone to make a lot of difference on such occasions. Not only in the interest of the institution but also our owns safety it is always advisable to keep a watchful eye on the entire goings in the branch and to be vigilant when something unusual or abnormal is found out. Any aberration has to be nipped in the bud itself. Hence when a rat is smelt it should immediately be brought to the notice of the concerned competent authority. The whistle blower policy too mandates that one should not close ones eyes to the goings on in the branch. We have been cautious enough to spare no opportunity to impress upon the administration to adopt a fair and reasonable course. We have noted to repeatedly urge upon the administration to take into consideration the severe work pressure and high expectation from the customers. Though our Union has been extending all kinds of support to the staff members while facing the disciplinary proceedings, everyone should exercise caution and care while discharging their duties. When the clerical staff members are vested with the passing powers, it is better to be doubly cautious while functioning in the cash counters by meticulously following the ruses and regulation. After all prevention is better than cure. Domestic Enquiries I am glad that today many office bearers of our union are handling domestic enquiries independently and have done their best in defence of the delinquent employee. We will endeavor to conduct defence training, workshop in future. I have to state that we have been able to acquit ourselves creditably in few cases of disciplinary action against our members during the period. Though we deem it as our duty to render such assistance, in many cases the situation could have been avoided had our members been conscious of their duties and the limitations the Union has in defending cases where there may not be any justifiable reasons for certain actions. We deem it as our bounden duty to thank our CVOs during the period under review for their pragmatic, progressive, principled, holistic approach embracing tenets of human essence
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and natural justice in dealing with this complex subject. We also appreciate the initiative taken by the department in bringing out an informative vigilance magazine IOB-Vigil, for creating vigilance awareness among our staff members. I am sure that our staff members will go through this informative magazines and equip and do their best in espousing the cause of preventive vigilance the new buzz word to growth and prosperity. If we gloss through the charge sheets only very few relate to indiscipline and this fact should efface the campaign against bank employees unleashed by vested interests. Basic Amenities/Better Working Conditions Some units especially from rural areas have complained that amenities of basic and fundamental nature has not been provided by the Bank. We took up this matter very seriously with the Bank and as a result the problem has been solved in number of units. We are aware of the fact that there are still units where premises has to be changed or needs improvement. We have taken up the case of such units and are confident that the grievances of members in those units would be redressed very shortly. Our Struggles Banking exposes us to all aspects of human life. But what is it does not teach us, is the fact that outside the Bank, we are no body. We deal with people from a position of Banker, but not when we are like any body else the common man,. It is in crisis, such as strike, struggle that we learn to tackle people from the position of common man. Agreed that strike is painful labour without wages but it will deliver fruitful result not only in the form of pay wages, but also in the form of self-development and recognizing our hidden strength. It also enables us to introspect and remodel we get an opportunity to show our subtle potentials. Those of us who remain dormant, either because of overwork or otherwise, get a chance to show our talents in various fields. The responsibilities relegated to us help us to develop our personalities. The strikes have given us an excellent opportunity to reaffirm our status. The status, which will grow forever. During this phase we have seen and experienced the incredible. We dared to do the things, which we would not have dared in a lifetime. The struggle and strikes have given us strength, power, and lion heart to combat every battle of our lives. Times will change. The future generation of Bank Employees may not even remember us, but for us, this experience is a bouquet of ever-fresh memories of things, which we gained and lost in this struggle. This phase will pass away. But the struggle will never end. During the period under review the relentless campaigns conducted by NUBE in pursuit of 9th bipartite, one more option for pension, reintroduction of Compassionate Appointments or against mergers and acquisitions, Re- privatization moves of government, commencement and early settlement of 10 th bipartite are something historic in the annals of organized trade union movement. We are proud that in all these struggles of the Bank employees throughout the country, was well accentuated by the prominent part IOB comrades played. Comrades, once again we remind you that the future at hand may soon loom red before us and we must brace ourselves to cope with trials and problems of what would be stern and terrible times. We should do with assurance of ever growing strength and unity. We should do so as union of good will. We should do with bold heart and good conscience. Our Nominee on the Board of Directors of the Bank With the fullest satisfaction that he has done justice to the faith and confidence reposed by all of you Com. S.L.Lakhotia our Vice President (east) completed his term on 8-08-2013. Com. Lakhotia deserves praise and acclaim from every one of us for the yeoman service he has rendered. His endearing qualities and his uncanny knack of dealing in depth any issue, however complicated or intricate, have been his imprints. It
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was during his time many challenging situations arose which with equal facility he had dealt with to the satisfaction of all concerned. As General Secretary of the Union I deem it a privilege to place on record our deep sense of gratitude to Com. Lakhotia for his meritorious service. Pursuant to the Government of India / Bank certifying our union as the representative union in IOB after physical verification of our membership under the Nationalised Banks (MMP) Scheme, 1970 we shall be submitting the panel of three names for one of them to be appointed as workmen nominee on the board very soon . It is noteworthy that this is the tenth time your nominee has been chosen to represent the workmans interest on the Board of the Bank. The task of new incumbent in the Board is both easy because healthy foundation has been laid and a fund of experience, passed on to him by his illustrious predecessors and difficult because he has to further build up the rich tradition they have established.. Our CASA Campaign Say It With Pride! I Owe The BANK Banks have a social purpose. Banks are entrusted with a worthy cause. Banks belong the nation. Therefore a job in a public sector bank like ours is a noble one. Only through us can our bank discharge the responsibility that rests on it. Against this background of fierce competition that ahs come to stay in the banking industry sequel to ill advised financial sector reforms and the need for employees of the bank, particularly public sector banks to not only keep public sector banking strong but to strengthen further , the paramount importance of rendering customer service to customer s gets doubly emphasized . Remember! Our customer in essence is our defacto employer providing us jobs and constant wage revision. So it is incumbent on us to reciprocate and express our gratitude to our clientele, majority of whom are working and people toiling like us in ample measures, by continuing to extend exemplary, efficient, personalized customer service. We have been passing through one of the most critical phases in our trade union movement. There are many issues, very important ones, and to the best of our ability, we are trying to solve them some time by dialogue with the management and sometime through mobilization of our membership for realization of our demands. There will be no let up in such exercise. However one issue which should concern us most today is the future of the institution in which we work. Our trade union movement will lose direction unless we develop a proper understanding of the situation which confronts IOB as an institution and its employees. Hence as a responsible union whilst welcoming the New Year 2010, we issued circular Observe each year from January To March during the period under review Savings Bank Deposit Mobilization Carnival! We knew that the clarion call given by the union whether it pertains to agitation, social mission or call for duty will be heeded by the disciplined ranks. To us commitment is not an empty word but action. We practice what we preach. For us motivation is not mere appellation. We congratulate our units for making this deposit mobilization carnivals an unprecedented success. The data collected from the bank makes it loud and clear that our members response to the clarion calls of the union for mobilization of low cost deposits has been a rousing success. There should be sense of satisfaction for all of us that during the period of all the campaigns, we ensured that SB deposits have grown up by leaps and bounds. It is matter of pride for all of us when the bank acknowledged our devotion conveying their thanks to the leadership of our union, that our members had largely contributed for the same. As dedicated soldiers we have created an impact that we are distinctly different. We achieved something noteworthy. We have transcended the maxim we are good people to grow with into action, upholding the tradition that we look upto to the bank as an institution whose progress is interlinked with the union. We have done our duty.
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We are proud that our members have ensured live participation in the deposit mobilization campaign and have convinced the customers and general pubic that their money in nationalized banks is always safe. Congratulations! to all our members for achieving our goal . History of our union will be ever proud of our actions. We dont know whether our Bank which was so profuse in its appreciation of the role played by you all on Deposit campaign had intimated to Ministry/IBA that there are hundreds of Bank Employees who are living monuments to explode their notions that Bank employees are not conscious of their obligations. We congratulate every member for the high sense of devotion to duty demonstrated in the campaign. Industrial Relations in Our Bank I regret to report that the period under review witnessed industrial relations in our Bank at its lowest ebb. This was a period unprecedented in the annals of our institution. We were all along proud of the traditions that we had built up and the values which we uphold. But strangely for reasons still unfathomable by us, the management of our Bank bid good-bye to all that helped IOB reach its present place. We had to begin the financial year 2013 in a very troubled way. We were sad. This was because, by tradition, ours is a peaceful organization. We have never indulged in activities which upset industrial peace and have always strove our best to resolve our problems through peaceful means. But the management during the period offered us limited options. Our patience and our beliefs in peaceful methods were mistaken as weakness and we were called upon to struggle for basic human rights. All of a sudden, our Management removed the words fair play from their dictionary and acted as if it was their birth-right to practice discrimination and unfair treatment by all means or foul. We had brought to the notice of the management that double standards, vindictive measures, unfair victimization in the matters of industrial relations eroded not only their credibility but also brought to disrepute the foundations and basics of a sound industrial relations policy. Whether it be on the episode enacted at, we found to our dismay, that our bosses were practicing to perfection a new concept in the theory of management functioning Management by deceit. It was our experience when it came to action against our members even on trivial matters, the management was very swift and quick but when it came to their favorites, however big the magnitude, paralysis of will crept and devoted cold feet. On various issues we had occasions to meet the Chairman of our Bank and to plead with him for justice and fairplay, pointing out the specific concrete cases. But it is our sad experience that on all such occasions he would put on an air of injured innocence and plead ignorance of facts. When countered further with irrefutable facts we were informed of who amongst the subordinate executives was responsible for the impasse. It was no consolation for us to have an individual responsible for the situation being identified by the top. When wars are won or lost the credit or the blame goes to the generals not the foot-soldiers. When rules are broken, it is guardians of those rules who must acknowledge the deed. When traditions are trampled upon, it is those whose name it is done who must own up. When institutions are abused, it is the protectors of those institutions who must stand up and be counted. And, when deeds are committed, then the head of that management cannot afford today: I was not consulted. I did not know. Even if the top does not know, he is responsible. Acceptance of responsibility is the crux of leadership. It is only a bad carpenter who complained about his tools. We did what we should do. We were not bothered by the end result for a Trade Union cannot struggle only for winning causes. I am thankful to everyone of you who stood by the organization in those eventful days. Your unflinching faith and loyalty to the organization has done glory to the movement and the working class. We have demonstrated in one voice that we shall rise up against injustice and pay any price to uphold human dignity and the rights of labour. As a Trade Union, we have done our duty. At the same time as a responsible union we have, as you are aware, always placed much faith in the negotiated settlements rather than adopting agitational means. This faith in negotiations is because we feel that we have nothing to fear from negotiating at the appropriate time and nothing to gain by refusing to negotiate as long as we know what compromise our vital interests and our long range of goals. If vital interests under duress can be preserved by peaceful means negotiations will find that out. If other side will accept nothing less than concession of our rights negotiations will find that out. And when negotiations take
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place this organization has not abdicated to the management the task of choosing the forum and frame work and the time. We have amply made clear to the management time and again that while we are prepared to exhaust all avenues for a peaceful solution we would also at the same time maintain our right to fight if necessary to protect our legitimate rights and interests. We must thank you for having helped us to make clear to all concerned our willingness to fight, if fight is must. Such a grasp of trade union convictions comes from an approach and attempt to understand events in a historical perspective. The three-day-long discussions on 19th, 20th & 21st August 2013 with the Committee of 4 General Mangers constituted by the Chairman And Managing Director for immediate restoration of harmonious and cordial relations has resulted in resolution, for the time being, of the stalemate. Pursuant to the three-day-long discussions our office-bearers have had with the committee of four General Managers, we have withdrawn all agitations for creating a proper and congenial atmosphere for further developments. The Management has agreed on the following major principal demands: 0 0 0 0 0 0 0 Allocation of special assistants for the current year as per existing settlement by partially modifying the same on mutually acceptable terms. Bank will endeavor to consider the demand of the union with regard to need based recruitments in clerical cadre commensurate with increase in business, branch expansion and vacancies. Restoration of payment of Single Window Operator Allowance-B at Administrative Offices. 25% of vacancies in messenger cadre to be filled up by permanent part time /full time sweepers drawing scale wages. Review the decision on rate of reimbursement of petrol expenses to award staff hitherto pegged at March 31st of every calendar year. Calling for next batch of promotions to officer cadre. All the pending issues raised by the union will be expeditiously discussed and resolved bilaterally.

The above demands, not so incidentally, were precisely the common and fertile ground of dissatisfaction in which, dark and desperate attempts were made to sow the seeds of discord. I have deliberately not taken you into the sordid details of the events that took place during those days. My reasons for so doing are that I do not want to revive bitter memories and also feel that the dark eclipse has passed.

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CHAPTER - XV
Our Social Conscience
Un-Organised And Child Labour More than 85% of the countrys total workforce is in the un-organised sector. Governments apathy to solve the problems of this abysmally low-paid vast multitude deserves condemnation. Also even after 60 years of independence we are not free from the curse of child labour. We must espouse the cause of the unorganised labour and demand in unison with the democratic movement of the country for eradication of child labour. On Women issues Generally people have three ropes round their necks. But women have four: political authority, clan authority, religious authority and the authority of the husband. These authorities embodied the whole feudal and patriarchal ideology and the social system. For thousands of years, whether in slave society or feudal society or in todays globalised westernized society women do not yet have right over property, nor did they enjoy any independent decision making power in the matters affecting the family and clan. A woman is subjugated throughout her life to an unending series of authorities, her own mother and father, her husbands mother and father, her husband and finally her son. Patriarchal ideology is wide spread in the society as a whole because our system is patriarchal. This influences both women and men. Hence chauvinism in men and submissiveness in women prevails. These two thinking (i.e. two faces of patriarchy) and specifically the male chauvinist thinking, seriously hinder the trade union movement as well as progress of women. This may reflect in the extent of womens participation in the general day to day activities of the union. Therefore we should understand the historical clauses and treat them as equals and should not wrongly comment or falsely criticize them when it comes to their transfers or placement on promotions. Let us resolve in this conference that we will be observing every year International working womens day not only at the Head Quarters of the union, which as a practice has come to stay but at all branches , at all regional units and recognize the necessity for conducting an education, awareness rectification programme using correct independent ideology and culture to strengthen gender equality. Apart from such economic exploitations there is an intensified cultural and social onslaught on women under the so-called economic reforms. In the last decade frenzy has been calculatedly whipped up in India over beauty contests from the local level to the international. While the benefits of this frenzy are reaped by the multi national corporations (MNCs) who advertise their products via these phenomena, the entire display has had its impact on minds of urban women particularly the middle and lower middleclass young women. The vast proliferation of beauty parlours and facial creams which promise to increase fairness bear witness to the notions being inculcated. Globalisation has affected women by the cheap commodification of beauty. The proliferation of the tourist industry and accompanying spurt of sex workers, the high profile promotion of beauty industry where appearance is made the sole criteria of acceptance and the debasement of women through the spread of pornography means of the internet have affected womens dignity. The recent brutal gang-rape of a 23-year old woman in Delhi has left the entire nation shocked and outraged. The fact that the woman was picked up along with a male companion from a crowded bus stand and then raped in the moving bus has left the public stunned. The sheer brutality with which the rape was committed has fuelled large scale protest. This widespread agitation by women and general masses all over the country reflects not just shock, but is also an expression of tremendous anger against continuous and growing violence on women. After all, the recent case of gang-rape is not an anomaly but a latest manifestation of a deeply ingrained rot that corrodes our lives, now overtly and at other times covertly. Unfortunately, while there has been massive public outrage and a long dormant anger has spilled onto the roads, there has been little effort to tackle this issue in a rational manner. Spontaneous anger and symbolic
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violence have given vent to our frustration, but also carry the danger of being co-opted by the vested interests of the ruling class and its decadent culture. Therefore, this is an opportune (and imperative) moment for us to envisage ways in which to prevent such incidents from recurring in the future, and to ensure that the agitation against violence on women is not misused by vigilante groups (and other dubious social forces). We have to keep our autonomy of action, as well as the independence of our will intact. Thus, we must consciously deliberate upon the direction and content of the ongoing struggle. It is important to remember that we are not fighting against only one brutal incident of rape, but against an entrenched phenomenon. It is a fact that women in this country have and are facing sexual exploitation and oppression in diverse forms. Recently cases of rapes have been reported from other states but the media has made the current case a city specific issue. Clearly, not all incidents of rape have met with the same quantum of media coverage and public outcry (at least at the level of the capital and its corridors of power). This is not to say that there have been no movements or agitation against sexual violence on women. Indeed, the ongoing protests should be seen in continuation with and connected to other protests against similar violence on women Without a doubt, our most formidable weapon against sexual violence is a sustained mass movement. Of course, a list of demands, as the one below, will only see the light of day until women across the country organize themselves under women organizations, and launch a multi-pronged and consistent movement on the issue of womens exploitation and oppression. Hence we must treat women issues serious at a juncture when there is serious threat to survival of women in India. Throughout the life cycle of Indian women different types of problems female foeticide, infanticide, discrimination in family, dowry, sati strengthens the value that women are subordinate and easily disposable item. All the conscious citizens have to alert about this dangerous and derogatory trend. If we do not want Indian women to be an endangered species we have to make conscious efforts to fight against any form of discrimination and degradation, oppression and exploitation to end indignity, inhumanity and insults perpetrated on women. For us in AIOBEU, achieving gender equality is not just a women concern it also deeply concerns men. Our union has been conscious of this. The just compassionate stands we have taken when it comes to considering request transfers of women comrades, or their placements on promotion, and the innovative unique four month maternity leave, maternity leave for removal of uterus, inclusion of mammography in the health checkup scheme, inclusion of vital investigations with or without hospitalization in connection with major women related diseases/ailments and above all the recent introduction of reimbursement of expenses incurred in normal delivery embellishing our service conditions bear testimony to our convictions. Needless to underscore that it was due to the efforts and militant initiative of our union organizing direct actions at Mumbai in 1990 against the mendacious designs of IBA in aborting provisions relating to abortion and miscarriage leave, carrying miscarriage tales against modesty of women, abortion and miscarriage leave was restored. Endorsing our social vision of empowering women (shakti) AIOBEU jointly with IOBOA and the Bank has set up IOB Sakthi Chidambaram Chettiyar Trust, which provides entrepreneurship, skills development training, each year to scores of women. On the occasion of observance of 34th conference we , thus, appeal to all women and men to become part of progressive and democratic organisations so that even after these protests ebb we dont just go back to leading our existing lives, but continue to aspire and struggle for a more just and equitable society for all. It is in this light, we submitted demand as under which are not only just demands from the state but also stand for our claims on society which is proposed as aresolution in this General Council Atrocities on SC/ ST Class is defined in terms of the division of labour Caste is not a division of labor but a division of labourers - Dr. B.R. Ambedkar
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Atrocities on SC/ST people comprising the socially oppressed strata of the society are going on unabated. In most cases, police and administration side with the landed gentry in their attacks on the people belonging to the oppressed castes. Many where such clashes end in mindless killings, SC/ST community become the worst victims. AIOBEU appeals to all to come forward in defence of the socially oppressed people and demands of the government to take stern actions to stop, attacks on them. AIOBEU has always provide a sense of spaciousness and accommodation in relaxation and reservation criteria in the settlements on promotion policy to SC/ST comrades and reassures them we as vanguard of the downtrodden will continue to espouse their cause. The greatest sons of Mother India, Dr.Bhimrao Ramji Ambedkar, architect of our constitution, a peer par excellence who stirred the depressed classes into action, espousing a national cause with his conviction the moral timber and political dynamism of the society could be measured from the morale of the lowest class. Today talks of reviewing our constitution is in the air. It is apprehended that behind such an exercise, what may be aimed at is the amendment of the fundamental tenets of the countrys constitution, which has stood the test of time. Any amendments aimed at fudging or diluting benefits guaranteed by the constitution to the weaker sections of the society, we are firmly opposed to it. Today, the increasing caste attacks on dalits is not restricted to Acts of violence the intolerance is also clearly reflected in other spheres like that of reservations and conversions. The right to reservations of the socially oppressed is a right seized through struggle. Until full social equality is achieved, it is fully justified. Only economic criteria can never be a basis for reservation as capitalisms basic essence is economic inequality and real equality can only be achieved, not through reservations alone but through socialism. Both reservations and the right to conversion have come under direct attack in the new dispensation of globalisation. Globalisation through whole scale privatisation of the public sector and mass retrenchment of government (and semi- government) employees is directly impacting on the possibility of jobs through reservations. In addition, during the 1990s due to the impact of globalisation, a spate of closures and retrenchments followed aggravating the economic crisis of the Dalits even further. Generally the Dalits, who constitute unskilled or low skilled labour in factories, could be easily displaced by new automating technology. We are glad in our bank due to efforts of union adhoc wages is abolished and is replaced by scale wages with all attendant benefits, regular promotion from sweepers to messengers is well nigh guaranteed, substantial number of messengers are promoted as clerks periodically, and above all, regular and fast track promotions from clerical to JM1 officer cadre, which bespeak our conviction, ideology and faith espousing cause of social equality. Many members hailing from these strata of society have achieved in our Bank economic status, which they would have never seen. But, with the government now making drastic cuts in jobs in all its departments (excepts for ministers) and with the rapid privatisation on of PSUs the chances for the next generation dalits (and others) to get jobs in public sector are dim. The backlog is unlikely to be ever filled, more likely the posts will be abolished. In private sector the cultural factor and the fact that upper castes dominate the bulk of the top posts, through which appointments take place, the jobs are more likely to go to their kith and kin. Besides with globalisation, English speaking, western mannerisms, social contacts and cultural sophistry all have a premium and virtually acts to push dalits out of the job market, except for the very elite amongst them. As though this was not enough the Supreme Court has ruled against reservation in the institutions of higher learning putting forward standard merit argument, ignoring of course the fact that it is money and not merit that allows the bulk of the admissions to these institutions. Therefore it is imperative that SC/ST welfare organizations join the struggle against globalisation, against anti-labour policies with the mainstream unions. To say that the caste struggle is a pre requisite to all other struggles or taken as a one point agenda is not only counter-productive, not only does it go against the very interests of the dalits, but it also promotes caste exclusiveness, perpetuating caste divisions in the trade unions and wider society. So caste class equation needs to seen in its proper perspective. The fusion of Dalit movement with working class movements can resolve these major contradictions. We aver in this house that interests AIOBEU and that of SC/ST EMPLOYEES WELFARE ASSOCIATIONS in our Bank are not contradictory, but complementary and we assure this house that in the days ahead it will be cemented with mutual trust and faith, which shall strengthen love, amity, among the membership and in the process strengthen social equality.
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CHAPTER - XVI
Our Amiable Allies
IOBOA The relationship with IOBOA is based on mutual trust and respect. Living under the same roof, travelling in the same ship, we are comrades in distress as well as in delight. Our ineffaceable bond is like a pair of shears, so joined that it cannot be separated, often seemingly moving in opposite direction, yet always punishing any one who attempts wedge in our unity. With Com.Anand Kumar Gen. Secretary and Com. J.D. Sharma, President of IOBOA, extending their unstinted cooperation and support to common issues affecting workmen and officers alike in the Board, we are now happy couple leading life filled with harmony. I also take this opportunity to thank the Officer Association and our entire officer brethren for extending their fraternal support to our cause in the struggles that were launched during the period under review. With entire office brethren ever willingness to extent potential support to our cause, showering their good wishes, love and affection to our organisation, I am confident that in future also the comrade hood between AIOBEU-IOBOA woven with strong threads of unity will ever remain intact as a relation between mother and daughter. IOB Retirees Association In deference to persistent demand of hundreds of ex-IOBians through out the country. IOB Retirees Association was started in the year October 1995, by the doyen of AIOBEU, Com.P.Balagopal Menon. Since its formation it has functioning effectively, clarifying queries, doubts, replying to letters attending to grievances ensuring early settlement of terminal benefits to retired employees, above all issuing circulars from time to time, in his own inimitable style with content substance and punch. the prsent leadership President. Sri.AL.Chandramouli, and General Secretary Sri.B.Ramji have been espousing the causes of retirees very dedicatedly. Our union has been extending support and solidarity to IOB Retirees Association. We shall endeavor and make all efforts to strengthen this organisation in the days to come. It is our conviction that all senior citizens have to treated by the Government with care, concern and compassion. A true welfare state should not go satisfied by taking care of its serving employees only, but the entire older generation including those belonging to the un-organised sector also needs to be taken care of. Supreme Court has held that as per article 21 of Indias Constitution, right to life included right to live with dignity and right to health is integral to right to live and consider our just demand of 100% neutralization of DA in pension the news magazine of their organization The Veteran is very informative and kudos to them for bringing it every quarter without fail. I commend that all our members on retirement will enroll in this organization and strengthen it.

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CHAPTER - XVII
Communication: The Tool For Our Actions
As precursors for triggering IT revolution in Nationalised Banks, we have to comprehend ground realities, which are emerging in the Banking Industry. Our organizational response has always been consistent with the needs of the Industry and needs of the society. We are seen as facilitators, rather than obstructionists of these changes. We are equally conscious that ever since information technology was introduced in our bank, due to our pragmatic and progressive stand, it has changed our work culture. In the days ahead, redeployment (which is the demand of IBA) (redeployment with minimum fears and no tears is the Union response) in the VII Bipartite and re-training will assume importance. Job enrichment will be the order of the day. Today we have put e-mail communications to optimum use, which has made distance and time shorter. I call upon the branch secretaries, to have separate e-mail ID and address communication to the Central Unit E-mail ID gsaiobeu@gmail.com, gsnube@gmail.com.We assure our members that all their communication will be promptly responded and further re-assure that all the circulars / any information will be disseminated by us to their respective E-mail IDs. We further appeal to all our branch secretaries and members of national executive to use/view their email periodically so that they will get all communications of the union in nick of time, faster than light and covey to other members promptly AIOBEUS website Log on to www.aiobeu.org From the days the founding fathers of our Union worked sitting under a tree handwriting pamphlets sticking and mailing them all by themselves collecting subscriptions at the gates today having an office for Union with paid employees check off system for collection of subscription and good infrastructure such as telephone, telex, fax, computers for dissemination of quick information represent the voyage of growth. None can stunt the progress of art technology and improvement in communication techniques. In the days ahead, we intend having a Website for our Union, for furthering our communication channel, effectively with our members online, and other trade union, like minded organisations nationally and internationally. Efforts are on to create this Website for Union very soon. AIOBEU has already hit the headlines, in the trade union movement and is today Acclaimed as Indias Outstanding Bank Employees Union. During the period under review we could establish contacts with various international new groups in trade union movement, such as UNI, ILO, etc and extending support and solidarity to various trade union organisations nationally & internationally responding to the reasonable appeals for support made by such news groups. This has facilitated us in conveying to them our achievements, our agonies, our issues, our problems and our struggles seeking reciprocal solidarity support from them. Our activities, our circulars, our pamphlets are widely appreciated by the international fraternity of trade unions as could be seen from the number of E-mails we receive each day from the various news groups. Though this has increased our workload we draw great pleasure and satisfaction that we are alive to the problem faced by various trade unions internationally.

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CHAPTER XVIII
Our Tasks-Our Future We have narrated till now what we have been able to do and what remains to be done. We should self critically evaluate our performances, our positive sides as well as our deficiencies and only then can we amend our shortfalls and strengthen ourselves. In this respect I want to draw the attention of all of you and our entire membership to what we stated in our last report. A class conscious trade union has basic objectives, some principled perceptions, which we cannot ever forget or forsake. Our role and achievements have been acknowledged, appreciated and emulated by many. Time and again we have been overwhelmed by the sympathy and support we have received from the trade union fraternity. We are happy and immensely grateful. The support has been forthcoming, for we have always considered ourselves and acted as part and parcel of the general trade union and democratic movement. Our trade union consciousness propels us towards the united movement in peoples cause. We are sure that this would continue, both for the sake of general democratic movement and in our own interest as well. The entire trade union movement is facing a grim situation. The offensives of capital worldwide have intensified. Newer and newer methods of attack against the employees collectivity, consciousness and perception are being employed to break the morale and the solidarity of workers. A psychological offensive has been let loose which tries to project that workers can no longer protect themselves against attacks, trade unions can offer no solution to the situations coming forth, that they are vulnerable and helpless before the attacks and they have no alternative but to submit and surrender to the dictates and exploitation of the owners of capital. The role objective is to deunionise the employees because the employers know pretty well that if the unions are not there as the collective embodiment of strength of the employees and the workers, they have none to fear for. If the unions are not there or are there for namesake only, not having any effective role, the common employees out of sense of despair and uncertainty would no longer think of collective resistance and will act at the bidding of the management. This is an ideal situation for any management or employer. The process is in full swing in many countries and has started in our country too, simultaneously with so-called reforms. The managements, the employers, the chambers of commerce and the foreign agencies are demanding time and again to repeal the labour laws so that they have the power to hire and fire, as we have stated already. Along with that comes another tactic of the management-you are no longer required and the institution cannot provide you with monthly wages day in and day out when your job has either been abolished or can be performed by lesser number of people; hence you retire voluntarily and take some money in return. Individual employees out of their despondency and sense of insecurity might opt for such a solution, which is no solution at all, for, they might have already lost the confidence that trade unions and the collective endeavours can protect them. It is, therefore, extremely necessary to combat the psychological offensives, else, the trade unions will cease to be a rallying point of the employees and the instruments of struggle. This is a danger accentuating day by day. Hence trade unions must squarely face such a situation, the combined offensives of the capital, and only a strong united, conscious organization can take up the challenge. Organization and organization alone is the only weapon in the hands of the employees to protect them. For building a strong organization, unity amongst the membership, and unity amongst the employees in general, unity with the democratic people and the working class must be achieved-that is the paramount task before us. We must admit that we find ourselves lacking in many respects. Our units are there, our activities are there, but mobilisation of membership on issues is not to the desired extent. Are we losing touch with our membership? Let us analyse self-critically. But, it is also our experience that the same membership rush to us time and again for their own needs and difficulties; then, it might be that we are not being able to inculcate amongst them the gravity of the situation and the need to rally behind the Union for any call.
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If so, it is the failure of the leadership both at the Central unit and the all India levels. Members may give more attention to circulars dealing with their day to day issues or items related to their own immediate desires and expectations, while ignoring those which seek to apprise them of the situations around and our tasks ahead. This is not unusual, but this is an area of our weakness definitely, because, as we have stressed time and again in this report itself and in other fora, that if our membership are not aware of the situations around they may not defend their own interests. Short-term needs must not blur our vision to long-term interests. A trade union without a long-term perspective cannot correctly understand the present also and is likely to falter and fail. True, there are practical difficulties and genuine problems; local, regional situations and varying stages of democratic movement are factors of constraints. Nevertheless, we must consciously strive on a priority basis against these factors and only then AIOBEU can play its due role in a very complex and difficult environs to safeguard long-term interests of the employees and the institution. Group interests must not be allowed to prevail over the collective interests and Union is definitely not a platform for sectional projections. This weakens the organisation at its very root. Uncalled for dissension, not on issues and principles, but centering round groups and individuals is extremely undesirable for any democratic organisation. Units strength can be judged only by its strength of mobilisation and they can have the strength only if the members are fully united. The unit leadership has the greatest responsibility in this regard ,and I want to particularly emphasize this aspect before the conference, which is the assembly of the grass root leadership of our Union. None of us can afford to work in a way that weakens our collective strength, for that will be the most singular disservice to the cause of Bank employees in a crucial time. AIOBEU and its units should be catalyst for unity and in this regard once again we draw attention to what we said in our last report We, AIOBEU and all its units must develop ourselves as the centre of all embracing unity of the employees. We must fight resolutely against any sort of caste, religious or regional feelings of discrimination, if there be any, anywhere. To us, love for the Union and dedication to the cause of collective interest are only, what matters, and absolutely nothing else. We are proud that all sections of our members, irrespective of their caste and creed, look to the Union as their very own and feel emotionally involved. This is a feature we must cherish, strengthen and carry forward. Any deviation, would be a gross departure from our principles and tradition and would harm us irreparably. Unit leadership should associate themselves actively with the general Bank employees, working class and democratic movement of the respective areas. This will facilitate our integration with the general trade union movement, which is very vital in the overall perspective today. This will also give an exposure to our base level leadership and educate them appropriately. Our participation will be welcomed by the fraternal trade unions. A few colleagues in some centers are still away from us. We must patiently explain to them our sincerity and commitment for the issues affecting the Bank employees and try to bring them in. We have already stressed on an area of deficiency in our organisation i.e. lack of participation of the lady employees in all regions in our activities. This has to be addressed very seriously and AIOBEU will be extremely happy to extend its help to the units in this regard. Educating the membership is also an important responsibility of any conscious trade union. We have not been able to make much headway in this regard till now though we have discussed the matter time and again. We propose to form an Education Sub-committee. This sub-committee shall pursue the matter seriously. Culture is a unifying force. But our culture is under incessant external attack. Mahatma Gandhi expressed eloquently earlier in the last century:

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I do not want my house to be walled in on all sides and my windows to be stuffed. I want the cultures of all the lands to be blown about my house as freely as possible but I refuse to be blown off my feet by any. The new culture of globalization is the culture of decadence, culture that turns all values and ethics into commodities, culture of crass individualism. The great culture of our country, which upholds the ideal of unity in plurality and humaneness, has to be spread to counter the corroding effects of a decadent culture. Thus, such cultural activities by our units are most welcome-they have a role to organise the employees. A new mindset has developed amongst the elitist section of the society to which, we, the bank employees also belong. It will not be an overstatement if we say that the middle-class sections are increasingly becoming a victim of consumerism and money mindedness leading towards giving less stress on inter-dependence and collectivism but more accent on individualism contributing towards another form of Deunionisation eroding the very fabric of organizational bondage. So, it needs rejuvenation and reorientation of required ideological course for building better understanding in the rank and file ensuring their involvement in organizational matters with consistent process of attachment by extending grass root level organizational democracy to affront the new challenges in the new challenging situation. Thanks to our traditional futuristic vision, our organizational units at various levels have been able to assimilate the changing context and attune themselves by and large. That is why we are relevant and vibrant. Again, running our Unions in todays context requires special attention. More and more young comrades are catapulted to positions of responsibilities in the Union. They cannot be expected to be thorough in all facets of the organizations administration. Organising, mobilizing, communicating, interacting, convincing, negotiating with management, legal knowledge, experience in defense, knowledge about our Settlements, service conditions, rights and privileges it is a skilled job to be a Union functionary. Hence, our Unions have to take steps to impart trade union education to the increasing new comrades who are the future of the organisation. But presently trade union education is by and large a casualty. Can we ignore it any longer? The whole edifice of the organisation stands on the strength of our members. Hence, a strong membership alone can ensure a strong organisation. The strength of the membership will correspond to its conviction, discipline and loyalty. A mechanical or contractual or casual approach to the organisation is not desirable. A member with full understanding, involvement and consciousness will alone add intrinsic strength to the organisation. Hence, in the emerging scenario, when de-unionisation is being attempted, the prime task of the organisation is to further unionise the members in the strict sense of the term. We can ignore this task only at the peril of our Unions. Today the composition of employees has undergone a change. In the post-VRS scenario, new problems are cropping up. With the fast advent of technology, in the computerized atmosphere, the job role of the employees and officers is undergoing a change. The role of banking as an intermediary is also changing. The attitude of the employees has undergone a change in the context of the improvement that has taken place in their lives and living standards. Hence, the organisation has to attune itself to these changes and workout its appropriate strategies to stay on. We have tried to carry on the duties to the best of our ability. The task is enormous and onerous. The future is going to be full of challenges around us. Unless we build a broad team and function more effectively than in the past, we will not be able to match the situation. Hence strengthening our organisation should be our main thrust and concern in the coming years. If we can take care of the organisation, the organisation will take care of us. We appropriately want to highlight one aspect which as a trade union we have not yet properly addressed ourselves to-the work culture. As employees of this premier public sector institution it is our bounden duty to give our best for the institution, in extension, for the nation. We must inculcate amongst the employees at large, the concept of disciplined dedicated service, sincerely attending to ones jobs and responsibilities.
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Then, and only then only we acquire the moral right to fight against mismanagement, if any, against dereliction of duty at any level, however high. We, by our own conscious collective efforts, should make this institution an epitome of efficiency and service and at the same time an institution where workers rights, privileges and security of service are fully protected and which discharges its responsibilities to the nation without any curtailment. Trade union members are not only workers, but also consumers and citizens. As workers they expect unions to defend their rights and interests at work. As consumers they are not content if the quality is shoddy or inconsistent, prices are unreasonable, supply erratic and attitudes of staff reprehensible. As citizens they want their rights above other workers rights. As members of the community they want the government to set things in order, stem pollution and cut red tape. Thus today trade unions have additional dilemmas, because their members wear different hats. In the enterprise where they work, they are affected employees seeking to protect and defend the rights and interests as employees, or they look at issues through the eyes of a consumer or member of the community. We will be isolated if we merely and narrowly pursue the selfish sectional interests of the members at the enterprise. We should therefore fit in the role of aligning our members with the interest of those of the immediate community and the wider society. Trade unions today have to continue to diversify their activities, both internally and externally. Internally we have to appeal to our workers by offering a new range of services, upgrading of skills etc. Externally we have to strengthen our position by seeking new alliances through civil society-with environmental groups, women associations, and community associations. In making common cause with such groups we can secure broad public support for important employment issues hence there is a need to develop an associational, instead of pecuniary logic, an inclusive instead of exclusive strategy in membership drive and establish broad alliances with various institution in the civil society. We need to preserve our place in the wider society by building coalitions with other stakeholders and chartering their programmes and services to their members with due regard to their social tasks. Another aspect that is also very necessary, a little self-critical approach on how we also fail sometimes. Many of us have some tendency to treat our unions as our personal preserves. If we have got to establish the image of AIOBEU, the image will be established not alone by the office bearers who have got to be the ideals in so far as all the virtues of trade union leaders are required, but by our attitude, by our utterance, by our perseverance, by our tolerance and by our comradely approach to all those comrades who are young. Disruption thrives on disaffection. Disaffection comes where we are unable to provide proper leadership at regional and local levels in the desired manner. I do not blame anybody, I shall take most of the blame myself, and each one of us has got to take a self critical, a self-analytical approach and correct mistakes collectively. AIOBEU is a legacy bequeathed to the trade union movement of the bank employees. I am confident that with our honesty, with our hard work and with our sense of dedication, without using this great organization as a platform for personal convenience, we the bank employees of the country, some of us may be there - but I know the flag of the AIOBEU unity of IOBIANs, vanguard of independent trade union bank employees movement will flutter high in the blue sky in every bank branch, in every part of the country from metropolitan, rural and also to remotest part of country wherever good people to grow with works and lives. Glory to AIOBEU! We emphasize once again that the unity, broadest possible unity amongst our members, communality of perception and perfect amity have to be assiduously built up everywhere through democratic methods by free and uninhibited exchange of views and thereby making our Union stronger. Let, this be the clarion call from this conference to our membership everywhere. Self-Introspection We have narrated till now what we have been able to do and what remains to be done. We should self critically evaluate our performances, our positive sides as well as our deficiencies and only then we can
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amend our shortfalls and strengthen ourselves. In this respect I want to draw the attention of all of you and our entire membership what we stated in our last report. Through years of struggle and sacrifices, AIOBEU has remained a vibrant organization, championing the cause of the Bank Employees. Our members have always responded to the call of the organization. But there are certain weaknesses too. We are to overcome those weaknesses. Sometimes we become very casual in our approach and do not mobilize our members nor do we reach to our members carrying the message of the organization. Many times some of the Units failed to fulfill their organizational commitment. We also do not take up the issues, which are of fundamental nature, and/ or concern but prefer to ignore or overlook. We have developed a tendency to give priority to our bank wise organization than to industrywise organization, which has been providing a protective umbrella to all our activities and helping us to achieve and march ahead even in our respective banks. Can we today run a Union without having confrontation with the management on fundamental issues? Can we service by maintaining so called cordial relation only with the management? To-days management, in the reforms era, have no human feeling and devoid of compassion. They want to utilize union leaders and unions to implement their own agenda. They want to dictate our trade union policies / functioning. We should not fall prey to such designs of the management. Unless we tighten the loose ends of the organization and units and fight, we cannot survive. The spirit of oneness, which was preached and practiced by our leaders, is still the guiding force of our organization. We must strengthen NCBE as a platform of Bank Employees of all shades of opinion with democratic functioning. In the context of increasing attacks, many protest programmes are being undertaken- protest letters, protest telegrams to Government, IBA, RBI, Bank Managements, etc.- we find that even these simple programmes are sometimes ignored or not cared for. Is it lethargy or are our units engaged in other important work? If our own Units do not register their protest as called upon, how can we focus our viewpoints to the authorities? Will they take us seriously? Is there not a danger that Government and managements will tend to undermine our organization? The constant and continuous programmes that we are required to undertake in the present circumstances will become effective only when all our members become aware of the decisions of the organization. It is observed that the communication from the apex to the rank and file gets diluted at every stage or tier of the organization. Sometimes, even the circulars to the Branch Units are not shown to members. Generally the participation of the members in the various programmes like demonstrations, deputations, meetings, processions and rallies are gradually coming down. Is it because that our members are not serious about these programmes? Is it because that our Units and leaders are not mobilizing our members or unable to mobilize our members? Is it that we have not adequately inspired or educated our members on the significance of these programmes? We must discuss and take effective steps to remove this deficiency. If we move properly, we can mobilize the members. Branch meetings are becoming far and few unlike in the past. The Branch unit is the live wire of the organization where our soldiers members are located. If the live contact with the Branch Units are affected or snapped, the whole organization will get affected. Frequent Branch visits, periodical branch meetings, reading circulars in the Branches, regular interactions with our rank and file members, expeditious attention to their problems and grievances are pre-requisites for effective functioning of our organizations. We are failing to attract more and more dedicated and committed cadres and leaders in our day-to-day trade union activities. Reasons may be many. No recruitment, Retirements, more promotion, high wage, feeling of job security, etc. are some of the hurdles in developing new activists. We have to overcome these organizational weakness for our survival and protection of Trade Union Rights and Jobs through constant training collective effect, young cadre building, and developing effective leadership of the Unions at different levels.
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Privatisation and Deunionisation are the prime agenda of the Government and the Bankers. The fight against them not only warrants organizational unity and strength but also total comprehension and perception both ideological and political. Hence, the near future will be quite challenging in the real sense of the term. Prioritisation of our tasks and proper orientation of our objectives, have to be paid special attention. Intensification of our activities, envisioned strategies and functional effectiveness are the need of the hour. The organization has to be tuned with military discipline and preparedness to face the grave attacks. Having discussed all the developments that have taken place around us during the recent years and the growing challenges confronting the trade unions in the present circumstances, it is necessary that we concretize our tasks and move accordingly.. Unification, mobilization, caderisation, militantisation, education, environmentalisation, evaluation, politicization, direction, and action these shall be our 10 commandments in the organization to carry out the following 15 vital tasks. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Taking necessary steps to remove the weakness in our organization at various levels and to strengthen them appropriately. Giving periodical trade union education to the active cadres of the units. Special efforts to spot and develop active cadres for the future requirements of the organization. Special efforts to improve the participation of our members in various programmes of the organization. Periodical meetings by units at all levels to keep the members aware of all the developments. Special meetings to be conducted to make the employees more aware of the implications of various policies of the Government since there will be more and more struggles against these policies. Periodical Conventions and Seminars to keep the units and members abreast of the various developments in the banking industry. Strengthening NUBE More co-ordination with the general trade union movement. Special attention for improving customer service to the general public. Prioritizing the issues before the trade unions so that the unions do not become out of context or out of focus and exposing the hidden agenda of politicalised unions. Defeating bank privatization attempts at all costs. Saving the jobs and job security of the employees with all earnestness. Fighting against outsourcing and organized outsourced employees Defeating de-unionisation and preserving our unions.

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Our Thanks I would be failing in my duty if I do not record my sincere thanks to our present office-bearers at the Administrative Office for the efficient work done. With increase in the number of branches and membership the load of work has increased manifold and I am thankful to all my colleagues for rising up to the occasion. While I undertake the responsibility for any lapse, I must point out one thing, our Union has today got involved in the daily life of each of its members that it has come to be looked upon more as a service centre than a trade union centre. This naturally encourages every, member to approach the union with everything concerning them on the bank be it PF loan, ASHL, SHL,Society loan, Transfer or LFC or appointment or any other matter, the membership first thinks about union only. I am glad about this but I have to point out that naturally the volume of non-trade union function also has increased resulting sometimes in our not being able to service you as desired. I thank the Deputy Labour Commissioner (Central), RLC (Chennai) and the entire staff of the RLC for the support, cooperation, advice and guidance imparted to the Union from time to time. I thank staff and proprietor of Bapuji Printers for the cooperation extended to us in printing numerous circulars, booklets, reports, etc. in a record time enabling us to convey information to our members in the nick of time. Towards the objective of setting up our EDP centre, the Herculean task of creating database, including profile of our members are meticulously done by a few women comrades from branches.Com. Meenakshi Prasad has been handling this arduos tasks voluntarily, spirtedly beyond mere call of duty. I thank her and her able dedicated team for carrying out this important task splendidly. I thank them for their commitment to duty. During the period under review the number of members benefiting under various welfare schemes in vogue in our bank due to efforts of the union and the amount sanctioned/disbursed to the beneficiaries under various welfare schemes given S.No. 1 2 3 4 5 6 7 8 9 Scheme Applications Amount Disbursed Sanctioned Sanctioned (in Rs.) 28814 2166 1388 858 7968 49 307 2557 12006 1875 10981 4516 319 4763 9,82,95,876 16,15,970 4,83,11,510 38,23,763 1,64,15,349 54,77,755 8,87,25,191 108,75,60,950 135,12,90,860 88,26,12,880 264,57,80,981 386,92,64,061 31,05,445

Reimbursement of educational expenses Financial assistance to employees for purchase of spectacles EX GRATIA scheme on Hospitalisation EX-GRATIA scheme without Hospitalisation Master Health Check up scheme Distress assistance scheme (Housing) SSBS Sanctioned SHL Sanctioned Provident Fund Loans P.F.Settled

10 Provident Fund Withdrawals 11 Gratuity 12 Compassionate Gratuity 13 Pension

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