Bank Union Suggestion On Budget

CIRCULAR NO. 27/67/2014/23 20th June, 2014
TO ALL UNITS & MEMBERS

Dear Comrades,

AIBEA’s SUGGESTIONS TO GOVT. ON BUDGET

Units are aware that the new Government at the Centre is getting ready to present its budget next month. From AIBEA we have sent our submissions and suggestions to the Finance Minister for consideration by the Government. We furnish herein the suggestions given by AIBEA for the information our units and members.
With greetings,
Yours comradely,
C.H. VENKATACHALAM
GENERAL SECRETARY

PRE-BUDGET CONSULTATIONS – AIBEA’s SUGGESTIONS & PROPOSALS :

BANKING SECTOR:

• The Government should decline to accept the adverse recommendations of PJ Nayak Committee which was set up by the Reserve Bank of India.
• All Private Sector Banks should be brought under the Public Sector.
• The Government holding in the Public Sector Banks should not be reduced below 51%, rather the Govt. should hold full control over these banks by 100% equity holding.
• The Governance Board of the Public Sector Banks should be enlarged, strengthened by appointment of professional persons from various fields of interest.
• A CMD should have a minimum tenure of 3 years.
• Willful default of bank loans should be declared as criminal offence through suitable amendment of law.
• Non-Performing Assets of the Banks are rising at an alarming speed. The Government needs to deal strictly with the defaulters.
• The Govt. should set up Fast Track Judicial Courts, exclusively to deal with Debt Recovery cases. Suitable law should be enacted under SARFESI Act for attachment of personal assets of the defaulters.
• Once in six months the defaulters list should be published in public interest.
• Similarly, the loan defaulters’ list in respect of dues to the Public Sector Banks should also be published simultaneously.
• The bank loan defaulters should not be permitted to contest in the election, either to the Legislative Assembly or in the Parliament Elections.
• A system to be evolved to ensure accountability and responsibility on the part of the CMD and Executive Directors of the Public Sector Banks in respect of sanctions of credit etc. which ultimately becomes distressed assets.
• A review should be made to identify the beneficiaries whose debts/loans availed in the banks with interest was written off.
• The RBI should impose a ban on corporate houses to borrow under OCB route as they tend to park the money with domestic banks and earn higher rate of interest, instead of deploying the money for project building.
• Floating ARC as a tool to reduce NPA should be discouraged whereas NPAs should be actually recovered. Auction of NPAs should also be stopped as the same involves huge write offs ultimately resulting in heavy loss to the Banks.
• The Govt. policy should aim at promoting savings and investments by parking the funds in Public Sector Banks. Hence the Govt. should persuade the Public Sector Banks to increase the interest rate on Savings Banks Accounts to 5-1/2%.
• The exemption of tax on interest received from deposits should be increased to Rs. 25,000/- from the present level of Rs. 10,000/-.
• The Reserve Bank Policy to entertain private sector corporate houses to open banks should be discouraged. On tap licencing policy should be discontinued.
• The concept of investment banks, retail banks etc. are not relevant to the Indian Banking system and hence the Government should not entertain such proposals.
• All the Regional Rural Banks should be merged with the sponsored banks.
• The Co-operative Banking Institutions should be adequately strengthened and recapitalised by collective mechanism of funding them by Central & State Governments by implementing the recommendations of Vaidyanathan Committee.
• Profits of Co-op. Banks should be exempt from Income Tax under Sec. 80-P
• Moves at merger of nationalized Banks, merger of Subsidiary Banks with SBI should be totally abandoned. Associate/Subsidiary Banks of SBI should be freed from SBI and made independent Banks.

RURAL SECTOR :

• All villages must be provided with a minimum of civic amenities for a decent and hygienic living.
• As suggested by the former President of India, Shri Abdul Kalam, PURA MODEL should be adopted uniformly.
• Community Public Toilets to be provided for Men & Women separately.
• School Buildings to have minimum of amenities like water supply and exclusive toilets for girls.
AGRICULTURE :
• Future Tradings in all Agricultural commodities must be banned.
• The State must increase investment in infrastructure as well as provide easy Credit to all categories of cultivators to free them from private money lenders.
• No agricultural land should be converted into commercial land.
• Lands acquired by banks in settlement of loans by the small and marginal farmers must be returned to the original owners on repayment of installments on the basis of similar deals in respect of commercial companies.
• No farmer should be forced to surrender his land for the failure to repay the loans.
EDUCATION AND HEALTH :
• The right to health and education should be deemed as fundamental rights.
• Similarly, Health and Medical Services should be run by professionally qualified persons in association with State Agencies on the basis of PPP Model.
• Health should be included in the concurrent list of the Constitution. Adopt a National Health Policy legally binding on the Executive.
• Implement the Rational Drug Policy and Drug Pricing.
• Primary Health Centre should be established in all centres, for every 30,000 population, with 24 hours service.
• The Policy of gradual privatisation of Government Medical Institutions should be stopped forthwith.

PRICES :

• The system of computation of consumer price index should be reviewed as the present index is causing huge financial loss to the workers.
• The APMC Acts should be abolished.
• Farmers should be allowed to sell their products to consumers without the intermediation of wholesale traders.
• The Government should distribute excessive stock of food grains.
• There should be strict laws against hoarding.
• The Government should also consider introducing Windfall Tax to curtail windfall gains by traders and speculators.
LABOUR LAWS :
• Minimum wages linked to consumer price index must be guaranteed to all workers. It should not be less than Rs. 15,000 per month.
• No casual labour for a regular ongoing work in any establishment should be permitted.
• Government should constitute a machinery such as Labour Laws Enforcement Commission with Judicial rights.
• Violation of labour laws should be made a punishable offence.
• The pace of job creation in the manufacturing sector should be accelerated given the challenge of observing the rising supply of potential workers especially females.

TAXATION :

• Income Tax exemption ceiling for salaried persons should be raised to Rs. 5 lakhs p.a. and fringe benefits like Housing, Medical and Educational facilities should be exempted from income tax.
• Income Tax rates for rich individuals is to be raised significantly. For persons with incomes between Rs. 30 lakhs and Rs. 1 crore, the tax rate should be 40% and income of above Rs. 1 crore, it should be 50%.
• Adequate steps to recover the tax due to the Government should be initiated through stringent enforcement of law.
• Meeting fiscal deficit target to please the credit rating agencies abroad should not be priority of the Government.
• Indirect taxes on goods and services must follow the principle of low taxes on mass consumption goods and high taxation on luxuries.
• A transaction tax on all Stock Markets and Future Market’s transaction at least at 0.5% must be collected.

PUBLIC SECTOR UNITS :

• Disinvestment of shares of profit making public sector units should be stopped forthwith. Budgetary support should be given for reviving potentially viable sick CPSUs.
• The public holding in PSU Units should not be increased from the present level of 10% as proposed by SEBI.
• Appointments of Chiefs of Public Sector Units, remaining vacant for a longtime should be expedited.
• The Government holding in Axis Bank, Larson & Tubro as well as in ITC should not be disinvested.
• Disinvestment of Public Sector Units with a view to reduce the fiscal target should not be continued as a policy.
• Concerted efforts are needed to generate employment through massive revival of public sector.
• LIC should remain with Government of India.
FDI :
• All foreign investments should be subject to KYC norms and by proper identification of ultimate beneficiaries.
• All Foreign Trade Agreements (FDAs), Bilateral Investment Treaties (BITs) and Double Taxation Avoidance Agreement (DTAAs) should be reviewed comprehensively in India’s national economic interest.
• Foreign Investment in Service Sectors, LIC, Private Sector Banks should be discouraged.
• The Foreign Investment Promotion Board (FIPB) should be replaced by a Foreign Investment Review Board (FIRB).
• FDI in Retail Sector should not be permitted.