INDIA'S RICHEST POLITICIANS

Editor Speaks: There’s an old saying that money is the mother’s milk of politics. In the Indian context, it’s more a question of milking the state. We have reached a level of cohabitation where money, corruption and unethical deal-making occupy the same bed. Increasingly, people are joining politics to make money or stay out of jail. Money power is the dominant factor in today’s electoral politics.

Back in the mid-90s when HNN was launched, I remember meeting politicians who were struggling to make ends meet. When we featured them next, they had become overnight millionaires. The point is not that we can’t have wealthy politicians but the question of how they earned their wealth. I am sure there are many legitimately rich politicians but politics increasingly resembles a profitable business rather than a public service today.

It wasn’t always so. Money power has played a positive role in politics: Industrialist G.D. Birla bankrolled Gandhi’s campaigns and along with other businessmen entered politics inspired by the freedom movement. It was in the late ’60s, when ‘Aya Ram Gaya Ram’ entered the political vocabulary, that money became a major factor. Since then the situation has only worsened with the dawn of coalition governments in the late ’80s.

With the likelihood of not being returned for the next term, they make hay while the sun shines and quite blatantly. No wonder many of these governments have been termed as ‘cash and carry’ ones. These days, it’s almost impossible to find a poor politician except among the Left parties. Adding to the scenario is the fact that a large number of businessmen have joined politics in recent years, either elected or nominated by various parties.

So who are India’s richest politicians? Thanks to a Supreme Court ruling in 2002, the filing of assets data is mandatory by anyone contesting an election. In order to establish exactly who are India’s rich politicians, we undertook a study along with EmpoweringIndia, an initiative of the Liberty Institute led by Barun Mitra. It took three months of exhaustive research at the Election Commission and Rajya Sabha Secretariat by staffers Swati Reddy and Kajol Singh under the supervision of Editor in Chief M H Ahssan to list the richest politicians whose submissions are open to debate.

The filing of assets data is mandatory but not verified. Some legislators have shown an increase in wealth of over 500 per cent in four years. Yet, the statistics are revealing. Of the 215 Rajya Sabha members for which we have data, 105 are crorepatis. Of the 522 Lok Sabha members, 135 are crorepatis.

Members of legislative assemblies seem wealthier than many of the MPs. The top five MLAs across the 30 states are worth Rs 2,042 crore. Uttar Pradesh has the richest chief minister and 113 crorepati MLAs. One indication of how this money has been accumulated is that of 150 wealthiest MLAs, 59 don’t even have a PAN card! Our cover story looks at India’s richest politicians across various categories. A handful are legitimate businessmen, the rest only serve to reinforce the dubious nexus between power and money.

Richest politicians
A lean bare man on the banks of a river near Champaran, his eyes moist with sadness, letting go of his shawl for a poor woman downstream to cover herself and her child. This poignant moment from Richard Attenborough’s biopic on Gandhi is perhaps the most eloquent image of selfless politics.

The gentle giant—loved as Bapu and revered as the Mahatma—epitomised the philosophy of public service as one who gave up everything to be one among the huddled millions. Nearly a century later there is little evidence—in reel or real life—of the high moral ground once straddled by that generation.

The brazen parade of the Prada Prado set zipping across cities in cavalcades, appropriating security funded by public money is evidence that politics has since morphed into a largely self-serving enterprise. The pretense of khadi and Gandhian values went out of vogue with the Gandhi cap long before the Gucci generation stormed the political arena in the 1980s.

The transition is best described by Rajiv Gandhi who said at the Congress Centenary in Mumbai in 1985 that politics has been reduced to “brokers of power and influence, who dispense patronage to convert mass movement into feudal oligarchy”. Yes there are those who enter politics to serve the public cause but they are exceptions rather than the rule. Entering public life is now an investment of time and effort for dividends to be earned from political entrepreneurship. A joint study by HNN and EmpoweringIndia (an initiative of the Liberty Institute) of the reported assets of our elected representatives reveals a startling contrast between the rulers and the ruled.

In a country where over 77 per cent of the populace, or an estimated 836 million people, earn an income of Rs 20 per day and over 300 million are living below the poverty line, nearly half the Rajya Sabha members and nearly a third of those from the Lok Sabha are worth a crore and more. Just the top ten Rajya Sabha members and the top ten Lok Sabha members have reported a cumulative net asset worth Rs 1,500 crore. The 10 top losers in the last Lok Sabha polls—including Nyimthungo of Nagaland who reported total assets of Rs 9,005 crore —is Rs 9,329 crore. Members of legislative assemblies seem wealthier than many MPs. The top five MLAs across the 30 states are worth Rs 2,042 crore. Of these 150 crorepati MLAs, 59 don’t even have a PAN card.

And don’t look for a correlation between the state of the state and the wealth of the legislators. Uttar Pradesh boasts of the largest number of people—59 million or over a third of its population—living below the poverty line. Not only is Mayawati the richest chief minister in 30 states, the state also boasts of 113 crorepati MLAs. Similarly, Madhya Pradesh which has over 25 million of the 60 million people living below the poverty line boasts of 80 crorepati MLAs. The Marxists are the stark exception in this study too. The CPI(M) has 301 MLAs across 10 states but has only two MLAs with declared assets of over Rs 1 crore. Of the 537 candidates who contested on a CPI(M) ticket, only seven had assets of over Rs 1 crore, of which five lost in the elections.

As the old maxim goes, power begets power and money attracts riches. Clearly, it pays to be in power. Take the last round of Assembly elections which afforded the study an opportunity to compare the increase in wealth. In Rajasthan and Madhya Pradesh where the BJP was in power, the average assets of candidates increased by five times.

In Karnataka too where the Congress ruled in rotation with Deve Gowda’s JD(S), Congress candidates reported a fivefold rise in their assets. Mercifully, wealth doesn’t always ensure success. In all, 365 crorepatis contested the Lok Sabha elections in 2004; 88 lost their deposits, and 114 came second.

Last December in Delhi the Congress learnt this important lesson again when they found that Congress candidates who lost in Delhi were on an average richer than those who won. But wealth clearly does matter, all other things being constant.

The caveat emptor here, as with all matters concerning transparency in public life, is that we are going by what the political class has chosen to declare. After all, the statement of assets filed by candidates is at best a confession of sorts mandated by two Supreme Court judgements of May 2002 and March 2003.

There are several gaps in the information available. Of the 542 Lok Sabha members, details of assets are available for only 522. Similarly in the Rajya Sabha, only 215 members have filed details of assets.

There is no institutional mechanism to cross-check facts, nor is there a requirement for candidates to declare the source of wealth, or the increase in wealth of candidates in subsequent declarations. In Mizoram for instance, none of the 10 top candidates have reported possessing a PAN card even though their wealth is in excess of Rs 1 crore.

What is worse is that although MPs who are ministers file annual statements of their assets, the information is not available to the public. This virtually negates the concept of scrutiny that would prevent misuse of position of power and enrichment. Indeed, what should be openly available is denied even under the Right to Information Act.

It is tragic that the Office of Prime Minister Manmohan Singh—who has been described as integrity personified—has been made party to this decision to deny the information. Again, while Central ministers are required to file a statement of assets, there is no such requirement for ministers in states.

The adulterous cohabitation of power and pelf is conspicuous across the political spectrum. The chasm between the declared and perceived reality is all too obvious to be missed. Contrast the wealth reported and wealthy lifestyles of those elected to high office.

Clearly the tip of the benami iceberg has not even been touched. In a country with a stark asymmetry in opportunities and ability, political power enables bending and twisting of policy, converting politics into the elevator politicians ride to reach the pot of gold. Living room conversations in middle and upper middle class homes are dotted with whose son, daughter or son-in-law is raking it in using the benami route to accumulate property and assets.

Television footage of currency notes being waved in Parliament during the last trust vote, the airborne campaigns witnessed during the polls in Rajasthan and Madhya Pradesh, money spent in fielding dummy candidates, funding of party offices, travel in Toyota SUVs costing over Rs 75 lakh each and private charters that politicians avail of to fly within the country are all pointers that are hard to ignore.

Bankers and brokers talk in not so hushed tones about the role of politicians in corporate scams. There is also speculation about the real beneficiary and benami ownership of at least two airlines, several real estate ventures, pharmaceutical units and infrastructure companies. The corporate concept of ‘sleeping partner’ has a whole new connotation in the political world. As long as the real incomes, wealth and funding of politicians remain opaque, governance will continue to suffer and democracy will be rendered more often on the liability side in the balance sheet of development.

Television footage of currency notes being waved in Parliament during the last trust vote, the airborne campaigns witnessed during the polls in Rajasthan and Madhya Pradesh, money spent in fielding dummy candidates, funding of party offices, travel in Toyota SUVs costing over Rs 75 lakh each and private charters that politicians avail of to fly within the country are all pointers that are hard to ignore.

Bankers and brokers talk in not so hushed tones about the role of politicians in corporate scams. There is also speculation about the real beneficiary and benami ownership of at least two airlines, several real estate ventures, pharmaceutical units and infrastructure companies. The corporate concept of ‘sleeping partner’ has a whole new connotation in the political world. As long as the real incomes, wealth and funding of politicians remain opaque, governance will continue to suffer and democracy will be rendered more often on the liability side in the balance sheet of development.

Wealth leadership
1. T. Subbarami Reddy
Indian National Congress
Rajya Sabha, Andhra Pradesh
Total Assets: Rs 239.6 cr

2. Jaya Bachchan
Samajwadi Party
Rajya Sabha, Uttar Pradesh
Total Assets: Rs 214.3 cr

3. Rahul Bajaj
Independent
Rajya Sabha, Maharashtra
Total Assets: Rs 190. 6 cr

4. Anil H. Lad
Indian National Congress
Rajya Sabha, Karnataka
Total Assets: Rs 175 cr

5. M. Krishnappa
Indian National Congress
MLA, Vijay Nagar, Karnataka
Total Assets: Rs 136 cr

6. MAM Ramaswamy
Janata Dal (Secular)
Rajya Sabha, Karnataka
Total Assets Rs 107.7 cr

7. Anand Singh
BJP
MLA, Vijayanagara, Karnataka
Total Assets: Rs 239 cr

8. Anil V. Salgaocar
Independent
MLA, Sanvordem, Goa
Total Assets: Rs 91.4 cr

9. N.A. Haris
Indian National Congress
MLA, Shanti Nagar, Karnataka
Total Assets: Rs 85.3 cr

10. Mahendra Mohan
Samajwadi Party
Rajya Sabha, Uttar Pradesh
Total Assets: Rs 85 cr

Money Wise: How Women Are Handling Recession

By M H Ahssan

How long do you think this recession will last? That's the question everyone has been asking. Experts are not very sure but they say that it is not going to go away in a hurry and, unfortunately, the worst is yet to come! This has ignited a lot of concern among working women, many of whom are seeing a downturn in their workplaces. This is unchartered territory for most and women are learning to negotiate it the hard way by tweaking their expenses and altering their lifestyles like never before.

India is one of the countries relatively less affected by the global economic crisis - economies in the West are already in recession - but millions of families here have acted quickly to slice their spending habits. Of course, leading the new conservative trend are women who, are more often than not, responsible for managing home finances. Many are putting on hold all spending that can wait.

In the new scenario, women are counseling paranoid husbands to be more cautious of new ventures. They are largely investing family money in good old bank deposits that are more dependable and putting off expensive vacation plans. Many are also trimming family spending by cutting down on entertainment, eating out and buying new clothes. There is also a greater care taken on avoiding the careless use of electricity and fuel.

Delhi-based Sridevi Sunderajan, 46, a public relations executive with an international NGO says, "With recession and jobs cuts, there is so much uncertainty about the immediate future. I have put a stop on any big buys. I had planned the renovation of my house, which is long pending and for which I have already saved up, but now I would rather wait. I am doing an audit of my family's expenditure to see where I can cut costs. I now look for cheaper options everywhere, though we are just a family of two."

Suddenly, the Indian middle class dream seems to have become just that, a dream. Every year, employees wait eagerly for their annual increments. Things are different this year. In fact, from small enterprises to the big guys, salary cuts are now the norm. Recently, a television channel's head wrote to the employees saying that the top management had agreed to take a 20 per cent cut in salary. The inference is that soon, they too would have to agree to a similar move.

Another effect of the crisis has been that women haven't got carried away with the year-end sales - something that is usually the highlight of the festive season and New Year. Financial discipline is a concept that many more are diligently following as they prepare for the tough days ahead.

Rajni Pradhan, 27, Senior Manager, Knight Frank, real estate consultants in Pune, has started using her landlines more than the cell phone. She has cut down on eating out, socializing, let go of the cook, got her husband to call his business associates home for dinner instead of entertaining them in restaurants, and so on. Her husband, Alok, had three mobile phones, two of which he hardly ever used but got billed for every month. Rajni has now got rid of the two phones. "It was not easy asking the cook to leave as it put additional burden on me, but we all have to learn to cope," she observes quietly.

It is not just at home that Rajni is battling the recession. At work, she ensures that computers are switched off when not in use. She has also taken on new job roles to hone her skills and, more importantly, to keep the specter of the pink slip at bay. Then there are the others small switchovers: Now, for instance, when she travels on work to Mumbai, she hops on to a bus or a train instead of the more convenient taxi.

Sulina Menon, 44, a media and brand consultant in New Delhi, is upset seeing so many of her friends losing their jobs, as downscaling takes place. She knows that it is only a matter of time before she too gets affected. As a freelancer, projects will be fewer and far-between in the months to come. "All of us will have to tighten our belts," she warns.

The Nielsen Online Global Consumer Survey conducted by Nielsen Consumer Research a couple of months ago in the United States with 28,663 Internet users showed that only 11 per cent of women felt that there would be an end to recession soon, as compared with 27 per cent of men. There has been no similar survey in India, but the situation here is no different. Women appeared to be more concerned and anxious than their male counterparts.

Another recent study by Cambridge University suggested that if there were more women in top power positions, the global financial crisis might have been less in scope and impact. Dr Gita Piramal, author of 'Managing Radical Change', would agree: "Thinking things through, being authentic, ready to get your hands dirty and get down to the frontline yourself, being nurturing and supportive, these are traditionally a woman's traits but they rise to the fore in a crisis situation."

Women are heralding subtle lifestyle changes and know that a salary cut is not far away. There is, however, no unnecessary panic. They know that all it takes to control a money crisis is to increase financial discipline, consult experts before making investment plans and upgrade skills so that they do not become redundant in the office.

Some like Sridevi are even exploiting the recession, making smart investments right now. She could not get any blue-chip company shares during the boom, so now she is getting her husband to research on what to buy as the prices are low.

What ails Indian Muslims?

By M H Ahssan

Indian Muslims are making waves. A.R. Rahman, Ustad Zakir Hussain, Irfan Pathan, Yusuf Pathan and Sania Mirza are winning kudos for themselves and their country. There are scores of other Indian Muslim achievers. The Pathan brothers came from a muezzin's home who did not have the means to even get a pair of shoes for such brilliant kids.

Another Indian Muslim, Azim Premji, is set to rub shoulders with US President Barack Obama. And Shah Rukh Khan, the king of Bollywood, was the first Indian to be invited to the Golden Globes to present an award.

But if you happen to be an Indian Muslim reading Urdu newspapers, you may never be able to realize these success stories. What you will read day after day will be traumatic memories of some riots in Gujarat or a Batla House incident in Delhi or discrimination against Muslims in some obscure corner of the country.

Almost three months after the Batla House shooting involving suspected terrorists, an Urdu newspaper with around a dozen supplements ran a full-page report on what happened there and also imagined conspiracy theories behind the Mumbai terrorist attacks. Unfortunately, conspiracy theories have become a part of the Muslim psyche in India.

With such depressing news unleashed on unassuming minds of the community, Muslims have become pessimistic to say the least. Almost all Urdu papers and the community media churn out similar news with impunity.

After the Batla House incident, the Muslim community acted as if it was orphaned. They behaved as if it was the end of the road for them. Many felt that way and even worse after the 2002 Gujarat riots, the 1992 Babri Masjid demolition and earlier violence elsewhere.

But Muslim leaders and clergy that continue to have a stranglehold on the community have neither tried to fight the pessimism among their people nor tried to do something that can give hope to Muslim youth. On the other hand, they have tried to push negativism deeper in the Muslim psyche by carelessly railing against the Indian government and Hindu groups. They have tried to put the blame for Muslim backwardness on successive governments and divisive politics of the Sangh Parivar, avoiding questions about their own contribution to the community.

The notion is not without basis. Governments over the years have largely neglected Muslims. The Sangh Parivar's hate campaign has also contributed to alienating them.

But the major blame for the Indian Muslim's psychological alienation and backwardness must lie with their leaders and clergy for whom good news is not good enough to take them to their people. Bad news is good propaganda tool. Bad news gives them reasons to perpetuate their negative mentality.

They would talk about lack of literacy and lack of job opportunities among Muslims but not about how that literacy level among Muslims in seven states including Gujarat, Tamil Nadu, Jharkhand and Chhattisgarh is more than that of other communities. They will talk about discrimination against Muslims but never say a word about how Khorakiwallas, Premjis, Hamid Sheikhs, Allanas and thousands of other Muslims have made a mark in their fields. Achievers in the eyes of clergy and community leaders are collaborators.

Indian Muslims need new age leaders to guide the community, leaders who are not educated in madrassas that teach syllabus prepared over 700 years ago, without little or no exposure to modern educational or scientific developments. They need leaders from grassroots level, not from religious families. I hope the community gets such leaders pretty soon.

How bankable is your savings account?

By M H Ahssan

Identify Your Banking Needs & Do Proper Research On The Bank Before Opening A Savings Account

Savings bank account holders have always been viewed as sticky customers by banks. Most of them do not leave the bank unless they shift homes or move jobs. Yet, opening a savings account is perhaps one of the least researched decisions. This may be due to the fact that most customers perceive savings account as a commodity, where interest rates are fixed and transactions largely involve depositing and issuing cheques and withdrawing funds. But, in not choosing an account carefully, many customers end up opening multiple accounts as their original bank does not fulfil all their needs.

By identifying their banking needs and accordingly selecting a bank, account holders will be rewarded with considerable savings in terms of time, as well as, money. It would obviate the need for multiple accounts to hedge the risks. “This will ensure that you don’t have to forego the benefits that come with maintaining a higher balance,” said KVS Manian, group head, retail liabilities and branch banking, Kotak Mahindra Bank.

Identify the right bank
The first step towards selecting the ideal bank account is evaluating the profiles of various banks in general and the branch in particular. The bank’s target group should also be considered while making a decision, that is, you need to know whether the bank’s focus is on the mass, mass-affluent or high-end customers. For instance, if the target group of a bank is high-end customers, and you fall in the middle-income group, you may not be treated as a valued customer, resulting in dissatisfactory level of service.

For instance, large-sized private banks may not attach enough importance to small-time traders’ needs as they are not priority customers for such banks, and even routine services like signature verification could turn out to be time-consuming affairs.

Analyse channels offered
Once you are convinced that you would be comfortable with the bank’s profile, you can look at the convenience aspect. “Branch and ATM network constitute the key factors impacting this decision. If the bank under your consideration does not have a branch located close to your place, find out if they at least have an ATM near your house to make up for it,” suggested Anindya Mitra, senior vice-president, retail liabilities, HDFC Bank.

If you intend to avail of locker facilities, proximity of the branch will be crucial. Another channel which could be of great interest to many, especially senior citizens, is the home banking facility. You need to enquire whether the bank undertakes to deliver cash, cheque books and documents at your doorstep. This apart, before signing up for a savings account, ascertain whether services such as bill payment, transfer of funds and placing orders for cheque books are offered through all channels.

Evaluate technology-friendliness
“If service is the differentiator, then technology is the enabler. The affluent class, in particular, is constantly on the move. Thus, a savings account should allow customers to access their banking needs whenever and wherever they need the same,” said an HSBC Bank official. While most banks claim to offer all platforms, it does not necessarily mean that they provide all the services as well. “Not all banks offer all the services on Internet, phone and mobile platforms.

If you are an Internet-savvy person, but net banking is not your bank’s strength, it could cause a lot of inconvenience,” pointed out Mr Manian. To cite an example, if your bank does not facilitate regeneration of net banking password on the Internet, you will end up spending time and money to visit the branch for submitting the application. Same is the case with mobile banking. If you happen to be a frequent traveller, who completely relies on his/her cell phone for most transactions, you will not be comfortable with a bank that does not have a fully-enabled mobile platform.

Scrutinise product features
A comparison between the account features offered by various banks is essential. Typically, most foreign and private banks do not offer accounts with a minimum balance requirement of less than Rs 5,000-10,000, whereas public sector banks continue to offer products starting with Rs 500 too. You also need to enquire whether your account follows the minimum daily balance or the average quarterly balance system. In case of the former, the bank could slap a non-maintenance charge, if you fail to maintain the relevant balance even for a day. On the other hand, an account with average quarterly balance would mean you can avoid the charges by ensuring adequate balance on most days.

“If you need to transfer money on a regular basis to a family member not based in your city, a nofrills account won’t be of help, as it may not issue ‘At Par’ cheques, thus leaving the recipient hassled,” informed Mr Manian. In addition, find out if the account comes with the sweep-in-sweep-out facility as it can help you avoid the notional loss incurred in letting cash idle away in the account.

Be aware of the charges
Upon opening an account, most banks supply an account opening kit containing a schedule of charges detailing the non-maintenance charges, cheque return penalty, debit card charges, etc. Many account holders are unaware of the fee levied on debit cards after the first year of acquiring the same. Some banks also charge customers for SMS alerts. While comparing the charges of various banks, you need to determine whether they are inclusive or exclusive of service tax. A thorough scrutiny of the schedule of charges will ensure that you are not taken by surprise later.

How bankable is your savings account?

By M H Ahssan

Identify Your Banking Needs & Do Proper Research On The Bank Before Opening A Savings Account

Savings bank account holders have always been viewed as sticky customers by banks. Most of them do not leave the bank unless they shift homes or move jobs. Yet, opening a savings account is perhaps one of the least researched decisions. This may be due to the fact that most customers perceive savings account as a commodity, where interest rates are fixed and transactions largely involve depositing and issuing cheques and withdrawing funds. But, in not choosing an account carefully, many customers end up opening multiple accounts as their original bank does not fulfil all their needs.

By identifying their banking needs and accordingly selecting a bank, account holders will be rewarded with considerable savings in terms of time, as well as, money. It would obviate the need for multiple accounts to hedge the risks. “This will ensure that you don’t have to forego the benefits that come with maintaining a higher balance,” said KVS Manian, group head, retail liabilities and branch banking, Kotak Mahindra Bank.

Identify the right bank
The first step towards selecting the ideal bank account is evaluating the profiles of various banks in general and the branch in particular. The bank’s target group should also be considered while making a decision, that is, you need to know whether the bank’s focus is on the mass, mass-affluent or high-end customers. For instance, if the target group of a bank is high-end customers, and you fall in the middle-income group, you may not be treated as a valued customer, resulting in dissatisfactory level of service.

For instance, large-sized private banks may not attach enough importance to small-time traders’ needs as they are not priority customers for such banks, and even routine services like signature verification could turn out to be time-consuming affairs.

Analyse channels offered
Once you are convinced that you would be comfortable with the bank’s profile, you can look at the convenience aspect. “Branch and ATM network constitute the key factors impacting this decision. If the bank under your consideration does not have a branch located close to your place, find out if they at least have an ATM near your house to make up for it,” suggested Anindya Mitra, senior vice-president, retail liabilities, HDFC Bank.

If you intend to avail of locker facilities, proximity of the branch will be crucial. Another channel which could be of great interest to many, especially senior citizens, is the home banking facility. You need to enquire whether the bank undertakes to deliver cash, cheque books and documents at your doorstep. This apart, before signing up for a savings account, ascertain whether services such as bill payment, transfer of funds and placing orders for cheque books are offered through all channels.

Evaluate technology-friendliness
“If service is the differentiator, then technology is the enabler. The affluent class, in particular, is constantly on the move. Thus, a savings account should allow customers to access their banking needs whenever and wherever they need the same,” said an HSBC Bank official. While most banks claim to offer all platforms, it does not necessarily mean that they provide all the services as well. “Not all banks offer all the services on Internet, phone and mobile platforms.

If you are an Internet-savvy person, but net banking is not your bank’s strength, it could cause a lot of inconvenience,” pointed out Mr Manian. To cite an example, if your bank does not facilitate regeneration of net banking password on the Internet, you will end up spending time and money to visit the branch for submitting the application. Same is the case with mobile banking. If you happen to be a frequent traveller, who completely relies on his/her cell phone for most transactions, you will not be comfortable with a bank that does not have a fully-enabled mobile platform.

Scrutinise product features
A comparison between the account features offered by various banks is essential. Typically, most foreign and private banks do not offer accounts with a minimum balance requirement of less than Rs 5,000-10,000, whereas public sector banks continue to offer products starting with Rs 500 too. You also need to enquire whether your account follows the minimum daily balance or the average quarterly balance system. In case of the former, the bank could slap a non-maintenance charge, if you fail to maintain the relevant balance even for a day. On the other hand, an account with average quarterly balance would mean you can avoid the charges by ensuring adequate balance on most days.

“If you need to transfer money on a regular basis to a family member not based in your city, a nofrills account won’t be of help, as it may not issue ‘At Par’ cheques, thus leaving the recipient hassled,” informed Mr Manian. In addition, find out if the account comes with the sweep-in-sweep-out facility as it can help you avoid the notional loss incurred in letting cash idle away in the account.

Be aware of the charges
Upon opening an account, most banks supply an account opening kit containing a schedule of charges detailing the non-maintenance charges, cheque return penalty, debit card charges, etc. Many account holders are unaware of the fee levied on debit cards after the first year of acquiring the same. Some banks also charge customers for SMS alerts. While comparing the charges of various banks, you need to determine whether they are inclusive or exclusive of service tax. A thorough scrutiny of the schedule of charges will ensure that you are not taken by surprise later.

How bankable is your savings account?

By M H Ahssan

Identify Your Banking Needs & Do Proper Research On The Bank Before Opening A Savings Account

Savings bank account holders have always been viewed as sticky customers by banks. Most of them do not leave the bank unless they shift homes or move jobs. Yet, opening a savings account is perhaps one of the least researched decisions. This may be due to the fact that most customers perceive savings account as a commodity, where interest rates are fixed and transactions largely involve depositing and issuing cheques and withdrawing funds. But, in not choosing an account carefully, many customers end up opening multiple accounts as their original bank does not fulfil all their needs.

By identifying their banking needs and accordingly selecting a bank, account holders will be rewarded with considerable savings in terms of time, as well as, money. It would obviate the need for multiple accounts to hedge the risks. “This will ensure that you don’t have to forego the benefits that come with maintaining a higher balance,” said KVS Manian, group head, retail liabilities and branch banking, Kotak Mahindra Bank.

Identify the right bank
The first step towards selecting the ideal bank account is evaluating the profiles of various banks in general and the branch in particular. The bank’s target group should also be considered while making a decision, that is, you need to know whether the bank’s focus is on the mass, mass-affluent or high-end customers. For instance, if the target group of a bank is high-end customers, and you fall in the middle-income group, you may not be treated as a valued customer, resulting in dissatisfactory level of service.

For instance, large-sized private banks may not attach enough importance to small-time traders’ needs as they are not priority customers for such banks, and even routine services like signature verification could turn out to be time-consuming affairs.

Analyse channels offered
Once you are convinced that you would be comfortable with the bank’s profile, you can look at the convenience aspect. “Branch and ATM network constitute the key factors impacting this decision. If the bank under your consideration does not have a branch located close to your place, find out if they at least have an ATM near your house to make up for it,” suggested Anindya Mitra, senior vice-president, retail liabilities, HDFC Bank.

If you intend to avail of locker facilities, proximity of the branch will be crucial. Another channel which could be of great interest to many, especially senior citizens, is the home banking facility. You need to enquire whether the bank undertakes to deliver cash, cheque books and documents at your doorstep. This apart, before signing up for a savings account, ascertain whether services such as bill payment, transfer of funds and placing orders for cheque books are offered through all channels.

Evaluate technology-friendliness
“If service is the differentiator, then technology is the enabler. The affluent class, in particular, is constantly on the move. Thus, a savings account should allow customers to access their banking needs whenever and wherever they need the same,” said an HSBC Bank official. While most banks claim to offer all platforms, it does not necessarily mean that they provide all the services as well. “Not all banks offer all the services on Internet, phone and mobile platforms.

If you are an Internet-savvy person, but net banking is not your bank’s strength, it could cause a lot of inconvenience,” pointed out Mr Manian. To cite an example, if your bank does not facilitate regeneration of net banking password on the Internet, you will end up spending time and money to visit the branch for submitting the application. Same is the case with mobile banking. If you happen to be a frequent traveller, who completely relies on his/her cell phone for most transactions, you will not be comfortable with a bank that does not have a fully-enabled mobile platform.

Scrutinise product features
A comparison between the account features offered by various banks is essential. Typically, most foreign and private banks do not offer accounts with a minimum balance requirement of less than Rs 5,000-10,000, whereas public sector banks continue to offer products starting with Rs 500 too. You also need to enquire whether your account follows the minimum daily balance or the average quarterly balance system. In case of the former, the bank could slap a non-maintenance charge, if you fail to maintain the relevant balance even for a day. On the other hand, an account with average quarterly balance would mean you can avoid the charges by ensuring adequate balance on most days.

“If you need to transfer money on a regular basis to a family member not based in your city, a nofrills account won’t be of help, as it may not issue ‘At Par’ cheques, thus leaving the recipient hassled,” informed Mr Manian. In addition, find out if the account comes with the sweep-in-sweep-out facility as it can help you avoid the notional loss incurred in letting cash idle away in the account.

Be aware of the charges
Upon opening an account, most banks supply an account opening kit containing a schedule of charges detailing the non-maintenance charges, cheque return penalty, debit card charges, etc. Many account holders are unaware of the fee levied on debit cards after the first year of acquiring the same. Some banks also charge customers for SMS alerts. While comparing the charges of various banks, you need to determine whether they are inclusive or exclusive of service tax. A thorough scrutiny of the schedule of charges will ensure that you are not taken by surprise later.

Slowdown hits growth and finances

By M H Ahssan

High growth rates have helped. Changes in attitude have also helped. Above all, information systems and technology have helped the most. And, if I may add in a lighter vein, having a lucky finance minister may also have helped.” As Pranab Mukherjee unveiled the budget numbers in the UPA’s sixth and final budget, more correctly vote-on-account on Monday, the former FM, P Chidambaram must be rueing budget day last year when he tempted Lady Luck.

Or maybe not! Because though Lady Luck seemed to have deserted the government after smiling on it for four successive years, Mr Chidambaram himself has been saved the embarrassment of presenting a rather sorry report of government finances. Thanks to a surprise cabinet reshuffle that saw him being shifted to the home ministry!

In all fairness, the about-turn in government finances that undoes the success of the post-reform period and takes us back to the pre-reform period is largely a consequence of the unprecedented turmoil in the global economy. As a result after coming ‘within striking distance of fiscal correction’ it’s now back to square one all over again. And it is going to be an incredibly tough job for whichever government comes to power next.

Revised estimates presented in Parliament show revenues down, expenditure up. There can only be one outcome of such a scenario and sure enough, both revenue and fiscal deficits are up. And while the increase in fiscal deficit was expected what is particularly worrisome is the more than four-fold increase in revenue deficit, up from 1% in budget estimates to 4.4% (Rs 2,41,273 crore) in the revised estimates. Incidentally, the fiscal deficit is not 6% as stated in the budget documents but 7.8% once off-budget items like fertiliser and oil bonds are factored in and may end up higher when the final figures come in.

This is, perhaps, inevitable when an economic slowdown is coupled with widespread unemployment. Any government, more so a democratically elected one, would have to spend more on programmes like the National Rural employment Guarantee Programme (NREGA) to address basic livelihood concerns. Hence increased allocation on NREGA and other social development programmes like the Jawaharlal Nehru Urban Renewal Mission and Indira Awas Yojana to provide housing for the weaker sections is not only unavoidable but may even be desirable.

Having said that two caveats must be kept in mind. One, unlike a higher fiscal deficit that can augment the country’s repayment capacity, a higher revenue deficit means the government is borrowing to spend on current consumption. A revenue deficit adds to the debt burden without creating the wherewithal to repay the debt. This is the reason why fiscal economists warn against countries running high revenue deficits.

Two, increased allocations do not translate into improved delivery on the ground. As the data on roads and other infrastructure projects released by the ministry on programme implementation has shown, progress has been tardy in most areas. Consequently, along with higher allocations government will have to spruce up implementation if we are to justify the much higher cost in terms of higher borrowing (and associated with that higher interest cost) of a higher revenue deficit.

Given that debt servicing (debt repayment plus interest payments) already accounts for almost 100% of revenue receipts, according to revised estimates for the current fiscal, the danger of a high revenue deficit going forward cannot be over-emphasised. The good thing is that the interim budget recognises the pitfalls of fiscal adventurism, with Mr Mukherjee reiterating on more than one occasion the need to ‘revert to fiscal consolidation at the earliest.’

No doubt, it is this realisation that has led the government to observe constitutional niceties and show commendable restraint, spurning the temptation to play the election card. It could not have been easy given the pressures and expectations from industry and the public. But for all of us with a stake in the future of this country, it is a welcome mark of responsible government.

Exclusive: WHERE’S THE NEW DEAL?

By L K Advani

In his letter asking me to contribute a brief piece for the special edition of the HNN to be published on the occasion of the UPA government’s Interim Budget, HNN has observed: “You may recall the BJP had coined the term Gross Domestic Happiness during its stewardship of the NDA government.”

I do recall that five years back, on February 3, 2004, the then finance minister, Mr Jaswant Singh presented to Parliament the NDA government’s Interim Budget. It was in this budget speech that Jaswant Singh had remarked his budget was not about economic development alone. “This is a political statement too”, he said and added, “it seeks Gross National Contentment.” Jaswant Singh’s coinage was slightly different from the one ET editor has used. But in substance, it is the same.

In this article I am expected to evaluate where the UPA stands against “the standard of Gross Domestic Happiness”, conceived by the NDA.

I have come across last week an excellent book titled Happier by one of the most popular teachers in Harvard’s recent history, Dr Tal Ben Shahar. The back cover of the book poses the question: Can you be happy? and answers it affirmatively saying: “One out of every five Harvard students has lined up to hear Tal Ben Shahar’s insightful and inspiring lectures on that ever- elusive state: HAPPINESS”. The book describes happiness as the “ultimate currency”. The author adds: “Wealth, fame, admiration and all other goals are subordinate and secondary to happiness; whether our desires are material or social, they are means toward one end: happiness.” This is true of an individual; this is equally true of society. In a way, Jaswant Singh’s choice of the word ‘contentment’ was wider, and more fulfilling than even happiness.

Very soon the country is going to elect its 15th Lok Sabha. Even though the government continues to be in a state of denial, the economic situation in the country is grave.

On Saturday last I had an interaction with a group of distinguished economists who not only expressed deep concern about the present state of the economy but kept emphasising that the worst was yet to come. My colleague Yashwant Sinha quipped: “Well, if in May 2009, the people of India do give us a mandate, after this interaction with experts like you, we cannot say we had not been warned!”

When the NDA government left in 2004 and the UPA government assumed office, the economy was buoyant. The UPA government’s Economic Survey of 2004 showered fulsome praise on the state of the economy. The Survey said: “The economy appears to be in a resilient mode in terms of growth, inflation and balance of payments, a combination that offers large scope for consolidation of the growth momentum with continued micro-economic stability.”

The NDA government started with 5% growth in 1998 and left with 8.5% growth. The UPA started with 8.5% and will leave at 6% or even lower. These statistics apart, can our country forget that in these last five years of UPA rule we have had tens of thousands of farmers committing suicide — and all in Congress-ruled states like Maharashtra and Andhra? If happiness is regarded as the ultimate currency, suicides can only be the ultimate curse that can be inflicted on a human being!

The UPA had come to power in 2004 on the promise that they would radically change the life of the aam admi. The first three years of the UPA rule did affect the aam admi’s life radically. Prices of all essential commodities kept soaring in a manner as to make the common man’s life miserable. That problem persists still. On top of that has come unemployment of frightening dimensions.

Two days back I saw a news item in a Mumbai daily in which a young boy retrenched by the IT company for which he was working told his mother that he had decided to commit suicide. The upshot of it was that both mother and son committed suicide.

The UPA government’s track record on the internal security front has been abysmal. The spate of terrorist attacks during its five-year term, more particularly the horrendous Mumbai tragedy in November last has created a scare in the country and has made some foreign countries issue advisories to prospective tourists to avoid India.

So if the UPA’s tenure were to be assessed by the measuring rod that happiness provides, I can only say that farmers suicides plus inflation plus unemployment plus terror makes this the worst government the country has experienced in many many years. The NDA government’s sixyear term had ushered in confidence and hope about the future. As the UPA government’s tenure is about to end, I regret to say there is only uncertainty and despair.