Money & Banking
Govt gives more money to PSU banks for lending during festival season

Government expect state-run banks to lend this additional money to consumers for buying auto, consumer durables at lower rates during the festival season

Ahead of the festival season, the Indian government on Thursday decided to enhance capital infusion into the public sector banks (PSBs) over and above what was provided in the Budget to enable them to extend more credit to auto and consumer durables sectors to stimulate demand and combat slowdown.


The decision to increase the quantum of capital infusion was taken at a meeting between the Finance Minister P Chidambaram, Reserve Bank of India (RBI) governor Raghuram Rajan and Economic Affairs Secretary, Arvind Mayaram.


“This amount (Rs14,000 crore provided for capital infusion in the Budget) will be enhanced sufficiently. The additional amount of capital will be provided to banks to enable them to lend to borrowers in select sectors such as two-wheeler, consumer durables, etc at lower rates in order to stimulate demand,” a finance ministry statement said.


It further said the additional fund infusion would help in combating slowdown and boost output.


“While this will bring relief to consumers, especially the middle class, it is also expected to give a boost to capacity addition, employment and production,” it added.


Consumer durables, a reflection of demand for manufactured products, include TV, fridge, washing machine.


The two-wheeler sales recorded a flat growth of 0.72% in April-August period current fiscal, as against a growth of 6.8% in the corresponding period last year.


Aadhaar ID or internal passport?

PS Deodhar is former advisor to Rajiv Gandhi on electronics, but even his article in 2009, highlighting the problems with Aadhaar, was ignored in a hurry to push through Nandan Nilekani's ambitious and expensive UID scheme

On 1 July 2009, in a Delhi seminar on the subject of national identification (NID) card, I opposed the proposal to get into national ID cards for every citizen in the country. I fully endorsed the need to create “Citizen Data Base” by allocating a unique national identity number (NIN) to every citizen and resident of India as was suggested by our former President, Dr APJ Abdul Kalam, sometime ago in context of voter’s list. Let me also first establish my credentials by adding that I am a technologist who had brought smart card technology to India 23 years ago and I have followed ID card technology since, having personally developed India’s own smart card pay phone as well as applications for smart cards in financial and health sectors. Smart Card Forum of India in 2002 named me as “Smart Card Pioneer in India.”  Yet I opposed this move. Here are some of my relevant comments:


Socio-political realities and limitations 


NID card becoming an ‘internal passport’

An ID card, by definition, is a form of internal passport. Virtually all ID cards worldwide develop a broader usage over time, than was originally envisioned for them. This development of new and unintended purposes is becoming known as function creep. Without care, the card becomes an icon. Its use is enforced through mindless regulation or policy, disregarding other means of identification, and in the process causing significant problems for those who are without the card. The card becomes more important than the individual.


Loss or lack of NID card

Virtually, all countries with ID cards report that their loss or damage causes immense problems. Up to 5% of cards are lost, stolen or damaged each year, and the result can be denial of service benefits, and - in the broadest sense - loss of identity. Imagine illiterate Indians in city slums, beggars on the street, farmers in the field, adivasis, illiterate women and shining India NID Smart Card.


Replacement of NID

The replacement of a high security, high integrity card involves significant administrative involvement. Documents must be presented in person to an official. Cards must be processed centrally. This process can take some weeks. However, a low value card can be replaced in a lesser time, but its loss poses security threats because of the risk of fraud and misuse.


People who lose a wallet anywhere or their passport in foreign county will quickly understand the misfortune and inconvenience that can result. A single ID card when lost or stolen can have precisely the same impact in a person’s life


Countries that have opposed National ID cards and their reasons

US: In the United States, successive administrations have refused to propose an ID card for every citizen. Extension of the Social Security Number (SSN) to the status of an ID card has been consistently rejected since 1971 by the Social Security Administration task force as well as by the Carter, Reagan, Clinton and Bush Administrations. In US, issues of individual autonomy and national sovereignty have dominated the Identity card issue, despite a high level of anxiety over fraud, tax evasion and illegal immigrants.

Australia: In 1986 Australian Government planned to introduce NID, after a fierce resistance from citizen that formed the biggest civil campaign, the government abandoned the plan in 1987.


New Zealand, UK And Philipines: All dropped their plans for the reasons of cost and complexity as well as the popular resistance. 


France: France has ID cards but it was stalled for many years because of public and political opposition. Public debate intensified in 1980, with the judiciary expressing concern that an ID card had the potential of limiting the right of free movement. Francois Mitterrand expressed the fear that the creation of computerized identity cards contains a real danger for the liberty of individuals. The plan was re-introduced under a later conservative government.


Canada, Ireland, Nordic Countries and Sweden: All these countries too do not want national ID for one or other of the above reasons.


TN Seshan’s failed voter ID initiative

This task was indeed Herculean and our Election Commission has a first-hand experience of it.  TN Seshan and many others, who followed him, know it well from their experience with the administrative disaster related to Voter’s ID card with a photo. Experience of voters in the recently concluded election will tell us of the reforms we need in this basic task. Like our former President observes, we need at first a reliable Voter’s Digital List and only then we can hope to have Voter’s ID. A Unique National Identity Number for every individual and making it accessible on a public data base is all that we need to derive the desired objective.


Effectiveness of NID Card

Containing terrorism: Of the 25 countries most affected by acts of terrorism 80% have national ID cards. One-third of those include a biometric element. In addition, it is reported that almost two-thirds of known terrorists operate under their own identity, and that most enter countries using tourist visas, which, because of their popularity, are subject to low levels of scrutiny. Since 1986, Pakistan, which also has a national ID card program with a biometric element, has suffered thousands of terrorist attacks, killing several thousand citizens. During the same time frame, India, which has no national ID card program at all, suffered fewer attacks, killing less than 1,500 people. National ID cards are not new in Britain. During both World War I and World War II, citizens were required to carry a national ID card at all times and produce it when demanded by police. In 1951, however, Britain's National Registration Act was repealed and ID cards were no longer issued. It is good to know why.


Assisting law enforcement: Law and Order is a key motivation for the establishment of ID cards in numerous countries but their usefulness to police has been marginal. In the UK, Association of Chief Police Officers observed that instead of NID Card they are in favour of a voluntary system and police would be reluctant to administer a compulsory NID Card possession since it might erode relations with the public. The major problem in combating crime is not lack of identification procedures, but difficulties in the gathering of evidence and the pursuit of a prosecution. Criminologists too have not been able to show any evidence that the existence of a card would actually reduce the incidence of crime, or the success of prosecution. In reality, only a national DNA database as has just been suggested by Dr Kalam or a biometric database now used in Canada might assist the police in linking crimes to perpetrators. In Brazil, all residents are obliged to carry at all times NID Card, of the size of a credit card bearing a photograph, thumb print, full name and parents' names, national status (Brazilian national or alien resident) and a serial number. Is this feasible in India?


Controlling illegal immigration: Although the immigration issue is a principle motivation behind ID card proposals in continental Europe and the United States, the impact of cards on illegal immigration has been patchy. The use of a card for purposes of checking resident status depends on the police and other officials being given very broad powers to check identity. More important from the perspective of civil rights, its success will depend on the exercise of one of two processes: either a vastly increased level of constant checking of the entire population, or, a discriminatory checking procedure which will target minorities. The argument most often put forward to justify the quest to catch illegal immigrants in any country is that these people are taking jobs that should belong to citizens.  The image of the illegal immigrant into Indian cities is a powerful one, and it is used to maximum effect by proponents of ID cards. In India, getting a false ID for a bribe will in any case defeat the purpose.


Increasing police powers: A Privacy International survey of ID cards found police abusing NID cards in virtually all countries. Most involved people being arbitrarily detained after failure to produce their card. Others involved beatings of juveniles or minorities. There were even instances of wholesale discrimination on the basis of data set out on the cards. Cards are often alleged to be the vehicle for discriminatory practices. Police who are given powers to demand ID invariably have consequent powers to detain people who do not have the card, or who cannot prove their identity. Even in such advanced countries as Germany, the power to hold such people for up to 24 hours is enshrined in law. The question of who is targeted for ID checks is left largely to the discretion of police. The wartime ID card used in the UK outlived the war, and found its way into general use until the early 1950s. Police became used to the idea of routinely demanding the card, until in 1953 the High Court ruled that the practice was unlawful and that led to the repealing of the National Registration Act, and the abandonment of the ID card. The Chief Justice remarked, “ although the police may have powers, it does not follow that they should exercise them on all is obvious that the police now, as a matter of routine, demand the production of national registration identity cards whenever they stop or interrogate a motorist for any cause. In this country we have always prided ourselves on the good feeling that exists between the police and the public, and such action tends to make the public resentful of the acts of police and inclines them to obstruct them rather than assist them”.


Facilitating discrimination: The success of ID cards as a means of fighting crime or illegal immigration will depend on a discriminatory checking procedure which could indeed target the poor and minorities. The irony of the ID card option is that it invites discrimination by definition. Discriminatory practices are an inherent part of the function of an ID card. Without this discrimination, police would be required to conduct random checks, which in turn, would be politically unacceptable. All discrimination is based on one of two conditions: situational or sectional; Situational discrimination targets people in unusual circumstances. i.e. walking at night, visiting certain areas, attending certain functions or activities, or behaving in an abnormal fashion. Sectional discrimination targets people of certain section i.e. poor, women, youths, illiterate or the homeless. ID cards containing religious or ethnic information make it possible to carry this discrimination a step further. Several developed nations have been accused of conducting discriminatory practices using ID cards. Ironically, the Parliaments of several European nations, including France and Holland, have accepted a law introducing the obligation to identify oneself in numerous situations including, for instance, at work, at football stadiums, on public transport an in banks. While the card is voluntary in name, it is in effect a compulsory instrument that will be carried at all times by Dutch citizens. Moreover, foreigners can always be asked to identify themselves to authorities at any moment and in any circumstance. French police have been accused of overzealous use of the ID card against blacks, and particularly against Algerians. Greek authorities have been accused of using data on religious affiliation on its national card to discriminate against people who are not Greek Orthodox. In India, what could be in store?

Please let’s not rush. There are things to do before we invest and squander thousands of crores of much needed resource.


(PS Deodhar is founder and former chairman of the Aplab Group of companies. He is also the former chairman of the Electronics Commission of the Government of India and was an advisor to late Prime Minister Rajiv Gandhi on electronics. He also was the chairman of the Broadcast Council in 1992-93 that set in motion the privatisation of the electronic media with metro channels.)




4 years ago

I fully agree and endorse the views and objections for "Aadhaar"card as elaborated by shri Deodhar .


4 years ago

There is a basic confusion about treating Aadhaar as an Identity Card; which is wrong. Aadhaar is similar to the social security number of the US and is certainly not an ID Card. Aadhaar is an identity system based on biometrics which is verifiable online.
Primary aim of Aadhaar is to empower the citizens and prevent misuse of identity. For example it is highly possible that ration is being consumed in one person name without one knowing about it. How else is it possible to have more ration cards than the number of families? Similarly, impersonation is rampant in other identity system like passport, voter id card, license etc.
A smart card as the writer mentions is waste of money. No card can substitute an online id system.
Aadhaar is the only online identity system in the world which is not only accurate, efficient and reliable but also acting as a financial address. It is not only harmless but empowers and protect the common man like a Raksha Kavach.
There are some critics of Aadhaar. The reasons are easy to guess. Nation is waking up to accuracy and transparency… there is bound to be some opposition from the people who benefited from impersonation.

Mukesh kamath

4 years ago

@Joseph Korah: NPR is a terrible scheme and mysteriously critics have let it run and concentrated all their efforts in stonewalling aadhaar. Probably no one wants to attack a weak scheme. That aside aadhaar card once lost it should be possible to retrive it by submitting the biometrics of a person. I suggest all permanent enrollment stations have a procedure to scan biometrics of a person who lost his card. Then run a 1:n match in the database and pull up his record and issue him a duplicate card then and there. For a person who has lost his aadhaar card to the police it should be possible for him to live with just the print of the e-aadhaar and the number alone.


4 years ago

In chennai the Aadhaar Card enrollment is based ONLY on the Census taken in 2010. If a resident does not have this census slip of 2010 then he will have to get his name included in the NPR Schedule form which has to be submitted to the Zonal Office of the Corporation,After which the officials will come for checking and then a new census slip will be issued after which enrollment under AAdhaar can be done. So no other documents like Passport or PAN Card or Driving License is valid proof for enrollment for Aadhaar.

India Inc fund raising surges two-fold in August

Fund raising by corporates through primary market during the April-August period surged to Rs3,967 crore through 18 issues, from Rs1,140 crore raised via 13 issues a year-ago

Fund raising by Indian companies during August through primary market route jumped more than two-fold to Rs1,726 crore in compared with Rs747 crore in July.


According to data from Securities and Exchange Board of India (SEBI), the cumulative amount mobilised during the current fiscal (April-August) has surged to Rs3,967 crore through 18 issues, from Rs1,140 crore raised via 13 issues during the year-ago period.


During August, four companies, Reliance MediaWorks, Godrej Properties, Kokuyo Camlin and Asahi India Glass Ltd raised Rs1,659 crore through rights issues.


The amount raised through the equity segment during the month included five initial public offerings (IPOs) — GCM Commodity & Derivatives Ltd, VKJ Infradevelopers, Silverpoint Infratech, Kushal Tradelink, Tiger Logistics (India) Ltd — listed on the small and medium exchange (SME) platform.


Market experts said fund raising increased in August over the preceding month and most of the money was garnered through rights issues and only small companies hit the capital market to mop up fresh capital.


Meanwhile, the benchmark S&P BSE Sensex plunged 726 points or 3.75% during the period under review.


“During August 2013, Rs1,726.1 crore was mobilised in the primary market by way of nine issues as compared to Rs747 crore mobilised through three issues in July 2013, an increase of around 131.1% in the previous month,” SEBI said.


During FY2012-13, companies had raked in Rs32,455 crore via the primary market, the lowest since 2008-09 when they had garnered Rs16,220 crore.


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