Banks are now offering 6% on savings accounts, more than what a liquid fund would, on an average
With the deregulation of savings interest rates, it has become even more evident that liquid funds of mutual funds are not meant for retail investors. Usually companies (which do not earn any money by keeping their money in current accounts), and high net-worth individuals (HNIs) invest in liquid funds. Retail investors are still averse to parking their money in such funds. They prefer savings bank accounts.
After the recent deregulation of interest rates, banks are supposed to now offer 5.5% for deposits up to Rs100,000 and 6% above Rs100,000. This makes liquid funds unattractive for retail investors—because most often liquid funds earn between 4%-6%.
The biggest plus that a savings bank deposit has over a liquid mutual fund scheme (short-term) is that people don’t have to take the trouble of selecting the right scheme and go through the cumbersome paperwork imposed by the market regulator. Bank deposits fetch a uniform rate of interest and, after the recent diktat of the Reserve Bank of India (RBI), interest is calculated in a manner friendly to the depositors. On the other hand, there are dozens of liquid funds and you have to choose which one to invest in and their performance can vary widely depending on interest-rate movements.
If you are not on the right side of the market trend, your returns are not going to be more than 6% which your savings account now guarantees you. Your money is totally at the mercy of the short-term demand and supply of money. On several occasions, returns from liquid schemes fetch you lower than 6%.
Liquid- and money-market funds allow the crucial liquidity advantage to corporate investors to park their surplus cash for the short term. Their short-term cash is normally lying in a current account which fetches them no interest. Liquid funds are ideal for them. This is evident from the fact that corporates and other institutions account for nearly 90% of the total assets under management (AUM) in liquid- and money-market funds. For retail investors, liquid funds have just become irrelevant against a guaranteed 6% in savings bank accounts.
An email falsely claiming to have been written by a renowned doctor and Padma Bhushan awardee titled “How Indian Doctors Loot Patients” has gone viral on the internet—is it because there is a lot of truth in what it says?
An email titled “How Indian Doctors Loot Patients” is bound to grab attention. After all, each one of us is grappling with soaring medical costs and shortage of high quality healthcare facilities. But what catches your attention even more is the claim that this mail is written by highly reputed Professor Dr BM Hegde (www.bmhegde.com).
Dr Hegde, a Padma Bhushan awardee and the former Vice Chancellor of Manipal University at Mangalore and Editor-in-Chief of The Journal of the Science of Healing Outcomes, has a string of degrees to his credit (MD, FRCP, FRCPE, FRCPG, FRCPI, FACC and FAMS). Dr Hegde vehemently denies having anything to do with the email—but to understand why the email was sent under his name, there are a few factors to consider.
The email, claiming to be based on “observations either completely or partially true”, exposes numerous ways in which a cozy system of referrals and pass-backs is looting patients. For instance it says (this is an edited version):
* Many doctors get a 40%-60% kickback for prescribing various pathology, radiology tests, X-rays, MRIs etc from the laboratories. Often, this income is more than consulting fees charged.
* Many doctors and GPs get a 30%-40% pass-back for referring patients to consultants, specialists & surgeons.
* Many doctors get 30%-40% of total hospital charges when they recommend hospitalisation. Even private nursing homes pay and this includes the charges for ICU, bed, nursing care, surgery.
* Many doctors prescribe what are called ‘Sink Tests’—i.e., tests that are simply not needed and merely inflate bills and earn commission from the laboratories. These are usually pathology tests where samples (of blood, urine etc) collected are simply thrown into the sink.
* Many doctors admit patients to hospital for “keeping (them) under observation”, if they complain of being unwell; they do this even when fully aware that the patient is “safe”. These ‘safe’ patients are put on a saline drip with mild sedation, and sent home after 3-4 days after charging them a fat amount for ICU, bed charges, visiting doctors’ fees.
* Some ICUs do not even have the necessary intensive care equipment. Only “safe patients” are admitted to these ICUs (usually part of private nursing homes where the doctor-owner is a call away), while those who require genuine emergency care are usually referred to hospitals that have proper ICUs.
* Some doctors are known to perform unnecessary Caesarean surgeries and hysterectomies to keep the cash register ringing.
* Cosmetic surgery is advertised through newspapers making them appear as easy as facials and waxing. The Indian Medical Council has strict rules against such misrepresentation. But nobody is interested in taking action.
* Even doctors in prestigious hospitals find ways to provide indirect kickbacks since there is a give-and-take involved. If a doctor fails to refer a certain number of patients he is quietly dumped—so he admits patients even when there is no need.
*The most reprehensible is the claim of "Emergency Surgery" that is apparently performed on dead bodies by some hospitals. The email says, “If a surgeon hurriedly wheels your patient from the ICU to the operation theatre, refuses to let you inside and gets you to sign a consent form for “an emergency operation to save his life”, your patient may already be dead. The “emergency operation” is for inflating the bill and you are allowed to claim the body only after paying added charges for the operating theatre, surgeons’ fees etc.
* The email says young surgeons who have heavy education loans to pay back and also need to build a reputation tend to recommend surgery more easily. To them, “every case seems fit for cutting. But with age, experience and prosperity, many surgeons lose their taste for cutting, and stop recommending operations”.
* Finally, it says, to a man with a hammer, every problem looks like a nail. So surgeons like to solve medical problems by cutting, just as physicians first seek solutions with drugs. So, if you take your medical problem to a surgeon first, the chances are that you will unnecessarily end up on the operation table. Instead, please go to an ordinary GP first.
The startling contents strike a chord with almost every reader and their explosive nature make it clear why the writer needed to attach a renowned name to the claims. We wrote to Dr Hegde to verify whether he had indeed written this email, especially since some doctors had congratulated him for his boldness. When Dr Hegde denied it, we did a Google search to try and track the origin of the email—it goes back many months and has been posted on numerous blogs and has gathered supporting messages and congratulations as it circulated through email forwards. Sadly for this highly revered profession, the most people seem to think that too many doctors in India have forgotten the Hippocratic Oath they take swearing to practice medicine ethically (see http://en.wikipedia.org/wiki/Hippocratic_Oath) —to them, medicine has turned into a lucrative business.
Our attempt to trace the origin of this email only revealed more dubious practices. Many doctors told us that the contents are certainly true. A family of doctors which runs a small private hospital tells Moneylife that refusing to play ball with this dubious system earns them constant opprobrium from colleagues in the fraternity.
The sister of a skin specialist tells us how she is disgusted to see him filling out envelopes with passbacks for referrals every weekend. He insists it is an “accepted market practice” and his practice will vanish if he doesn’t fall in line.
A communications expert connected with a large heart hospital tells us that surgeons get a passback on every valve used in heart surgery—he further adds that the passback is heftier for the more expensive imported valves even though the quality is almost the same. The doctor helpfully gives the patient a choice instead of making a recommendation—needless to say, those who can afford it take the expensive option —nobody knows that the doctor is a beneficiary.
The list of such malpractices to downright cheating and fraud is apparently long—and frightening—and the Indian Medical Council is doing nothing.
Nine MPs across party lines occupy different properties as compared to the land allotted to them. The Lok Sabha Speaker—who oversees government appointment— had not handed over a bungalow even after she was allotted another one after her appointment in her current position in 2009. This information was unearthed after RTI activist Subhash Chandra Agrawal filed an application
Eight former and one sitting Parliamentarians are not only occupying government bungalows after losing entitlement, but are not even paying nominal rent which is mandatory for staying there. Moreover, the Speaker of the Lok Sabha, Meira Kumar, has not handed over a bungalow even after she was allotted another one after her appointment in her current position in 2009.
The information has been revealed by RTI (Right to Information) activist Subhash Chandra Agrawal through an application to the directorate of estates at the Ministry of Urban Development.
The six former Parliamentarians who have defaulted on the rent are: Ram Deo Bhandari, Sangita Kumari Singhdeo, G Venkataswamy, Devwrat Singh, Jagdish Tytler, the family of late Krishan Lal Balmiki and sitting MP YSR Jagan Mohan Reddy. Ajay Singh Chautala and Gireesh Kumar Sanghi have not defaulted but occupy unauthorised bungalows.
The biggest defaulter is G Venkataswamy, who owes Rs29 lakh; followed by Mr Tytler who owes Rs 19lakh as on 30 September 2011. Both their allotments were cancelled on 18th June 2009.
Mr Agrawal has also accessed information of land being allotted to various political parties for their office buildings. However, the addresses of AICC, BJP, CPI and Samajwadi Party do not match those which feature in a statement issued by the directorate of estates titled ‘Accommodation attached to various political parties and dues against them.’ This statement shows four properties attached to AICC, two with BJP and one for Samajwadi Party and CPI each.
The details of the dues (as on June 2011) against some accommodations are: BJP at 14, Pandit Panth Marg has outstanding dues from April 2009; Nationalist Congress Party at 10, Dr BD Marg from September 2010 to June 2011; CPI at AB-4 Purana Qila Road from July 2010 and president of Bahujan Samaj Party at 4,GRG Road from January 2011.
The Speaker of the Lok Sabha supervises the accommodation facilities allotted to the members. But Ms Meira Kumar herself quoted controversy about a year ago by not handing over the bungalow whose allotment was cancelled in 2009. Incidentally, that same bungalow now houses ‘Babu Jagjivan Ram Memorial’; named after her father and former Parliamentarian—and also has a statue of him.
The reply to Mr Agrawal’s letter says, “The bungalow No. 6, KM Marg was allotted to Smt Meira Kumar, the then Union Minister of Social Justice and Empowerment, on 04.06.2004. However, she did not occupy the same. Subsequently, on her becoming the Speaker, she was allotted bungalow No. 20 Akbar Road on 06.07.2009. The bungalow No.6, KM Marg, has not been allotted to anyone thereafter.”
In his reply, the director of estates says that there are no rules pertaining to how long a government bungalow can stay vacant. On being asked about the vacation certificate of bungalow No.6, a central public works department (CPWD) has declared, “No action in this regard can be taken by CPWD unless the bungalow is vacated by the honourable Member of Parliament.”