This refers to the edited excerpts from Reserve Bank of India Governor Raghuram G Rajan's speech delivered at the Third Dr Verghese Kurien Memorial Lecture "Who pays for this one-way bet large promoters enjoy?" (Opinion, November 30). At last, someone high up has raised a valid point. Large companies are where netas, too, have investments and hence they need to be protected. In India, one does not know whether industrialists are running politics or politicians are running business. The scam started a long back in the 1970s when a patriarch made equity the darling of the common man. All issues had a "promoters' quota" that was used to butter the powers that be. In the days before demat, promoters renounced shares held in benami names to the high and mighty. That's why over the years we have seen fiscal benefits to equity that are denied to bank interest where the common man invests. Tax-free dividend is just one item. Perhaps Rajan should argue for tax-free bank interest.
Further, large borrowers escape the personal guarantee clause and public sector undertaking (PSU) bank heads with two-year terms care a hoot as to what may happen after a decade. Let PSU loans above a certain amount be treated as revenue dues and see the game change.
T R Ramaswami Mumbai
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