My View on "Contingent liabilities of states a cause for conce...":
The suggestions are worthy of immediate attention by the GoI. It is also desirable to consider either a separate legislation or as part of the overall legislative reform of financial sector, that all the State Governments be barred from either announcing or implementing the write-off of loans issued by the banks for any category. Even Government of India shall indulge in this compulsive act only under extraordinary circumstances of severe natural calamities affecting various parts of the country from out of a separate Calamity Relief Fund to be set up with participation from the State Governments, NABARD, commercial banks and Insurance Companies. What is uninsurable alone should qualify for such waiver that should be approved by the Parliament. Several State Governments in their annual Budgets should clearly spell out specifically such write-off amounts issued under a guarantee mechanism or public borrowing facility.
- Dr.Yerram Raju
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