Srinagar Jan 25: Peoples Democratic Party (PDP) today said   that the justification offered by the state finance minister to the decision to ‘drop’ J&K Bank as the Bankers was an attempt to mislead the public opinion ‘on a brazen sell  out’ of state interests.
In a statement issued here today, the   former deputy chief Minister Muzaffar Hussein Baig alleged that Rather’s statement exposes more of the government’s negative intentions and inefficient performance than it is able to cover up the conspiracy against a people who have historically been at the receiving end of the NC’s tricks.
Baig questioned “If there is financial indiscipline in the state government, as Rather sahib has acknowledged and cited as the main reason behind handing over all banking operations to RBI after divesting our own institution the J K Bank of this prime responsibility, why should we be punishing our premier financial institution instead of disciplining the expenditure?” He said “this strange argument is an eloquent commentary at the government’s inability to improve its performance, curtail its own waywardness and extravagance and NC’s propensity to escape responsibility at any cost while sticking on to power”.
The former finance minister said it would have been more dignified for the government to admit that the present coalition in absence of a common minimum program had made the state ungovernable as it was being steered in different directions with every element in it pursuing an individual agenda. And it was unfortunate that the party which swears by autonomy and has been fooling people at every juncture had thought of outsourcing the entire fiscal system at a huge cost to state’s dignity and options while abandoning its routine duty of internal fiscal management he said adding only a party like the NC could treat public understanding of issues with such contempt.He said in fact the political waywardness of the Omar Abdullah government is at the root of the fiscal disaster that it projects now as a reason for the latest sell out.
Maintaining that the shift from J&K Bank to RBI was primarily a part of the process that NC had led in divesting the state of all its economic strength, whether that was water or power projects or now the premier Bank, there was hardly any convincing merit even in the detail that the finance minister presented at his press conference.  He said J&K state will not benefit from the interest payment to financial institutions for clearing the Rs 1300 crore overdraft from J&K Bank as the interest, which would prior to this new arrangement go to J&K Bank and its growth, will now go to outside financial institutions. How can Rather expect the people to be so naive as not to understand this small arithmetic, Baig wondered. He said the argument that over Rs 300 crore would go in interest to J&K Bank and therefore the RBI arrangement would save it did not hold much water as most of the profit earned by the Bank would come back to the government itself in the shape of dividend.
Pointing out the disturbing downward trend in the shares of JK Bank ever since the first hint of state government dispensing its services in favor of the RBI, Baig said the whole process had been presented as if the Bank had been involved in some underhand business or an immoral relation with the state government. “We are seriously concerned about this situation and would want the government to reverse its decision unless it wanted to enfeeble the bank to a level where its takeover would look normal” Baig said.
The former deputy chief minister said with RBI's hike of interest rates today and the industry's expression of concern over this move, J&K Bank is quite likely going to find it harder to lend its extra liquidity. “We hope that the worst fears don’t come true and profitability of the bank is not compromised, but it is clear that the government has exposed its own company to unfair competition while any loss to it would in fact be a loss to the state government also as its majority stake holder”, he observed .

Lastupdate on : Tue, 25 Jan 2011 21:30:00 Makkah time
Lastupdate on : Tue, 25 Jan 2011 18:30:00 GMT
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