India's wholesale price inflation hit a three-month high in March, snapping an easing trend that will give the Reserve Bank of India (RBI) less scope to support the economy amid fresh signs of slowdown. A pick-up in inflation, coupled with a slump in industrial production and merchandise exports and the risk of less-than-normal monsoon rains this summer, calls into question assumptions that the worst is over for Asia's third-largest economy. The wholesale price index (WPI), long regarded as India's main inflation measure, rose a much faster-than-expected 5.70 per cent last month from a year earlier, on higher food, fuel and manufacturing costs. It was the quickest pace since December 2013 and snaps a three-month easing trend. The rise compared with a 5.30 per cent increase forecast by economists in a Reuters poll. In February, wholesale prices, rose 4.68 percent, their slowest pace in nine months. The reading for January WPI inflation was also revised up to 5.17 per cent from 5.05 per cent earlier. Radhika Rao, an economist at DBS Bank reckons the data has raised the odds for a significant jump in consumer price data due at 5:00 p.m. on Tuesday. Retail inflation was expected to have quickened to 8.19 per cent in March from a 25-month low of 8.10 percent a month ago, according to the median forecast of a Reuters poll. That will be a worry for the RBI which aims to bring down retail inflation to 6 percent by January 2016. After raising lending rates three times since last September, the Reserve Bank of India (RBI) left its policy repo rate unchanged at 8 percent this month. "The RBI is likely to stay concerned on the inflation outlook and stick to the tight policy stance," Rao said. "Policy bias will be for further rate hikes in the second half of FY14-15 when the potential El Nino development and impact on southwest monsoon become more apparent." India's 10-year benchmark bond yield jumped 3 basis points to 9.03 per cent after the WPI data. India has been battling a prolonged spell of high inflation and low growth. While economic growth has almost halved to below 5 per cent for the past two years, the worst slowdown for the South Asian nation since the 1980s, retail inflation has been averaging around 10 per cent. A sharper-than-expected cooling in vegetable prices in the past three months had raised hopes of breaking out of that spell. But recent unseasonal hail and heavy rains in parts of the country have damaged crops and driven up food prices again. A continuing slump in investment and consumer demand resulted in a surprise 1.9 per cent annual contraction in industrial output in February, which compared with analysts' median forecast of 0.9 per cent growth. Exports fell for a second straight month in March, widening the trade deficit to a five-month high. El Nino ThreatCompounding growth worries is an uncertain outlook for summer monsoon rains due to a possible El Nino weather event that affects wind patterns and can trigger both floods and drought. Australia's Bureau of Meteorology last week predicted that the chance of an El Nino weather event developing in 2014 now exceeded 70 per cent. A strong El Nino in India would trigger lower production of summer crops such as rice, sugarcane and oilseeds. In 2009, it had turned monsoon rains patchy, leading to the worst drought in nearly four decades which shot annual food inflation up to more than 21 per cent. Such a scenario would further compound the challenges awaiting a new government that takes over in New Delhi after national elections in May. Persistently high inflation has become a feature of the Indian economy in the last five years and is widely expected to haunt the ruling Congress party in the elections which began last week. The opposition Bharatiya Janata Party's leader Narendra Modi, a hot favourite to head the next government, has been relentless in his attack on the ruling alliance over its failure to cool prices, demanding an apology for "cheating" the country. Modi says he will create a price stabilisation fund to combat inflation and set up special courts to try those who hoard goods.(Reuters)
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Economic Affairs Secretary Arvind Mayaram said he hopes policymakers will try to bolster growth with wholesale price index inflation easing to an eight-month low in January.Mayaram said he hopes there will be a "real push" to boost growth in Asia's third largest economy where economic growth has slowed to a decade low of around 5 per cent.Mayaram was responding to queries on whether the Reserve Bank of India's April policy decision will be guided by the recent easing in inflation.India's WPI inflation eased to 5.05 per cent in January, helped by moderating food prices compared with a 5.80 per cent jump forecast by economists in a Reuters poll.(Reuters)
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The direction and pace of policy reforms in India, more than which political party takes control after elections, will have a bearing on the sovereign rating, said Standard and Poor's rating agency on Tuesday (15 April)."An important factor is how fragmented the government will be. The more parties involved in the next coalition government, the more likely policies will be incoherent and less supportive of credit attributes," said Kim Eng Tan, sovereign credit analyst at S&P, in a statement.The world's biggest-ever election is under way in India, Narendra Modi, the prime-ministerial candidate of the Bharatiya Janata Party (BJP), taking on the ailing ruling Congress party and several regional parties.Most surveys predict BJP will win the biggest chunk of seats but fall shy of the halfway mark, forcing them to seek a coalition with the powerful regional parties. Voting runs until May 12 and results are due on May 16.S&P has a BBB- rating on India with a negative outlook and has warned of the risks of a ratings downgrade in the absence of structural reforms, fiscal consolidation and if economic growth decelerates further.(reuters)
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The government has not been able to make contact with 40 Indian construction workers in the Iraqi city of Mosul, with one leading Indian newspaper reporting that they have been kidnapped.Foreign Ministry spokesman Syed Akbaruddin said dozens of Indian workers were living in areas overrun by the Islamic State of Iraq and Syria (ISIS). India is in contact with many of them, including 46 nurses, and has sent a senior envoy to Baghdad to support repatriation efforts."There are also reports which have been brought to the notice of our embassy that there are 40 Indian nationals in Mosul. Despite our best efforts at this stage, we haven't been able to contact them. So they remain uncontactable at this stage," Akbaruddin said.Akbaruddin said the government had no "confirmation or verification" of a story in the Times of India newspaper that the construction workers were being held by suspected ISIS fighters. (Reuters)
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Sriram Iyer was surprised to hear the introduction to the casually dressed Anil Guha. This was the Chief Operating Officer of Trix India! What unusual coincidences life presented. They were at a CII forum on ‘Customer service in the context of the 2000s’ and Guha was the guest speaker on customer systems and service efficiency. When the Q&A session began, Sriram promptly asked, “If a customer encounters a problem twice, what is the system you have to ensure the problem is flagged and thrown up for investigation at the brand level?”“That is an unusual question!” Guha replied, “At Trix, it will get lost in the statistics. The probability is 1 in many thousands; Trix has never had a problem getting repeated.”Sriram: Despite the fact that the same problem has occurred twice, your system rounds it off as ‘not significant’? It does not cease to be a problem. Does it not bother you from an R&D point of view?Guha: No point worrying about something insignificant, so won’t waste my time! ... Next?Sriram was not surprised anymore. This laid back attitude cut across the rank and file at Trix India; his experience had shown him that.Last year, his daughter Ursula received a Trix laptop as a gift from her cousins. One morning, less than two months later, she woke up to find the right side, outer side base plate was totally cracked. Teary eyed, she dragged her father into her room and showed it to him. Sriram was surprised but immediately took it to the Trix service centre (SC). The local manger said, “Yes, it is in warranty. But because it is an external damage it cannot be covered under warranty; You will have to pay Rs 7,000 for the hinge and the entire base plate, which will also need to be changed. Otherwise you cannot open it and if you do so the screen will also crack.” The warranty did say that it would not cover damage due to misuse. Ursula swore she had not dropped or banged the laptop. But her mother suggested she may have been careless. And poor Ursula was most disappointed. She had wept the whole day. Sriram left the laptop at the SC, accepting their verdict that the damage could not have happened without the user being careless. The laptop had to be repaired. But he said to the guy, ‘Be sure it is not the hinge that is at fault. I do not want this to recur.’ In a day, the SC called Sriram and said,“You are lucky the hinge is okay, we are going to change the base plate; your laptop will be ready in four days.” Based on this, the repair cost would be Rs 4,000, the SC guy said.Sriram gave them the go ahead. On Day 6, he called them up and asked, “Is it done? I am coming to Mango Street, I can pick it up.” But the laptop was not ready. The service engineer told him the part had not come. He suggested that Sriram wait for 3-4 days. Several days passed and on Day 11, Sriram went to the SC wanting to know what was going on. The engineer said, “This is a cosmetic part, we don’t carry inventory of these parts. They have to come from Singapore or Hong Kong.”Sriram: Then on what basis did you message me that the laptop was ready? This is a model you are selling currently in India! How long will it take? You give me a date, please! It is part of warranty and already two weeks are gone. We can’t use the laptop. But the service centre blamed the company and said, “We are the franchisees; we can’t do anything about policy.” Sriram then asked to speak to the manager. The manager was called. Sriram recognised him as he coming out of his cabin. This was the same guy he had come to for a problem with a Trix TV last year! When Gulab Rawal came up to him, both caught up in their mind their mutual recognition and discomfiture. “Oh, it’s you, Mr Iyer!”Sriram: Yes, we meet again! I do hope we are not going to see history repeat! But already the symptoms are identical! What is your policy on the matter of laptop parts? You are charging me Rs 4,000, despite being in warranty, on a false assumption that I damaged the laptop. I am paying, but now after telling me the laptop is serviced and ready for delivery, I come here and am told that ‘Oh, parts have to come from Hong Kong’. But nobody can tell me how long that will be? This is so slipshod!Rawal (embarrassed by the attention they were drawing from other customers): I need some time to get back to you. I will put it in the global tracking loop so that once recorded your need will be accessible to all service centres globally. I am sure the chain will access the part faster that way. Sriram’s colleagues at work were also involved in the case. Soon, another contact at Trix Global emerged, through one of his colleagues. This new person said, “Arre, yaar, you should have come to me. But now once you are registered in the global track system, I cannot do anything!”Sriram: What would you have done that these guys cannot?New Contact: I would have told you to register under the global warranty quota. Then, I would have shown it as an ‘outside’ repair, as if a foreigner had come on a two-day visit to India from Hong Kong, suffered a product breakdown, etc., That way, you would even get the service free! Did that mean they had the inventory? wondered Sriram, taken aback. He was slowly seeing the underbelly of Trix and its secret dual policy.After his experience with getting his Trix TV repaired last year, Sriram was not expecting much now from the laptop division. But he felt he must get the area sales manager involved if he must get his laptop back. He obtained the ASM’s number from the SC and called. The ASM informed him blandly that he was aware of Sriram’s case. Sriram: What is the wait time now? It’s already been so many days...No one seems to have an idea! I don’t expect this from Trix!ASM: Look, we are doing our best. If that is not good enough, you are free to go to consumer court!Sriram was taken aback by this unexpected assault. “How dare you talk to me like that?” he yelled, as others in the SC winced. “Of course, I will damn well go to consumer court! But you are not the brand, you are only a paid employee so you can lose your job for abusing the brand, bear in mind!”Others at the SC began to calm him. A furious Sriram walked out. Next morning, the SC manager called Sriram and put a date to when the part would come. Peace returned. The part did come exactly 27 days after they committed and finally the laptop was repaired. Ursula was delighted as Sriram placed the laptop on her table and opened it. Right before his eyes, the laptop cracked in the same spot, in the same pattern, same shape, while he was opening it!He got up and went straight to Mango Street. The manager was away, so a service engineer attended to him. “Give this in for repairs, sir,” he said. “The part will have to be ordered and it will take 27 days....” he rattled off in practised manner.Sriram threw a fit. “This is getting to be a joke. This laptop came from repairs this morning! You need to replace that laptop! ... baat karta hai... What nonsense! Where is the manager?”A fuming Sriram decided he was not going till he met the manager. After two hours, Rawal, the manager arrived. He shot off an e-mail to the head office saying, ‘This should be repaired free of cost’.Sriram: Please tell me, what is the story? Kahaani kya hai?Rawal: Kya bolegaa, sir! They don’t want to listen. We are the service people, we know design defect when we see it. But the company does not agree. It wants customers to pay. Kantaal aa gaya! (Am fed up).Sriram now began to prepare for war. He returned to his office, immensely annoyed over the lost time and the stupid inefficiency of companies that consumers believed in because of their global image. There was already an e-mail from Trix India. It said: The part cannot be replaced free of cost. You will have to pay Rs 7,000.Sriram replied: ‘If you think I am going to fund your experiments with faulty design, you have another think coming. Watch this space...!’But an automated system replied to him, ‘You have not agreed to the estimate. Please pick up your equipment and take it back.’Read Analysis by: Chandan Dang & Rajan Chhibba break-page-breakSriram went to the SC again. He walked right into an angry fight between the SC and another customer. Seeing Sriram, the man said, ‘After warranty I spent Rs 18,000. That computer has not worked for seven months!’ Everyone there was an aggrieved customer. When his turn came, the service manager said, “I am unable to help you. I did what I could. I made the request. I even told ASM to come and see the product problem. But woh nahi aayega... Company has a standard stance on this. They won’t budge.”Sriram: But there are two claims: one, refund of Rs 4,015 because the problem could not be corrected; two, this time the repair should be done free of cost because it is clearly a manufacturing defect or a design defect. I will now take this to the streets if I have to...Rawal: Karo, sir... I hope they see how wrong they are...Nothing happened for a week. Sriram drove to Trix’s office in the far suburbs. At the reception he asked to see the seniormost sales manager on the premises. The reception said if there was a service problem, I should meet the service manager. Back at the Mango Street SC, Sriram waited for 45 minutes, calling all levels of people but nobody came out to meet him. By now furious, Sriram began to shout. He had had enough. Other customers gathered around him and soon they were all sharing issues they had with Trix. The raised voices did not augur well for Trix. Out of nowhere, a slightly senior looking man in blazer emerged and taking Sriram to a corner, he shook his hand. Sriram realised this was the peace corps. So, he said, “What would you do in my place? What would you think of a company that avoids addressing the issue, whose service team is clueless, whose ASM tells you go file a suit in the consumer court...! What would you do? Slightly-Senior Man: You tell me. Sriram: Give it in writing that you won’t repair this!Just then, another man came up and showed the complaint to the senior man on his tablet. Sriram noticed two photos sent by the SC of both panels — the one that broke the first time and the one that broke the second time. And a comment from sales: One-off occurrence. Does not warrant leniency.’ Sriram read that and gagged. “Leniency? You owe it to me, dammit! How about respect?” Sriram was hollering by now. “Is there anybody here who takes responsibility for the brand?” And out emerged another even more senior-looking man. He was the assistant VP of the SC. Apologising as he sprinted towards the lobby area where Sriram was raving and ranting, the new man said, “Sorry, I was in a meeting, simply could not...”Sriram: In a meeting? I have dropped all my work and come here to save a Rs 40,000 laptop. But you don’t worry for a Rs 40,000 crore brand?!The assistant VP, Sumedh Chary, remembered Sriram so well. Sriram’s Trix TV, a wall-mounted model... the SC had taken it for repairs from his residence and as his luck would have it, the service engineer went and lost the bolts that held up the TV. And when Sriram asked, Trix’s SC asked him to pay Rs 6,000 for the bolts! And now Sriram recalled to Chary, “How do you expect me to have any faith in anything you say or do? The last time, your guy was acknowledging that he had lost them, yet you asked me to pay. Do you recall? And what was your plea? That your head office was not approving the cost. How was that my problem, Mr Chary? But you made it my problem!” But the repair itself was a nightmare, Sriram recalled. Four times in 15 weeks he had to take the TV back to the service shop. And even after four attempts, they were unable to fix it. Finally the engineer told him to get the repair done in ‘private’. Frustrated Sriram had dug out an old electric repair chap, Alam bhai, someone who used to repair his transistors and recorders 20 years ago. He fixed the TV for Rs 3,000, including installing in it an original Trix motherboard. But Trix did not replace the bolts!Chary chaffed at the memory and said, “Ok, let me give this my best shot. I need the MDs approval to get this done.” And sure enough, the next morning Sriram was told, “Ok, we will replace it free of cost.”But what about the Rs 4,000 he had paid the first time? Trix did not send a written reply, but a telephonic reply was given to him: That transaction is over. You have paid for it, and that cannot be refunded.’ Sriram pondered on the condition that India was in, where senior management of companies in which society placed great faith, rampantly abused right behaviour . The service staff was where the brand really fought hard to survive. He now recalled Madan Johri, the service engineer, who had said, “We had sent photos of the crack to the main office and told them that it was a design fault.”The front end was saying, Serve the Customer. The back end was saying, Damn the Customer. Madan explained: the moment you book a complaint, a copy of it goes to Trix India, to Trix APAC and to the HO. If anything has to be replaced free of cost, it needs to be approved by Trix India first. The chaps who say ‘Yes’ and ‘No’ are tucked far away into the system and you cannot get access to them. The mindset was becoming clear: the Trix India system was not designed to service individual customers. Is customer service really a service, or is it a profit centre? Is it not a means to enhance a customer’s brand experience? Or is it a live R&D operation funded by the consumer? Given this, is Customer Service a service or a business opportunity? Read Analysis by: Chandan Dang & Rajan Chhibbacasestudymeera@gmail.com (This story was published in BW | Businessworld Issue Dated 05-05-2014)
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The rupee is trading at 62.30/31 versus its close of 62.42/43 on Thursday (13 February).Weak US retail sales data has raised some investors' expectations for a slower reduction in the US Federal Reserve's monetary policy stimulus programme.The rupee is seen moving in a 62.20 to 62.60 range during the session.Local shares up 0.3 per cent and will be watched for cues on foreign fund flows during the session.Wholesale-price inflation data due around noon will also be key for direction.(Reuters)
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Time has come to move from the bravado of campaigning to the serious task of governing which includes all the difficult decisions on labour laws, higher education regulations, changing the Right to Education Act (RTE) from focusing on enrolment to focusing on outcomes, says Manish Sabharwal, co-founder and chairman of TeamLease Services to Rozelle Laha of BW|Businessworld. The fundamental problem in India is not money. What is needed is essentially a more holistic view of the three Es -- education, employment and employability.What are the key points for you in the forthcoming budget?The new government campaigned on jobs, won on jobs and therefore should focus on jobs. The budget should set an agenda for labour reforms, skill development and education reforms.How can the labour laws be best reformed? Which components of the law should be amended on priority?Make labour laws a state subject and let chief ministers decide on labour laws' legislation. Why should we decide from Delhi what needs to be done? Labour reform is a very important component. Labour laws in India are like marriages without divorce. It is very important to have labour law reforms to increase formal employment, so that we can reduce the capital intensity of India’s employment and increase manufacturing jobs. Hundred per cent of net job creations since 1990 have happened in the informal sector.Low wage workers see 48 per cent of their salaries earmarked for PF and ESI. People can’t live on half their salary. The labour law needs to be overhauled.What hurdles do you see in creating a business environment in India? What should be the primary agenda of the Ministry of Entrepreneurship?The regulatory framework makes life very difficult for small entrepreneurs in India. India has a hostile habitat for entrepreneurship. Things like complying with the labour laws and service tax have to be made easier to start a company. A massive simplification and de-regulation is needed. All these definitely won’t happen in the budget. The budget at this stage should focus on infrastructure – soft and hard. Soft infrastructure is the three Es (education, employment and employability). Hard infrastructure is the the Goods and Services Tax (GST), roads and power.The geography of work in India has to change. India has only 35 cities with more than a million people. China has 350 cities. We have six lakh villages, two lakh of those villages have less than 200 people. We need to take people to job and not job to people and hence, changing the geography of work in India is about infrastructure.Sixty per cent of India is already self- employed. The poor cannot afford to be unemployed. They are self employed. The Ministry of Entrepreneurship must be given the mandate to pray to one God, and to do everything to remove the barriers in job creation.What are the challenges in job creation and what are our recommendations for creating more jobs?There is obviously an infrastructure deficit and labour law hurdle in the long run for creation of new businesses. Fifty per cent of Chinese exports come from multinationals who have invested in China. We need to be open to foreign investments because they not only create jobs but train managers and transfer technology. The most important part of foreign investments is not the money they bring in but the management technique and technology they bring which train Indians. We need to think of attracting more FDIs which bring technology and management techniques.Infrastructure reforms, labour law reforms, Apprentices Act reforms, higher education reforms and employment exchange reforms are very important. Last year, the employment exchange has placed only 4 lakh people out of four crore registered jobseekers. We have only three lakh apprentices in India against three million in Germany, 20 million in China and 10 milion in Japan.Is there a need to reform education system?We should have a complete de-regulation of higher education. Higher education regulations confuse university buildings with building universities. A shift towards learning outcomes is needed. The only hurdle when we set up more and more IITs and IIMs is quality faculty. It’s not only more cooks in the kitchen, it’s about the recipe. We need to think about innovation and boldness.RTE should be re-named to right to learning act. Its focus should shift from hardware to learning outcome. Focus should shift from enrolment to learning. unemployability is a bitter problem than unemployment. Focus on learning outcomes than enrolment.
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Trix is a victim of a deep malaise that strikes many durable product brands — the great IT-enabled service fallacy, which is often grounded by big data. Enterprises like Trix set up expensive IT systems mainly with the objective of standardising service response and improving response time. What is often achieved is a lot of live data, but the main use of the data is to drive “service” profits and not customer “happiness”. When Sriram reached Trix’s service centre, his complaint was promptly recorded as yet another statistic; the system checked the service response protocol that said any physical breakage is the customer’s fault and instructed that all such services will be “paid” even though the product was in warranty. It failed to recognise the repeated product failure and had no room for the front line service engineer’s assessment. The service model is clearly designed for maximising service revenue. The result: a very angry customer. What had Trix forgotten? That service is a front-end activity and not a back-end play. Service means responding to the customer through the four Ms — mood of the customer in the most recent context; materiality of customer beyond today’s billing; message to the customer regarding his need first and money commensurate with the actual cost. These would have applied in this case thus: Mood: When Sriram came the second time after the body had cracked right in front him while opening the laptop, the mood at best was “rage”. Rage at the laptop base cracking again and the fact that Trix had cheated by charging him during warranty. His second visit just could not be treated as another call or statistics. Given that the mood was clearly adverse, the dealing mechanism should have altered. Only the front end, represented by the service engineer, can assess and manage the mood. On the contrary, Trix’s IT driven service decision system had disempowered the front end’s ability to manage the “mood”. Materiality: From Trix’s point of view, the materiality lay in the Rs 4,000 it earned as revenue. The front-end team knew that Sriram was a multiple product user, so the client materiality or life-time value was far higher. The complaint should have got flagged as “save a customer”, which is the real material impact on Trix’s business. Message: Trix’s effective message to the customer was that its systems slowed response the first time round. The second time, it conveyed that its processes come first and then the consumer. It conveyed that the staff Sriram was dealing with had no real power to perform. The service engineer saying that “we agree that it’s a product problem but the Trix office is not listening” is very damaging. Money: Trix priced its service as ‘premium’ yet had no means to show it. Consumers respect a fair ‘profit’ but not profiteering. Trix was clearly into profiteering. Sriram should have been told that he was a valued client, but they couldn’t be sure if this was a product problem or a client fault. The customer may need to pay right now but if there was an iota of doubt that it was a product problem, even if the first one on their record, the amount would be refunded! It may be useful to mention that spare part pricing should not lose sight of the part cost versus the original equipment cost. In this case, the part cost was initially quoted as 30 per cent of the new machine cost, within warranty. One always wonders if there should be a discount on part costs during warranty repairs. After all, the aim is to ensure that Trix’s equipment keeps working for at least a year. Also, it seems that while strong IT systems are supposed to improve service response time, in this case, the laptop was non-functional for at least three months of the 12-month warranty period. Did Trix offer to extend the warranty? To start with, Trix should have offered to check if it was a technical fault instead of assuming client fault. Next, it should have got the front end to flag a regular Trix customer. It should have proactively kept the customer posted. When the second complaint came, it should have offered to either replace the machine or refund the first Rs 4,000. It did neither. Chances are that it lost more than a few thousand rupees. Given the circumstances, one can safely predict that Trix will soon be consigned to the dustbin of history if it fails to realise that its service is a fallacy and that it is destroying the brand. The writer is the MD, Intrim Business Associates, a global management consulting firm (This story was published in BW | Businessworld Issue Dated 05-05-2014)
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Reserve Bank of India Governor Raghuram Rajan said a moderation in the minimum support prices for agricultural products would help curb inflation in the country."Inadequate" or "inappropriate" price adjustments in these areas will mean the central bank has to bear a bigger burden to combat inflation, Rajan said at an industry event on Thursday (13 February).The annual consumer price inflation eased more than expected to a 24-month low of 8.79 per cent in January, helped by moderating food prices, government data showed on Wednesday.(Reuters)
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The Election Commission has asked the government not to implement a Rs 2,600 crore scheme to provide a moratorium on interest payments on the education loans of 9 lakh students until the elections are completed. The interest-waiver scheme can be implemented by the Finance Ministry after the election process, sources said. It also asked the ministry to ensure that no publicity of the scheme is made during the election period, sources added. Voting in the Lok Sabha elections is scheduled to end on May 12 and counting will be taken up on May 16. In the February 17 interim Budget, Finance Minister P Chidambaram announced the waiver of interest on education loans taken before March 2009 that were outstanding at the end of December 2013. "Since interest concession is being given to borrowers (who have availed of loans) after April 1, 2009, what we are saying is if there is any outstanding interest on the loan you took as on December 31, 2013, I am willing to take over the interest burden," the Finance Minister had said. "Our calculations show Rs 2,600 crore is the outstanding interest as on December 31, 2013. We are wiping out that burden from the shoulders of families, we are taking over the burden. This is huge relief to 9 lakh families," he had said. However, borrowers are required to pay regular interest after January 1, 2014. As per the announcement, Rs 2,600 crore was transferred to the designated Central Scheme for Interest Subsidy (CSIS) banker Canara Bank. At the end of December 2013, public sector banks had 25,70,254 student loan accounts and the amount outstanding was Rs 57,700 crore. In the 2009-10 Budget, the government had announced the CSIS in respect of education loans disbursed after April 1, 2009, under which the government took over the burden of interest for the duration of the period of study and a little beyond. (PTI)
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