Opinion 1873 affairs

There are a few historians in North Block. So it is doubtful that financial sector policy-makers will be familiar with a murder case that rocked Kolkata in 1873. Sixteen-year-old Elokeshi was married to Nabin. Elokeshi lived in a village while Nabin lived in Kolkata. And there was a mohant (head-priest) in a temple in Tarakeshwar. On the pretext of treating her (Elokeshi was expecting),the mohant seduced and raped Elokeshi. Learning about this,Nabin murdered her. At the trial,Nabin was sentenced to life imprisonment and the mohant got three years of RI (rigorous imprisonment). The episode spawned an industry in Bengal,with Kalighat paintings,wood-cuts,prints and plays. Swati Chattopadhyay’s book (“Representing Calcutta”) mentions 19 plays based on this affair and these rejuvenated the Bengali stage. Several historians have analysed popular reaction to this affair. Such cases of seduction (and perhaps even murder) still occur in India. But do we react to them in the same way and has India changed since 1873? Not really. Otherwise,in discussions on small savings,we would have questioned the relevance of the Government Savings Bank Act of 1873,from which we derive our present system of administered interest rates on small savings.

Perhaps UPA-II has learnt its lesson from UPA-I. “Now the Government proposes to amend the National Savings Bank Act (sic),1873 to transfer the savings schemes to banks and other financial institutions. Such a move will adversely affect the Postal Department.” This is R Kamaraj of AIADMK,reacting to 2004-05 budget. Shri Kamaraj was concerned about postal department’s revenue (it would lose commissions) if such a move was undertaken. Actually,the 2004-05 budget had no such proposal. After stating that “I believe that all interest rates should be aligned to the market”,the Finance Minister left all administered interest rates on small savings unchanged. It is some kind of indictment that many reform proposals mentioned in UPA-I’s first budget are now floating around for possible inclusion in UPA-II’s first budget. What are we contemplating on small savings? Sure,guaranteed interest rates on small savings force banks to compete in attracting deposits and lead to higher lending rates. That’s plain common sense. Is UPA-II’s intention only to reduce that rate by 0.5 per cent from the present rate (unchanged since 2003) of 8 per cent? Or is UPA-II’s intention to scrap the administered regime entirely and repeal the 1873 legislation? The latter is reform. It is impossible to accept the former as reform.