Continued
from the previous post –
Third category is
personal loans. This
category helps only that individual without harming interests of
other.
Out of the thirteen
types of borrowers such as, Shop owners, manufacturers, builders,
contractors and transport are doing business, which generally
benefits society. The gambler group category consists of forward
traders, commission agents, money launderers, black market, gamblers,
speculators and crony borrowers. These are actually burden on the
economy of that society and they are the ones who benefit by lower
rates in interest on loans. The first category borrowers do not
really benefit by reduced interest rates on loans. I shall explain
how in coming part of this essay.
Policy of lowering
of interest rates benefits the gambler group types of borrowers and
personal loans type. All political parties benefit of funds from
these people and so they are always favored by government when
policies on financial activities are finalized. After all, what is
government? It is a team comprising of political parties. Out of the
"Real economic group, most do not really benefit by any
reduction in interest rates. When lower rates are offered, they do
not mind that minute benefit and so keep silent. I shall explain this
point as the topic progresses further. it is observed that if company
management is working efficiently bank interest component remains at
around 4% out of total expenditure but if the company management is
not efficient we notice this components grows to as high as 10%.
Mismanagement in controlling demand/supply ratio could be major
grounds; in addition to that, other wasteful spending may add to
that. We do not have any regulation to decide management efficiency;
if that factor gets importance we can stop unnecessary expenditures
and keep this component at its best level (4%). We
may say that this component can be used to indicate how efficiently
that company works. If it is 4% or less company efficiency could be
best and for every rise in this indicates inefficiency of that
management. These companies
never want to improve their working style and cover up for that they
want to keep bank interest component at lowest level and continue to
demand lower interest rates on their borrowings.
Continues in next
post –
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me on my Email ID given below,
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visit my other blogs
Ashok
Kothare,
http://ashokkotharesblog.blogspot.com/
for stories
I
reckon,
http://kotharesviews.blogspot.com/
for philosophy
You
may visit blog, Ideas
and tips on any subject,
http://kotharay.blogspot.in/
for intelligent discussions.
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