By increase the bank interest rate, the purchasing power of Aam Adami has reduced.I read in one Article that the total Bank Credit is around Rs.175000 crore. out of the above amount only 23000 crores were lend to company listed in stock exchange and remaining were lend to small enterprises and personal loan. this means the additional burden on the small sector and Aam Admi which results is reduction of purchasing power. which means 1% increase in interest rate reduction in purchasing power by 1750 crores and recently the interest rate have gone up by 3-4 % which means reduction in purchasing power by Rs.5250-7000 crores. this will lead to reduction in purchsing of industrial goods and less revenue collection by the govt. and less employment generation.
The system should be such that the lower segment of loan should be given at a lesser rate and higher segment loan should be given at a higher rate of interest. like loan upto 10 lakhs should be given at 2% and from 11-25 lakhs should be given at 5% and from Rs.25-50 lakhs at a 7% and so on. since the big industry can earn the profit due to technological advancetage and the capital employed turnover is more than the small sector. and also the cost of the procurement of raw material etc. are also less which means the cost control can be done by the large industries. if the large industries can not afford to higher interest then they should not be allowed to function.At least in small industries, the employment generation will be more and more and more people will come forward to set up the industries due to low rate of interest.
like wise the tax structure should be designed where the low capital industries should be given more deduction and more tax to big industries. since the big industries can afford to pay more tax on their income.
Now a days, the big industries are earning 2000% some even more why they should be allowed to earn that much.it means their cost is very less and they are taking the advantage of consumers.
their should be a monitoring authority who should monitor the profit of the big industries and in no case they should be allowed to earn more than 100%.
By increasing the interest on bank loan, the hidden agenda of the government becomes visible where the all small industries will be closed due to competition from the big industries and no person will have time to protest due to such a high cost of essential items. if they protest than they will not able to earn money to feed themself for that day. for every day food they will have to work every day other wise to starve.
