y and interest rates to subserve the larger interest of 
making a success of the Centre's borrowing programme.
Over the last two years, the Government has been able to borrow cheap from 
the markets - a facility denied to other parts of the economy that have to 
borrow at stiff lending rates from the banks. 
Banks credit-rate borrowers and only the best get funds - this is perfectly 
logical. They also blindly put in funds into Government floats as they are 
totally risk-free, which again is perfectly sensible. 
Perhaps, in no part of the world is the practice of banking so risk-free as 
in Mera Bharat Mahan, with banks carrying NPAs of well over Rs 52,000 crore. 
The votaries of higher Government spending should not crib as the Centre's 
borrowing programmes have received a huge applause from the banking 
community. And the Centre promptly uses the funds on interest payments, 
defence and subsidies with capital investment getting to be negative. 
Allowing the private sector greater latitude has not curbed the scope of 
public sector capital investment. If it has not taken place, it is because 
even the Government is reluctant to set up power plants which have to offer 
free power to farmers. That is precisely why the private parties are 
insisting on escrow accounts. 
Over the planning period, public sector investment did not believe in 
cost-benefit principles as neck-high taxation levels and subsidies helped to 
hide the inefficiency. That is not possible today. In fact, higher savings of 
the Indian economy are being wasted more by the Government than by anybody 
else; also savings cannot be said to be acting as a restraint to the 
investment process. 
In the urban sector, there is an interest rate dichotomy with New Delhi 
getting easier funds than the corporate world. There is no premium on the 
interest rates for Government inefficiency. The same dichotomy prevails in 
the rural sector with bank funds flow tapering off and informal channels 
busy. Under Indian conditions, higher savings have nowhere to go,