Decrease EMI Increase ATM, PC to Banks
Learned Finance Minister has tried to show extremely positive picture of state run banks and made all possible efforts to boost up lending in farm and auto sector. He has further stressed that banks should help in creating a culture to promote investment and by reducing EMI, bank should promote auto loan and home loan.
It appears that FM was pleading on behalf of car manufacturing industries and real estate builders and developers. I am unable to understand his logic that the car sale increased from 400 to 1200 just by reducing EMI by an amount of Rs.67. In my opinion, people who buy a car can easily pay Rs. 25 to Rs. 50 more EMI if he can afford buying a car and who can afford average monthly expenses in maintaining a car and who can afford paying for costly petrol per day.
I would rather like to say that role of interest in EMI is totally insignificant in repaying capacity of car buyer or home buyer or in decline of car sale or sale of flats. If a person whose annual income is of Rs.5.00 lacs and more can dream of a car or a home .If he buys a car of Rs.5.00 lacs and avails a loan of Rs.4.00 lacs from a bank repayable in 60 months. His net monthly income comes to Rs.35000 per month after normal deduction on PF, Income tax, Insurances etc. He has to pay at least Rs.5000 per month as rent if his is living in a rented house.
Now he has to pay Rs.6700/ per month as installment (loan is availed free of interest), Rs.600 as insurance of car, Rs.500 as road tax, Rs. 200 pm as misc cost and Rs.2000 p.m as minimum fuel and maintenance cost of car which altogether comes to Rs.10000 per month. If minimum interest of 8 to 9 per cent is charged on loan, the EMI will rise by Rs.1500 per month which means total load per month goes to Rs.11500 out of net salary of Rs.35000 per month. Now if interest rate rise by 3 to 4 percent, EMI loan increases by 500 to 600.Obviously a person who can afford spending Rs.11500 pm on car he can easily afford additional 500 to 600 rupees.
One can imagine the pathetic position of the same person he decides to avail housing loan of Rs.10 lacs to buy a house of Rs. 12 lacs and become ready to pay minimum EMI of Rs. 12000 pm when residual pay for his family expenses will be hardly 7000 to 10000.It is not clear that load of interest is very small compared to load generated by price rise in other essential commodities like food items, education, electricity, petrol etc.
It appears that FM was pleading on behalf of car manufacturing industries and real estate builders and developers. I am unable to understand his logic that the car sale increased from 400 to 1200 just by reducing EMI by an amount of Rs.67. In my opinion, people who buy a car can easily pay Rs. 25 to Rs. 50 more EMI if he can afford buying a car and who can afford average monthly expenses in maintaining a car and who can afford paying for costly petrol per day.
I would rather like to say that role of interest in EMI is totally insignificant in repaying capacity of car buyer or home buyer or in decline of car sale or sale of flats. If a person whose annual income is of Rs.5.00 lacs and more can dream of a car or a home .If he buys a car of Rs.5.00 lacs and avails a loan of Rs.4.00 lacs from a bank repayable in 60 months. His net monthly income comes to Rs.35000 per month after normal deduction on PF, Income tax, Insurances etc. He has to pay at least Rs.5000 per month as rent if his is living in a rented house.
Now he has to pay Rs.6700/ per month as installment (loan is availed free of interest), Rs.600 as insurance of car, Rs.500 as road tax, Rs. 200 pm as misc cost and Rs.2000 p.m as minimum fuel and maintenance cost of car which altogether comes to Rs.10000 per month. If minimum interest of 8 to 9 per cent is charged on loan, the EMI will rise by Rs.1500 per month which means total load per month goes to Rs.11500 out of net salary of Rs.35000 per month. Now if interest rate rise by 3 to 4 percent, EMI loan increases by 500 to 600.Obviously a person who can afford spending Rs.11500 pm on car he can easily afford additional 500 to 600 rupees.
One can imagine the pathetic position of the same person he decides to avail housing loan of Rs.10 lacs to buy a house of Rs. 12 lacs and become ready to pay minimum EMI of Rs. 12000 pm when residual pay for his family expenses will be hardly 7000 to 10000.It is not clear that load of interest is very small compared to load generated by price rise in other essential commodities like food items, education, electricity, petrol etc.
|
|
