Dodging the Dodgy
Looks like Bengal chief minister Mamata Banerjee is spending sleepless nights thinking up ways and means to combat the chit fund menace in the state. After announcing plans to levy an additional 10 percent tax on tobacco products to raise money for a relief fund for the victims of dodgy chit funds, she has come up with another idea. Possibly to counter possibilities of Ponzi schemes from raising their ugly heads again—they have a history of doing that time and again—she said that she was thinking about setting up a “social security scheme” for small savers. This, she hoped, would address the need for a “safe and secure” investment option for the rural and poor people who did not have large sums of money to afford banks. She did, however, point out that the government scheme would not be able to afford the high returns or interest rates that the chit funds promised. But then, if even the principal amount isn’t coming back—as in the case of Sharadha—what difference does it make if the returns they offered were high or low?