The Hindu Business Line : Reforms that create assets

This refers to the article `Drop in net financial savings of households' (Business Line, September 5), which is a cause for concern, especially when coupled with the fact that household financial liabilities have increased by 65 per cent. By contrast the country's financial savings is a paltry 9.9 of its GDP.

The aggregate household savings is a national asset and the present decline cannot be due to people turning away from banks in the wake of falling interest rates. Economic reforms purely based on the rise of consumerism sans production will only create financial chaos in the country.

The advice of the Prime Minister, Dr Manmohan Singh, to invest more in financial assets could not have come at a more crucial time.

No doubt, it sounds a clear warning signal to the supporters of `anywhere going reforms theory'.

The apex bank should advise the government appropriately to give a thrust to the reforms, useful to society and not just for the sake of forming reforms.

C. P. Velayudhan Nair

Kochi

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