The Hindu Business Line : Unfinished agenda

The article “Unfinished Agenda” (Business Line, May 26) pointed out that the dear money policy being pursued by the RBI for quite some time now is telling upon industrial expansion and growth and, as a result, the Index of Industrial Production may fall again, this time. The government’s effort to persuade manufacturers to keep prices depressed may not work in the long run and is not an enduring solution.

The power sector, for instance, has indeed been a symbol of abject failure. As stated in the article, the government must address the task of bridging the power gap by means of installation of additional and extra capacities and reducing supply bottlenecks, apart from adopting policies that encourage use of alternative energy.

Increasing the production of food-grains and other food items must be given primacy, and creation of a situation of abundance alone can act as preventive for spiralling price rise. Government policies and efforts must focus on creation of abundance. The idea of an ‘evergreen revolution’ mooted by Dr M. S. Swaminathan can be explored further and implemented to ensure food security on an enduring basis.

As rightly stated by article RBI must focus on core inflation, as is being done by the Federal Reserve System in the US. The most important unfinished agenda, the non-implementation of which has come in the way of maintaining growth momentum, is the failure to take up and implement further reforms. Second generation reforms adopted at the right time could have been the booster dose for various sectors of the economy, helping maintain optimism and business confidence.

K. K. Ammannaya Udupi

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