This is with reference to the editorial “Pausing on the rate cuts” and the article “RBI does well to do nothing” ( Business Line ,June 18). Both have stressed the fact that there will be nothing worthwhile if the RBI cuts rates.

The growing current account deficit caused by the sliding rupee and the import bill on oil and gold are the biggest hurdles.

With increasing urbanisation, it is the lowering of loan rates that will enable farmers to continue cultivation. What will also keep them going are hopes of a good monsoon and flow of foreign capital which is fast drying up. Hence, pressing the pause button on rate cuts is rational. The way forward is to rein in inflation and bring in reforms. But can this be done by a Government concentrating on the upcoming election?

N. Nagarajan

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Bring gold to the fore

This refers to “As gold imports spurt, Chidambaram reiterates need to curb consumption” ( Business Line , June 18). As regards coal and oil, the recognition that increase in domestic production is imperative and depends on setting right the priorities and having a long-term policy perspective is most welcome.

The problem of uneasy levels of gold import may need approaches different from increase in import duties or exhortations to reduce consumption. Unlike oil and coal, India has a huge domestic stock of gold which is ‘underground’ in the form of stocks with organisations and individuals.

The Government and the RBI should assess the exploitable part in this stock and take proactive measures to bring that to the mainstream gold stock.

This may need joint efforts by the Central and State governments, and there is no reason why a consensus cannot be arrived at to handle this. Standardising the gold stock with institutions could be the first step.

Having a National Registry to keep track of present domestic stock and further accumulation could follow.

M. G. Warrier

Mumbai

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