Data tabled in Parliament has established that insurance companies, both public and private, have made windfall profits from farm loan insurance. While instances of farmers committing suicide due to crop failure are escalating, it is shocking to see that that insurance policies are designed to increase the bottom line of the insurers at the cost of farmers. The settlement is one-fifth of the premium collected. The statement that insurance companies are on the learning curve is pathetic. Farmers are being used as guniea pigs to experiment with farm insurance schemes.

When there can be a specific insurance even for a cycle and motor vehicle, denying the farmers specific policies to indemnify their individual loss is biased. Invoking the clause of total crop failure as a prerequisite in the entire revenue district is clearly exploitative. Insurance companies should plough their profits into enhancing schemes such as eNAM.

S Veeraraghavan

Coimbatore

Not peak form yet

This refers to ‘The Buffett indicator is not for India’ by Aarati Krishnan (July 21). The fact is that unlike in India where equity investments are real and are made out of domestic savings, in the US funds are sourced out of debts to invest in capital markets. The methodology adopted for GDP calculation is not the same across all countries.

India has effected a few changes in the measurement of GDP which is now calculated based on market prices instead of factor costs to take into account gross value addition in goods and services as well as indirect taxes. The base year has also been shifted to 2011-12 from 2004-05 earlier. Another anomaly is that the large informal sector isn’t accounted for in GDP calculation which ultimately boosts the existing market cap-GDP ratio. The same goes for foreign portfolio investors who have been pumping money into Indian equity market: this has not been factored in. Hence one feels that Indian stock prices have not yet peaked in terms of valuations.

Srinivasan Velamur

Chennai

The argument that the valuation does not justify corporate earnings ignores the potential earnings of the corporate sector. The present high price earnings are a reflection of the investors, foreign and domestic, in the economy. The stock market is driven by liquidity rather than fundamentals. MFs, ETFs and pension funds are pumping in large amounts in fundamentally strong stocks which have strong balance sheets.

It may be noted that the present boom in the market is not secular but selective. Only companies which are consumer facing and leaders in their sectors are attracting investment. The funds are expressing great faith in the economy as it has smoothly passed two major reforms such as demonetisation and GST.

Philip Sabu

Thrissur, Kerala

Opposition hurdles

This is with reference to ‘Our Maha-inept Opposition’ by Monu Rajan (From the Viewsroom, July 21). A strong opposition is now more necessary as the party in power is led by a determined and dominant prime minister. Unfortunately, we have an opposition only in name. An effective opposition has a people-oriented agenda, a thoughtful strategy to corner the Government on its weaknesses and an energetic leader with widespread acceptance among opposition partners and in the country. Our opposition parties lack leadership at the top. Moreover, the parties which could form the coalition are led by headstrong leaders with prime ministerial ambitions.

YG Chouksey

Pune

Substandard catering

The CAG’s report on food served on Indian Railways is shocking. It appears that hygiene is an alien concept. When passengers pay through the nose for food, why cannot the establishment take care in providing better fare? Even the railway minister has on many occasions warned that stringent action will be initiated against the people concerned if they are found catering substandard food. The report is a wake-up call.

RK Sridharan

Chennai

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