In connection with “Time to mend fences with the US” by Rudra Chaudhuri (June 4), the Obama administration had predicted the political change in India well before the Lok Sabha elections were announced. This is evident from the visit of the US Ambassador to India to Gandhinagar where Nancy Powell met Narendra Modi three months before the elections. Americans know which way the wind is blowing.

Given the importance of strategic, economic and political links with India, the US does not want to antagonise the popularly elected government. The reason for the US’s enthusiasm are the threats to its supremacy emanating from China. Bullying and pressurise tactics won’t go down with the new government.

A Prabaharan

Tiruchirapalli

Walking the tightrope

The balanced move of the RBI has to be appreciated. It has been forced into tightrope walking in an underperforming economy (“Why the RBI decided to go easy” by A Seshan, June 4). The additional funds to be released into the banking system has to be put to good use.

Banks have enough liquidity to fund viable projects, but they are haunted by two factors. First, corporate confidence is below par. Second, rising NPAs drive up bankers’ fears; they may be held accountable. Hence confidence requires a boost. If the RBI can think of paying interest on the CRR held by them, the bottomline of the banks will increase and banks can revisit reduction of interest on advances and enhancing interest on deposits.

S Veeraraghavan

Madurai

Playing safe

This is with reference to “The ball is in the Government’s court” by Ashoak Upadhyay (June 4). In the midst of expectation of a slash in the bank rate, the RBI has again played safe. Of course, the trajectory of the global economy influences our growth especially in exports and imports. Again the Government has to clear pending mega projects, augment private investment, downsize subsidies and tune up public sector performance to bring fiscal discipline.

NR Nagarajan

Sivakasi

Brilliant measures

This is with reference to the editorial ‘Wait and watch’ (June 4). Raghuram Rajan has once again brilliantly devised measures to boost the sluggish economy. The measures are industry as well as retailer friendly. The credit policy also raised the annual overseas investment ceiling for individuals to $125,000 from $75,000. This move will certainly help investors invest more in stocks, mutual funds or real estate abroad.

In another good move, the policy has helped Indians to carry ₹25,000, against the existing ₹15,000, with them while visiting foreign countries. It is a matter of satisfaction that the rupee has stabilised. The policy has been hailed by leading bankers as well the corporate world. However, one hopes the RBI will not hesitate to bring down interest rates if inflation is tamed before the next credit policy. The RBI has done its job scientifically and it is the turn of the government to take the right steps

Jayant Mukherjee

Kolkata

The government can roll out its agenda by clearing stuck projects and making regulations more business friendly. Just making available more money for lending will not help unless the issues with respect to regulations/approvals are addressed. Issues relating to environment clearances/land acquisition have to be cleared.

Sridhar Narasimhan

Email

To mobilise more resources, the finance minister should tax agricultural income. Income is income, whatever its source. A salaried person who earns ₹25,000 a month pays income tax whereas a rich farmer who earns ₹1,00,000 a month does not. Considering the importance of agriculture, more concessions should be granted to the farm sector but it need not be exempted from income-tax.

S Raghunatha Prabhu

Alappuzha

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