Think long-term

This refers to your edit, “Rites of passage” (August 7). Why should we facilitate benefits to some Indian promoters by allowing only 49 per cent FDI in insurance? When we allow FDI we should do it for the full 100 per cent. The present system helps promoters, not consumers.

We need to have confidence in ourselves. Look at LIC and Maruti, the former wholly Indian and the latter with foreign collaboration and heavy foreign competition. If we allow 100 per cent FDI in retail, the consumers will benefit, not the promoters. Let the Indian and foreign businesses slug it out in the marketplace. When Indian promoters cannot compete with the Walmarts of the world we should not help them. Blaming politicians for not taking the right economic decisions is insane.

CR Arun

Email

This is nothing but opportunistic politics at its worst. When a party that initiated the increase in FDI in insurance opposes it for the sake of it, it is unfortunate. The Congress should realise that tactics like these will not help in long run. Especially if it obstructs proceedings in Parliament.

Bal Govind

Noida

High inflation is detrimental for sure, but it’s not clear if the high interest rates have actually brought inflation under control in the current circumstances, since the inflation we face is cost-push inflation. The problem faced by the common man is that while inflation is ruling high due to the erratic monsoon and global phenomena, his income is curtailed by lack of growth, as high interest rates are keeping economic growth down.

While the Government is trying to take steps to revive the economy, high interests may stop corporates from borrowing to invest in capex. Even if they borrow, they will pass on the cost to consumers. This will hit consumers adversely, fuel inflation and also subdue demand because the consumer may not want to pay more. It’s a vicious cycle and the RBI’s hawkish stance doesn’t help.

Sridhar Narasimhan

Email

Raghuram Rajan says we have to bring down inflation to attain sustainable growth. To bring down inflation, savings in fixed income should be encouraged by giving higher rates of interest. Higher inflation also means currency depreciation relative to the rest of the world; that too can cause inflationary pressures. It is the cost of capital that retards investments.

Wilful defaulters should be prevented from accessing all kinds of funds. Also, non-cooperative defaulters are a financial risk. They use the law to their advantage when banks move against them. So, costs should be increased from a financial stability perspective.

TV Jayaprakash

Palakkad, Kerala

Push for growth

This is with reference to the article, “Not by small banks alone” by TB Kapali (August 7). The RBI has issued draft guidelines for the establishment of small banks primarily to push financial inclusion. Financial literacy will largely push growth, which can be made possible by expanding banking services to rural households. This is possible with small banks and local area concepts. NBFCs and other co-operative institutions also have to think of converting their activities within the meaning of small banks. Too many unregulated financial intermediary institutions will cause huge losses to the economy. Only banks under the supervision of the RBI that will prevent money-laundering.

Ravindranath Shetty

Mangalore

Waiting to be discovered

This refers to the critical and objective analysis on e-commerce by R Srinivasan. “Time to bury the ownership issue” (August 7). The phenomenal success of Flipkart is an eye-opener. As rightly pointed out, food retail is a totally unexplored sector in e-commerce and it is high time some imaginative entrepreneurs took it up. It is also heartening to note that Ratan Tata is actively thinking of investing in this sector. Though not in the food sector directly, the Tata arms (Tata Chemicals and Rallis India) have much to do with agriculture and food.

KP Prabhakaran Nair

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