Inflation versus growth
Apropos ‘RBI hikes repo rate by 50 bps to 5.9’ (September 30), it should not be construed as an ordinary development that the repo rate has gone up by 190 basis points since May 2022.
Notably, five out of six members voted to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward.
The latest repo rate hike comes as the retail inflation is ruling above the upper tolerance level of 6 per cent and the rupee has been on a declining path.
The RBI has also downgraded the nation’s real GDP growth rate to 7 per cent for FY23. However, the RBI’s moves would add more salt to the wounds of the already overburdened loan seekers, without also ensuring commercial banks simultaneously extend the benefits thereof by appropriately hiking the deposit rates.
The RBI has hinted at inflation remaining on the wrong side of the target for some more time. Given that the global scenario is equally bad, the best approach would be to accept the situation: “What cannot be cured, will have to be endured.” The government and the RBI have been using a host of policy tools to tame inflation.
The post-pandemic global situation and the growth expectations within the country do not augur well for the economy. Still the trust of the market and people in the RBI and the Finance Ministry remains positive, and that is definitely a silver lining.
Apropos the editorial ‘Safety drive’ (September 30), the final comment, ‘Our roads are way too unsafe’, is a telling commentary on the state of affairs regarding road construction and related governance on the part of various participants. Investigation into the Mistry accident has reportedly blamed ‘bad road geometry’.
The particular stretch where the mishap happened seems particularly vulnerable due to suboptimal road architecture/maintenance.
While the focus on enhancing vehicle safety features is welcome in order to reduce fatalities during accidents, the authorities may consider toning up road building, including road design and maintenance, in order to avoid accidents in the first place. In addition, prohibited vehicles entering certain highways and wrong side driving are instances of unsatisfactory governance.
Apropos ‘Pesticide use must be controlled’ (September 30), the rudimentary fact is that the field level farmer is unable to essentially differentiate between a pest and an insect, and to know the harm each of them causes; not all insects are harmful, though. Secondly, the quantum of application is grossly ignored due to the misconception that more the concentration, faster is the remedy, which has its own shortfalls as the pests/insects develop tendency to acquire immunity.
Thirdly, with the market flooded with these derivatives, the perplexed farmer decides on their selection based on the advise of the trader, without bothering to approach the nearest academic institutions or agri department staff. Agri universities must undertake field visits on a regular basis to educate farmers by roping in Krishi Vigyan Kendras and the student community.
Halekere Village, Karnataka