Rate hikes alone won’t do

The bimonthly Monetary Policy announced by the RBI continues to be hawkish. The inflation projection continues to be at 6.7 per cent, far above the comfortable level of 6 per cent. The overall inference one gets from the policy is that the RBI alone cannot contain inflation and ensure GDP growth unless the fiscal policy is in tune with the monetary policy measures and there is total coordination between the government and the RBI.

The assurance that the RBI would initiate all measures to keep the expected inflation targets of the MPC is encouraging, though. The emphasis that global interconnectedness is also a matter to be factored in to contain inflation and ensure growth highlights the RBI’s limitations in inflation control.

TV Gopalakrishnan

Bengaluru

Stubborn inflation

The RBI has raised the repo rate by 35 bps more in hope than design, when it is evident that inflation trend is unforgiving.

For a while now, the classic tenet that lower interest rates and injection of liquidity will fight stagnation, and raising policy rates and banks’ cash-reserve ratios stifle inflation, is being belied. Central banks’ policy of liquidity flooding has unfortunately failed to jump-start economies and create more jobs.

High inflation now forces them to feverishly hike rates.

Global finance is ever piloted by investors to its highest use and hence growth, per se, possesses greater ability to drive direction and density of money flow, less through monetary policy prescriptions.

R Narayanan

Navi Mumbai

Fresh capex

This refers to ‘India Inc can step up investment’ (December 7). A few months ago, Finance Minister Nirmala Sitharaman invoked Hanuman in the context of Indian Inc’s capabilities. First-half data are encouraging. If capacity utilisation is close to 75 per cent, then Indian companies can start contemplating fresh capex investment.

Through the PLI scheme, the government has provided a good platform to many companies to start investing which, in turn, will help in both employment generation and GDP growth.

Bal Govind

Noida

Reining in BigTech

This refers to ‘House panel moots ex-ante regulation of BigTech’ (December 7). While this is a step in the right direction, limiting the application of regulations to certain digital platforms only may be discriminatory. Any anti-competitive practice regulation should be applicable to all the players. Under the proposed framework, the gatekeepers are to ensure that the end-users should be able to uninstall the pre-installed core platform services. Instead, the regulation may prohibit the pre-installation of any software by default, alongside the operating system, as such pre-installation militates against competition and gives an inherent edge to the installer.

Kosaraju Chandramouli

Hyderabad

Philanthropy list

This is with reference to ‘Adani among 3 Indians on Forbes Asia Heroes of Philanthropy list’ (December 7).

If India’s super-rich donates a part of their wealth to charity, we can have a better world as millions of Indians are poor, sick, hungry and uneducated. However, to give to charity one need not be super-rich. Many of us can afford to give at least a small part our earnings to charity.

Veena Shenoy

Thane

comment COMMENT NOW