Letters to the Editor dated June 27, 2022

George Verghese 4772 | Updated on: Jun 27, 2022

Commodity futures

This refers to ‘Bring back futures trading in oils, pulses’ (June 27). Derivative contracts are mainly meant to insulate holders from price risk. Due to the ongoing Russia-Ukraine war the prices of vegetable oil and various metals have skyrocketed, putting immense pressure on wholesale traders. With no solution for the war in sight, rising commodity prices are expected to get cascaded to the CPI space, leading to a spurt in price/inflation.

Under such a volatile situation, traders are expected to take refuge in various derivative products to insulate themselves from price risk. When this option is available to products like currencies, commodities, etc., continuing with a derivative ban on selective food items of daily consumption like crude palm oil, wheat, rice,  chana, etc., is inexplicable. Hedging would pose an upside risk only when not backed by underlying assets, leading to speculators trying to bet against price movements to profit. But the selective food items facing a ban are all genuine trade transactions exposed to price risk during such uncertain times. It is time the government revokes the ban on futures trading on mass consumption items like oils and pulses.

Srinivasan Velamur

Chennai

GST and insurance premia

It is unfortunate that the GST Council has not taken into consideration lowering of life and health insurance premia by reducing the GST component on them. Their argument that the amount of cover/claims has increased enormously over a period of time, especially due to the pandemic effect, is no doubt valid, but then it is the duty of the Central Government to absorb some amount of GST to help insurers during these critical times.

The Centre has many sources to raise credit, to offset losses or for running the government machinery. Insurers, on the other hand, are mostly middle class people and retirees with limited sources of borrowings.

Katuru Durga Prasad Rao

Hyderabad

Population control

Human population is projected to touch 9.8 billion by 2050 and 11.2 billion by 2100. In the 1970s, China enforced a one-child fiat and India launched a sterilisation campaign that often bordered on ruthless programmes. Africa is in similar quandary. These are nations with a bulging human load, which is putting immense stress on food and health security.

Western nations being far less populous and enjoy relative affluence. Their governments are thus not only more liberal in their policies on family size but as much on the rights of women. The recent judgment of the US Supreme Court on criminalising abortion, runs counter to a Western societal paradigm that has taken deep roots. The US is caught between conservative religious prescriptions and the enlarging space for female empowerment — social, economic and political.

R Narayanan

Navi Mumbai

Addressing the power crisis

The article ‘Challenges that come with energy transition’ (June 27) has rightly focused on the hurdles faced by the coal industry and the government in balancing the demand and supply of power. India is next only to China in the consumption and import of coal. Coal powers 70 per cent of the country’s electricity. India is poised to achieve 175 GW of renewable capacity, including 100GW of solar power, by 2022.

Currently, the economy is caught between a coal linked power crisis and the oil price rise. The ongoing Ukraine-Russia war is only part of the problem. Almost all sectors of the economy returning to normalcy, summer heat, and hurdles to the movement of coal to power generating companies have also contributed to the current complex situation. India needs to phase out coal based power plants and decommission old plants as spelt out in the Glasgow summit.

Various alternatives such as extensive usage of ethanol blended fuel and blending of imported coal to ramp up power production do exist. However, the need of the hour is to consider innovative market reforms to incentivise renewable energy.

RV Baskaran

Chennai

Celebrity endorsements

This refers to ‘Cracking the whip on brands and celeb endorsers’ (June 27). India is a country where celebrities, especially cricketers and cine stars, are treated as demigods. Hence they get endorsements for various products running into crores of rupees.

Celebrities should market only those products which are good for the country/youth and refuse to endorse junk food, aerated drinks, and other harmful products. One of the main reasons for the popularity of junk food like noodles/pizzas and beverages high on sugar content is due to promotion of these by our film stars and sportspersons. Instead, the celebrities should encourage the youth to participate in nation-building, do away with tobacco/smoking/drinking liquor, conserve water, etc. Also, they should also actively promote the government’s flagship programmes.

Veena Shenoy

Thane

Published on June 27, 2022
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