That the CPI inflation has skyrocketed to 7 per cent in August after easing a tad in July should serve as a wake-up call for the RBI not to lower its guard against the growing inflationary pressures in the economy. While unleashing a slew of measures to rein-in inflation, the RBI has its task cut out to ensure it does not derail growth.

With inflation largely driven by supply side factors, the RBI needs to adopt a pragmatic approach when it comes to increasing the interest rates.

M Jeyaram

Sholavandan (TN)

Growth-inflation conundrum

With reference to the Editorial ‘Resilient monster’ (September 14), the challenges for the Monetary Policy Committee are high inflation and the need to accelerate growth. It is unwise to forsake growth to rein in the inflation rate within the RBI’s targeted band stipulated. While credit demand from all segments is rising due to economic activity rebounding, any hike in the policy rate transmitted through the lending rates will dampen investments and capital formation.

However, the credit expansion by lenders continues to be strictly in line with the regulations of the banking regulator to optimise the capacity utilisation of the capital employed and to minimise non-performing assets.

A review of the food procurement policy and foodgrain stocks, besides regulating/stopping the export of grains is paramount. The supplies of vegetables, foodgrains and other essentials of day-to-day life must be rapid and uninterrupted to curtail scarcity.

The MPC must bestow priority on growth rather than looking for a hike in the policy rate. As the economy is advancing, it is vital to refrain from actions which are growth-negative.

VSK Pillai

Changanacherry

Reviving animal spirits

With reference to the news report ‘What is holding back your investments, FM asks India Inc’, in 2012 then Prime Minister Manmohan Singh had said Indian Inc should revive animal spirits and now our Finance Minister has mentioned various reasons as to why Indian Inc must start investing and compared them with Lord Hanuman who has forgotten his strong powers.

While the PLI scheme in many sectors is providing much needed boost to Indian manufacturing, but unless Indian Inc starts fresh capex investment not much will change. So it would be better if the Finance Minister and her colleagues can have a comprehensive meeting with Indian Inc representatives to assess the situation and revive investments.

Bal Govind

Noida

Caution with China

This refers to ‘India, China complete troops disengagement process at Patrolling Point 15’ (September 14). It may be encouraging to learn that India and China on Tuesday have pulled back their troops and dismantled respective temporary infrastructure to complete the process of disengagement at Patrolling Point 15 Gogra-Hotsprings at the LAC in Eastern Ladakh, six days after the two sides announced their intention to resolve another friction point and create an amicable atmosphere on the eve of the Shanghai Cooperation Organisation (SCO) Summit in Uzbekistan.

While such a move may send some positive signals even as Prime Minister Narendra Modi and Chinese President Xi Jinping are slated to attend the two-day summit starting on Thursday but it also goes without saying that going by China’s past record, it can hardly be trusted.

You never know what Xi’s hidden agenda is. China’s designs in the South China are well known.

So India ought to be diligent and watchful enough of all its 'nefarious' designs aimed at 'capturing' the Indian territory in Ladakh, Arunachal Pradesh as well as in the upper parts of Uttrakhand.

SK Gupta

New Delhi

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