This refers to ‘MPC likely to unanimously vote to up the policy repo rate by 50 bps’ (September 26), to rein in inflation and address concerns around weakening of the currency, when it meets next on September 30. However such an iron handed measure could turn out to be 'counter-productive' to industrial growth rate which has already dipped to 2.4 per cent in July. The MPC finds itself in a ‘Catch-22’ situation if it eventually decides to further hike the extant repo rate of 5.40 per cent by 50 bps.
Experts seem to have arrived at a consensus on the repo rate hike, , let us wait for the MPC’s final decision.
What’s interesting is every time the MPC meeting is due the media is flooded with such unsolicited advice.
Apropos ‘Time to invoice oil trade in INR’, it is high time that the ‘Petrodollars standard’ which came into existence after the collapse of “Bretton Woods Gold standards” gets revamped to reduce the emergence of dollar, challenging all other currencies. With the changing geo-economic situation and with all the major currencies falling vis-a-vis dollar, the rupee is relatively resilient. Now is the time for the government to use rupee for global trade settlement, as our trade deficit is already on the verge of $28 billion.
The NPA headache
This is with reference to the report ' With high NPAs banks go slow on education loans (September 26).
Both public and private sector banks should promote education by financing needy students. But unfortunately nearly 10 per cent of educational loans are turning into NPA's which is not a good sign.
This trend has to be arrested and the bankers should be very meticulous in updating the data of borrowers periodically. Also in deserving cases banks should also restructure loan accounts of the borrowers where the recovery is not satisfactory so that some time is given to the honest borrowers.
This will help boost the recovery rate and credit discipline can be ensured and help spur educational loans.
Katuru Durga Prasad Rao
This refers to the editorial " Future calls'. The new Indian Telecommunication Bill 2022 is the need of hour. However, much needs to be done to ensure Indian telecom sector stay financially robust and serve the needs of customers. However the Centre’s discretionary powers in writing off telecom firms’ dues and decide on the mode of allocating spectrum are fraught with risk. At the time when the country's telecom sector has been reduced to duopoly, attempts to reduce the role of telecom regulator are not advisable.
A comprehensive legal framework to cope with the sweeping changes in the telecom sector ushered in by new technologies is needed, but it can be pushed through only after careful deliberations with all the stakeholders.