This has reference to “Revive development finance institutions” ( Business Line , July 19). The author is right in contending that low interest rates for long-gestation projects are a thing of the past.
The present high interest rate scenario is caused by raging inflation.
Unless inflation is controlled to, say, around 2 per cent there is no scope for low interest rates. We must remember that, even at current rates, the individual depositors, numbering about 60 crore, are losing money in real terms.
It is not unfair for depositors, who provide the bulk of resources of banks, to expect at least a zero rate of return in real terms on their deposits.
B. M. Bhide
Growing urbanisation
The editorial “Growing India, shrinking Bharat” ( Business Line , July 18) made a thought-provoking reading.
No doubt, a few apprehensions that have been raised in the write-up do reflect the problems, the solution to which may need more resources.
But what about the fear of agricultural production registering a decline, given the decrease in number of producers brought about by shift of farmers to urban areas?
Millions of tonnes of food-grains purchased by the government to be stocked in godowns are seen rotting on railway platforms. Is this terrible waste of precious food-grains not accountable for spiralling inflation?
Migration of people from villages to cities must be seen as one of the safety-valve measures to mitigate the pressure of the population on dwindling employment opportunities.
Shreeprakash Sharma
Samastipur, Bihar
Accountability
This has reference to the Offhand column “Why are government offices such a put-off?” ( Business Line , July 20) dealing with the subject of the non-responsiveness of officials. I think government offices have become impervious to the needs of the common man because of two reasons.
One is that it is very difficult to fix responsibility and enforce accountability in the present-day government set-up. Any official can easily pass the buck up or down the hierarchy.
The other reason is that, very often, senior officials — be they administrative or political — who form the policies are often bereft of field-level experience.
Hence, they have no idea of the problems faced by the public or by field-level officers. The way out would be to chalk out a clear line of accountability, starting from the very top, right down to the lowest field level office and making it mandatory for every officer to put in at least five years of service at the local level.
K. Parameswaran
Chidambaram
Taking responsibility
This is in response to the article “God's Own Country? Not Really” ( Business Line , July 11) and to a subsequent retort by Mr A.P. Somasundaram, published in the Letters to the Editor column on July 14.
The author was presenting a snapshot of his own attempts to draw investment into Kerala, but, unfortunately, his point was lost in the presentation.
It certainly seems disingenuous of him to claim that he was unaware of the poor quality of the Bangalore-Palghat highway or of the filth in public places until he travelled down that road with a European moneybag.
At the same time, letter-writer Mr Somasundaram's bland denial goes a long way to explain why things fail to improve in Kerala. Perhaps it would be better if we tried to introspect and accept the fact that there is certainly much scope for improvement in our infrastructure and public administration.
Dinakar R
Thiruvananthapuram
Avoiding risks
This is in response to “No point letting bankers off the hook” ( Business Line , July 19). The US regulators did not correct the system when the Black-Scholes model triggered a stock market crisis, when the dotcom bubble burst and when home loan mortgages were exported as financial products.
Every time, the crisis was resolved as a short-term solution. Even during the post-2008 recovery process, some stimulus money was used to disburse Wall Street bonuses and this shook the confidence level of the common man, as taxpayers' money was used to pay underperformers.
Many major European nations have implemented rules on banks and bonuses. Krugman is right in his observation that the US is slower than the rest in this direction.
Many banks are deficient in curbing excessive risk-taking. It is time banks in the US performed the fundamental role of banks and are discouraged from participating in financial markets.
S. Vaidhyasubramaniam
Dean - Planning & Development
SASTRA University
Thanjavur
FDI in retail
This is in response to “Multi-brand retail: Keep FDI riders to minimum, says PM's advisory panel” ( Business Line , July 20).
The direction of the PM's advisory panel to keep the FDI in multi-brand retail to a minimum will pave the way for the induction of adequate foreign investments in the retail sector.
In the present conditions, foreign investors invest 50 per cent in back-end infrastructure, procuring 30 per cent of the products from small/medium units and multi-brand retail is allowed in cities where the population exceeds one million.
This will serve the national interest and protect the livelihood of small traders across the country.
It is known that unnecessary riders prevent newcomers in any venture. The Government should expedite the opening up of multi-brand retail to provide ample opportunities to the consumers.
C. P. Velayudhan Nair