Hike in small savings rate

This refers to the editorial ‘Overdue hike’ (September 24). Indeed, increasing financialisation of Indian savings is welcome news as Indian savers, generally, have been wary of putting their hard-earned money into stocks or mutual funds. But more than the risk associated with such products, it is the lack of far-sightedness that creates trouble for retail investors.

Against this backdrop, the government hiking rates on small savings schemes is a good move as it will give these retail investors an alternative option to put some portion of their money in such schemes, which have low level of risks. Even young investors should know that a balanced approach, with a mix of savings products and mutual funds, will fetch good and sustainable returns.

And, with elections getting closer, the market is bound to be volatile. As retail investors are the ones to panic more in such a situation, they can now rethink their long-term strategy and change their allocation. Yes, the government took long to raise rates, but it’s better late than never.

Noida

With OPEC’s decision to rule out the possibility of additional increase in crude output in the near-future, it is important to initiate steps for removing sectoral barriers and encourage new entrants in the oil marketing sector. This can help overcome monopolistic fuel-pricing and serve consumer interests. The hitherto daily revision in prices has not only increased the administrative costs for OMCs but also offered very little benefit to the consumers. Petrol/diesel prices hardly mirror international trends. Aggravated volatility and undue speculation can generate inflationary pressures in the economy. Increased participation in the commodity-derivatives market and a robust framework, based on competitive pricing and a lower rate of indirect taxes, are required.

New Delhi

It was a historic day for India when Prime Minister Modi launched the world’s largest government-funded healthcare programme, ‘Ayushman Bharat’, which would benefit 50 crore Indians. The programme aims to make healthcare accessible and affordable, by providing a coverage of ₹5 lakh to ₹10 crore to economically backward families. This will be the biggest achievement of the Modi government if it turns out to be successful. Yet, the question lingers: Why did the government launch the scheme at a time when Lok Sabha election is round the corner? Is it a move to gain votes?

Madhya Pradesh

The war of words between the BJP and the Congress over the Rafale aircraft deal has further intensified after a revelation by former French President Hollande that it was the BJP government led by the Prime Minister Narendra Modi which had suggested Anil Ambani’s firm, Reliance Defence Ltd, as a offset partner for the deal. While the reported statement by Hollande has given fresh ammunition for the Congress to mount a fierce attack on Modi, what should not be forgotten in the ongoing political slugfest is the need to infuse transparency in the defence procurement process, especially one involving foreign players. The demand of the Opposition for a joint parliamentary committee to examine the Rafale aircraft deal merits serious consideration from the ruling dispensation.

Sholavandan, TN

Consolidation of banks

The move to consolidate Bank of Baroda, Dena Bank and Vijaya Bank, according to the Centre, may become a template for future mergers. However, one must remember that in all the mergers that have happened so far, the entities involved were not satisfied with the process and do not think the mergers have benefited them a lot. The recent merger of SBI and its associate banks is a case in point. The government has been trying to mislead the people that there will be a reduction in NPAs after mergers. According to experts, such a reduction is unlikely to happen.

Bheemavaram, AP

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