Letters to the Editor dated December 7, 2019

This is with reference to the editorial ‘MPC could have opted for a rate cut’ ( thehindubusinessline.com ). The adage that too much of a good thing could be bad has dawned on the MPC. Data from sectors such as real estate, auto and agriculture suggest that five interest rate cuts this year have failed to put the brakes on a declining economy.

The government said in Parliament that on its part it has taken 32 steps pertaining to different sectors. However, most of the measures tend to support growth only in the medium-to-long term as a supply-side response to revive growth, when the need is to stimulate demand by putting more disposable income in the hands of households.

There is a clear connection between agricultural decline and supply of labour to the real estate sector in India. Till real estate kept doing well, earnings in rural India and thus the consumption by rural India helped GDP sustain a handsome growth rate. Shifting of labour to real estate also supplied capital to marginal farmers for agriculture and maintained a viable farm wage.

Navi Mumbai

I was surprised to read the article ‘Rising sugar prices on lower output to sweeten profits of mills’ (November 30). It must be pointed out that sugar prices in the country are not rising, but falling. The current price of sugar, at ₹3,200-3,000 per quintal ex-factory, is much lower than the cost of production. The average sugarcane price in India is around ₹3,000 per tonne. On the recovery of 10 per cent of sugar, the cost of sugarcane alone is ₹3,000, plus there is the cost of labour, chemical and interest (conversion cost is around ₹800). Is it possible to cover all of these at ₹3,000/quintal price of sugar? Even after the realisation of bagasse and molasses, sugar prices will not be less than ₹3,700 per quintal ex-factory, that is, ₹37 per/kg. Your assumption that the stock will decrease will also depend on the exports — by producing 280 lakh tonnes and consuming 240 lakh tonnes, we will add 40 lakh tonnes to the stock. The country had a stock of 145 lakh tonnes as on October 1, 2019. If we export 60 lakh tonnes, as envisaged by the Centre, even then by October 1, 2020, the stock will be around 120 lakh tonnes, which is sufficient for six months’ consumption. With such huge stocks, the prices are not going to increase. Rather, for revival of the sugar industry as a whole, the Centre should fix the revised MSP at 3,700/quintal ex-factory.

CMD, Riga Sugar Co Ltd

This refers to ‘Unauthorised pledges’ (December 5). As rightly said, the broking firm in question has acted far beyond its scope and authority, misusing the power of attorney given by its clients.

The strange part is how the new generation lenders who employ “sophisticated risk-management tools” took such a huge credit exposure overlooking the basic tenets of law of agency. Inasmuch as it is clear transgression of systems and procedures normally adopted by all banks, the chances of making a valid claim with insurance companies also look very bleak.

Kumbakonam

This is with reference to ‘Crime and punishment’ (December 6). A really interesting perspective to punish hardened criminals by enrolling them in clinical trials of life-saving medicines. What message would that send to potential volunteers who have no criminal record? If one concern here is that there are not many volunteers for such trials, the approach must be to highlight the need for it and the magnanimity and selfless willingness to subject oneself to such trials. Not the shame of embracing a method meant to deter a crime.

Also, in all this one seems to forget how we as society are influenced by glorified images of violence, especially in films, that propagate brazen violation of human rights and dignity. Where are the examples of respectful behaviour in our society that youth can emulate? There is no reason to justify a crime such as this, but there is also no justification for a community, culture and society to ignore how it is contributing to such brutality in first place.

Pune

LETTERS TO THE EDITOR Send your letters by email to bleditor@thehindu.co.in or by post to ‘Letters to the Editor’, The Hindu Business Line, Kasturi Buildings, 859-860, Anna Salai, Chennai 600002.

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