Letters to the Editor dated Jan 25, 2020

This refers to ‘A Budget for markets’ (January 24). The upcoming Budget treads a tricky path. It has to pull up growth quickly enough and yet keep markets reasonably steady. Today, despite a broad-based slowdown and the recent IMF projection of 4.8 per cent GDP growth, the benchmark indices trade at near highs with minor corrections. This is due to the out-performance of a dozen heavyweight stocks far less affected by the slowdown.

That said, the RBI and the government have been taking incremental steps to revive the economy. The cumulative rate cuts at 135 bps had a significant contribution and markets are pricing in a recovery in the economy even as domestic fund flows continue to be resilient.

The key concern ought to be over increasing deviations between the benchmark and broader markets. This distorts the true picture of the economy and knee-jerk reactions could unsettle the market too frequently. Any dip in growth indices now on would translate into a sharp loss of investor sentiment and then to a drifting market. That will be worse.

Navi Mumbai

Apropos ‘Economic slowdown: What should the Budget address?’ (January 24), the authors point out that the erosion of savings and investment rates have reduced the growth rate to 5 per cent. Beyond the need to stimulate demand on all spheres using monetary and fiscal policy tools, public sector banks must be extricated from the vicious grip of swelling NPAs. The pressure to reduce taxes to boost demand and stimulate the corporate sector will weigh on tax revenue collections. Improving ‘the ease of doing business’ is a must to create a viable atmosphere.

Sivakasi

This is with reference to ‘First look: India may have a good monsoon in 2020’ (January 24). This will be of interest to policymakers and economists who have the task to extrapolate data for statistical purpose. For farmers, the monsoon in the last two years has been good only from the angle of quantum of rainfall. The huge downpour over a short period has done more harm than good. A good monsoon is characterised by an even spread of rain. Even a delay in the withdrawal of monsoon affects crops to a great extent. Coffee plantations, for instance, have been hit by erratic monsoon.

Hassan, Karnataka

This refers to ‘Cut in reserve price of rice, wheat will hurt FCI’ (January 23). The overflowing granaries of FCI and the rotting of foodgrains have become commonplace. The FCI, however, hasn’t taken corrective measures and it eventually resorts to distress sale to make room for fresh crops.

The moot point is why the FCI is not able to forecast its demand for foodgrains appropriately and scientifically? Even though the monsoons are erratic, the foodgrains output can be predicted with a fair amount of accuracy. The FCI should either be disbanded or it must be overhauled and made more accountable.

Chennai

As political animals, we never tire of following elections or develop (or suffer) election fatigue. Now we are treated to a no-holds- barred electoral battle in Delhi. With AAP, BJP and Congress in the fray, it is a three-cornered contest. Even so, it is obvious that the real fight is between the AAP and BJP.

AAP must be commended for conducting its election campaign on the bread-and-butter issues of politics; it stands a fair chance of re-election with the Delhi-ites benefited from the Kejriwal government’s remarkable work in education, healthcare and delivery of power and water.

The corruption-free administration that Kejriwal has provided in the last five years too will stand AAP in good stead when it comes to persuading the voters to prefer it over the BJP. While the BJP plays the ‘hyper-nationalism card’, AAP relies on the ‘guarantee card’ to woo the electorate. The contrast cannot be more striking.

Maruthancode, Tamil Nadu

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