Letters to the editor dated May 25. 2020

This refers to ‘Reality check’ (May 25). Notwithstanding the government guarantee, unless banks come forward to lend, the stimulus package will not be successful. The emergency credit scheme proposed for retailers and traders will also meet the same fate under the current circumstances. The regulator must consider putting a cap on funds placed by banks with the former under the reverse repo. The banks will have to play their role correctly at this moment, and the government should also come out with an one-time immunity for bank employees from accountability for all loans sanctioned under the government guarantee.

Mumbai

Apropos ‘Further rate cuts may boost credit-led growth’ (May 25). Without a doubt, rate cuts provide enough space and buffer to banks to lend more aggressively in the market. But we need to understand that even without these flurry of rate cuts, banks were already flush with funds, as they were hardly lending. Coupled with this is the ₹20-trillion relief package, which again focusses on providing easy credit to MSMEs and small companies.

But what is really missing from the scene is a demand-side push to the economy. With jobs lost and salaries cut, people tend to become overly conservative. So the ball is in the lender’s court to revive the economy and with the credit risk covered under government guarantee, banks can not afford to be conservative any more.

Noida

This refers to ‘Has the RBI got its inflation outlook wrong?’ ( May 25). There can’t be two views about the fact that providing sn inflation outlook may be easier said than done. What else could explain the RBI Governor himself, on May 22, admitting that the inflation outlook has become complicated? He also went on to add that the supply shock to food prices during this month may show persistence over the next few months. But, curiously enough, while the RBI has constantly been pushing up supply of the liquidity into the system, what about the initiation of the fiscal measures that may be equally essential to spruce up demand in the economy?

It goes without saying that the central bank can’t exercise any control over the retail price levels at any point of time. Though the crude oil prices are currently ruling low, the fears of inflation raising its head may come true if the government eventually decides to pass on the additional burden of the would-be hike in the central excise duty (on the auto fuels) to end-users.

New Delhi

The resumption of domestic flights after a hiatus of two months, despite the inexorable spike in Covid-19 cases, appears to be aimed at a gradual return to normalcy. Perhaps it is also aimed at pulling the aviation sector back from the brink.

The civil aviation authorities, airport staff, security personnel, flight crew and flyers need to be extra-careful to reduce the risk of transmission of coronavirus. The flyers are to abide by the protocol from downloading contact tracing Aarogya Setu app (its efficacy is still to be proven conclusively), thermal screenings before entry into the terminals and wearing face-masks and gloves.

The prescribed two-metre distance is too long to keep inside a spatially constrained plane. However, planes are not packed to their full capacity. Incoming passengers must go in quarantine.

As a measure of abundant precaution, pieces of passenger luggage were disinfected. It is not yet forgotten that in all likelihood, Covid-19 found its way from Wuhan to other parts of the world via air travel.

Passengers must have compelling reasons to travel. Only asymptomatic passengers can fly, but then it makes no big difference, as in that infected persons can infect others even while they are asymptomatic. .

We have to be fully aware of the rapid progression of the disease even as we are exiting the prolonged lockdown.

We have to now find the fine balance between ‘learning to live with the virus’ and containing the pandemic.

Maruthancode, Tamil Nadu

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