Letters to the editor dated July 17, 2020

This refers to ‘After August, the road ahead for banks’ (July 17). MSMEs, small and marginal farmers, landless cultivators, and other partakers of the economy engaged in low scale economic activities contribute considerably to the generation of jobs and to the overall growth of the economy. However, the flow of adequate credit at low cost is vital and it is essential that these segments are able to borrow from the banking system.

As the economy is yet to resume activities in entirety, a major portion of the credit deployed in various economic activities hasn’t been productive enough and, therefore, there’s the likelihood of a huge rise in bad assets on the expiry of the moratorium.

The income recognition and asset classification norms based on Basel standards need some flexibility to suit the present situation, besides ensuring the financial soundness of the lenders. The government, on the other hand, must boost expenditure and give a push to economic activities.

Kottayam

This is with reference to ‘The Ambani show’ (July 17). The AGMs of Reliance Industries have always been a huge spectacle, but due to Covid-19, the AGM this time had to be an online affair. With the kind of investment Mukesh Ambani has brought into RIL in the last 4-5 months, this AGM would have been the biggest until now. RIL now aims to become the biggest technology and telecom player.

Sooner or later, Jio Platforms will be listed and, in all probability, it will attract a lot of retail investors as well. But the key lies in judicious spending of the massive money it has been able to attract. Reliance needs to be aware that despite the massive launch of Jio, almost half the population still does not have access to the Internet.

Noida

A new study in Lancet projects India’s population peaking much earlier than expected, at 1.6 billion in 2048 before declining to 1.09 billion in 2100. This points to a narrowing window for demographic dividend. Sharp falls in working age population will require many countries to pursue liberal immigration policies or alternatively improve workforce participation rate among elderly and women.

Countries unable to stabilise their working age population are priming themselves for economic stagnation. The biggest challenge will be to sustain large public social security nets without overburdening a smaller workforce with higher taxes. Powered by a young workforce, India must utilise the narrowing window to lay a strong economic foundation and robust infrastructure.

Delhi

Apropos ‘Can the Quad rise to be an Asian NATO?’ (July 17), the author brings to fore the dire need for Asian nations and even Quad members to reduce their dependence on Chinese supply chains. This dependence has clipped the wings of nations in containing the geo-political prominence of China, which has expanded its supply chains worldwide, increased its infrastructure investments in financially weaker countries on loan basis, and is pushing ahead with its Belt and Road Initiative. At this juncture of a global pandemic, the Quad should take the lead role in weaning away Asian nations from their dependence on Chinese funding and products.

Sivakasi

This refers to ‘Interest payment during moratorium: There is no need for judicial activism’ (July 16). If for any reason ‘regulatory forbearance’ takes precedence over the ‘mandate’ of the central bank to stand for the protection of interest of depositors, then stability in the financial sector will be affected.

Small savers’ suffering will increase substantially. The not-so-well-off savers are also taxpayers in many cases. The interest of the depositors should not be sacrificed due to excessive regulatory forbearance being granted in favour of the borrowers.

Bhubaneswar

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