Letters to the editor dated February 25, 2021

This refers to ‘RBI should stop fretting over bond yields’ (February 25). One could understand the tight spot the RBI is in, in terms of keeping the bond rates low with several economic indicators like inflation and liquidity indicating to the contrary.

Though the RBI has several quantitative and qualitative tools at its command to control money supply, as manager of public debt, its role is to gauge market appetite and the absorptive capacity of G-Secs.

Further, several bond auctions devolving on primary dealers have put upward pressure on inflation. Due to the Covid pandemic, the government has embarked upon a record borrowing programme and the RBI is acting with the sole aim of keeping the interest cost low disregarding other factors.

Also, the fact that repo and bond rates do not move in unison indicate the flawed approach pursued by the RBI in rate setting. With banks approaching the financial year closing, the losses on revaluation in their securities portfolio should be staring at banks which should be another cause for worry to the RBI. Rising bond yields is not unique to India but this is a phenomenon that is visible globally including the US due to increased government spending.

Though the RBI can keep long interest rates under check by resorting to OMO, operation twists, etc., this could only have a temporary impact. As such, self-correction is the best way forward.

Chennai

The decision of the Finance Minister to permit private sector banks to conduct government business like payment of income tax, government pension, etc., is a welcome one. This comes on the heels of the recent decision to privatise two public sector banks.

There has been a constant decline in the quality of services rendered by the public sector banks and the merger of some of the public sector banks has only compounded the problem. There is a view that one of the unstated reasons for the merger of the banks was to coax the customers to prefer private banks.

Mysuru

Apropos ‘More women in shop-floor’ (February 25). Women across sectors have ventured into so-called male domains and made their presence felt. They have proved their worth beyond doubt and proved their mettle. But the manufacturing sector is still one segment where women hardly have any presence. The electronics sector can definitely change that for good. As far as critical areas like scope soldering is concerned, women will have a natural edge.

The sector can identify more such skills where women are bound to perform better than their male counterparts. In other sectors like pharmaceuticals also women employees should be given more chances to bridge the huge gulf and provide them real empowerment.

Noida

This is with reference to the article ‘Toy fair to showcase India as manufacturing and sourcing hub’ (February 25). Although it is tough to compete with Chinese toys which are produced in bulk and hence less expensive, by initiating certain steps we can very well boost our toy industry.

First, the government should make it mandatory for all schools whether government or private to buy toys/sports equipment from indigenous toy manufacturers only. This will increase the demand for toys manufactured in India.

Second, story telling in schools should be accompanied by toy. Ancient stories and fables abound in India, which can be told to students with the help of toys/dolls.

This will make school authorities approach the manufacturers of such toys, thus giving a boost to our toy makers. In the same way, stories pertaining to our freedom struggle and national heroes can be enacted with the help of toys. Further, local festivals and their importance can be explained to children with the help of toys. Finally, boosting rural tourism can also play an important role in give the toy industry a lift.

Thane

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