Letters to the editor dated July 27, 2021

| Updated on July 27, 2021

The reform architects

Apropos ‘Reliving the landmark 1991 economic reforms’ (July, 27), the fact that Manmohan Singh started working as Finance Minister even before the Council of Ministers was formally announced shows the backing he had from then Prime Minister Narasimha Rao. The situation was so grim that India’s forex reserves had plunged to a record low, barely enough to meet the nation’s import requirements for a month.

Apart from the Iraq invasion of Kuwait, which caused crude oil prices to double, India’s political instability, too, with four leadership changes in three years, made foreign investors jittery enough to pull out their funds.

The Rao-Singh duo skilfully defused the crisis, in the process, setting the economy on a growth path, creating huge employment opportunities for the youth. If Singh was the architect of reforms, Rao shielded him from motivated attacks from the opposition, in and out of Parliament. The present Congress leadership may not acknowledge Rao’s role in the 1991 reforms, but generations of Indians, especially the millennials, owe the duo an eternal debt of gratitude.

V Jayaraman


Forex reserves

This refers to “The forex bonanza is not a cause for celebration’ (July 27). Even though India’s reserves are considered to be third largest in Asia after China and Japan, it is the composition of reserves leading to stability that matters the most. For instance, while China and Japan’s reserves are based on export surpluses, the same is not the case with India.

Though foreign currency asset constitutes more than 67 per cent of total reserves, the returns on such assets due to the prevailing low interest rate regime at a global level are not attractive.

Also, money which flows into India through the FPI route being ‘hot money’, once the US starts pursuing a tight money policy, it will have an impact on forex flows of all emerging economies including India.

With India being one of the top 10 buyers of US treasuries, the returns are not commensurate with the volumes. Hence, there is a need to rejig the composition of forex reserves to maximise returns.

Srinivasan Velamur


Boon for private banks

Apropos ‘PSBs vacating branches open doors for other lenders’ (July 27). The premises being vacated by public sector bank branches will be ideal for private sector banks looking to do business in the area. Rather than create new infrastructure, they can move into the vacated premises — which would require only minor alterations at the most — and carry on their operations.

The new incumbents can also attract the customers of the closed bank branches as most customers value proximity.

Katuru Durga Prasad Rao


A strong leader

This refers to ‘Yediyurappa steps down as Karnataka CM’ (July 27). Irrespective of his alleged shortcomings he held his own among the divergent political factions, communities and religious sects. He enabled the BJP snatch power from the Congress-led coalition.

The BJP is yet to learn from its experience in West Bengal, which showed that elections are won by strong State leaders and not by Modi magic alone.

YG Chouksey


Spying scandal

The Forbidden Stories consortium and Amnesty International tell us that the Israeli tech firm NSO Group’s spyware Pegasus, intended to “collect data from the mobile devices of specific individuals, suspected to be involved in serious crime and terror,” has been ‘systematically abused for years’ in India and many other countries. Pegasus has hit India’s democracy like a storm of Poseidon.

France has opened an investigation into the allegations of spying on several French journalists.

The new regime in Israel has also set up a commission to review the allegations of misuse of the NSO Group’s phone surveillance software, Pegasus.

India, being in the league of the top 10 user nations, too, should order a thorough inquiry into the murky spying scandal.

Haridasan Rajan

Kozhikode, Kerala

Published on July 27, 2021

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