Letters to the editor dated December 31, 2021

Apropos ‘Why India’s airports haven’t taken off’ (December 31), under the UDAN scheme, many airports were built in Tier II and III cities and the government is still constructing more airports across States. The fact that many big airports are making losses needs to be taken into consideration before constructing more.

Optimum utilisation of airports is a must for achieving break-even. While the Prime Minister’s vision of making air travel accessible to the common man across the country is laudable, a lot more factors need to be weighed in before going in for large-scale construction of new airports.

Chennai

Constructing new airports is not a good move at this juncture since airports are incurring losses, especially since the Covid-19 pandemic. Even top airports in India are sustaining loss due to the huge drop in passenger traffic, and small airports aren’t even getting revenues to break even, thanks to high operating costs. Even privatised airports are loss-making.

Hence, the government must put off constructing new airports until stability is achieved in passenger traffic both in the domestic and international segments. With new Covid variants like Omicron spreading fast, it appears airlines’ recovery is still some way off.

Sivakasi, TN

This refers to ‘A perfect storm awaits the rupee in 2022’ (December 31). The primary reason for RBI to be ever vigilant against a depreciating rupee in 2022 is due to the unstable nature of forex inflows, which mainly consist of FPI, FII and FDI. Any hawkish policy stance adopted by the Federal Reserve (as has been the case at present) will pose a serious challenge to regulators due to the expected flight of US dollars. No doubt the RBI is seized of the problem and has accumulated reserves to intervene at appropriate time in case of need. But the challenge is that in 2022 the pressure on the rupee could originate from multiple sources.

Apart from the adverse impact the recent FOMC statement had in terms of three interest rate hikes the Fed was contemplating in 2022, other factors like prepayment of ECB loans taken by Indian corporates, increasing gold imports, spiralling crude oil price, increasing trade deficits, etc., will put enormous downward pressure on the rupee. Ever vigilant speculators will further play spoilsport in the spot and forward markets.

The government needs to promote exports in a big way by providing incentives to exporters. As the rupee is expected to come under pressure in 2022, the long pending issue of India’s entry into global bond indices needs to be weighed carefully.

Though it could create initial euphoria, it has to be considered in the background of expected rupee volatility. In spite of record forex accumulation by the RBI, a multi-pronged strategy is required to ensure stability of the rupee.

Chennai

This is with reference to ‘Structural reforms have effectively checked corruption’ (December 31). The Modi government’s fight against corruption is laudable.

One of the main reasons for the underdevelopment of the country, which despite being rich in natural resources and abundant youth power, is that crores and rupees which should have rightfully gone to the national treasury is pocketed by a handful of corrupt people.

In such a situation, the government’s various initiatives such as demonetisation, tax reforms, closure of shell companies, agricultural reforms, weeding out of archaic laws, digitisation, the Insolvency and Bankruptcy Code, besides Direct Benefit Transfer (DBT) to underprivileged people under several social security schemes showed the way for economic reforms and development.

In addition, the government should protect whistle-blowers as also their families. The public, on their part, can weed out corruption by sending people with clean records to Parliament/State Assemblies and other government bodies.

Thane

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