Letters

Letters to the editor dated January 10, 2022

| Updated on: Jan 10, 2022

Market behaviour

This refers to ‘Economic laws don’t always hold’ (January 10). By classical economic theory as demand rises, prices are also expected to rise with supply remaining constant. But in the case of government securities, though the G-Sec acquisition programme should have led to an increase in prices and a fall in interest rates, with limited market players, continuous acquisition on the part of the RBI had led to loss of demand which in turn led to the market participants expecting a higher yield.

As for bank credit, the appetite for industrial credit came down in spite of the RBI holding the repo rate at 4 per cent. Here one needs to consider the elasticity of demand for a product.

In the case of food items and commodities, though a good monsoon led to a healthy kharif harvest, the benefit did not evenly spread across all food items leading to a shortfall in edible oils, vegetables, etc. This led to a spurt in food inflation.

Overall, the supply and demand theory propounded by Adam Smith would decide market behaviour in an ideal scenario, which is not the case due to the world passing through a challenging phase.

Srinivasan Velamur

Chennai

Assembly elections

With parties across the political spectrum unanimous in not deferring the Assembly elections to five States — Uttar Pradesh, Uttarakhand, Punjab, Manipur and Goa — the Election Commission has announced the dates for the polls, which begin from February 10.

Given the rapid surge in Covid-19 cases, which is largely driven by the Omicron variant, prudence suggests political parties strictly abide by Covid-19 health protocols while electioneering. Instead of holding mega rallies, they can resort to virtual rallies and thus prevent their election campaigns from becoming super-spreader events.

M Jeyaram

Sholavandan, TN

Electioneering mode

For this vibrant and democratic nation of over seven decades, here is an opportunity to move away from the headcount mania during electioneering. Covid could prove to be an inflexion point in our conduct of elections.

Rather than focus on mass rallies, political parties must look to convey their vision and agenda through the print and visual modes.

The prime remit of the EC is facilitating maximum voter participation. It needs to equip itself with tools for ease of polling over a longer time span — even days prior to the closing date of the schedule or for the extended hours on polling day itself.

R Narayanan

Navi Mumbai

Biofuel feedstock

Apropos ‘How India can give a boost to biofuels’ (January 10), achieving net zero remission by 2070 will require a lot of effort. The transport sector accounts for 10 per cent of the total greenhouse gas (GHGs) emissions. Against the targeted building of 12 new bio-refineries, IOC has just completed constructing two. Oilseeds, waste or low quality foodgrains, used vegetable oil, sugarcane molasses and crop residues are the main sources of feedstock for manufacturing bio-fuel. But getting a steady supply of these raw materials is a challenge. Making available such crop residues at the doorstep of biofuel manufacturing plants is also a major hurdle.

Identifying select feedstock and undertaking genetic engineering on the plants to make them the main source of feedstock is being considered. This should ensure availability of adequate supplies.

RV Baskaran

Chennai

Omicron impact on economy

This refers to ‘Optimism and reality’ (January 10). Two domestic rating firms have cut GDP growth projections in 2022, citing the impact of the third wave led by the Omicron variant. Though there hasn’t been a need for total lockdowns, thanks to the massive vaccination drive and better preparedness on the healthcare front, the mobility restrictions announced by States may put brakes on the growth momentum.

Also, private investment and consumption may go down with the loss of income and jobs.

NR Nagarajan

Sivakasi, TN

Published on January 10, 2022

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