Improving micro lending

This refers to ‘Microfinance sector poised for rural take off’ (April 1). Indeed, it is a welcome news to see RBI showing much-needed confidence in the microfinance industry and coming up with new guidelines. We need to remember that local moneylenders still operate in rural areas and only a sustained and collaborative approach would help MFIs displace moneylenders from the scene completely

As far as providing a factsheet to the borrowers is concerned, undoubtedly it is a good idea. But whether MFIs will take the pains to provide it, and borrowers will really understand the same, is a big question. As for creating assets, it is a definite sign of a mature product and this will be facilitated by the government’s social welfare schemes and money going into the beneficiary account.

Bal Govind

Noida

Flip side of sanctions

Ever since the Russia-Ukraine war started and subsequent imposition of sanctions on Russia by the US and EU, immense pressure has been applied on countries like India to stop importing oil from Russia. The decision on compliance should best be left to countries based on their energy requirements. Already, globalisation, which was a buzzword in the 1990s, has taken a severe hit, forcing countries to take a protectionist approach due to several adverse developments like South-East Asian crisis, Brexit, US-China trade war and Covid pandemic in recent times.

Economic inequality is part of global phenomena and countries which have surplus resources should help countries which are in deficit, leading to trade expansion, opening supply chains, etc. Sanctions come in the way of globalisation. The role of leading countries should be to bring the war to its logical end, but the way it is handled proves that any issue could be politicised and weaponised. Restricting the usage of SWIFT will cripple the whole financial system. Trade sanctions will force countries to narrow down their approach from global to bilateral. Hence the approach should not lead to redrawing relationships between countries, creation of new power centres, etc. The aim should be to make the world a better place to live in.   

Srinivasan Velamur

Chennai

US’ double standards

This refers to ‘US, allies step up pressure ahead of Jaishankar-Lavrov meet’ (April 1). The US’s warning of consequences for India’s proposed oil trade with Russia through local currency transaction is uncalled for and bereft of morality. India is putting its self-interest at the fore, even as the European Union continues to buy oil and gas from Russia; or the US, which has refrained from banning uranium imports from Russia for its nuclear plants, or Washington’s ally Saudi Arabia, which is busy filling up its coffers with US dollars and doesn’t seem to be in any rush to pump in more oil to help steer prices lower.

The heavy reliance on imported fuel means that when crude oil prices go up — as they have now — India’s finances come under extreme stress and Budget estimates go for a toss. The Indian economy could be in for a major shock if crude oil remains above $80 a barrel for months, stoking inflation and hurting recovery at a time when pandemic scars remain raw.

N Sadhasiva Reddy

Bengaluru

Invest wisely

This young and restless generation believes that the stock markets are the easiest route to make money. Unaware of the machinations of the operators who trap the unwary, first-time investors must vow not to indulge in day trading. Or step into the minefield of futures and options carefully. Patience is the key and long term does not mean a few months. Immediate returns cannot be the benchmark.

Anthony Henriques

Mumbai

Calibrate agri exports

Apropos ‘Qualified success’ (April 1), the Aatmanirbhar Bharat programme has possibly given a big push to exports while reducing dependence on imports. It is heartening to note the big share of engineering goods at 26 per cent. The performance of the agri sector is encouraging. In addition to staples, there exist new opportunities in horticulture and traditional/medicinal produce.

However in agri exports, there is need for some caution. One is obviously self-sufficiency. Another is inputs. Water-intensive crops is a case in point. When we export a kilo of rice, we are inadvertently exporting 2,000-3,000 litres of water — free. With large parts of the globe running out of freshwater, we need to keep this in mind. While cultivation for our own needs is necessary, export must be calibrated.

V Vijaykumar

Pune

Protect retail investors

This refers to ‘Why SEBI should mind the retail rush’ (April 1). Foreign institutional investors exiting the Indian capital market isn’t surprising, as this has been triggered by monetary tightening by the Federal Reserve, war contingency, rising oil prices and sell-off in the global equity market. But such factors have never reduced the animal spirits of domestic retail investors.

The onus is on SEBI to protect the retail investors from market risks, through investor awareness/education programmes. The influx of new investors in the derivative market is welcome, but they should be encouraged to have a long-term vision of their investments.

NR Nagarajan

Sivakasi, TN

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