End reservation regime
Apropos of the editorial “Reservations about India” (FE,March 24), one must remember that reservation is not a silver bullet; providing more government jobs, expanding blue-collar jobs and so on must be the focus of the government. The alarming truth is that 80% of the Indian population is covered under quota system whereas the remaining 20% of the population is poor and running from pillar to post to get education and job despite high marks. Reservation was introduced to ensure that the historically underprivileged communities were given equal access to resources. Eradication, not perpetuation, of caste was the objective of the reservation policy. It is time to give reservation to communities on the basis of economic backwardness. Only then will vote-bank politics disappear. Reservation should be restricted to one generation. It would be impossible to provide effective benefits to this large a group. Thus, some choices within these categories will inevitably need to be made. Proper and exhaustive investigation and research must be made into this subject, otherwise this issue will someday destroy the unity and integrity of the country. Time has now come when the entire reservation policy is to be revisited.
Vinod C Dixit
The administered interest rate regime has become a thing of the past as rates are now determined based on the prevailing market forces. The government has revised downwards the interest rates for the small savings schemes, including the 15-year Public Provident Fund to align them with the yields on government securities. Another striking aspect and perhaps the right move is that this rate notification is made applicable only for the first quarter (April to June 2016) of next fiscal while future rates will be reset every quarter in tandem with the yield on G-secs. This is a more transparent way of keeping pace with the present. The logic behind the whole thing is that the above normal rate on small savings will needlessly push the cost of borrowings up for the central government. Politically speaking, a tough decision as small investors are a disappointed lot (more so with the quantum of cut) but, understandably, the finance minister is hard-pressed due to serious economic compulsions. It is a matter of common knowledge that interest rates have to come down if growth is to pick up. The country is witnessing a sagging growth for quite sometime now. Host of measures taken by government in the recent past to stick to fiscal prudence will put additional pressure on RBI to further cut the rates to spur investment and growth.