No time to be conservative
Apropos of the column ‘A central banker in the defence mode’ (January 17), crude oil is getting fantastically cheaper by the day and inflation, tamer. Yet, the best RBI does is cut repo rate marginally, that too after more than necessary circumspection. This timidity must be traced to the disproportionate blow-up of the NPA issue in PSU banks. Infact, RBI was all set to reduce key rates in September 2014, but was overly influenced by the NPA issue. The high-visibility Gyan Sangam conference on PSU banks must have added to its caution levels. Given our strong fundamentals, the eventual economic recovery would have capped the problem of underperforming loans. This is not the first time NPAs had reached high levels. It is hoped that the monetary policy review due in two weeks would show greater faith in our own economy and energetically go for growth. The plunging commodity prices is no boon but portends a global economic slack that, like a receding tsunami, will damage economies that choose to remain placid and conservative.
R Narayanan
Ghaziabad

Rajan’s rate-cut is right
Apropos of the column ‘A central banker in the defence mode’ (January 17), Reserve Bank Governor Raghuram Rajan’s cautious approach may have stirred criticism from NDA leader Subramanian Swamy, but one should not forget that he steered the Indian economy with firm hands during the turbulent days when trade deficit rose to an alarming level and rupee weakened to nearly 70 to the dollar. With clever steps like swapping with Japan, he helped to gradually put the derailed Indian economy back on track. The author, Keith Bradsher has rightly pointed out that even with interest rate cut of 100 bps, as demanded by India Inc, if inflation rises to an alarmingly high with rise in demand, the onus will be on  the governor and not on the finance minister. So, it is better to be unpopular with unpleasant and delayed steps than have the inflation rate get out of hand and the Indian economy back in doldrums. The Harvard economist is an asset to the country and he showed courage by not relenting to political pressure till he thought the situation is conducive to the gradual rate cut which was anyway assured by him. Now, it is up to the government to initiate reformist measures expeditiously so as to reap the benefits of rate cut and a historic low of crude price thereby rejuvenating the ailing Indian economy.
Debabrata Sengupta, Howrah

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