This refers to the editorial “A textbook response” (Business Line, August 1). The RBI has once again done a balancing act by reducing the SLR. This move is bound to increase the flow of liquidity, which will lead to a substantial leap in growth. By not touching policy rates and the cash reserve ratio, the central bank had done well, in view of the existing economic situation. It is now for the Finance Ministry, under a new incumbent, to take steps to control the fiscal deficit (according to the warnings given by the RBI during its previous reviews), expedite reforms and woo prospective investors to revive the economy. Inflation needs to be reined in to mitigate the sufferings of the aam aadmi. The RBI’s directive to relax the norms in forex earnings will help exporters. The poor, especially the senior citizens, will feel encouraged to keep their hard-earned money in banks as the interest rates have been left unchanged.
- Jayant Mukherjee, Kolkata (HBL)
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