Pradeep S Mehta rightly emphasises the urgent need for a level playing field between public and private sector companies for fostering efficiency (“Competitive neutrality in public policy,” August 22). However, the examples he has cited as failures in competitive neutrality are questionable. The critical anti-competitive measure in the banking sector is having a fixed savings bank interest rate, and not one per cent subsidy on agricultural loans. If the savings bank interest rate is freed, public sector banks, with their pampered employees and less competitive practices, will lose market share and India will soon have the lean and efficient banking sector that it needs.
Also, Air India’s plight has little to do with policies relating to competitive neutrality. One of the reasons it crippled was the increased manpower costs resulting from so-called productivity-linked incentives. The move gave huge salary increases to everyone even when there was no increase in productivity.
Alok Sarkar, Kolkata
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