With reference to the edit, "A welcome correction" (September 30), Raghuram Rajan, governor, Reserve Bank of India, is best placed on Mint Road to take a right decision at the right time. He is an outstanding economist and a respected figure around the globe in the economist-administrator circles. Having been entrusted with the job that is demanding more than ever before due to growing uncertainties and complexities, it is necessary to repose faith and also stand by him for all his actions. Needless comments about his rigidity in cutting the key policy rates were born out of ill-conceived thinking. In a move now that has completely surprised the market, he has cut the repo rate by 50 basis points to 6.75%. In view of factors like deficient monsoon and its impact on crops that might trigger price rise, inflation would continue to cause worry. But it is also a point that the level of inflation has moderated considerably and with the US Federal reserve postponing its policy normalisation, and persisting with easy liquidity conditions, there won't be a more opportune time than now to act fast. The RBI governor has seized the opportunity not simply to please but to cheer the market. The message on the wall is clear: the onus is on the banks to respond in a similar manner. Going forward, one can expect growth to gain momentum; if it does, the stress in the system would automatically ease to pave way for a reduction in nonperforming loans, which has been a burning issue for banks for quite some time now.
Srinivasan Umashankar Nagpur
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