This refers to the report "Rajan is 'perfect'; govt, RBI think on similar lines: Modi" (April 2). If Reserve Bank of India (RBI) Governor Raghuram Rajan was "perfect", then why were his wings clipped by Prime Minister Narendra Modi? Does Modi want the RBI to follow his dictates like the National Institution for Transforming India (NITI) Aayog?
The differences between the government and the RBI over inflation and interest rates are too conspicuous to be wished away. Under pressure, Rajan had to make two cuts in as many months in bank interest rates by 25 basis points. This step might boost some sectors of the economy but not without causing erratic inflation, depending on the duration of the government's largesse.
Regarding the government's move to extend easy loans to farmers for promoting the so-called inclusive growth, public sector banks could agree to this, provided they are ready to write them off as bad loans sooner or later. Non-performing assets are already proving a ball and chain for public sector banks.
India's economy might be on the path to recovery but to take it to promising heights, we should avoid burdening it with populist schemes such as inclusive growth and Jan Dhan Yojana. They are not a real solution to the problems that the government seemingly intends to address.
Tarsem Singh Hoshiarpur
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