With reference to the report, "Amid rate cut chorus, Rajan warns against quick fixes" (September 19), broader economic and fiscal goals can be attained only with long-term fiscal planning and not first-aid measures like rate cuts by the Reserve Bank of India (RBI).
To ensure economic growth, monetary and economic policies should be correlated and not be at loggerheads with each other. Fiscal stability is essential to our economy, given that we are surrounded by global commercial turbulence that has led to higher cost of imports, drop in exports and falling foreign exchange reserves. The international economic environment has been undergoing swift changes since oil prices started falling globally. The competition is so intense in international trade that long-term budgeting policies for industry are not relevant in the present scenario.
The RBI's major role is to ensure economic safety along with a stable currency. While thinking of a policy geared towards global commercial expansion, the government should not fall prey to changes in market velocity, which will hamper foreign trade.
C Gopinath Nair Bengaluru
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