With reference to the report, "RBI may cut rate despite rise in retail inflation" (September 15), the differential between Wholesale Price Index and Consumer Price Index shows that the economy is not in good health.
Savings, arrived at as a percentage of gross domestic product, are shrinking and confirms Chief Economic Advisor Arvind Subramanian's fear that the economy is in deflation territory.
Prime Minister Narendra Modi in his address to industry captains recently pointed out that they were shy of taking risks. In fact, the stimulus provided by the 2009 Budget was not passed on to consumers by the industry and three rate cuts effected by present RBI Governor Raghuram Rajan were not passed on to clients by the banks.
It's time for the Bharatiya Janata Party-led government at the Centre to take a relook at the economic policy, keeping in mind our strengths, weaknesses and demands.
N Ramamurthy Chennai
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