Business Daily from THE HINDU group of publications
Monday, Apr 09, 2007
ePaper
Business Daily from THE HINDU group of publications Monday, Apr 09, 2007 ePaper |
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Opinion
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Letters Reining in inflation
It is unfortunate that Reserve Bank of India (RBI) has chosen to tackle inflation in a way that could hurt economic growth. The economy was growing at a stupendous 9 per cent, second only to China worldwide. The momentum should have been allowed to continue. Now that the CRR and repo rate are being hiked frequently, the economy may take a U turn, as most commercial banks religiously increase their lending rates, without actually studying the impact. The ordinary citizen is the worst affected while the inflation problem remains largely unaddressed. The Government, Finance Ministry, RBI should analyse the reasons for the price rice. They should study the prices of various commodities and take corrective steps in arresting the price rise. Curbing the growth of banking may be only detrimental to the entire economy. Further, the hike in interest rates for loans affects all borrowers, old and new, whereas the hike in interest rates for deposits is applicable for new depositors only. Existing depositors have to close their deposits and re-open them to be eligible for the new rates. The banks should address this anomaly to ensure fairplay. Unless corrective measures are taken soon, damage will be done to the economy. The GDP growth too may slip to 5-6 per cent if such hasty measures are implemented. Balike Bharath Mangalore
Letters to the editor and contributions can be sent by e-mail to: bleditor@thehindu.co.in
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