Letters to the Editor dated April 7, 2022

sri lankan crisis

This is “Dissecting Sri Lanka’s Self-Induced Crisis” (April 7). It is sad to see the deteriorating economic situation in Sri Lanka. Like other countries, Sri Lanka has also had to deal with the impact of Covid-19, which has affected its tourism industry, which is one of its main sources of foreign exchange.

Unplanned borrowing and overreliance on a single country for infrastructure development have increased its debt service burden. Considering the size of the country, an $11 billion debt is staggering. The Rajapaksa government has not embraced the progressive development of ports and roads.

The overnight switch to organic farming was yet another blunder. Moving chemical fertilizers away from the fields is a good decision, but it should have been done gradually and scientifically, giving the farmers confidence and giving the soil some time to adapt to the natural manure.

Furthermore, the country has failed to learn from India’s experience in fighting the pandemic and get the economy back on track. Sri Lanka’s failures could also be attributed to a less experienced group of family members in key and strategic positions in government.

RV Baskaran

Chennai

Musk on Twitter

The role that social media plays today does not need to be explained. Now, Elon Musk sits on the board of microblogging platform Twitter, with a 9.2% stake. So is his intention to join Twitter aiming to have a free and fair platform or is it just a practice before launching his own social media platform? The possibilities are wide open.

Shruti Sharma

Ujjain, MP

Monetary Policy

This refers to the “RBI monetary policy conundrum” (April 7). Despite public clamor for lower taxes on the price of oil at the pump, the government takes no action. The rise in the price of oil is having a domino effect on inflation, which has now exceeded the Reserve Bank’s target. Even though RBI formulates monetary policy for economic growth with price stability, prices of essential goods and services increase.

As the surge in prices of essential goods is due to the rising cost of oil, the government should reduce the tax on the price of oil at the pump and simultaneously the MPC should seek to raise the policy rate and pass the effect on to the economy to stop rising commodity prices.

The RBI needs to step up its oversight over the expansion of lenders’ loan books to control excessive credit supply. The high level of questionable assets, the slow progress in its resolution and the high likelihood that standard assets will turn into stressed assets are causes for concern, especially at a time when the economy is on the road to recovery. and revival. The MPC must consider these causes and set policy and rates to accelerate growth with price stability.

VSK Pillai

Changanacherry, Kerala

Sustainable finance

This refers to “The importance of ‘transition bonds’ (April 7). There will always be excitement about the launch of a new financing instrument designed to help ‘brown’ businesses transition to greener business activities. The new product, transition bonds, can be issued by industries that currently have a high carbon footprint and, therefore, are excluded from existing sustainable finance markets.

The slow growth of the transition bond market can be attributed to the lack of a clear definition of what transition financing really means and how environmentally sustainable these instruments are. This has fueled investor skepticism that this debt instrument will become another “transition washout” tool.

S Muthulakshmi

Virudhunagar, TN

digital currency

This refers to “Is CBDC Even Necessary” (April 7). Indeed, the RBI’s decision to float a digital currency seems hasty without analytically weighing the pros and cons of introducing such a virtual currency into the monetary system. If a legal digital currency is launched at this stage, where existing private cryptos are levied at a high rate of capital gains tax, it would not get the desired reception as a legal medium.

Additionally, allowing two legal tenders in one country can create chaos in the money market. Nevertheless, a strict control mechanism is also needed over government digital currency as it can be used for illegal purposes like terrorist financing and money laundering.

NR Nagarajan

Sivakasi, TN

Published on

07 April 2022

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