Letters: Keep things under control

This refers to the report, "Will review small savings schemes to enable rate cut transmission: Jaitley" (September 30), banks have not passed on the 75 percentage point rate cut announced by the Reserve Bank of India (RBI) this year to the borrowers, but promptly reduced the deposit rates. Now the government wants to effect a cut on postal savings schemes on which many senior citizens survive. A reduction in the deposit rate on savings will affect every household, more so senior citizens who have no pension. The speech the RBI governor made while announcing the policy decision implies he was forced to shed a "hawkish" stance and wear the "Santa Claus robe". The eight point difference between the Wholesale Price Index and the Consumer Price Index, and the reduction of domestic savings from 34 per cent to 28 per cent of GDP, are clear indications that the economy is "not" on the path to recovery; rather, it is moving towards deflation.

The government should not only keep its hold on the present rates, but also revise upward the ceilings on investment.

N Ramamurthy T Nagar

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