Letters: Rate-cut boost

This refers to the editorial "A logical response" (January 16). A cut in its benchmark rate by 25 basis points to 7.75 by the Reserve Bank of India (RBI) is a welcome step, but we had to wait for it. The cut will surely set the business activities in a virtuous circle, removing the despondency and depression from the market. It is true that the circumstances have become propitious mainly because of the continuing decline in the prices of oil.

But one rate cut is not enough for the regeneration and resurgence of the economy, which has been in dire straits for over two years. Now, if inflation remains under control and there is no fear of blowbacks on the horizon, another reduction in the lending rate needs to be implemented. Of course, we need to adopt a middle path in order to avoid being caught unawares by unforeseen adverse situations. But it should not prevent us from breaking new ground. Walking on eggshells will not help put the economy back on the rails.

Tarsem Singh Hoshiarpur

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