Letters: The real problem

This refers to the report "Markets dance to Rajan tune" (September 6). The new Reserve Bank of India governor has taken some excellent steps. The foreign exchange and share markets were looking for a reason to be happy. The ills of the Indian economy, however, go well beyond any central bank's ability to fix; it requires a performing and fair government. If one refuses to acknowledge reality, one will swing between irrational exuberance and nihilistic pessimism. Tinkering with foreign exchange regulations, new banks, foreign direct investment in pension or insurance, even telecom re-allocation will not cure the real issues - un-competitive manufacturing, high prices for land, energy, lack of job opportunities, etc. It is great that south Mumbai real estate prices are one of the highest in the world, or that Indian corporate chiefs earn $27 million annually. However, the reality is better reflected in the fact that China's biggest bank's market cap is 14 times that of India's biggest bank.

P Datta Kolkata

Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number