Letter to BS: Govt must take steps to resolve supply-side bottlenecks

Increasing the supply of credit and arresting the accumulation of bad assets is crucial to making the banking sector robust

This refers to "Market sees a long pause from RBI as CPI hits 7.35%" (January 14). Since the 135 basis point cut in the repo rate is waiting for full transmission, any further cut would be worthless. The task of lifting the economy from the deep slowdown and to transform it into a $5trillion economy by 2024-25 needs fast growth in household savings to push investment. The current inflation is due mainly to the hike in the prices of food articles. The government must initiate corrective measures to resolve the supply-side bottlenecks for smooth flow of food products. It must