Wednesday, December 31, 2008

Letter in FE

The Financial ExpressPosted: 2008-12-31 00:35:48+05:30 ISTUpdated: Dec 31, 2008 at 0035 hrs IST
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: The editorial (‘Price growth high’, Dec 20) warns against RBI being too interfering. It also advocates greater accountability for RBI’s actions. The problem is, more accountability often means more interference which is mostly political, an anomaly in these times when state intervention is considered both pious and blasphemous. Effectiveness is preferable over efficiency, as Drucker put it. RBI can be all but unpopular with the cash-rich few who indulge in labyrinthine financial games. No open economy can be immune to market swings. A central controlling agency which can understand them and act is sine qua non. Conservative wisdom that has staggered meltdown effect is preferable to convoluted activism.
—Subhashree Kishore New Delhi

Friday, December 26, 2008

Letter in FE

Letters to the editor :
The wrong parallel
The Financial ExpressPosted: 2008-12-26 23:22:40+05:30 ISTUpdated: Dec 26, 2008 at 2322 hrs

Your editorial (‘By FDI for the poor’, Dec 24, 2008) draws a parallel between the vast volumes in the telecom sector and its promise of prosperity for the poor. With respect to raising living conditions, telecom and insurance are as different as chalk and cheese. Judging by use, telephone is not a necessity in the way medical care or life insurance is. The telecom success story and the mobile phone’s so-called levelling effect or its contribution to GDP may gratify but it doesn’t warrant hiking FDI or rolling the red carpet for reinsurance to the Lloyd’s which has been rocked by losses. Most of the foreign insurance players in Indian market are going through financial nightmares in the countries of their origin. This Bill may be an opportunity for them to cover up problems at home and reap benefits from the more secure Indian market. Shouldn’t we promote domestic Indian insurance firms instead of chasing faulty foreign ones?
—Subhashree Kishore New Delhi

Saturday, December 13, 2008

Letters to the editor : Baleful bailout mantra
The Financial ExpressPosted: 2008-12-13 01:00:02+05:30 ISTUpdated: Dec 13, 2008 at 0100 hrs IST
Rama Bijapurkar’s article ‘Problem isn’t consumer demand’ bats for ailing companies. She pleads that the consumer is too small or well-preserved by his/her own prudence and does not need any stimulus. Big companies are cash-strapped and need to be helped. The nice-sounding reason for this is that if companies fail, people lose jobs and current problems will snowball. A few things may have to be put in perspective. Recession implies piling up of stocks owing to dwindling demand. Injecting funds through bailouts or facilitating liquidity through banks to companies will mean that consumers lose from both ends. Price cut is ruled out in seller’s market and private losses are socialised. The fittest survive in a free market. If firms have over-leveraged and made a mess, there is no reason why government should help them to clean up. It’s a win-win for companies who need to give up neither control nor revenues.
Subhashree Kishore New Delhi