Letters to Editor – The Hindu BusinessLine

Consumption expenditure

This refers to ‘The tide could turn for the economy’ (April 2). Amid various uncertainties arising from geopolitical developments, the recent tax cuts are expected to boost consumption expenditure. However, there are multiple dimensions to consider. Countries like India still lean towards a savings-oriented model, and a portion of the tax reduction may be directed toward savings.

Bank loans could also play a significant role in driving consumption, with two key developments being noteworthy. First, the risk weight on loans given by banks to consumer microfinance in the retail loan segment has been reduced to 100 per cent. Second, the deferment of Liquidity Coverage Ratio norms is expected to enhance banks’ lending capacity. These measures could further contribute to higher consumption expenditure.

Srinivasan Velamur

Chennai

Boosting the economy

The demand-side economy can definitely get a push from the forthcoming Pay Commission boost and help sectors like consumer durables, electronics and auto, etc. But for the supply-side economy to get the desired boost private capex has to increase manifold times because public capex can aid only to a certain extent. Despite some stress in the unsecured loan portfolio, it is heartening that the RBI Governor is pushing for unhindered credit flow. This will have a positive effect on the economy. Given the tariff turmoil, it presents an opportunity for India to recalibrate, by upskilling the workforce and work towards inclusive growth.

Bal Govind

Noida

US ignoring climate

This refers to ‘Climate change blues’ (April 2). Soon after assuming office for the second time, Donald Trump exited from the Paris agreement on climate change. This will be a setback to the formation of a Liquidity Damage Fund, which could hinder the ongoing mitigation and adaptation efforts being carried out. In the long run, this could reduce the tempo of climate commitments. Developing countries like India have been taking serious steps in harnessing the naturally available energy sources such as solar, wind and tidal and spending aggressively for maximising energy production.

With vast tracts of open land and with copious sunshine available in many southern States, the US can easily harness and produce more clean energy.

RV Baskaran

Chennai

Contract farming

This refers to ‘Will ‘reciprocal tariff’ be a concern for agri trade?’ (April 2). Although yes, with huge tariff differences, India must strengthen its farm production.

One viable remedy is encouraging contract farming so that farmers with fragmented landholding may unite and focus on a few crops. Secondly, emphasis must be laid on the quality of exportable farm produce in view of the poor credibility of certification agencies. And, India must explore other markets for its farm exports with specific bilateral trade agreements.

Rajiv Magal

Halekere Village, Karnataka