Editorial 1 / Office of power
Editorial 2 / Grateful excess
The security malaise
Fifth Column / Moving towards a new arms race
Why cutting interest rates is not that unjust
Letters to the editor

The spurious allegations made against two key officials in the prime minister�s office have shifted attention from a more important dimension of the functioning of the government of India. Mr Brajesh Mishra, the prime minister�s principal secretary, and Mr N.K. Singh, officer on special duty in the PMO, may be as pure as driven snow but their innocence cannot take away from the fact that the concentration of power in the prime minister�s office has no sanction in the Constitution of India. The special position that the PMO enjoys in decision-making and governance has a rather undistinguished history in India. It was an instrument of power that was created and refined by Indira Gandhi. The first mandarin to wield enormous authority within the prime minister�s office was P.N. Haksar. Under him, almost every single important decision taken during Indira Gandhi�s notorious left phase emanated from the PMO. This was a transgression of all the norms of democratic governance and subverted the cabinet system and its checks and balances. The cabinet became no more than a rubber stamp for decisions that had already been taken and endorsed by the prime minister and her office. From this, it was but a short step to the Emergency when the concentration of power and decision-making moved from the prime minister�s office to the prime minister�s household. Those who opposed the Emergency � and the Jana Sangh, the previous incarnation of the Bharatiya Janata Party, did � were critics of this political process of subverting democratic functioning.

The shadow of the Emergency has long since lifted and been forgotten but the power that the PMO enjoys has remained. Every single prime minister after Indira Gandhi has appointed his trusted bureaucrats or counsellors, to the PMO and has proceeded to rule the country through them. The degree of success has varied depending on the personalities and the abilities of the concerned bureaucrats. It is here that the undoubted abilities of Mr Mishra have become crucial in the manner in which the government of Mr Atal Bihari Vajpayee has functioned and the success and the goodwill that it has enjoyed. Not since P.N. Haksar has a bureaucrat enjoyed so much power, influence and proximity to the prime minister. It would appear that the PMO and its powers have become intrinsic parts of the system of governance. But this is not the way the founding fathers of the Constitution visualized things. Neither is it a healthy symptom for the Indian democracy.

The exercise of extra-constitutional authority is, of course, not the same thing as corruption. But its growing predominance in national affairs is not something that can be ignored in a democracy. In the furore over Messrs Mishra and Singh, this aspect is being overlooked. That the prime minister has chosen to stand by his men is commendable, as is Mr Mishra�s declaration that if his resignation strengthens the prime minister, he is willing to step down. But this interplay of confidence and loyalty only camouflages the really important issue. What is equally significant is the refusal of all political parties to question the very existence and the need of a powerful PMO. Corruption saps the body politic of all morality. Extra-constitutional power subverts, gradually but surely, democratic governance. The avoidance of both should not be too difficult a task. But instead of steering clear, the Indian polity seems to have embraced both Scylla and Charybdis.


Mr Jyoti Basu must be a very embarrassed man. He has never liked much fuss, and has made sparseness his very own style. Therefore, the latest display of the state�s gratitude for his long service must have struck him as quite outrageously excessive. Mr Basu�s retirement benefits are going to be formalized in the last cabinet meeting before the polls. The inventory is a veritable embarrassment of riches � special security, a full office infrastructure, apart from lavish domestic, transport and medical perquisites. This, over and above the usual entitlements of retired legislators.

This is not simply a matter of good, or bad, taste. The scale and quality of the fanfare paralyzing the city on the occasion of his formal farewell ceremony were an ample foretaste of the Left Front government�s mode of expressing certain undoubtedly profound sentiments. In this case, larger material and ethical questions ought to be raised. Can West Bengal afford to keep up this generosity towards its retired political leaders? In a state where the police is chronically underequipped and unready, in which the most basic healthcare hardly manages to limp along, the symbolic disparity between Mr Basu�s privileges (involving both these services) and the predicament of the state is too glaring to be acceptable. The wastefulness of such �gifts� is a question that a government committed to the people certainly ought to be pondering. The whole matter seems to have been quite definitely settled, requiring only a formal stamp of approval from the cabinet. There is even a new bill to be placed in the house in order to regularize these benefits, which will also cover the other living former chief minister of the state. This might then inspire the other states, swelling the already obscene amount of money spent on senior politicians, retired and in office. Mr Basu will surely continue to remain an active presence in the polity, and he has every right to his legitimate entitlements for having been in service, like every other government servant. But draining the state, and its impoverished institutions, to sustain a misplaced and inflated sense of obligation to a particular individual, and placing a bill to legitimize this, is carrying gratitude a bit too far.


It is hazardous to take to the keyboard in the midst of a snowballing political controversy, specially when investigative journalists are still sitting on many hours of videotape, waiting to treat a hungry media and frustrated, out-of-work politicians with morsels of trash. But when the defence minister resigns on national television, ostensibly to uphold the morale of the armed forces � thereby implying that this unsavoury episode is indeed undermining the morale of our forces � then commentators on national security are forced to take note.

Watching the idiot box these last few days, one is touched by the deep concern shown by political leaders of all hues to the cause of national security. A concern that has been conspicuous by its absence in worse times for the security establishment. It is to unravel the cause of genuine national security that this writer has embarked on this piece even before the drama has unfolded fully.

As far as one can determine in the current fog of political oneupmanship, the following allegations are being levelled against the government, based on which Parliament proceedings are being halted and the government is being asked to step down � corruption in defence purchases at every level of the ministry of defence, including uniformed personnel; political party functionaries accepting funds from arms dealers, thereby subverting the defence procurement system; use of the defence minister�s residence for meetings with arms dealers, and finally, the subversion of national security.

To look at corruption in defence purchases first. Within our fragmented polity and independent media, military personnel are following events keenly. That they are not permitted to express themselves in the media should not be construed as endorsement of the state of affairs. The truth is that while the armed forces are keen observers of the rights and wrongs of our governance, they are resigned to the fact that in defence procurement, as in every other walk of life, there is rampant corruption and unfair money is being made.

Indeed it is this acceptance that may have tempted some Tehelka actors in uniform to cross the morality foul line. After all, during the past decade or more, even within the armed forces, fingers have been pointed at those indulging in malpractices in concert with politicians, bureaucrats and middle- men. Surely with the background of scandals like Bofors, HDW Submarine and Airbus 320, it would be futile to expect reality to be otherwise. In this scenario, the armed forces are unlikely to be upset if some of this home truth has now come on their TV screens. Although, one must admit, that seeing uniformed officers debase themselves must surely undermine the professional pride and izzat of our forces � causes for which they put their very lives on line.

Look at the propriety of collecting party funds from arms dealers, next. The law does not permit any means of fund-raising by political parties. Yet not only do political parties spend thousands of crores of rupees on electoral and other expenses, they are also given funds by individuals or institutions, often in cash. This has been accepted as a norm. From whom and how the funds are collected and how they are accounted for should have been an important issue to be laid down. For obvious reasons, nobody would want to give himself ample margin.

How then does one differentiate the Tehelkas from genuine political contributors? This is the poser for those in the forefront of today�s shouting brigade. When the Jain hawala case hit the news, we had many senior leaders admitting that they had received money towards party funds. Jain�s antecedents � the source of funds, the methods of payment and return favours � were never mentioned. In the harsh commercial world, one truth prevails. That there are no free lunches. So perhaps not just the two party presidents felled by Tehelka, but all others need to tell the people how they are any different. The crime of the two ex-party presidents, as my school housemaster would say, is not accepting the money but getting caught.

Much concern has been expressed about the supposed arms dealers having met the leader of a political party in the defence minister�s residence and accepting handouts. As far as the location is concerned, one wonders which of the two undermines national security. Ottavio Quattrocchi in New Delhi having access to the highly classified RAX telephone authorized only to very senior government functionaries or the residence of the defence minister also being used by a party president? Detractors of the present government need to answer whether the method would have become acceptable if it had taken place in a five-star hotel? Clearly, therefore, this is a non-issue, more a tactical ploy to inj-ect confusion in the enemy political camp.

Finally, the crux of this debate and an issue that concerns ordinary patriotic citizens of the country with no political axe to grind. Has this episode, in itself, compromised national security and is it a pointer to a deeper malaise slowly but surely eating into the vitals of national security? The answer to the former is clearly in the negative while to the latter it is clearly in the affirmative.

To take the former first. In the Tehelka case, even if the various functionaries subverted either by power or by greed had succeeded, a time would have come for the army to evaluate the system. Such evaluations are done by specialists from field formations and test establishments and not by the likes of those military men, corrupted by the Delhi system, which the Tehelka film has exposed.

With the hindsight of many years in the Indian air force test establishment, this writer can reassure the reader that in this case, even if the equipment had existed, its performance would have been judged on purely technical merit no matter what interest was shown, by whom and at what level. At the hands of our servicemen in the field, national security would in no way have been threatened. Mercifully for this nation, this is still true. But as we have seen, the abyss is approaching.

As far as the deeper malaise is concerned, there is a silver lining to this otherwise great national shame. We now have on record deep concern for national security expressed by every political party. The nation has every right to be assured that these are not crocodile tears camouflaging political ambitions, but are borne out of genuine concern for the security of the country, to stem the rot that has ingrained itself into the defence procurement system.

As a test and as a self-cleansing exercise, let this opportunity be taken by the Parliament to unanimously agree to an investigation by a sitting Supreme Court judge into the entire Sukhoi-30 purchase. A programme that, including licence production, will run into tens of thousands of crores of rupees and stands as the largest programme in India�s defence history. A programme that has at one stage or another been steered by different governments consisting of almost every major political party in the country. And a programme that has drawn serious allegations of the involvement of middle-men and kickbacks in some parts of the media without drawing even a whimper from the very parliamentarians who are today literally up in arms.

If such an inquiry gives the system a clean chit, the nation can heave a deep sigh of relief. If, on the other hand and as many suspect, it proves to the contrary, then all those shedding crocodile tears for national security today will stand exposed with their hands in the till. Their tears today will be seen not for national security, but because the till is presently out of reach. Is the national polity willing to accept this challenge?

The author is a retired air marshal of the Indian Air Force    

The American president, George W. Bush, has laid out a blueprint of �a new architecture for the defence of America and its allies�. It is based on light, high-tech weaponry and a missile shield that may one day render tanks and aircraft carriers obsolete. Bush has adopted two features of the Ronald Reagan legacy, tax cuts and the strategic defence initiative commonly known as �Star Wars�. Alarmed by the burgeoning destructive capacity of ballistic missiles, Reagan spent millions of dollars advancing his concept of an umbrella shield to protect the United States from this threat to its security.

But by the time Reagan left the White House in 1989, his missile shield was yet to be little more than an aspiration. His successor, the elder Bush, paid lip service to the idea but there was little practical advance by the time his single term ended.

The last president, Bill Clinton, who followed was clearly less keen on this but permitted the continuation of research on some variations of the original concept.

The main Clinton plan for missile defence was a limited one. It aimed at establishing devices in the northern American state of Alaska to intercept a limited number of missiles fired by rogue states. At the present time, the administration includes under this category North Korea, Iraq and Iran.

Failed tests

The Bush plan is much more ambitious. His recent speeches on defence have all emphasised his commitment to a larger and much more complex shield than the Clinton administration even contemplated. He has assured a military audience that the US will have a multi-layered defence against missile attack at the earliest possible date.

But, to the embarrassment of the sponsors of the National Missile Defence system, its limited objective looks suspect. Two tests were made. One of a very advanced interception system and another of the land-based rocket designed to hit an enemy missile � and both failed. After the second attempt, a further test of even more superior technology was scheduled for last July. It has not yet taken place.

Critics of both Clinton and Bush argue that long range missiles are no longer the major threat. According to them, those who target America with weapons of mass destruction were less likely to use intercontinental missiles than use small devices smuggled in suitcases, cars and the like. They said that these alternatives are less costly and more reliable and accurate.

Despite assurances that an American national missile shield would also protect friends and allies, the creation of such a system would certainly be a violation of the anti-ballistic missile treaty, 1972. The Russians are screaming at the NMD because the Bush administration is planning to alter the major part of the ABM treaty.

Going ballistic

Recently, Russia has handed over its proposals on European anti-missile defence to George Robertson, secretary general of the North Atlantic Treaty Organization. Moscow regards the set of proposals as an alternative to the US NMD system. It covers the major part of Europe. The Chinese have far fewer intercontinental ballistic missiles and these would be threatened by the NMD. Beijing�s angry response to the NMD and its �promised� linkages on issues of non-proliferation will be a headache for Bush.

Any change in the present Chinese posture is certain to fuel a fresh round of debate, given the new-found nuclear machismo in Indian strategic circles. The environment the NMD might thus generate would heighten threat perceptions in India. It would accelerate the operationalization and the state of readiness of the nuclear force.

India�s response can trigger off a similar response from Pakistan and lead to a regional arms race. This means a renewed transfer of missile technology to Pakistan from North Korea and China.

NMD deployment will certainly upset the fate of the comprehensive test ban treaty and of the negotiations on the fissile material cut-off treaty. Bush, will now have to wait for a report by the defence secretary, Donald Rumsfeld, who has been requested by the president to undertake a top-to-bottom review of the US security strategy. The plan that emerges will involve huge additional spending. But the advocates of NMD are undeterred by these difficulties.


�I am all for progress; it�s change I don�t like�, said Mark Twain. The critics of the finance minister�s budget will agree with Twain. Growth we all want but for that if you demand any sacrifice then we don�t care a hoot. Curiously, even if the sacrifice demanded of us seems most logical or does not even affect us as such, we all love to join the chorus and turn into all-knowing critics. The more underdeveloped a region, the more vocal the critic.

The proposed cut in interest rates on small savings in the country is one such interesting case study. First, look at the very logic of paying interest. It is to compensate the consumer for not spending the money today. By postponing his decision to consume today, he faces a discomfort. Money stashed away does not satiate any want per se. On the other hand, he stands a risk of losing the value of money he keeps away today. Given a steady stream of inflation, what his saved money could buy today, would not buy tomorrow. To maintain the value of money, he will need some incentive, at least enough to maintain the purchasing power of the money saved. Adding these two factors � maintenance of purchasing power and to overcome the disincentive of postponing a consumption decision today � he needs compensation, which we call interest.

When an active person stashes away money he does it for two reasons � one, to keep his unspent earning; two, to save for the rainy day. Most of us are compelled to save for the second reason. Few of us have the luxury of saving because we can�t spend what we earn. And when we do so we all look for two aspects � safety and steady returns. Small savings schemes in India have been offering both to millions. But the two successive Union budgets have shown that here, too, one cannot expect a steady stream of high returns. Rates of interest offered have been coming down to the discomfort of many. Are we not, in effect, harming millions of retired and elderly people?

In the heat of the sentiment so expressed, what we seem to ignore is logic. In any economy where inflation is a variable factor, a fixed interest offered on savings is an anachronism. A 12 per cent return is not adequate when the inflation rate is 14 per cent. This was the case in India in the early Nineties. Small savers at that time had actually been getting less than the rate of price rise. The governments of the day had actually been exploiting the hapless middle class. But no amount of strident criticism now will right the wrong meted out then.

The point we may establish is the urgency of having interest rates on such long-term savings fixed in relation to the inflation at the time. In other words, rate of return should be inflation plus one or two per cent in order to take care of the disincentive of postponing the consumption decision of today. Even if this means lowering of interest today, the government must not hesitate to bring about the changes. It has no right to fix interest rates arbitrarily. For driving home this elementary truth, the Union finance minister deserves bouquets, not brickbats.

The problem is that nobody wants change � least of all change in the form of downward revision of income. If inflation goes down, interest rates on long-term savings will also come down. Little do we care of the purchasing power of money we receive. Return in real terms is of very little interest to many of us. Through interest rates, we need to maintain the purchasing power of our savings. For that we need inflation-adjusted returns, even if that means a cut in interest rates at times of low inflation. Yashwant Sinha will do justice if he offers inflation plus returns on small savings. We are not concerned as long as through inflation adjustment, the government ensures unchanged real value of our savings.

Apart from the urgency of inflation-adjusted returns, there are other factors which necessitate an immediate change in the scheme for small savings. The lion�s share of small savings is used to finance expenses of different state governments. No long-term assets are created to generate future income from such investments. In short, money now received goes for repayment of money received earlier and maturing today and the remaining to meet government consumption expenses. This system can continue uninterrupted as long as money received today is more than the repayment liability of today.

In effect, the entire scheme of small savings has been financing consumption expenditure of government, shifting the onus of repayment to the next generation. In other words, in the scheme of things, the previous generation is taking money from the present, who, in turn, is looking towards the next generation for repayment. The cycle can continue, as we have mentioned, as long as collection today meets our liability of date. There may be two unforeseen factors, which may lead to a break in the chain.

First, if there is a sudden lack of confidence in the government being able to repay money according to schedule. Then all will queue up for taking back money so put in. No government can hope to repay the entire money in one shot. Though such a sudden loss of confidence is unlikely, there are plenty of examples of governments defaulting. New Delhi defaulted on external loans in 1991. Maharashtra defaulted recently on its liability towards Dabhol. Still we may stop worrying about government default for now and examine the other unforeseen factor that may lead to a break in the chain.

Collection today may be inadequate to pay back collections yesterday. And this may happen even without a change in the propensity to save of the next generation. In fact, with the drop in population growth rate, 20 years hence, there will be fewer savers to foot the repayment liability of the previous generation. In India, for instance, between 1991 and 2016, the percentage of elderly persons is projected to rise by 107 per cent while the total population is expected to grow by 49 per cent.

As a result, the proportion of elderly persons in the total population is projected to rise to 9 per cent. In every rich country the ratio of pensioners to workers will rise substantially between now and the year, 2030. Since state-run pension schemes and small savings schemes generally work on the pay-as-you-go principle, there is an urgent need for recasting the system. Sinha has attempted to do so in the recent Union budget.

Apart from the problems mentioned above, there is the problem of an unduly high cost of money as a result of high interest rates offered on small savings. In an economy, one cannot have an independent island of high interest rate. The high rate of small savings leads to a high repayment obligation for the government. This causes a high rate of borrowing, high fiscal deficit and effectively takes away money available for productive investment. Even banks at times find it more attractive to invest surplus funds in government debts than in industry.

Thus, the high cost of government borrowing dries up productive investment and suffocates the productive sector. Unfortunately, it needs some insight to understand the complicated link and the resulting problem. Politicians and union bosses have little time to probe the issue. It is easier to cry oneself hoarse over changes than to offer constructive suggestions.

What such critics wink at is the change in the method of fund management. In advanced economies, the government has been withdrawing from collecting and managing such long-term funds. One needs professionals to judge market risk and earn decent returns. It cannot be done according to bureaucratic whims and legislative diktats. For example, in case of small savings collected by various state governments, is it possible to calculate the economic rate of return on the fund raised? In contrast, mutual funds, even in India, have been showing quite a decent rate of return.

Annualized returns over the last five years for such funds is 30 per cent or above. If a small investor opts for the units of such funds he may earn a much higher return of 11 per cent or so paid by the government. In short, there is an alternative option. The sky will not fall on the heads of the small savers if rates of interest on state-run schemes come down. Only, it might fall over the heads of the politicians mismanaging the state economies. Predictably, such states will cry hoarse against the Union budget. If they cannot dupesuch investors year after year, how will the states continue to finance their extravagance?

True, fund managers are no gods, nor are they crystal-gazers. There have been occasions when funds have performed worse than the index. That is if the stock market has gone up, the value of the fund has climbed slower than that. Also, there have been instances of rogue traders ruining a fund. To control such problems there must be stringent codes for market regulation and supervision. Once such a system is in place, we may even consider replacing state-run small savings schemes with privately-managed funds to suit all pockets. The point to note is that long-term savings is for our own rainy days, and not for bailing out bankrupt governments.



Shame and scandal in the family

Sir � Flip flop. From baying for the blood of the Bharatiya Janata Party government, K. Sudarshan, the Rashtriya Swayamsevak Sangh sarsanghchalak, suddenly seems to have changed tack (�RSS throws weight behind Vajpayee�, March 19). Is it because of a rather late realization that the BJP and the RSS after all belong to the same family and that family members ought not to be bickering with each other in public? There is no doubt that the RSS chief could not stop himself from using this one chance of wielding the stick with the BJP which has been putting down the former for quite some time. There have been numerous instances where the RSS has tried to show the BJP who is boss. Sudarshan, if one notes, has seized the opportunity to make the likes and dislikes of the RSS known to the government once again � Brajesh Mishra being called �incompetent� is one instance. He has also reminded the government of the troubles the RSS can create. But did the turnaround have to be so ridiculous?
Yours faithfully,
Joy Sen, Calcutta

Still bleeding

Sir � Ariel Sharon�s election on February 7 as prime minister of Israel by a landslide victory is of crucial importance to the west Asia peace process (�Power pangs for winner Sharon�, Feb 8). Sharon�s career is marked with the acquisition of Arab lands and Zionist expansionism. Naturally, his ascendancy has brought a pall of gloom over Palestine. To the Arabs, Sharon is still the hardcore Israeli general who took part in all the Israeli aggressions from 1953 to 1982. The last of these was the �Peace for Galilee� invasion of Lebanon, which resulted in the massacre of 2,700 Palestinian refugees in the camps of Sabra and Shatila. These acts earned Sharon the epithet, �Butcher of Beirut�.

As a minister and member of parliament, Sharon voted against peace deals. His opposition to the 1979 accord with Egypt, the withdrawal of forces from most parts of Lebanon in 1985, Israel�s participation in the Madrid peace conference, the Oslo accord of 1993 and the Hebron agreement of 1997 is well-known.

In 1994, he abstained from voting on the peace treaty with Jordan. Last year too he objected to the Israeli withdrawal from Lebanon. Sharon�s uncompromising nature is also evident from the statement he made a day before the elections. He wanted the people of Israel to vote for him because he would preserve for them an undivided and united Jerusalem as a capital for the Jewish people.

However, on assuming office, Sharon showed a conciliatory approach. He began a dialogue with Ehud Barak about the setting up of a national unity government, although the two leaders are sharply divided on the kind of peace adjustments they would like to have with the Palestinians (�Arafat to give Sharon a chance on peace�, Feb 12). Barak had offered to set up a Palestinian state consisting of about 90 per cent of West Bank and the Gaza Strip, sharing Jerusalem and dismantling the Jewish settlements in the region. Therefore, Sharon�s invitation to the Labour Party for talks was significant.

However, Barak�s refusal to join the coalition paves the way for further uncertainty in west Asia (�Barak blessing in disguise for Sharon� Feb 22). Labour presence would have helped exert a moderate influence on the government run by hardliners. There are groups of reactionary forces like the ultra-nationalists, messianic religious parties, hardline Russian immigrants and military settlers living in the West Bank, Gaza Strip and Golan Heights who support Sharon. A fresh wave of violence has already erupted in west Asia. If the moderates don�t come forward, the region will continue to bleed.

Yours faithfully,
Seema Sengupta, Calcutta

Sir � One never ceases to get appalled by the continuing violence in west Asia (�Israel grenade injures six Palestine children�, March 16). Even schoolchildren are not being spared now. No matter how serious the conflict, the targetting of the young is inhuman. There seems to be something frighteningly unreasonable in the Jewish recalcitrance to give up the regions they have occupied from the Arabs.

The trouble with the rightwingers in Israel is that they are intoxicated by the power they have come to wield. Support for them in the United States has also raised many eyebrows. Surely, mediation by the US in the west Asia crisis cannot be totally unbiased given the strong Jewish lobby in the US.

Yours faithfully,
Souvik Mukherjee, via email

Taking stock

Sir � The present finance bill is supposed to have been designed by the finance minister in order to induce the small investor to invest in the stock market and not in fixed deposits. This is indicated by the reduction, both in interest rates and in the dividend tax (�Perfect 10, almost, for Sinha�, March 1.) But recent incidents in the stock market prove that it has become the duelling arena for bulls and bears where the small investor could lose his meagre capital because of the manipulation of speculators.

Small investors look for security of their capital and decent returns on the investment, both of which are absent in the stock market. If Yashwant Sinha wants the small savers to invest in equity, he should enable the public to buy and sell shares directly from and to the companies concerned, and not through the stock market where prices are manipulated by parties interested in the game.

Yours faithfully,
C.V.K. Moorthy, Bellary

Sir � The Union budget 2001-02 contains some long-overdue measures such as initiatives for the reduction of the bloated bureaucracy and the raise in the ceiling for retrenchment from 100 to 1,000 workers.

But there are three disturbing features in the budget. One, the failure of the government to display exemplary financial prudence. Two, the reduction in interest rates on deposits is against the logic of liberalization. Long-term savers should be encouraged by, and rewarded with, higher interest rates. There is a propensity to save in India and this generates capital. This tendency should not be thwarted. Three, excise on items of mass consumption should have been slashed to enable better consumption by people on the lower end of the economic scale. This would also stimulate industrial growth.

The budgetary approach is based on wrong policies because the government wants to borrow compulsorily at cheaper rates and because the financial intermediaries and banks are operating at low levels of efficiency. Depositors are needlessly being made to pay a price for this. If the interest rates were hiked, it would have benefited millions of pensioners, fixed income group people and others.

Yours faithfully,
M.R. Pai, Mumbai

Sir � The technicalities of the budget are beyond the comprehension of the common man. The same is true for the share market. The underlying principle of the share market is �money begets money�. It is only the affluent who can think of investing their money in the share market given the risk factors. Yashwant Sinha�s recent budget has come as a boon to these privileged sections of society. But the bubble has burst now with the stock market dipping considerably and even generating fears of a collapse.

Unless people have enough money to invest irrespective of the risk factors, neither will the stock market burgeon nor the economy experience growth.

Yours faithfully,
K.R.Venkatasubramanian, Calcutta

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