One side of the story

Sir — First, the holier-than-thou reasons for waging war on Iraq, then the fabricated news coverage and manipulated television reports and finally, an all-out effort to make the most of a victory and a war hero. Hence the American TV’s scramble for young Jessica Lynch’s tales from the Iraq war (“Networks vie for Lynch story”, June 18). Leave it to the Americans to make a mountain out of a molehill. How is Lynch “a hero to many and a symbol of...patriotic pride” any more than so many young Iraqi men and and women? She bore the brunt of the war, but so did the orphaned and maimed-for-life Iraqi boy, Ali Ismail Abbas, and those nameless, innocent families gunned down by the the coalition troops. Do these dead Iraqis remind the Americans of their obstinacy and buffoonery just as Lynch reminds them of patriotism? Surely not, because Americans love to feel they are on the path of “righteousness and truth and justice”. The fuss over Lynch is making them feel exactly that.

Yours faithfully,
Shaoni Das, Ranchi

In whose interest?

Sir — Abhirup Sarkar has hit the nail right on the head by pointing out that the Reserve Bank of India is only serving the government’s interests by reducing interest rates (“To break the vicious circle” June 6). The RBI is doing this solely because the government is a large borrower, and a reduction in the interest rates will reduce the burden of loan repayment. The government is simply taking the easy way out at the cost of the small investor, and yet, has failed to keep the fiscal deficit under control. There is always a huge gap between the projected fiscal deficit figure in the annual budget and the actual one at the end of the year. Government expenditure, on the other, hand is forever on the rise. Why should the RBI make things easier for the government, which does not even consider the option of expenditure reduction?

The move to reduce interest rates — which happens to be the main source of income of most senior citizens — so that the young people increase their purchase of goods including consumer durables, does not seem to have paid off either. A recent report shows that this has led to a reduction in the purchase of daily necessities, especially groceries.

It is, therefore, time that the government made a serious effort to curtail its unnecessary expenditures to assist the RBI in putting the economy on the right growth path. The economy will be perceived to be healthy if the fiscal deficit is brought under control. In the process of trying to reduce expenses, it would also do the government good to check corruption within its various departments. The value added tax has been put in place only in a few states presumably to satisfy the traders’ lobby. The Kelkar committee report, which advocated tax on agriculture income, has been kept in abeyance to safeguard the interests of the powerful farmers’ lobby, which includes several politicians.

The government has been righteously declaring that it will downsize its offices. But nothing has come off such pious declarations.

The RBI and the government need only look at the American economy, which is in recession even with drastically reduced interest rates. Should the RBI still be making room for the government’s profligacy?

Yours faithfully,
Tamal Basu, Kodalia, Hooghly

Sir — The adverse effects of successive interest rate cuts, particularly on the senior citizens, have been talked about for some time. Abhirup Sarkar has exposed the bad economics of it. Earlier, the finance minister had magnanimously announced that Life Insurance Corporation of India would launch the Varishtha Pension Bima Yojana, an assured return pension scheme for senior citizens. Here the minimum and maximum monthly pensions proposed are Rs 250 and Rs 2,000 and will start from the month following the payment of the lumpsum amount. Any citizen above the age of 55 years will qualify. But now it has been postponed, and on the flimsy excuse that A.B. Vajpayee was preoccupied with his China visit. But it seems more credible that the government has miscalculated the amount of subsidy to be given to LIC. So despite having arranged for funds to be invested in this policy, there is little to do but wait.

Yours faithfully,
Ajit Kumar Mukherjee, Calcutta

Sir — Scores of advertisements of housing complexes sprouting up in and around the city, not to speak of the whole country, are thrust on us every day. Banks have reduced their lending rates to facilitate purchasing houses, flats or property. In the absence of attractive investment substitutes — with falling interest rates and unsustainable performance of share markets — buying property has become the safest investment. The taxman is also treating the housing sector more favourably than other financial assets. Taxpayers are getting relief on interest on loans taken for purchasing property and on repayment of the principal amount of loan. Further, one can also get exemption from capital-gains tax if the proceeds of the sale of a house are further invested in purchasing the house property within a stipulated time. These have added up to make the housing industry a lucrative and potentially beneficial one.

But will this trend be sustained? Housing is as volatile as the stock market. Investments in the housing sector are increasing in the expectation that the price of houses will continue to rise. Is it not a sign of the formation of another bubble that might burst one fine day? Reduction in property prices is surely on the anvil. A decline in prices may leave people with houses worth less than the amount they have borrowed as loan. And it may soon happen that banks will be burdened with increasing non-performing assets on account of default in repayment of loan.

Yours faithfully,
Masood Md Sohail, Calcutta

Sir — The de-reservation of 75 more items in the small-scale industries is a welcome change. However, keeping in mind the important role the SSI plays in our exports, a total review of the de-reservation policy for this sector is more appropriate. Most SSIs are handicapped by insufficient capital, outdated technology used in production and weak marketing.

Yours faithfully,
R.N. Lakhotia, New Delhi

Hot air

Sir — In “The charge of the child brigade” (May 24), Samita Bhatia mentions that Kutumb is shown on Zee TV. It is, in fact, shown only on Sony Entertainment Television.

Yours faithfully,
Prithviraj, Calcutta

Sir — The plot of Kahani Ghar Ghar Ki has from the beginning centred around jealousy, conspiracies, extra-marital affairs, and other absurdities which seldom reflect the average Indian’s lifestyle. Since these are hardly ghar ghar ki kahani, maybe the makers should think of a different name for their serial.

Yours faithfully,
Sandeep Holani, Salkia