Deposit mobilisation

This refers to ‘Banks must ensure adequate resources for lending’ (June 11). Even though the lending power of the banking sector has grown appreciably due to gross and net NPAs coming down, the resources to lend are not expanding fast enough to meet the demand for credit. Banks, being major providers of credit to various economic activities, have to go aggressively for retail deposit mobilisation, and to facilitate that they must increase the interest rates on those deposits.

The ceiling of retail deposits to ₹3 crore is advantageous to banks. Banks’ reliance on bulk deposits needs to be restricted to curtail the cost of funds.

Also, existing deposit products need to be altered, especially retail ones, to make them more depositor-friendly and cost-effective for banks.

VSK Pillai

Changanacherry

Voters have come of age

This is with reference to ‘Re-elected parties see voter base decline in 68% of the constituencies’ (June 11). The decline in vote base of various parties is but natural, looking at the way our politicians have fought over irrelevant matters, not touching real issues such as employment generation, improvement in infrastructure, welfare schemes, etc.

Political parties and leaders should realise that henceforth they are answerable to a smarter and younger India who cannot be fooled with empty one-time money generating schemes, loan waivers, and hollow speeches. The Indian voter has become smart and cannot be taken for granted. The voter demands good infrastructure, jobs, economic development, and investment in health and education facilities. The various political parties need to learn lessons from the verdict and work for the development of the country.

Veena Shenoy

Thane

The dip in savings

This refers to ‘Is a savings dip driving growth?’ (June 11). For a nation whose savings once catered to its capital requirements, the dip in gross domestic savings must be a worry. In a decade it has dropped to 30 from 35 per cent of GDP.

The savings of India’s corporate and government sectors are inadequate to meet the country’s investment needs. An added concern is household debt figures show an unwelcome trend. Non-mortgage debt is far higher at 25 per cent of GDP than the 10 per cent of the mortgage class, indicating consumption-led borrowing.

Also, income disparity is increasing which skews purchasing power and taming inflation becomes a huge challenge.

R Narayanan

Navi Mumbai

Reforms must continue

This refers to ‘Change and continuity’ (June 11). From the look of the Cabinet it will not be an exaggeration if we say that it is old wine in a new bottle.

But it should be easy for the Prime Minister to take forward the work done in his previous tenure. The forthcoming Budget would definitely show us the direction, but it would be welcome if the government continues on the reform path, especially in the areas of land, labour and agriculture. GST collections have been breaking records each month, and it is time the government moved towards a three-rate regime.

It should also bring more sectors under PLI. The RBI dividend windfall has given significant fiscal space to the government and it can choose to reduce borrowings as well as stimulate the economy. Also, more attention must be given to the underprivileged sections.

Bal Govind

Noida