Feedback from the readers

Positive outlook

Your cover story (Slowdown may hurt, but not kill) was timely. The report highlights the tenuous balance that needs to be maintained between controlling inflation on the one hand and sustaining and promoting growth on the other. A consumption-based economy with a burgeoning population is good news, but things can go wrong if policy-making gets tangential and overlooks factors to simultaneously accelerate growth and maintain global competitiveness.

V. Ramachandran, through e-mail

Companies should do their bit

It was reassuring to read why the Slowdown Won’t Kill You. It sends out the message that things are not as gloomy as they appear to be. You have rightly pointed out that the factor favouring India is rising consumption due to increased purchasing power. I feel companies can alleviate the situation by reducing their spends on advertisements and sponsorships. This way, they can keep prices down and reduce the burden on the consumers.

Chamarthy Deenadayal, through e-mail

Time for a cut in interest rates

The CXO Poll in Why the slowdown Won’t Kill You clears many doubts and sends out a positive message. An escalation of 40-50 per cent in prices in just five months is somewhat unrealistic. Things should improve if we get a normal monsoon and a good harvest. And growth can be sustained, even if there is a marginal decline in its rate. Besides, exports are on track despite the rising rupee. In fact, the Reserve Bank of India should consider a cut in interest rates to combat the slowdown. If right measures are taken, then the slowdown will neither hurt nor kill.

Jacob Sahayam, through e-mail

Lessons to learn from AICTE

AICTE: Time to revamp (BT, May 4, 2008) highlights the sorry state of affairs at the statutory body. One does not know whether to rejoice at ISB making it to Financial Times’ list of top 100 business schools in the world or lament the ostrich-like outlook of AICTE. It is sad that a statutory body that is supposed to regulate higher education is actually coming in the way of its development. The solution lies in a wellintegrated approach and the incorporation of an independent regulatory authority for higher education, as suggested by Sam Pitroda.

B.Rajasekaran, through e-mail

Aravind has vision

Your article on India’s Most Innovative Companies (BT, April 20, 2008) was very informative. In healthcare, you have made a great comparison by calling Aravind Eye Care the “Toyota of Eye Care”. Aravind offers quality eyecare at an affordable price to millions of rural people and has empowered thousands of young village girls by training them in eyecare. It would be fitting if you could devote an entire article to the group.

Arun R. Nagarajan, through e-mail

NBFCs need to revamp

The rising ambition of NBFCs was well analysed in Licence to Bank (BT, May 4, 2008). NBFCs, or nonbanking finance companies, went through difficult times in the early ’90s but have made a great turnaround since then. NBFCs are quite like the Development Financial Institutions (DFIs) of old. The prudential accounting norms introduced as part of the liberalisation process made the DFI role model outdated due to the high cost of deposits, long gestation period on term loans and high non-performing assets, culminating in an asset-liability mismatches. Most DFIs, such as ICICI and IDBI, therefore, quickly converted themselves into banks.

This helped them raise cheaper resources for funding credit. Things are not very different in the case of NBFCs, except that they lend for a relatively shorter tenures. Sooner or later, NBFCs, too, will have to convert themselves into banks. A beginning has already been made with 20th Century Finance and Ashok Leyland Finance merging into Centurion Bank and IndusInd Bank, respectively.

Srinivasan Umashankar, through e-mail

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