Consumption conundrums

This latest household consumption expenditure survey shows that the rural-urban gap continues to narrow with faster pick up in rural spending. Household expenditure surveys are also important as they are used for estimating poverty and for constructing economic indicators such as the Consumer Price Index.

The growing clamour for adopting a new base year by late 2025 or early 2026 is understandable, as it would result in lower weightage to food in the Consumer Price Index. But what cannot be forgotten is food inflation is still a challenge.

M Jeyaram

Sholavandan (TN)

Insurance hurdles

With reference to the editorial “Inadequate cover” (December 30), the low insurance penetration risk can be attributed to the poor regulatory control, lower standards of consumer protection, lack of product awareness and complex claim settlement processes.

In health insurance, the nexus between some unscrupulous corporate hospitals and health insurers resulting in exorbitant treatment charges.

Transparency of policy terms bhassle free claim settlements, technological adoption for for speedy grievance redressal, besides restoring tax sops to consumers are vital.

Sitaram Popuri

Bengaluru

Unsecured worries

This has reference to ‘A year after risk weight hikes, lenders still wary of unsecured credit growth’ (December 30).

The factors determining the credit quality for unsecured and secured loans are almost similar where enforceability of the security and liquidity play a major role.

Comforts like post dated cheques, set off from salary accounts and capturing other businesses of borrower are always helpful. Mere increase in capital adequacy to 125 per cent by itself will not improve asset quality.

M. Raghuraman

Mumbai