Budget imperatives

US President Donald Trump’s threats of import tariff hikes, visa crackdowns, and other immigration-related actions; capital outflows from a strong dollar; and rising treasury yields, which hasten the depreciation of the rupee, are causes for concern.

A weaker rupee not only prevents RBI from cutting rates but also from injecting liquidity due to its inflationary implications.

In this backdrop the Budget needs to rationalise GST rates to spur demand and a put leash on food and fertilizer subsidies and direct funds towards less market-distorting income support transfers and infrastructure.

M Jeyaram

Sholavandan (TN)

Pinching the pocket

Prices of rice, wheat, cereals and edible oil have been spiralling in the last couple of months.

Every time one visits the grocery shops, one has to shell out a minimum of 10 to 15 per cent more for the same items bought last (Brakes of the boom, January 26). The MRP of food items keeps changing hitting the common folk.

Despite bountiful harvests, prices of agri commodities keep shooting up. A poor consumer tries to scrimp on his spending temporarily to manage the situation but not for long.

Retail inflation impacts Consumer Price Index leading to cascading effect on the exchequer in outflow of money towards shelling out proportionate dearness allowance to the government employees.

The onus lies on the government to arrest the trend to cut down the inflation level.

RV Baskaran

Chennai

Pay panel quandary

I fully agree with your observations in the Editorial ‘Questionable rationale’ (January 27).

On the one hand, the RBI is obsessed with inflation and not cutting rates.

At the other end of the spectrum, we see that the government is ready to loosen its purse strings on the revenue expenditure.

Setting up of the Eighth Central Pay Commission and implementing its recommendations will undoubtedly increase the money supply and push up prices too.

Also salary hikes are offset by higher taxes so they are often a mirage.

S Ramakrishnasayee

Chennai