THE REAL MALAISE

This is in reference to the editorial, ‘Bottomed out?’

(July 21). The downward pressure on rupee is not on account of just inflationary pressures and rupee outflow, but more so on account of perceived future actions that are being envisaged in terms of tax collections and increasing inflation. What the markets are envisaging is that the tax collections are falling with declining spends and general economic slowdown. And the same is visible in the random tax changes continuously announced by the government. From the return of ‘Gabbar Singh Tax’ on basic necessities to the windfall tax on crude, the govt machinery is in an overdrive to protect revenues at all costs while justifying the same using such cryptic wording that one can only laugh at. Further let’s clear the fact that FII withdrawals have been just seven per cent of our USD 600 bn forex reserves, that too over a period of seven months. Compare that with the stupendous decline in rupee value over the same time period and it becomes clear that the two aspects are not directly proportional. The market is clearly factoring in a stagflation environment as the government is not able to move the growth handle and is thus discounting the rupee. It’s the growth and sanity which has bottomed out, not the rupee and inflation.

— REGARDS, GURUGRAM via email

PROSPECTS OF DEVELOPMENT

This is in reference to ‘Great Expectations’ by Ravi Rebbapragada (July 21). Droupadi Murmu, since her nomination, has indeed evoked a lot of expectations among general citizens and in her own tribal populace too. As she has already been in the shoes of a tribal woman, she will understand the whammies of SCs and STs more intensely. Her background as a tribal woman and now her involvement in country’s decision-making at the topmost level, both will ensure a contraction of the gap between the tribal and urban populace and their development, culminating in the wholesome good of the country.

— ANUSHKA JAISWAL, UJJAIN via email