Date:05/05/2003 URL: http://www.thehindu.com/2003/05/05/stories/2003050500431002.htm

Opinion - Letters to the Editor

RBI interest

Sir, — The RBI decision to lower the Bank Rate which, in turn, results in lower interest rate with hints of reduction in the future is an ominous sign to honest savers. It is a case of `robbing Peter to pay Paul'. The intention also appears to be to reduce the interest burden on the Government and support inefficient fiscal management.

It is extremely unfair to the saver even as the Government has succumbed to the political pressure to defer VAT so that traders and business houses could continue to evade taxes. It is ironical that it is this very group that is going to be the major beneficiary through cheaper loans at the cost of the saver. The Reserve Bank governor, Bimal Jalan, should realise the consequences of this shortsighted policy.

P.V. Hariharan,
Chennai