THE HINDU BUSINESS LINE
Financial Daily
from THE HINDU group of publications

Friday, November 02, 2001

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Opinion

Banking and Finance
An unkind cut for RBI
LAST week the Reserve Bank of India snipped the Bank Rate by half a percentage point, and pared the cash reserve ratio to let banks have another Rs 8,000 crore to lend. Even if it did not specifically say so, the RBI dropped enough hints that it wants ba nks to lower their lending rates and nudge the sluggish economy forward. In response, this week some banks have announced a cut in their deposit rates; even if one senses a reluctance among bankers to drop lending rates, they may eventually persuade them selves to do the RBI's bidding.

Editorial
The UTI makeover
THE BROAD THRUST of the Malegam Committee recommendations on the corporate repositioning of the UTI appears to be on desirable lines. At the core is a severance of the link between the UTI and the government. This is to free the institution from governme nt interference and also remove misconceptions about UTI's operations being underwritten by the government. The government's position has been that it would not repeal the UTI Act to allow for its eventual privatisation. But it would do well to remember that the alternative is periodic bailouts of UTI's assured returns scheme that the government can ill afford. Of course, snapping the link with government is only a part of the solution. What the UTI needs is transparent, quality fund management free fro m any extraneous pressures.

Foreign Trade
Reforming tariff quota system
DURING the Uruguay Round of Multilateral Trade Negotiations, member-countries agreed to a tariff rate quota system as the most appropriate method to ensure market access during the transition from an agricultural trading system of complex tariff and non- tariff barriers to a tariff-only regime. Of late, the system has come under considerable criticism and, in fact, its continuation is also questioned. It may be inappropriate to discontinue the system at this juncture.

Miscellaneous
Social code
A TIME there was, until some thirty years ago, particularly in an honour-conscious and value-based state such as Tamil Nadu, when people felt themselves bound by a strict social code. They shunned anyone who was involved in a case civil or criminal even if the offence was a minor one of an undischarged debt, a land dispute or an assault. And if it was an accusation of commission or abetment of theft, misappropriation, embezzlement or murder, the whole village or community in effect stopped having any de alings or social intercourse with him, including marriage alliances. Certainly, he was not invited for any function or meeting.

Dumping ground
THERE was an interesting report on television that flashed by my eyes the other day. I didn't notice it any newspaper, so I guess it must have been important. I didn't catch the name of the organisation but it 'd checked all the makes of cars in India fo r pollution and environment friendliness.

Politics


`Don't think Kashmir has only political problems'
PROBLEMS ofmilitancy and violence aside, Kashmiris are facing many day-to-day problems such as shortage or rice and power, says the CPI-(M) MLA, Mr M. Y. Tarigami. Looking at the sufferings of the Kashmiri people "how can I not sound defeatist?'', he ask s in an interview to Business Line.

Terrorism
US' Afghan ops: A critical analysis
THE US air strikes on Afghanistan, with low-flying C-130 aircraft and helicopters being increasingly used, indicates that, at least till now, the US has had total control of the skies and that likely threats from the Taliban's Stinger missiles had been o ver-stated.


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