• It’s always interesting to try to determine the precise value of Indian currency that can be beneficial to both our importers and exporters. But is it really possible to determine such value with contradictory objectives? Ila Patnaik provides the answer in a simple way by suggesting that the rupee be allowed to appreciate, without raising interest rates. She has rightly observed that global weakening of the dollar and capital inflows will lead to rupee appreciation, making Indian exports more expensive for foreign consumers. But it will be temporary, and will get corrected automatically in future. It will be better for Indian exporters to adjust to the situation and plan accordingly.

In the coming years, the EU, the US and China will be major players in international trade. Hence the RBI will have to keep a close watch on movements in foreign exchange rates so that Indians benefit. During the same period, the RBI can effectively use monetary policy without increasing rates and controlling the CPI inflation.

— Shishir Sindekar

Nasik

Closing time

• The editorial ‘Just shut it’ is a welcome exception amidst a press palpably soft on Air India. Nehruvian socialism was conveniently twisted out of shape and the government, in order to placate politicians, had wide-ranging businesses run to ruin. It also made steel, heavy machinery, etc where, however, good technology helped survival. Unlike manufacturing, an airline belongs purely to the service industry that is only about customers. The attitude here has always been that of a rule-bound, haughty branch of government, kowtowing only to authority and extending largesse on a quid pro quo. Customers became a necessary evil, since revenue shortfalls were always met by a patronising bureaucracy.

... contd.