Rate Cut

RATE CUT

The CPI has argued that the cut in the repo rate and the cash reserve ratio announced by the Reserve Bank of India recently to improve liquidity in the market is futile. An editorial in CPI weekly New Age notes that the RBI has claimed that with these reductions, banks will reduce interest rates and the EMI installments will also fall, and argues that "according to the RBI's own calculation, the borrowers [will] pay just Rs 17 less per month on a loan of Rs 1 lakh".

It dismisses the argument that the reduction will release about Rs 18,000 crore into the market and help retail borrowers avail more loans to revive dwindling industries and establish job-generating units as "bogus". "Most middle and small industries that closed down during the past five years were hit by the decline in exports... Exports continue to decline. Besides, there is decline in domestic consumption... The present measures will in no way enhance the domestic consumption as the real purchasing power of the people will continue to decline," it claims.

The editorial posits that for a revival, domestic consumption has to increase. "But the theory of neoliberalism doled out by agencies of international finance capital as the only path of development is just opposed to it," it concludes.

HINDUTVA TERROR

The CPM journal People's Democracy argues that terror of all kinds needs to be fought, including "Hindutva terror", not "Hindu terror". It says no religious community as a whole can be held responsible for the terrorist activities of individuals embracing that religion.

"[The] same yardstick, however, should apply to other religions... [but] the RSS routinely adopts resolutions seeking to, 'curb Islamic terrorism with an iron hand'. This is not merely an expression of double standards. It reflects the ideological roots of converting the modern, secular, democratic Republic of India into the RSS version of a 'Hindu Rashtra' based on rabid religious intolerance", it says.

... contd.

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