RBI and its credibility

RBI and its credibility
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First Published: Thu, Jun 19 2008. 11 26 PM IST
Updated: Thu, Jun 19 2008. 11 26 PM IST
This refers to the Page 1 column “Reddy has restored the credibility of RBI ”(Mint, 12 June). Tamal Bandyopadhyay’s analysis is usually excellent, but he is mistaken in complimenting Y.V. Reddy for deftly handling the policy instruments in his armoury. You cannot conclude that the governor has restored the credibility of the central bank just because he has used policy instruments properly. RBI’s silence when finance minister P. Chidambaram announced the loan waivers for farmers is questionable. RBI lost its credibility ever since 14 banks were nationalized in 1969 and a further six in 1980, when it was not consulted by the government and the central bank did not voice its concern. So what if monetary policy instruments are used by RBI to control inflation?
—K.V. Rao
In two articles this week, Anand Giridharadas has failed to tell the story beneath the surface. His piece on the hungry people who queue up outside restaurants in the Mumbai neighbourhood of Mahim suggests that owners of these establishments are philanthropists who make meagre profits. In fact, those eateries were the subject of an investigation by the Mid Day newspaper last year, which showed that the restaurant owners feed far less people than they promise donors they will. The newspaper story showed that these “drive-through charities”, as Giridharadas described them, are actually scams to exploit Mumbai’s generosity.
In his profile of Mukesh Ambani (originally published in The New York Times), he is accurate in describing the high-rise residence that the business tycoon is building on Mumbai’s Altamount Road as “emblematic of his ascent”—but the article has got the reasons wrong.
The building is being constructed on a site on which an orphanage stood until recently and was acquired in controversial circumstances. The Waqf Board, the state-supervised Muslim charity in charge of the orphanage, fought a case which eventually made its way to the Supreme Court, claiming that the plot was sold to Ambani by some trustees at a considerably below market value. The sale was also investigated by a committee set up by the Maharashta government. The situation is more murky than he would have us know.
—Naresh Fernandes
This refers to your coverage on the construction of dams and hydroelectric projects in Arunachal Pradesh. (Mint, 15, 19, 20, 22 May and 5 June).
Ministers seem to have been so mesmerized by the huge megawatts of power promised by dam builders and power project providers that they have gone ahead with these projects without complying with environmental and other checks. Media reports catalogue the damage that would be caused to the lives and habitat of the people of Arunachal Pradesh.
There are more complications given that China is planning the diversion of the south-flowing Himalayan rivers to the north.
An official of the Central Electricity Authority has said, in the context of these projects, that they cannot wait for 15 years to collect data on water flow. Leave aside the time wasted in the two decades of Hindi-Chini bhai-bhai euphoria, the government had enough time after 1965, when Arunachal Pradesh came under the control of the Union home ministry. It did precious little in these 43 years on this front.
We have a minister for power, a cabinet minister with an additional remit of looking after the development of the north-eastern states and the governor of Assam with additional charge of overseeing development in the North-East. None of them has issued any statement in connection with this development.
Under the circumstances, will our parliamentarians raise this issue in the coming session of Parliament?
—S. Subramanyan
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First Published: Thu, Jun 19 2008. 11 26 PM IST