The article “Rupee depreciation is in our interest” ( Business Line , August 22) was academically engaging but was very much short on realities. India is an oil guzzler, that too of the state-subsidised variety and any increase of oil price in dollar terms or rupee depreciation such as the steep one we are witnessing now definitely seeps into the real economy by way of fiscal deficit and associated ills such as increased money supply and inflation.

Steep depreciation of rupee will result in higher inflation by way of increased freight rates and bloated fuel bill of individual commuters.

Why were the floodgates to borrowed currency opened wide for corporates to wreak havoc on the economy?

One is reminded of the Tamil saying that “one does not require a mirror to see the sore in one’s hand.”

S.Arivudainambi

Srirangam

Why schemes fail

Everyone condemns the poor performance of UPA II alongside the continuing scam stories in multiple sectors. But a key factor for fiscal problems goes unnoticed in the glaring focus on scams. It is the UPA’s penchant for Central-sector schemes.

Both UPA 1 and UPA 2 have seen a plethora of Central-sector schemes with ample fiscal support from the Central Budget. NREGA, JNNURM, PMGSY, NRDWP, PURA… the list goes on.

The sweetener in all these schemes is the lion’s share of funding from the Central Budget with a meagre share to be funded by the State government. But the hidden villain in the schemes is the approval authority.

Be it a drinking water project in a rural area or a solid waste management project in a municipality or buying of buses in a corporation, all the proposals, across all the States, are to be centrally vetted by the respective functional ministry. As the powers squarely rest with the Centre, those States that are under a non-UPA dispensation are reluctant to implement the projects.

Dileep Kumar C.

Ahmedabad

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