This is with reference to ‘Tripping up on sloppy policy flip-flops’ by Rajrishi Singhal (July 22). The main reason for criticising the NDA government is that in view of the massive mandate Narendra Modi was given, nothing less than perfection is expected from him and his government. Why do we forget that the government will make its share of mistakes, considering most of the team comprises first-time ministers. The government should be given a long rope if we want to see the changes we always wanted as the various policy measures show the Prime Minister’s intentions, which are beneficial for the country in the long run.

Bal Govind

Noida, Uttar Pradesh

Totally unpredictable

With reference to the edit, ‘The great gold brush-off’ (July 22), gold is more than a hedge for Indians, it is an emotional attachment. Gold was the shield against inflation, but corrective measures kept the balance. The US crisis of 2008 saw monetary polices getting skewed across economies. The universal mantra of QE has since injected a huge $10 trillion into the global money stream. Gold prices have remained multifactor-sensitive and the metal has never been able to compete with the dollar. Today the dollar is rapidly gaining value and now China is selling gold and together they have pushed gold prices to a five-year low. Despite this, as bullion prices dip, buying resumes and the price spiral starts. The fourfold increase in bar and coin retail investment from 2002 to 2011 proves that buying physical gold is a blind addiction. Even the best monetising schemes cannot match the unpredictability of the yellow metal.

R Narayanan

Ghaziabad, Uttar Pradesh

The current fall in gold prices is both a blessing and a curse: a blessing because investors will invest in more productive assets like bank deposits, stock, SMEs, business, land and buildings, infrastructure bonds, mutual funds; and a curse because an emergency sale of gold by households will fetch a lower value. For generations middle-class Indians invested in gold because of the faith that it is valuable in an emergency. The principle of ‘buy low sell high’ is no more applicable since the value of gold is steadily decreasing due to global factors rather than domestic demand. One of the reasons for the global decrease in gold demand is the lower dependence on gold as a reserve by central banks around the world. . They now invest in the US dollar making it the most sought after currency. Large-scale global disinvestment of gold also led to a decrease in its value.

Decreasing domestic demand also led to a fall in prices. The jewellery business may face heavy losses due to the high cost of large inventories and decreasing counter sales. Unfavourable monsoon predictions may lead to lower food production and leave rural India with less disposable income which will in turn take the glitter out of festivals and ceremonies like marriages, traditionally two occasions for large gold purchases. On the economic front, lower gold imports will lead to an improvement in CAD and lower outflow of forex reserves. Lower prices will also make smuggling of gold less profitable.

Mathew Abraham

Thiruvananthapuram

Lagging House

This refers to the ongoing obstructions in Parliament which gets adjourned without engaging in any legislative business. To begin with, our parliamentarians work only for around 70 days a year. The UK parliament works for 150 days and the US congress works for 200 days a year. As the least working lawmakers, we somehow find ways to reduce the already few working days of Parliament. The other point is that we have forgotten the phrase ‘loyal opposition’, which means ‘I oppose you but I am loyal to my country first and I will do whatever is good for the country even if you disagree with what I am doing because the country comes first’. It seems the Congress has become ‘the Opposition’ and not the ‘loyal opposition’.

CR Arun

Email

Erratum

b A brief item in the news section about Karnataka Chief Minister Siddaramaiah addressing Ficci, was wrongly headlined, ‘Yeddyurappa to address FICCI’ (July 22). The error is regretted.

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