Letters to the Editor dated June 27, 2022

Commodity Futures Contracts

It’s about “Bringing back oil and pulse futures” (June 27). Derivative contracts are primarily intended to insulate holders from price risk. Due to the ongoing Russian-Ukrainian war, prices for vegetable oil and various metals have skyrocketed, putting immense pressure on wholesalers. With no solution to the war in sight, rising commodity prices are likely to spill over into the CPI space, leading to a surge in prices/inflation.

In such a volatile situation, traders should take refuge in various derivative products to protect themselves from price risk. Where this option is available for commodities such as currencies, commodities, etc., continue with a derivative ban on selective daily consumption food commodities such as crude palm oil, wheat, rice, Chana, etc., is inexplicable. Hedging would only pose upside risk when not backed by underlying assets, prompting speculators to bet against price movements to profit. But the selective food products subject to a ban are all genuine commercial transactions exposed to price risk in these uncertain times. It is time for the government to revoke the ban on futures contracts on mass consumer products like oils and pulses.

Srinivasan Velamur

Chennai

GST and insurance premiums

It is unfortunate that the GST Board did not take into consideration the lower life and health insurance premiums by reducing the GST component on them. Their argument that the amount of cover/claims has increased enormously over time, especially due to the effect of the pandemic, is undoubtedly valid, but then it is the duty of the State to absorb a portion of the GST to help insurers during these critical times.

The Center has many sources to obtain credits, to compensate for losses or to operate the machinery of government. Insurers, on the other hand, are mostly middle-class people and retirees with limited sources of borrowing.

Katuru Durga Prasad Rao

Hyderabad

Demographic control

The human population is expected to reach 9.8 billion by 2050 and 11.2 billion by 2100. In the 1970s, China imposed a one-child decree and India launched a sterilization campaign that often borders on ruthless programs. Africa is in the same dilemma. These are nations with a bloated human burden, which puts immense pressure on food and health security.

Western nations are much less populated and enjoy relative affluence. Their governments are thus not only more liberal in their policies on family size but also on women’s rights. The recent judgment of the United States Supreme Court on the criminalization of abortion goes against a deeply rooted Western societal paradigm. The United States is caught between conservative religious prescriptions and expanding the space for women’s empowerment – ​​social, economic and political.

R Narayanan

Navi Bombay

Facing the electricity crisis

The article “The challenges that come with the energy transition” (June 27) rightly focused on the obstacles facing the coal industry and the government in balancing electricity demand and supply. India is second only to China in coal consumption and imports. Coal provides 70% of the country’s electricity. India is on track to reach 175 GW of renewable capacity, including 100 GW of solar power, by 2022.

Currently, the economy is caught between a coal-related energy crisis and rising oil prices. The ongoing war between Ukraine and Russia is only part of the problem. The return to normal of almost all sectors of the economy, the summer heat and the obstacles to the transport of coal to electricity companies have also contributed to the current complex situation. India must phase out coal-fired power plants and decommission old plants, as stated at the Glasgow summit.

Various alternatives such as heavy use of ethanol blended fuel and blending of imported coal to increase power generation exist. However, the need of the hour is to consider innovative market reforms to encourage renewable energy.

RV Baskaran

Chennai

Celebrity endorsements

This refers to “Cracking the whip on brands and celeb endorsers” (June 27). India is a country where celebrities especially cricketers and movie stars are treated like demigods. Hence, they get endorsements for various products that cost millions of rupees.

Celebrities should only market products that are good for the country/youth and refuse to endorse junk food, soft drinks and other harmful products. One of the main reasons for the popularity of junk foods like noodles/pizzas and high sugar drinks is due to the promotion of these by our movie stars and sports people. Instead, celebrities should encourage young people to participate in nation building, eliminate tobacco/smoking/drinking alcohol, save water, etc. In addition, they should also actively promote government flagship programs.

Veena Shenoy

Thane

Published on

June 27, 2022

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