The Reserve Bank of India’s decision to keep the repo rate unchanged at 5.25 per cent and maintain a neutral policy stance deserves appreciation. The move comes at a time when elevated energy prices and global supply chain disruptions, triggered by the closure of the Strait of Hormuz, are exerting pressure on the economy. The RBI’s revised growth forecast of 6.6 per cent, down from 6.9 per cent, appears realistic given the rising cost of crude oil and its impact on inflation, trade, and overall economic activity. While higher energy prices threaten to fuel inflation, an aggressive rate cut could worsen price instability.

In these circumstances, policymakers must strike a careful balance between controlling inflation and supporting economic growth. Alongside prudent monetary policy, the government should focus on improving domestic production, strengthening supply chains, and encouraging investment.

M Jeyaram

Sholavandan, TN

Accounting fraud

Apropos ‘Rajesh exports’ ‘gilded’ accounts’ (June5), the entire episode appears to be a well planned devious accounting fraud perpetrated by misrepresenting the books of accounts in a systematic manner. This kind of operation could not have happened without the active collusion of the auditors concerned or auditors were doing a superficial job of just routinely ticking the figures presented without asking any probing questions. A small cap company with astronomical revenue figures should have raised doubts long back. When the company had withheld detailed standalone financial accounts for its subsidiaries by referring to foreign confidentiality laws, it’s surprising how an apex regulator like SEBI had not become alert and acted with alacrity? SEBI needs to sharpen its oversight to detect such frauds early and protect investors’ interests.

Kosaraju Chandramouli

Hyderabad

Uneven credit flow

This refers to ‘Regional skew in credit flows’ (June 5). Despite the implementation of various credit-oriented schemes and credit guarantees to encourage lenders to provide sufficient credit, many crucial segments of the economy are not growing as expected. The agriculture and MSME segments, pivotal in generating employment and decisively contributing to GDP, aren’t getting the required amount of credit. Multifarious reasons such as a lack of sufficient branch network, high input costs and lack of competitive markets for outputs are restricting the growth of credit in those sectors. The government and the RBI need to execute measures to curtail the imbalanced growth of credit across the economy to ensure even and sustained growth.

VSK Pillai

Changanacherry, Kerala

Published on June 5, 2026