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Freebie menace This refers to the Editorial “Freebies Unplugged” (November 5). The freebies being announced by the contesting political parties for securing votes without considering the state’s fiscal conditions are imprudent. Parties announcing the freebies must reveal to the electorate how they plan to fund them. Inducing the electorate through the freebies is not less than an act of bribing voters. Voters must be made aware of the health of State finances. Such information and data will enable the electorate to understand the feasibility of the declarations being made by the contestants and will enable them to arrive at prudent decisions to cast a vote. Changanacherry (Kerala) Semiconductor strides It is with reference to the article ‘Building India’s semiconductor equipment ecosystem’ (November 5). Momentum is building up in semiconductor ecosystem in India with the six approved projects already in various stages of execution. With dedicated polices, increasing private sector involvement and global partnerships, India is actively building the full semiconductor value-chain from fabrication and assembly to packing. Massive capital investment, skilled labour, long-term policy stability and advanced supply chain are required to construct more semiconductor fabs. P Victor Selvaraj Palayamkottai (TN) Tread with caution Apropos ‘Banks seek higher exposure limit for M&A financing’ (November 5), the call by banks to relax exposure limits for merger and acquisition funding signals India’s growing appetite for corporate consolidation. But aggressive lending without adequate safeguards could expose the banking system to undue risks. The RBI must, therefore, walk a fine line between enabling growth and preserving financial stability. A pragmatic approach would be to allow higher exposure limits, but only for well-rated, transparent entities with proven governance. Gradual implementation, backed by strict disclosure and stress-testing norms, can ensure that ambition doesn’t outpace accountability. In doing so, India’s banking framework can foster dynamic expansion while keeping systemic risks firmly under check. This refers to “Banks seek higher exposure limit for M&A financing” (November 5). The RBI’s draft allows banks to fund acquisitions up to 70 per cent of deal value but caps their total exposure to such finance at 10 per cent of Tier-1 capital and largely restricts it to listed, profitable firms. Banks now want this ceiling raised to 30-40 per cent and extended to unlisted acquirers, a move that would significantly raise risk. Globally, 70-90 per cent of mergers fail to meet stated goals. Given that banks already struggle with complex project appraisal, M&A financing demands far stronger analytical and monitoring skills. Instead of an outright hike, the RBI should adopt a graded increase tied to demonstrated performance and sound risk-management capacity. Srinivasan Velamur Published on November 5, 2025
