The Hindu Business Line : Fiscal prudence

This refers to the article "Union Budget 2005-06: Positive approach to fiscal consolidation" (Business Line, March 01). The Finance Minister, Mr P. Chidambaram, was able to press all the `right buttons' in favour of investment, job-creation, minority welfare and so on only by pressing the `pause-button' vis-à-vis the FRBM Act.

The Act requires the Union government to reduce fiscal deficit by 0.3 per cent of GDP every year so as to reduce it to 3 per cent by 2008-09. This target can hardly be achieved with the decision of the Finance Minister to hold onto fiscal prudence in the Budget 2005-06.

C. Ramesh

Keeramangalam (TN)

Bottomline growth

This is with reference to the article, "Will UPA government pass the litmus test this time" (Business Line February 22). Even after this year's Budget, the same sordid saga of setting ambitious targets and then scaling down in subsequent quarters will continue.

In order to have sustainable growth and boost the economy, the economy purchasing power of both rich and poor alike has to be increased. Otherwise the economy will continue to shine only in statistics and not on the ground.

Siddhartha Raj Guha

Jabalpur

Withdraw 0.1 pc transaction tax

Mr Chidambaram, himself is an outstanding advocate and he is aware that the income tax must be on the income and not on `cash withdrawals of more than Rs 10,000'. This is against the basic fundamental principles of the constitution and has to be withdrawn. In fact, one can withdraw up to Rs 9, 990 to avoid the liability.

K. K. Sastry

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