The Hindu Business Line : Raise deposit rates

Post-office savings monthly interest scheme interest rates need to be revised from 8 per cent to at least 9.25 per cent, and in the case of term deposits, interest rates need to be revised to 8.5 per cent and 8.75 per cent, respectively, to provide middle income investors relief. In addition, the ceiling of Rs 6 lakh on monthly income schemes can also be revised upwards to Rs 10 lakh, so that employees who have retired on voluntary retirement schemes can meet their monthly budget through the income accruing on interests.

K. Venkataraman, Chennai-28

Stop sops to small cars

Stop giving fiscal incentives to small cars, especially diesel ones. In the name of `progress and development', small cars are choking our urban areas with outdated technology when it comes to emission. Levy road usage tax/ con-gestion tax/ road space occupancy tax on small cars so that the owners can pay for the congestion/ pollution/ road space they are taking up. This tax can be small but a start is needed ASAP. Promote public transport usage by giving credits/ tax breaks/coupons.

Ramachandran Balachandran

Introduce flat tax

The time has come for the introduction of a flat tax - a tax with only one rate for personal incomes. In fact, when the income-tax was introduced in this country, it was a flat tax. It prevails in the corporate sector. The exemption limit may be pitched at Rs 2,50,000 after which a rate of, say, 30 per cent, which is currently the highest marginal rate, may be levied. But all deductions and other exemptions may be abolished. It is likely to be revenue-neutral. It will make the tax structure simple and assessment and refunds quicker. The IT Department would need to look into only the correct reporting of incomes and not the admissibility of any deduction or exemption, which often leads to time-consuming and costly litigation. It will be almost Pareto-optimal making many better off without anyone being worse off.

A. Seshan, Mumbai.

(Send in your Budget wish list with a brief profile of yourself to wishlist2007@thehindu.co.in)