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Where’s the windfall profit for a tax? (Business Line, July 16) is an eye opener on a basic concept that is haunting Indian politics of late.

Looking back at the initial days of economic reforms that were initiated during 1991, India had to take off from an abysmally low foreign exchange reserve and poor investor confidence to what it is today.

Consistent economic policies, strong political will, committed bureaucracy and, above all, cooperation of the citizens has steered the economy to progress.

Corporate houses make their investments taking into consideration the policies, rules and procedures of the government. In the instant case, Reliance Industries has made huge investments in refining of petroleum following the set rules and procedures of the government.

Incidentally, the company made huge profits on increasing crude oil price.

Levy of windfall profit tax at this point of time will hurt investors’ sentiments and prove to be bad economics. Corporates may demand for a windfall compensation if they were to suffer losses.

With the nation passing through a crucial period of high inflation and souring oil prices, let us do what is good for the nation, not what is good for politics.

T. Prabakar Chennai

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