Deferring of GAAR comes at a good time. Moves such as FDI in retail and aviation and now deferral of GAAR are bound to please foreign investors. Also, the grandfathering in GAAR is good.

The same measures need to be applied for SEZs too, which have been suffering because of Minimum Alternative Tax (MAT) being imposed on them.

At time of their setting up, SEZs were free of MAT and offered certain tax benefits which attracted investors to them. But MAT has taken away those tax benefits, leaving investors miffed. With many cutting exposures and others pulling out, SEZs are suffering.

Also, new investors are keeping away from SEZs. MAT has hurt SEZs badly. MAT needs to be rolled back. If not, MAT too should at least deferred like GAAR and grandfathering introduced to appease investors.

Gautam Chauhan

e-mail

Diesel price hike

This is with reference to “ “Diesel price rise will have benign effect on inflation: Montek” ( Business Line , January 19).

When a layman can understand that an increase in the price of diesel will lead to spiralling inflation and affect the common man in everyday life, how can Montek Singh envisage the opposite? Even as the inflation index is increasing in arithmetic progression, the price rise will be in geometrical progression.

There are chances that when the price of petrol is increased, it will most probably affect the affluent rather than the common man.

But when the price of diesel is hiked, it will immediately affect the poor and the middle-class, since the price of essential commodities, namely, food, fruit and other necessities will increase disproportionately.

S. Ramakrishnan

Coimbatore

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