Rahul’s right

Rahul Gandhi hit the nail on the head when he said the Land Acquisition Bill is a “pay-back” for the funds corporates gave Narendra Modi at election time. He is also right in saying that farmers are living in fear of losing their land and their livelihoods. No amount of self-trumpeting is going to alter the perception that the Modi government is pursuing ‘anti-farmer’ and ‘pro-industrialist’ policies in the name of facilitating more rapid economic growth.

To say that those who are critical of the government’s policies have a “perverted mind-set” is unbefitting of the Prime Minister. Rahul seems set to reclaim the -poor space now.

G David Milton

Maruthancode, Tamil Nadu

Take it easy policy

This is with reference to the editorial, ‘Take it easy’ (April 20).The RBI governor and the minister of state for finance agree to the need of capital account convertibility but seem to be differing on the timeframe. CAC is the freedom to convert local financial assets into foreign financial assets at market determined exchange rates. The test of a strong rupee is not so much exchange rate parity with the dollar as the willingness of external investors holding on to it for long periods. High levels of inflation are a great disincentive to this. The one question that needs a clear answer is: Does the present state of our economy and its foreseeable trend permit us to even consider CAC? China with $3 trillion foreign exchange reserves, has not fully gone ahead with it.

It is an indication of the jejune state of the rupee in global trade and economics that RBI’s dollar purchase April 2014 to February 2015 touched a seven-year high, with the limited purpose of building up reserves against volatility pursuant to interest rate increase in the US. The Indian economy needs to grow much larger to be able to absorb and quench monetary heat upsin the wake of full convertibility.

R Narayanan

Ghaziabad, Uttar Pradesh

The editorial is very apt. The very thought of going in for full convertibility reflects the enthusiasm of the policymakers to be one among the advanced nations who are on full float with their currencies, without a full understanding of the implications and the damage it can do the domestic economy.

The inflows and outflows of foreign exchange should largely emanate from trade and commerce and there should be strong macroeconomic factors such as comfortable and sustainable inflation level, fiscal and current account deficits, good backing of foreign exchange reserves, manageable external debt, strong and dependable GDP growth apart from a healthy and sound financial system. The forex, debt, credit and their related derivatives markets should have the depth, width and strength to have a full float of the rupee. Jumping without a safety net is not advisable.

TV Gopalakrishnan

Bengaluru

It has been brought out well that a comfortable current account balance, low external debt and strong banking system are required before venturing full convertibility. It will be worthwhile to remember that China has not ventured full convertibility in spite of their comfortable current account balance and a very dominant position in the international trade. It is not clear why this debate has been kick-started simultaneously by the government as well as the Reserve Bank of India. Is it because of some pressure from external forces?

S Kalyanasundaram

Email

We need sincerity

The Pakistani administration calling upon the Indian government to resume diplomatic channels to resolve outstanding issues is appreciable, but it stopped short of handing over the dreaded criminals allegedly taking shelter in that country.

Opening up diplomatic channels should be concomitant with the Pakistani government acting to demolish terrorist training camps and sleeper cells on its soil. Given the military prowess, logistics and ample resources at its command, it is not impossible for it to browbeat the odious designs of disruptive elements.

HP Murali

Bengaluru

I-T forms are not Saral!

The I-T forms are most complicated, it requires assistance from professionals to fill them. The one-page Saral form for all taxpayers must be re-introduced. Details of expenditure and bank balances, etc must be avoided altogether as these are matters of expenditure tax and wealth tax (both have been abolished) For foreign income in foreign banks and properties outside India, simply ask Yes/No. The kind of details that are elicited can be safely asked only in select cases of Scrutiny, and in Income-Tax forms.

To safeguard against non-declaration of income, the declaration in the form that all income is truly reflected in the return is sufficient to prosecute if not true. The I-T department has already information relating to various financial transactions through various concerned organisations and departments (TDS / TCS / AIR ). The rest of such information must also form the part of Form 26AS and the necessary changes must be made in the existing Form 26AS for this purpose.

This will reduce chances of unaccounted income as taxpayers would think twice before non-declaration of their incomes. The suggested introduction of furnishing Aadhaar card number should be deferred as there are many who don’t have these cards as yet. It can be made optional to start with. Make e-filing compulsory with a simple one-page form.

Mahesh Kapasi

New Delhi

Get the fundamentals

This refers to your edit, ‘Take it easy’ (April 20). The fundamentals of the Indian economy does not have any room for us to have full convertibility. We need to invest in energy and try to become self-sustainable in energy, which will definitely help us have a comfortable current account. The government can play a big role in lowering inflation by following prudent fiscal policies. This will reduce our appetite for gold. With reforms taking shape the banking sector can recover from the dump which currently it is in. Let us get our fundamentals in place or else look at the Russian currency collapse. Having comfortable dollar reserves the Russian currency declined by more than 50 per cent in a year. Reserves matter only to a point after which fundamentals take over both the economy and the currency. So let’s get our fundamentals right, first.

CR Arun

Email

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