Apropos ‘Need for fiscal consolidation’ (January 25), it goes without saying that no economy can achieve its targeted growth unless its policies and plans are appropriately oriented towards fiscal consolidation. Since the Indian economy is beset by a huge fiscal deficit, much beyond the normally stipulated limit of 3 per cent, owing to the Centre’s socio-political obligations apart from its ‘other’ national priorities. 

The government was evidently obliged to provide for some emergent, unexpected yet unprecedented financial outgo towards putting in place the much needed massive medical infrastructure apart from urgently developing and freely distributing Covid vaccine to save precious human lives.

In the upcoming Budget, the Finance Minister has the tough task of achieving fiscal consolidation without compromising on the nation’s growth-centric objectives.

SK Gupta

New Delhi

Rising inequality

The widening gulf between the rich and the poor has remained a matter of grave concern for decades even before the Covid-19 pandemic struck. However, as pointed out by several independent studies on income and wealth disparities, the ongoing pandemic has exacerbated income inequalities with the poor being pushed to abject poverty even as the rich have managed to amass more wealth.

The increasing casualisation of workforce, rising unemployment rate and financial distress among micro small and medium enterprises ( MSMEs) needs to be juxtaposed with the booming profits of large firms and vaulting fortunes of the rich. This tells the grim tale of suffering disproportionately borne by those in the lower rungs of society.

M Jeyaram

Sholavandan, TN

IAS cadre rules

This refers to ‘An insight into proposed amendments to IAS cadre rules’ (January 25). Blatant non-compliance by many states of the convention to earmark 40 per cent of senior posts in every cadre of Indian Civil Service to meet central requirements (Central Deputation Reserve (CDR) obligations) seems to have prompted the Centre to amend the long-standing rules.

Published data shows a CDR shortfall ranging from 61 per cent for Tripura to 95 per cent for West Bengal. Over 14 states have a CDR shortfall of over 80 per cent.  Most states are not meeting their CDR obligations though annual recruitment in services has gone up since 2000. CDR utilisation has still dropped from 25 per cent in 2011 to 18 per cent in 2021-22. There is a particular shortage for joint secretaries, directors and deputy secretaries.

Retaining the federal characteristics of Indian democracy is the equal and joint responsibility of the sates and the Centre. Cooperation and not confrontation should be the tool to ensure this. 

YG Chouksey 

 Pune 

Spur economic activity

Apropos ‘Public spending in India needs to be stepped up’ (January 25), the Covid pandemic has impacted all walks of life. The pandemic has in fact put the spokes in the wheels of development, forcing planners and executors to go slow.

Normalcy is returning slowly, but the threat of new variants of virus looms large in the minds of the public and the government.

Treating the ongoing challenges as the new normal, the government needs to spur economic activity. Apart from creating enough consumption demand, a sizeable increase in public expenditure in the areas of healthcare, housing, agriculture, rural development and other tertiary sectors such as transport and communications would enable many other allied sectors to generate more jobs and revenues.

With another two months for the current fiscal to close, there is still enough opportunity for the government to accelerate its spending. Non-productive expenditure can be kept in abeyance for sometime.

RV Baskaran

Chennai

Tax breaks help

This refers to ‘Corporate tax cuts do boost investments’ (January 25). Indeed, the reduction in corporate tax rate cut from 30 per cent to 22 per cent has not only helped boost the post-tax earnings of corporates, but also had a multiplier effect on GDP, paving the way for higher investments. Corporate tax cuts play an important role in the revival of private capital expenditure. In a credit-constrained environment, tax cuts will generate funds both for operations as well as capital formation. At the same time, tax cuts will not be effective if corporates use them for debt repayment. In the current pandemic conditions, tax cuts can trigger demand revival.

NR Nagarajan

Sivakasi, TN

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