Letters to the Editor dated Feb 21, 2022

George Verghese 4772 | Updated on: Feb 21, 2022

Banking on private sector

Apropos ‘IDBI Bank: Unions want Govt to stop privatisation’ (February 21), it was intriguing to learn that the IDBI Bank officers and employees unions have voiced their concerns at the proposed move of the Central Government and the Life Insurance Corporation of India (LIC) to sell their stake (45.48 per cent and 49.24 per cent respectively) to the private players. Moreover, if one truly believes in Unions’ claim that the move of the Centre is totally against the solemn assurance given by the then Finance Minister in 2003 that Government, at all times, would maintain not less than 51 per cent shareholding in IDBI Bank, the highly aggrieved IDBI employees truly deserve full sympathy, especially as depositors have continued to repose faith in the bank, whose deposits stood at ₹2,22,578 crore as on December-end 2021.

The government of the day has been selling a large number of its ‘wares’ to the nation’s private sector? Does this sector provide ‘immunity’ from the whole lot of uncertainties and ambiguities usually associated with the highly turbulent ‘economic weather’ of the Indian economy? By the way, is ‘all well’ in the private sector?

Vinayak G

New Delhi

T+1 system

It is reported that settlement in the Indian equity market is to move to a T+1 system in a phased manner starting later this week from the current T+2. This would enable faster payment for sales and faster delivery of securities on purchase.

Is this change really necessary, especially given that even advanced country capital markets have a T+2 or longer settlement? Could the priority rather be on strengthening governance at the stock exchanges and among market participants? The Himalayan Yogi episode at the NSE has exposed the need for much strengthening, monitoring and improving governance and transparency in the working of institutions.

V Vijaykumar


Redesign tax structure

This is with reference to ‘Some ‘taxing’ issues in India’s fiscal policy’ (February 21). As India celebrates four years of the Goods and Services Tax (GST), it has emerged that its implementation has widened existing economic inequalities in the country, as it has put an additional burden of tax on the poor. Under the GST regime, the country is relying more on the indirect tax, which is applicable to everyone who makes a purchase or uses a service. The fiscal policy should be harnessed to reduce the inequality in low- and middle-income countries, but until now little action has been taken to reduce poverty.

If policymakers are committed to ending poverty and improving the lives of their poorest citizens, they need to explore ways to redesign taxation and transfers so that the poor — especially the extremely poor — do not end up paying more than their fair share without reaping the benefits. In short, fiscal policy should help improve the welfare of the least well-off, rather than pushing them into poverty or deepening their deprivation. The senior citizens should also be protected from the indirect tax burden.

P Sundara Pandian

Virudhunagar, TN

Broaden the tax base

While dealing with issues related to taxation, rather than looking at the present tax structure, more effort should be directed towards broadening and deepening of the tax base in India. In a country like India with a population exceeding 130 crore, only 83 million people pay tax. The proportion of working class who pay income tax is still less. The fact that only about 5.9 crore of population had filed ITRs filed till December 31 proves that there is massive tax evasion. Fiscal policy should aim at bringing all eligible income earners under tax net.

Tax evasion also leads to other social maladies like money laundering etc. In India, taxing agricultural income is considered as a politically sensitive issue. While small and marginal farmers deserve tax exemption, rich farmers who earn say more than ₹10 lakh annually can be brought under tax net since many wealthy people take refuge under “agricultural income” to claim tax exemption. Hence it is imperative that fiscal policy should aim at arresting tax leakage before talking in terms of ‘rationalisation’ of existing the tax structure.

Srinivasan Velamur


SBI circular

This refers to ‘SBI ‘pregnant’ circular: Not in sync with times’ February 21). It is unfortunate that this circular came from an organisation which was headed by a woman not long ago. Arundhati Bhattacharya not only broke many glass ceilings but she showed great empathy for women employees to provide them a level-playing field.

Being the largest lender in the country, SBI should have shown more sensitivity and pragmatism towards such issues. Indeed such directives are retrograde in nature and best avoided at any cost. Women have proven their mettle in almost all domains and they are proven multitaskers.

Bal Govind


Pensioners’ woes

It is quite disheartening to note that EPFO is to appoint an auditor to track fund managers, where investments are to be scruitinised on a daily basis. Even with a ₹15,690 billion corpus, they are giving a meagre amount (₹1,000-3,200) as monthly pension to its 7.1 million pensioners — who served quasi-government institutions for three to four decades and are now finding it difficult to make both ends meet. Hence, the minimum pension must be raised to ₹15,000 per month as early as possible.

VG Pushkin


Extend federalism to more areas

States are getting uncomfortable with the hegemonic trends of the Centre, be it in financial equity and even in concurrent subjects. Federalism must go beyond allocating greater share of finances by the Centre. It must begin to embrace areas of far greater import.

Alas, a gale of right wing politics is seen to be gathering ferocity in many regions of the globe and India could be in its path. Modern democracies had profitably learned to flourish under federalism all these decades. Clearly the theme of pushing neo-nationalism too far is touching a raw chord in the age old socio- political sentiments lying deep in every State.

Ardent majoritarian driven nationalism begets short term political gains but proves counterproductive for socio-economic stability in the long term.

R Narayanan

Navi Mumbai

Published on February 21, 2022
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