Silence zones

Talking on the cell phone, often loudly, while in waiting rooms or lounges of hospitals, railway stations and airports, as also inside trains, buses and aeroplanes (until take-off and immediately after landing), and in lifts and queues has become rampant. So is talking on the mobile while walking.

The talkers make gestures, laugh, swing their arms and make faces, as if they are at home.

All this is quite embarrassing, often disgusting and quite offensive (causing pain and discomfort to others) and is an insufferable nuisance to decent, peace-loving people.

The respective authorities should warn that loud cell-phone talk in public spaces is offensive and therefore prohibited. Just as there are “no smoking” areas, there should also be “no cell-phone talk” areas.

A separate space may be provided for compulsive cell-phone addicts. Their use in trains and buses must be prohibited between certain peak hours and even at other times, if co-passengers object.

T. H. Chowdary

Secunderabad

Betting on bonds

TheYour editorial “Betting on Bonds” ( Business Line , March 11) was interesting. Unlike currency futures, which have seen remarkable growth in trading volumes in India since their launch, growth in the trade volumes interest rate futures has remained stunted because of inherent defects.

The market is very small and skewed, with a few institutional investors whose underlying exposures in bonds and hedging needs are identical, such as banks, primary dealers and insurance companies. Retail investors' participation in the market is almost nil.

Currency futures market is used by a wide spectrum of investors with opposite needs and views on currency movement resulting in a large number of transactions on a daily basis.

But the number of participants in the interest rate futures segment is limited to a few institutions with a heavy tilt, either on the buy side or sell side, leading to a one-sided view on the price, which is not conducive for the orderly growth of the market.

Interest futures products are perceived to be complex by most institutional investors in India and hence many investors refrain from entering the market.

Generally, market participants' view on the interest rate movement is uni-directional leading to buy-sell imbalance on most occasions.

The best way to revive the interest futures market is to break the monopoly now enjoyed by National Stock Exchange and to infuse

competition among the other national exchanges by allowing them to introduce products so that investors have a wider choice. While cash settlement is a step in the right direction by the RBI, banks, primary dealers and insurance companies should be allowed to be market makers for the IRF products.

Manickam Ravindran

Mumbai

MAT on SEZs

The contention of Dr Rahul Khullar, Commerce Secretary, that the introduction of MAT on SEZs is unwarranted and may be untenable in law, has merit.

Even though the principle of estoppel is not applicable to income-tax law, it is not fair to suddenly go back on a legal promise given to SEZs that they would be given tax holiday for a particular period of time

This would seriously affect developers who, on the basis of the promised tax holiday, had pumped in huge funds.

In the absence of a tax holiday there is no incentive for the developers to undergo all the hassles connected with the development of SEZs and exporting the products.

However, the contention that the Finance Bill cannot impose MAT may not hold water as, when the SEZ legislation was brought, appropriate amendments were carried out in the Income-Tax Act. In the past also, numerous instances can be quoted where the Finance Act had effected amendments in other pieces of legislation.

R. Devarajan

New Delhi

The following is a selection of reader comments from www.businessline.in

Financial laws

With reference to “Making sense of financial laws” ( Business Line , March 11) and particularly the statement: “the problems are magnified….in the hands of the government”, it is suggested that all public sector banks, but excluding State Bank of India and its subsidiaries, be de-nationalised: sooner, the better.

K. Mundanad

MFs can tap exit load balances

It is good step taken by SEBI to protect the mutual fund house and as well as the interests of small investors.

In the present conditions, distributors are not interested to garner business for MFs as the commission is too small to make it worthwhile.

Rashmi Das Gupta

This is only the beginning. Investors will see reform reversals from SEBI for the next three years. In fact, investors should not expect anything positive when MF's puppet is running the show. SEBI will become another IRDA protecting the industry's vested interests only.

John Thomas

Let's hope that the distributors will now be motivated to do a good job and not mis-sell, as many of them had been doing earlier. Also, the balance amount must go back to the investors who are staying on with a particular mutual fund, with a long-term perspective.

Harish

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