This refers to your editorial ‘Bad news from Beijing’ (January 22). When the US Fed raised interest rates, there was this fear in the markets that the world is without any tools to fight a China-led recession in 2016.
That fear has grown with every passing day and there has been a $500 billion capital flight from China last year, crude oil prices have crashed below $30 a barrel and the US markets have had an exceptionally bad start to the year.
The year has started with a lot of turmoil in the financial markets, which is a good thing. Excesses due to liquidity will be cleared out and the focus will shift to fundamentals.
CR Arun
Bad news is also a good opportunity for the strategic planners. The US faced its biggest economic slowdown in this century in 2008- 09. However, the country utilised the opportunity to increase the fossil fuel production and it is now second to only Saudi Arabia in the quantum of petroleum products produced.
Its excess capacity is one of the reasons for the slide in oil prices, which has helped countries like India to narrow their current account deficits.
The low commodity prices, especially oil, can be used by India to build a buffer in these sensitive commodities. The tax raised by the government on oil products can be given to oil companies as loans to enable them to build such a buffer.
P Esakki Muthu
Prioritise education
According to an NCERT survey, Class 10 students in Tamil Nadu perform below national average. Education needs to be the top priority of governments. Educational policy should satisfy two vital parameters of growth: Skill-formation and character formation. The policies prevailing at present in all the States produce incredible pass percentages and grades, but not skills and discipline.
S Ramakrishnasayee
Ranipet
Income and tax
This refers to SS Tarapore’s article “The ‘golden mean’ for this Budget” (January 22). The general exemption limit for individual income tax is one of the most discussed subjects among the salaried class and senior citizens before every Budget.
The revelation that an upward revision of the threshold from ₹2.5 lakh to ₹5.0 lakh will have an impact of just ₹15,000 crore on the income side of the budget, by itself should be the guiding factor for the FM to be magnanimous and allow the doubling of the limit.
The present practice of keeping the exemption limit low and extending several deductions for savings and ‘perks’ forces the salaried class to save money in instruments which they would have loved to skip.
The deductions benefit mainly some service providers and ‘investment advisors’/ tax consultants. Pension and interest-income earned by senior citizens who are not pensioners should be fully exempt from income tax.
M G Warrier
Mumbai
Budget blues
It has become a mere formality for the government to invite suggestions from the public just before the Budget. The common demands from the public obviously include increasing the threshold limit and reduction of tax slabs along with increasing the savings limit.
These have never been taken fully into consideration. Employment generation and improvement in quality education are another two important demands which have always been met partially.
The most prominent of the demands always include reforms in agriculture. The new insurance scheme announced by the Prime Minister may provide solace to farmers. The removal of TDS on interest on deposits is another genuine demand.
TSN Rao
Bhimavaram,AP
Erratum
In the report ‘On expansion mode, Sonalika to focus on southern markets, exports’ (January 22), the investment in the tractor plant should have read ₹500 crore, and not ₹5,500 crore, as published. The error is regretted.
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