Fair revision

Bus services in Tamil Nadu are among the best in the country. Therefore, the recent price hike is long overdue and deserves to be implemented. What could have been tweaked are the odd fares, such as ₹6, 19, 23, 24, 27 and so on because they create small change problems. Fares of ₹5, 10, 15, basically multiples of 5, are easier to handle. The novel method of indexing is welcome one as this would ensure that there is no irrational revision and no skip in revision when warranted.

The plight of conductors deserves attention. In the north, they don’t go up and down in the bus issuing tickets as the responsibility of holding a valid ticket rests squarely with the commuter. But in the south, the onus lies with the conductor to issue tickets and they are often pulled up for passengers not holding tickets. This is why they have keep going up and down the bus; the problem of small change only complicates matters.

RS Raghavan

Bengaluru

Risky business

This refers to your editorial, ‘No place to hide’ (January 22). There is no dearth of financial instruments in the market for retail investors to participate in the market and earn better returns than conventional debt instruments. Having said that it is criminal to make a wholesale switch from fixed deposits to equity funds. Financial planners advise a mixed portfolio of debt and equity because of the risks involved. Since most retail investors do not take the help of professional financial planners they end up taking more risk than they should. That’s why the Government should come out with more tax-free bond options.

Bal Govind

Noida, Uttar Pradesh

Being risk-averse, Indian savers traditionally invest in bank deposits and various post office savings schemes. After demonetisation, gold and real estate have also lost their charm as investment options. Even a rise in bond yields has not lead to a rise in bank and postal interest rates; rather they are declining.

The coming budget should do away with tax on interest of bank deposits over ₹10,000 per annum. Due to the stock market boom, only mutual funds offer better returns when compared to traditional investment products. Already banks are feeling the heat due to rising NPAs and mark to market losses. So banks may not revise their interest rates upwards in tune with rising interest rates. Unless the Government takes steps to introduce retail products for small investors like tax-free bonds with attractive inflation adjusted returns, investors may gradually move to mutual funds which may severely erode the deposit base of banks and post offices.

Srinivasan Velamur

Chennai

India’s economic push of the past two decades is largely due to our savings rate that is higher than that of several countries with AAA rating. A renewed push for savings is overdue.

With our household savings at sub-20 per cent and gross domestic savings below 30 per cent , it compels investment to go to stock markets that invariably hurt the small investor. Not that government bonds are far better. They are fickle and too fluid as they lack the loyalty of holding as in small savings. Further they can come only in small tranches. Accrual through small savings is steady. .

R Narayanan

Navi Mumbai

Non-bankable funding

While corporates have been exploring non-banking avenues to raise capital, the trend may not continue for long. The lender-friendly IBC norms can be expected to compel borrowers to bank more upon fund inflows via equities and MFs/ETFs; however the capital market sentiment may not necessarily support the strategy.

Amidst sky-high equity valuations and uncertain shareholder returns promised within the IRP, investors would be reluctant to park their funds in a firm’s securities. That too when the general elections are due next year and the geo-political environment needs stability. Moreover, norms encouraging portfolio concentration and the proposal to limit the retail participation in derivative markets would only aggravate the market risk for potential investors.

Girish Lalwani

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