GST’s time has come

| Updated on December 16, 2014 Published on December 16, 2014

LETTERS TO THE EDITOR Send your letters by email to bleditor@thehindu.co.in or by post to ‘Letters to the Editor’, The Hindu Business Line, Kasturi Buildings, 859-860, Anna Salai, Chennai 600002.

The possibility of confusion and fear of litigation should not be reasons for postponing the introduction of GST as contended by Mohan R Lavi in his article ‘India not ready for GST’ ( December 16). Good drafting and informed debate in Parliament should make the GST Act clear in meaning and content. This seems realisable because the matter has been under discussion for a long time.

However, we are “argumentative Indians” as Amartya Sen reminds us. Besides, our courts take a lenient view of most cases. GST also will have its share of court disputes. While the contention that no GST is better than a compromised GST is important, the wait for this law has been so long and so necessary that a compromised GST which incorporates the essentials would still be welcome.

YG Chouksey


Monitor bank projects

This is with reference to the news item, ‘Infra push: RBI allows banks to recast existing project loans’ (December 16). The guidelines with riders issued by the RBI allowing lenders to restructure existing loans of above ₹500 crore to infrastructure and core industries projects will pave the way for arresting project loans from slipping into stressed assets.

The economy is not free from the evil effects of bad loans which are growing at a fast pace in the banking industry. Many big projects will get soothing comfort in servicing the debts. A dedicated monitoring team with adequate powers should be in place in banks to continuously watch the activities of promoters and projects to ensure that projects are going on in the right path. Any relaxation should be critically evaluated and examined. verenthusiasm in the matter may lead to failures which will land the projects and the banks in trouble.

The restructuring of accounts with the NPA tag should be strictly monitored in line with the regulator’s guidelines. Refinancing the projects in compliance with the riders will enable promoters to complete their projects according to schedule and avoid cost over-runs. The RBI’S action in this direction will augment industrial output, especially manufacturing, which has been registering a sharp slowdown .

VSK Pillai

Kottayam, Kerala

Eye-opening PIL

This refers to the report, ‘Central Bank employees’ union files PIL seeking direction to recover bad loans’ (December 16). The PIL should be an eye-opener to other PSB unions to file a co-ordinated and joint PIL against all State-owned banks (SoBs). SoBs have piled up huge amounts of bad assets and the corresponding recovery efforts are just a piece of action against defaulters. The defaulters know SoBs do not have the street sense to recover their loans. SoBs indulge in paper work and showcase their recovery efforts. Even the RBI feels that an occasional warning to SoBs serves the purpose of augmenting recovery efforts.

There is no doubt the governor has been making the right type of noises against bigwigs from India Inc who have defaulted. The PIL states, inter alia, that influential people and SoBs have been responsible for this recovery mess and has pleaded for stern action. The present PIL is a good case study and the court authorities have to take a serious view of the alarming situation of the falling financial health of SoBs due to bad assets. If the court authorities take a literal view of the PIL and dismiss it, the substance of the PIL will have long-term implications for SoBs.

KV Rao


Workable idea

With reference to ‘Work at will’ by Jinoy Jose P (December 16), it is pertinent to mention the SBI chairman’s efforts to pilot the practice of allowing women employees to work from home for certain types of banking activities. Studies world over suggest many positive outcomes from flexible working hours. It not only enhances growth in GDP, but also cuts commuting costs, and saves fuel and power, enhances health and social welfare, and reduces medical bills. At least the private sector should emulate the small beginning suggested by the head of the country’s largest lender and set the ball rolling for others to follow suit.

MA Khan


No difference

A drastic reduction has been effected in petrol and diesel prices. But no steps have been taken either by the Centre or the State governments to reduce bus, taxi, and auto charges. Politicians are keeping mum as if nothing has happened. It is worthwhile to examine whether the reduction in the prices of these commodities has really benefited the common man. Has it been reflected, proportionately, in the prices of essential commodities such as rice, wheat, vegetables and other provisions? Neither the Centre nor the RBI cannot make any tall claims for beating down inflation.

N Krishnan


Chasing a false mojo

This is with reference to your editorial, ‘Reading the tea leaves’ (December 14). Hopes of recovery recede with industrial production contracting by 4.2 per cent in October, mainly on account of a drag by the manufacturing sector and a dip in the output of capital as well as consumer goods. Manufacturing, which constitutes over 75 per cent of the index, went down by 7.6 per cent in October compared to a dip of 1.3 per cent the same month last year. We have come to a strange pass in our economy when neither inflation that is tending to zero nor any lowering of key rates seem to have much relevance. Manufacturing, once our mojo, was abandoned steadily. Chasing the chimera of the IT boom, every major manufacturer preferred to put greater faith in financial services/IT. Many had found short sustenance in these two areas, while manufacturing languished. In fact the Tatas have largely breathed easy of late because of TCS.

Nations across the globe are having hiccups in their economies too but they have kept manufacturing as the prime concern. Germany is showing steady but modest recovery since October in this sector. Whereas we have been shortsighted and have embraced a seasonal ally like IT which has many other suitors. A dipping global economy will further reduce the size and portion of this pie. It will not be easy to switch back to competitive manufacturing.

R Narayanan

Ghaziabad, Uttar Pradesh

Don’t sell the government

This refers to the article ‘Let’s explore our energy options’ by V Ravindranath (December 16). The article rightly points out that the price of gas should be market determined. But the problem in India is where is the market? We have not created a market for gas for us to have market linked prices. Do we know how to create a market in the first place? This is one pressing question which needs to be answered by the government. Without the market we cannot allow corporate rent seekers to benefit from the current situation. When we don’t have the technology we are undermined by international companies that high profits for their investments. Unless these companies are made to introspect, there is no hope for people to benefit from the exploration activity of these multinational companies. Don’t sell the government to these multinationals. Without people, who is the market going to serve?

CR Arun


Win-win hours

The call for facilitating ‘Work at will’ by Jinoy Jose P (December 16) is imaginative and in tune with the times. It will be endorsed by many. As pertinently pointed out, greater flexibility at work will enhance productivity and loyalty. And in a vast country like ours it will result in a win-win situation both for employers and employees. Itwill also lead to brain gain by way of larger employment of talented and resourceful people.

CG Kuriakose

Kothamangalam, Kerala

Inflation is a must

It is learnt that inflation based on wholesale price index (in November) in the country was zero. Hence it is argued that the RBI must reduce the interest rates to boost investment and growth in the economy. Viewed from the prism of economics, there needs to be creeping inflation for the producers to be inclined to produce more. The rate of interest, after all, is just a small component of factor of production.

S Ramakrishnasayee

Ranipet, Tamil Nadu

Published on December 16, 2014

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