Letters to the editor

| Updated on February 03, 2020 Published on February 03, 2020

Boosting consumption

This refers to the editorial ‘Mixed signals on savings’ (February 3). Although the proposed tax regime enhances the disposable income of the taxpayers, it will eventually disincentivise the creation of financial assets.

While the various small savings and the insurance schemes are critical to protecting society, they need to be enlarged. At a time when the government needs more investment to translate the economic policies into execution, discouraging household savings will adversely affect the revival of the economy.

As the banking system has sufficient resources and a robust capacity to lend, it is better to make available affordable consumption credit to boost the aggregate demand for consumer goods. With regard to profitability and incidence of NPAs, the retail segments proved to perform better than any other segments, and as such the lenders, will not shy away from expanding their loan books with the retail credits.

VSK Pillai


Inclusive tech

This refers to ‘Tech needs to be inclusive’ (February 3). A way to use technology for inclusive growth in rural areas and the hinterland is through the introduction of artificial intelligence, the Internet of Things, data analytics and quantum compounding for rural IT infrastructure in industrial training institutes (ITIs). Not only will this give ITIs a boost on employability parameters, but also help usher in savvy technicians for industries, manufacturing units, rural BPOs etc. Further, technology can be put to greater use by setting up a national MGNREGS portal. In the digital era, funds made available and output accomplished by MGNREGS workers should include changes based on various indices of prosperous districts and livelihood security for the rural population. All the districts seeking work under the scheme could be mapped on the portal, as well as the resources they need. And as all their accounts will be linked to banks, funds allotted to States and disbursed for MGNREGS workers should tally. A regular audit of the portal will collect vital data of each MGNREGS worker on different indices. By linking Aadhar cards linked, a clear picture of livelihood of all workers could be used through new technologies.

NK Bakshi


Tax calculation

This refers to ‘What the budget means for you’ (February 3). A question all individuals with a moderate taxable income are asking is whether they should claim exemptions and follow the existing slabs or switch over to the new tax regime.

Taking into account the new seven tax slabs against the previous four, tax computation for the common people is a challenging task.

Let’s review the Finance Minister’s example of an individual, below 60 years, having gross total income of ₹15 lakh, considering eligible deductions of rupees ₹2.5 lakh. The tax calculation here, under both the slabs, proves neutral, ie it arrives at a no benefit or loss point. Simply put, both the new and old slabs show the same result — a ₹1.95-lakh tax liability, including 4 per cent cess.

In other words, if the deduction, as in the above example, falls below the cited level, the new regime proves beneficial and the situation reverses as the deduction or exemption amounts go beyond ₹2.5 lakh.

Hanseswar Ghosh


Practical approach

This refers to the Budget presented by the Finance Minister and the various comments on it. It is a well-known fact that the economy is not in good shape. To try and enable a rapid rise through budget proposals would be impractical. Due to the poor monetary condition of the people, it would be unwise too to raise finance through taxes. Providing tax relief more than what has been done by the FM is also not practical.Thus, the policy adopted by the FM appears to be wise and prudent, as it hurts neither the people by raising taxes or the economy by providing excess relief.

TR Anandan


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Published on February 03, 2020
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