Letters

Letters to the editor dated December 28, 2020

| Updated on December 28, 2020 Published on December 28, 2020

The MSP imbroglio

With reference to the article ‘Why demand to legalise MSP makes sense’, (December 28), thousands of farmers have been protesting as the deadlock continues.

While the protesters reject the government offer of amendments to the laws and demand repeal of the laws, the government on the other is not coming forward to repeal the laws. Significantly there is no mention of MSP in the new laws on which farm community is worried.

If we talk about the facts the cost of procuring all 23 crops for which MSP is announced it would be around 50 per cent of India's annual expenditure. India has about 14 crore farmers and is it right to allocate 50 per cent of the budget for a small section of the population? More so as per the survey a small portion of farmers at an average of 20-25 per cent are getting MSP for their produce purchased by FCI.

The cost of MSP and subsidised food supplies are being met by heavy borrowings from National Small Savings Fund (NSSF) which is an unsustainable burden on the country's salaried class.

Hence, in principle, the MSP is not an economically efficient way of helping farmers. As per the new laws, the government has given freedom to farmers to sell their produce any where they get higher price. But is this practically possible for them? There should be an actual government machinery to implement the laws as that would create confidence among the farmers.

TSN Rao

Bhimavaram (AP)

To tax and to please

For petrol, taxes on the ex-refinery price are loaded 150 per cent at the pump. The government retracted its earlier fiat of deduction at source for dividends, which impacted investor sentiment. Its retrospective tax on telecom majors repeatedly fails the test of law, but the government seems adamant. It goes in for cess for every description only to leave it unspent on purposes for which they were collected. A surcharge is another blatant misuse of taxation. It is a travesty that they should continue endlessly.

R Narayanan

Navi Mumbai

With reference to the Editorial ‘To tax and to please’ (December 28), India and the Netherlands signed their Bilateral Investment Treaty way back in 1995. In September 2007, the Indian government raised a tax demand of ₹7,990 crore towards capital gains and withholding tax from Vodafone towards buying a major stake by the latter in Hutch including its mobile telephony business and other assets in India. Vodafone preferred an appeal in the Apex court.

The Supreme Court’s judgment was in favour of Vodofone. But, the then Congress government introduced a Bill in 2012 amending related provisions of the Income Tax Act, 1961, which logically is not a correct step. However, the Government now contends that the award needs to be challenged because it has questioned the Sovereignty the “right to tax” and not the tax demand. For sure, we will not be winning the race.

RV Baskaran

Chennai

Role of auditors

With reference to the report‘Auditors not just watchdogs’ (December 28), the purpose of audit is not only to ensure the accuracy of an entity’s financial statements, but also to confirm that they have been prepared according to the prevailing accounting standards.

In a manual environment, auditors may have had to rely on the documents provided by the officials. But, in the present computerised environment, it is possible for them to cross check the veracity of the same.

While it is true that an auditor cannot identify all misstatements, most could be spotted, by the increasing use of technology. The various sensational scams and frauds from Enron and Satyam, to the more recent collapse of some banks in India, can be attributed to the negligence, if not the connivance, of the auditors, who inspected their books. No one can render uninfluenced service, after accepting fees.

V Jayaraman

Chennai

LETTERS TO THE EDITOR

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Published on December 28, 2020
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