Letters to the editor dated March 12, 2021

This refers to the editorial ‘Fuelling GST’ (March 12). In 2017, when the APM (Administrative Price Mechanism) was dismantled to move to daily revision of petrol and diesel prices, it was hailed as a significant economic reform process.

Political parties were vying with one another to claim credit for this transition since it was widely perceived that government would not have any role in deciding the retail price of petrol and diesel that were tagged to international prices of crude oil with fixed excise duty (central) and VAT (states) added on.

Four years down the line, by increasing the tax rates unabashedly, devoid of any logic, the governments have turned petrol and diesel as their prime revenue generators.

The total revenue generated have reached a staggering ₹5.8-lakh crore for both the Centre and States put together, which is almost 50 per cent of the budgetary deficit projected for financial year 2021-22.

What has contributed to such an astronomical rise?

If, as the government claims, rising Covid-related healthcare expenses are the prime reason, has it explored all other avenues for revenue generation instead of targeting this one commodity?

What about the promise to bring black money into the country?

How much has been achieved? A blame game is on, with the Centre and States pointing fingers at each other with neither willing to act. Perhaps, it is time petroleum products were brought under GST.

Chennai

Apropos ‘The right way towards a $5-trillion economy’ (March 12). It has been rightly pointed out thathe t focus on physical/financial capital and infrastructure would increase the investment rate and trigger the multiplier effect.

The resultant increase in production and productivity will keep inflation low, create job opportunities and raise the standard of living with real GDP growth.

A pandemic-hit economy that is limping back to recovery ought to augment domestic consumption-based investment.

Sivakasi

This refers to ‘Street-fight in Bengal’ (March 12). The attack on West Bengal Chief Minister Mamata Banerjee has given sufficient fodder to media outlets.

Most political leaders enjoy low credibility and are adept in cooking up stories, which voters do not take seriously.

The Mamata episode may be a classic case of crying wolf. Political parties should get down to brass tacks and shy away playing the victim card time and again.

Noida

It is now certain that a bad bank to absorb all the non-performing assets (NPAs) of public sector banks and private banks will be set up as the government and the RBI have given their consent. However, there are different opinions among experts regarding the form it should take.

There is a view that the proposed ARC be funded by state-owned banks. Some prefer a government-funded ARC at it will be faster to set up and more capital efficient.

It is better, however, that two types of bad banks are formed — one exclusively for PSBs and another for private banks and financial institutions. The perception about treating the bad loans of PSBs and private banks is different. In the case of PSBs, the government can take a quick decision regarding how much interest waiver and how much write-off in principal are to be applied.

But if private banks are involved they may not accept what the government proposes. Hence, let the private banks and FIs formulate their own guidelines in treating their assets.

Anyhow the new ARC should ensure that minimum hair-cut is allowed in realising the assets transferred to ARCs so that the loss is minimised. Only then things will move faster, and the purpose of establishing a bad bank will be achieved.

Bhimavaram, AP

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.

COMMENT NOW