Letters to the editor dated July 29, 2021

This refers to ‘Why CBDC will not end Bitcoin’s reign’ (July 29). With lot of uncertainties about existing virtual currencies like bitcoin, etherium, etc., and on their impact on economies as they are not governed by any central bank laws, it is too premature to contemplate in terms of floating a central bank digital currency (CBDC).

Among the key factors having an adverse impact on economies across the globe are money laundering and terrorist financing. If CBDC is not expected to end the current crypto assets, it is akin to having illegal money (sans central bank controls) along with legal money.

Another issue relates to CBDC not earning any interest on deposits. If so how will the erosion in the value of money due to inflation, etc., be taken care of?

With even the US Fed unclear on the merits of digital currency, it will be too early to think in terms of floating a CBDC.

Chennai

This has reference to the valuation process for Air India (July 29). Even though the successful bidder has to absorb only ₹23,000 crore out of the debts of ₹60,000 crore, by no means is it small going by the problems faced by the sector.

For this much of debt, equity investment of at least ₹20,000 crore is required to keep the gearing comfortable and, in addition, funds will be required for business development, acquisition of aircraft, etc. In initial years the company will be a cash guzzler and debt servicing will be a challenge and may take many years.

To strengthen viability, the government may have to extend some non-monetary sops like reserving some routes for the airline and continue to handhold for some time. It is also not clear what the government will do with the ₹37,000 crore parked in the SPV and the taxpayer should not be made to bear the loss. It should be treated as portfolio loss and absorbed out of the profits on other disinvestments.

Mumbai

Apropos ‘Plug and play’ (July 29), a concessional import duty for EVs would serve the interest of the market amid the concerted push to promote electric mobility. Although the entry of a behemoth like Tesla will hurt the prospects of our domestic players in this space, its impact will be short-lived.

Tesla’s cars admittedly won't find many takers given its steep price tag; however, the presence on the road of the best of the breed will provide an impetus to increasing the adoption of EVs in the country. Tesla is a marquee brand, and its cars on Indian roads will undoubtedly stimulate interest in this category of vehicles. Eventually, as foreign manufacturers find traction for their cars, it will make the domestic manufacturers boost their competitiveness.

Bengaluru

It was intriguing to observe that various technical glitches still continue to obstruct the functioning of the new e-filing portal of the Income Tax Department. According to the CBDT, various stakeholders may still have to wait at least up to mid-August, when the website is expected to function normally. The new I-T portal is expected to reduce the time for processing returns from 63 days to one day and expedite refunds. One wishes that such an ‘over-ambitious’ game-plan does not meet the fate of the much promised ‘ Achhe Din ’.

New Delhi

This refers to ‘The Ken-Betwa project needs to be redesigned’ (July 29). The Ken-Betwa river-linking project will benefit the drought-affected regions of Bundelkhand and provide drinking water to several districts of Madhya Pradesh and Uttar Pradesh. The project has been facing several hiccups such as getting environmental clearance and relocating the displaced population.

The Ken-Betwa project passes through the Panna Tiger reserve, and animal rights activists are demanding a realigning of its route. The other major river-linking projects are awaiting the successful completion of this project.

Chennai

COMMENT NOW