Letters to the editor dated August 6, 2021

| Updated on August 12, 2021

The IPO deluge

Apropos Editorial ‘Irrational exuberance’, this mad frenzy for IPOs is only going to end in a lot of grief for investors, as has happened in the past.

Probably the new age retail investor does not have a long term horizon and is quite unaware of the boom that went bust at least on two occasions.

It was in 2000 there was a slew of IPOs in the telecom and IT sector. Barely a handful have survived and quite a number of promoters turned out to be fly-by-night operators.

Around 2010, a similar frenzy for leasing and finance companies was observed, with first time retail investors losing the little they had.

Now is the turn of the unicorns with suspect business models to lure the investors.

One hopes that history will not be repeated!

Anthony Henriques


Welcome change of heart

With reference to ‘Retro tax call off: Pragmatic decision, even if it was late in coming’ (August 6), it goes without saying that the Centre’s move to nullify the retrospective tax amendment could be attributed more to its “loss of face” after Cairn’s victory in its case (at the overseas Courts) against the Centre’s tax claims.

As regards, Finance Minister Nirmala Sitharaman having alluded in the Statement of Objects and Reasons to the Bill, acknowledging that the retrospective tax amendment is a “sore point” with foreign investors, one moot question obviously arises: Why the Finance Ministry took so long to arrive at a such a well meaning decision if it honestly wished to “chose pragmatism over vanity to put one of the most unsavoury episodes in India’s tax history to rest”? Why it did not try to seek an out of court settlement?

Let us hope that Cairn and Vodafone, and the others, eventually accept the government’s latest terms and amicably settle this 'hot bedded' issue.

Otherwise the consequences could be highly undesirable, from the FDI angle.

Vinayak G


The Danish way

With reference to the article ‘Managing water, the Denmark way’ (August 6), water stress is going to be the major issue which each country will be facing in the coming days.

Projects on inter-linking of rivers flowing within the State or across States are moving at a snail’s pace and the best example is the Ken-Betwa river linking project which is fraught with several issues.

Though it would be difficult to emulate Denmark’s example due to vast differences in humidity, temperature and extreme weather conditions, the best practices followed in managing the waste water through recycling and reusing must be given a serious thought by India.

Besides finding new sources for augmenting water supply which would become rather scarce in future, there is every need for the water managers to give more stress on 3Rs (Reduce, Recycle, Reuse) to beat the water stress.

RV Baskaran


Why No ECGC Cover?

Apropos “Rice exports to Vietnam face trouble” (August 6) is a clear case of arm-twisting tactics by the importing agencies. International trade of such high magnitude is invariably under a pre-agreed contract and covered under standard payment mechanisms like Letter of Credits etc, mostly irrevocable.

The Vietnamese importers’ threat to reject shipments demanding huge discounts is legally untenable, unless there are valid technical grounds.

However it is strange that the Indian exporters have not covered their shipments under ECGC policies, which comes to their rescue when consignments are rejected due to frivolous reasons.

Rajiv Magal

Halekere Village (Karnataka)

Published on August 12, 2021

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