Letters to the editor dated September 16, 2021

It was encouraging to learn that the government is currently toying with the idea of bringing petrol and diesel under the ambit of the GST regime. Such a well meaning move may see the light of the day if the GST Council scheduled to meet on Friday also accords its approval to it.

The end users of auto fuels are likely to be immensely benefited since the retail prices of petrol are likely to dip to around ₹75/litre and diesel may cost ₹68/litre or so. One wishes that wise counsel would prevail upon the GST Council members in the larger public interest.

New Delhi

This refers to the news report ‘Bad bank’s Security Receipts (SRs) to get govt backing’ (September 16). The decision of the government to provide its guarantee to the SRs to be issued by the Bad Bank, the ‘depository of duds’, looks bereft of logic.

The government has been pumping funds to arrest the erosion of the capital base of those nationalised banks making huge provisions towards NPAs. The bad bank was mooted to absorb the large NPAs of the nationalised banks, free them from making heavy provisions and thus their dependence on the government, to increase their capital.

Now that the government has chosen to provide its guarantee to the bad bank, the burden of meeting the unrealised SRs will fall on them, defeating the very purpose of the whole mechanism. If the government wants to give some sort of moral support to this venture let it limit its commitment to say 20-25 per cent.

Kumbakonam

It is a welcome decision from the government to guarantee the security receipts issued by National Asset Reconstruction Company Ltd (NARCL) when buying the NPA from banks. This is a contingent liability which would not have any effect on the finances for a short-term period.

PSBs have identified 22 stressed assets totalling ₹82,500 crore that may be transferred to the bad bank in phases. The advantage with NARCL is that the members are from nationalised banks, and delays would be avoided in decision making on . At least now the process of recovery of NPAs would speed up.

Bhimavaram (AP)

Apropos ‘4-year moratorium on spectrum, AGR dues top telecom policy’ (September 16), it is a welcome decision of government to support the telecom industry, and the ‘Digital India’ ambition. One hopes that with these and other likely measures, one would have a thriving telecom sector and an inclusive digital society for the benefit of common people.

More importantly, the move signals departure from decades old thinking that big business is ‘bad’ and all its attempts to grow and prosper must be thwarted.

The new thinking acknowledges the necessity of privately owned business, including foreign owned (100 per cent FDI), and its role in nation building. And therein may lie the real gains.

Pune

Apropos ‘Cash credit for Agri sector should be brought on par with other businesses’ (September 16) although is an improved way of funding the beleaguered sector, it may not be the best since farm activities are not to be treated at par with any other business, where the selling price of the product manufactured is not pre-decided by the producer-farmer, but by a third party, who faces least risk.

So it would be prudent if farm credit schemes are designed in such a way that the farmers get cushion to sustain the vagaries unique to agriculture.

NITI Aayog, the Ministries of Agriculture and Finance must jointly work on this issue so that the farmers get financial assistance to suit individual needs given the fact that loan waivers have not proved to offer major advantage, except political mileage.

Halekere Villae (Karnataka)

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