Letters to the Editor dated February 10, 2022

George Verghese 4772 | Updated on: Feb 10, 2022

Capital gains tax

This refers to ‘Govt open to ‘reworking’ capital gains tax regime’ (February 10). This is a welcome step. In a country like India which does not offer social security benefits to its citizens, for certain sections of the people the stock market happens to be the main source of income, and too high a tax structure on capital gains would impact such sections.

Another advantage is that lower tax will lead to stock market investments picking up rapidly that too at a time when inflows into equity mutual funds had dipped 41 per cent as per the latest news report. The scenario is expected to further deteriorate with US Fed having decided to pursue an aggressive fiscal policy aimed at increasing interest rates and curtailing its balance sheet size.

With hardly 4 per cent of the people invested in equities compared to about 55 per cent and 14 per cent in the US and China, respectively, the Indian stock market is one of the bright spots for investors.

Srinivasan Velamur


RBI policy

Contrary to general sentiment, the RBI has kept rates unchanged. Keeping the policy stance accommodative, it had the space to do a symbolic 15 bps reverse repo hike so as to signal rate normalisation, both to counter inflationary pressures and to be in alignment with the global trend. The inflation estimate for FY23 seems understated given the rising crude prices and the Ukraine issue.

The government’s capex needs are significantly larger than in the past, which could skew the demand and supply in market borrowings And any focus on normalisation would render managing bond yields difficult.

The RBI is cautious on the growth trajectory. Since the unorganised economy has been affected much too adversely and needs continued support from a liquidity perspective, the RBI will need to be quick footed once credit growth picks up. With many concurrent scenarios running, the RBI is perhaps pragmatic in pausing for breath.

R Narayanan

Navi Mumbai

TN’s NEET stand

The Tamil Nadu Assembly has passed the NEET Bill for the second time and sent it to the Governor. The previous Bill passed by the Assembly in September 2021 was returned by the Governor recently. The medical entrance test has had a checkered history and, finally, in 2016 the Supreme Court took back its earlier judgment and upheld the validity of NEET from a social justice point of view. All States except Tamil Nadu have successfully implemented the entrance test.

In 2017, the then AIADMK government passed a Bill seeking exemption for the State from NEET examination which was not approved by President. In the 2021 Assembly election, the ruling DMK made abolition of NEET a poll promise and got a Bill passed by the Assembly in September 2021 for exemption from NEET which was returned by Governor. There is hardly any scope for exempting only one State from NEET and the Supreme Court has already examined and given its judgment in the matter.

The abolition of NEET will benefit only the private medical colleges that cater to state board students and is not likely to benefit students of rural areas. In 2021, a large number of students in Tamil Nadu have cleared NEET, which is underplayed by political parties. The Assembly does not have the locus standi to pass a Bill in contradiction to the Supreme Court judgment and the Bill is also against natural justice. Medical education is important for the nation and should be kept out of politics and vested interests.

M Raghuraman


Digital push

With reference to ‘Digital drive’ (February 10), the slew of tech initiatives proposed in Budget 2022 towards sustainable governance will yield the desired results only if implemented effectively. A complete revamp of the document registration system is required to streamline the land revenue records. Similarly, due to lack of digital awareness among MSMEs, the utilisation of GeM portal services for participation in procurements of supplies and speedy realisation of receivables from government departments is still in the nascent stage.

While extending banking services to remote areas through India Post is a welcome step, in the absence of last mile internet connectivity, money transfers and other banking operations will not be possible. The much talked about tech start-ups still depend on private web services for their operations by paying hefty hire charges in the absence of government-supported facilities. Such hiccups must be identified and addressed.

Sitaram Popuri


Leveraging tech

One of the conspicuous features of the Budget lies in its concerted proposals aimed at leveraging digital technologies to deliver good governance even while ushering in transparency and accountability on the corridors of power to reduce corruption. However, given the entrenched digital gap which still prevents people from lower strata to access internet and enjoy the benefits associated with it, it is incumbent upon the Central and State governments to unleash time-bound measures to address this issue with a seriousness it truly deserves.

While the ambitious BharatNet and 5G telecommunication services could herald a new beginning and facilitate the penetration of internet in the hinterlands, concerns pertaining to breach of privacy of the citizens with a slew of state agencies having an unhindered access to personal data of people cannot be taken in lighter vein.. A robust data protection law to protect and address the privacy concerns of citizens brooks no delay.

M Jeyaram

Sholavandan, TN

Published on February 10, 2022
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