Buoyancy in tax revenue

The data released by the Controller General of Accounts recently has pointed to a conspicuous increase in the both tax and non-tax revenues in the just ended financial year, 2021-22 with the Centre’s tax collections at the aggregate level having reached Rs 27.8-lakh crore. No doubt the buoyancy in the revenue of the Centre will give enough fiscal headroom to it to revive investment.

However, there are several myriad headwinds which the government cannot ignore. Factors such as the recent cuts in excise duties on petrol and diesel, lower than expected transfer from the RBI, spending on fertiliser, food and LPG subsidies and the impact of the Ukraine war in all likelihood will affect government finances and its fiscal deficit calculations.

M Jeyaram

Sholavandan, TN

Job guarantee

This refers to ‘A job at hand’ (May 2). Providing jobs, besides enabling and empowering the youth to get themselves employed, is quintessential. The various productive segments with underutilised capacities need to be identified for infusing capital investment and incentivised to kickstart the stalled economic activity.

A comprehensive job guarantee strategy needs to be executed to provide regular jobs throughout the year. While the urban centres are getting flooded with job seekers from rural areas, it is essential to create more jobs in these centres by steeply augmenting investment in all kinds of farming-related economic activities.

The job guarantee schemes must not only be helpful to the unemployed but should also ensure optimum reciprocal productivity from the human capital. At a time when the economy is under the threat of stagflation, it is necessary to control the growth of unemployment through the job guarantee scheme in urban centres.

VSK Pillai

Changanacherry, Kerala

Skill, upskill, reskill

This refers to ‘A job at hand’ (June 2). Unfortunately, governments have for long adopted the dole-based approach for the welfare of the population, especially the less-privileged. This is because building skills and competence in the working class needs time and effort on the part of policymakers in strategising and implementing appropriate skilling interventions. Doles, on the other hand, are easier, much to the detriment of all.

Jobs and livelihoods are secured by individuals by acquiring the necessary knowledge, skills and other attributes required to perform income-generating work.

V Vijaykumar

Pune

Modi regime

Apropos ‘A structural reset during Modi govt years’ (June, 2), in addition to the creditable economic achievements, the BJP rule of the past eight years has been scam free and with no incidents of major terror attacks against civilian targets. Contrast this with the procession of scams and terror attacks across the nation during the previous regime.

Politics in India had become such a ‘low risk, high return’ profession, that even a Panchayat election victor could build a palatial bungalow within a short time. Against this backdrop, we saw a BJP government that made a sincere attempt at fulfilling its electoral promises and we already know the reasons for its popularity.

However, a lot more still needs to be done, such as curbing the unconscionable legal delays, controlling the population explosion, privatisation of loss-making public sector units, improving health and educational infrastructure, encouraging alternative sources of energy, etc, which when achieved would truly make it ‘Achhe Din’ for Indians.

V Jayaraman

Chennai

More boxes to tick

Robust delivery of social welfare schemes and the Jan Dhan scheme are among the most noteworthy achievements of the Modi government in the past eight years. While the government may not have a corrupt image, corruption still thrives at various bureaucratic levels. Though India has shown resilience on the economic front despite Covid and the Russia-Ukraine crisis, to become a $5 trillion economy and ensure that labour and migrant workers lead a dignified life, the government will still have to cover a long distance and tick more boxes.

Bal Govind

Noida

Rate hikes by banks

Further to the repo rate hike of 40 basis points effected by the RBI to tackle inflation, a few commercial banks are on a rate hike spree post the development. The RBI had given an option to banks to link to their rates to external benchmarks like repo or short term bill rates. Another choice which was made available was to link them to internal rates like base rate, MCLR, etc. More than half of the banks have chosen MCLR. In the case of MCLR, apart from other factors like CRR cost, etc., cost of deposits plays a major role in ascertaining spread.

The fact remains that deposit rates go up with a lag since rate change does not impact existing deposits. Under the circumstances, one is not clear why banks are in haste to increase loan rates not once but even more than once. At this rate one shudders to think how many loan rate hikes are in store since the RBI is expected to hike repo rates at least a couple of times by the end of 2022.

Srinivasan Velamur

Chennai

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