Scope for change

Updated on: Oct 12, 2015

Your editorial, ‘Killing fields’ (October 12), is timely. Various governments have failed to provide security to farmers from natural calamities. It is surprising that the coverage of agricultural insurance is low. A lot of improvements need to be made in the present system. Awareness must be created among farmers to avail of insurance. Another procedure is to identify the tenant cropper and insure that person and not the owner.

Insurance companies are reluctant insure farming as it is not profitable and natural calamities affect the yield every year. The claim to be settled is higher, and this affects the profitability of insurance companies. In such cases higher premium may be charged and 60 per cent may be borne by the government in the shape of subsidies.


Bhimavaram, Andhra Pradesh

We have not tried to use the power of our satellites to insure our farmers. Every farmer has a mobile phone. Our satellites can map every farm in this country and create a unique identity number for those farmers and their farms. Let our insurance companies tie up with seed and fertiliser companies.

When the farmer buys the fertiliser or seeds he can find a number when he opens the bag and he just needs to send that number as an sms to a given number. When there is no rain, or excess rain which destroys his crop, timely help from the insurance company by way of replacing the seeds and the fertiliser will help the farmer sow again. The insurance companies will use the satellite images to automatically process the claims. This type of insurance broadly used in countries such as Kenya, is a huge success in Africa. The insurance premiums are also low. If we have the will to save our farmers, there are ways.

CR Arun


People’s reps matter

The article, ‘Let’s not make the same mistake again’ by Telangana MP, Konda Visheshwar Reddy (October 12) raises several issues concerning skill development. It is comforting to find that people’s representatives are aware of the ground level problems faced by workers. A mention of girl students after a certain age dropping out of school for want of toilet facilities in schools made in the Prime Minister’s Independence Day speech made a difference.

MG Warrier


The real reason for rate fall

This refers to ‘Rates will only fall over the long term’ by Aarati Krishnan (October 12). The writer says the interest rate in an economy will fall on its way to development. She has cited the example of the US where Fed rates have been slashed from as high as 19 per cent in the early eighties to near zero now. She has, however, missed the real reason for the fall.

The real reason is the corresponding fall in inflation. In the early fifties, the Fed rate was about 1 per cent and the corresponding inflation then was minus 1 per cent to 1 per cent, whereas in the early eighties inflation was between 10 and 15 per cent; consequently the higher Fed rate. Currently the inflation and the Fed rate both are near zero. This clearly demonstrates that interest is a function of inflation, rather than development.

Further, the writer has said that interest rate is a function of number of savers relative to borrowers: where savers are more, interest rates will be lower. But the reality is otherwise. The savers and interest rates are, generally, higher in developing countries (30-35 per cent saving rate in India) than in developed countries (5 per cent saving rate in the US).

RK Juyal


Tax avoidance is legal

This is with reference to the item, ‘CBDT chief puts corporate on notice, says ‘era of avoidance’ is over’ (October 9). Such a statement is shocking as it comes from the CBDT. Tax avoidance is not tax evasion; tax avoidance is legal. One can save taxes within the four corners of the law, taking advantage of loopholes, court decisions — such as the right interpretation of some provisions of the Income Tax Act — as decided by the courts of law. Why not save taxes with tax planning legally?

Mahesh Kumar

New Delhi

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Published on January 22, 2018

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