Letters to the editor: Tax policy

Updated: Jun 12 2014, 05:45am hrs
In his column No more band-aid tax policy (FE, June 7), Surjit S Bhalla has explained how Indias effective tax rate, almost equal to 30%, has killed the corporates and the economy. But we need not worry about it now. The tax policy grows with the growth of the economy. It was Chidambaram who boldly reduced the tax rate and showed that the less the rate, the more the collection. It is time to revise our rate and follow the world or Asian trend of 21%. The next step will be to have it stable, so that the controls work effectively without any retrospective or other retrograde policy. With the UPA government we moved away from the Licence Raj. And now it is time to free the economy and move to a liberal policy aiming at growth and development. The example of China is always there before us.

Jacob Sahayam


Our vivid political palette

Apropos of the Idea Exchange programme Future belongs to BJP and AAP (FE, June 8), the wheels of politics keep turning. The Congress peaked in UPA-1 on an ascendant growth curve. The UPA-2 then inexplicably switched over to the extremes of inclusiveness, losing sight of growth and touching nadir. The BJP has since come back, riding high on the growth arc of the cycle this time. While its majority strength and its innate economic tenet might well enable a GDP recovery, the weak Opposition makes NDA vulnerable to socio-political and economic imbalances as the regime progresses, because of the ideology derived from the Parivar. If governance suffered under the UPA due to a diffraction in authority, the NDA in turn could be susceptible to too much of it being centralised. Even the best political outfit and redoubtable leaders must go through a learning curve. Modi and his NDA-2 will also travel this path and political entities will cyclically keep following one another. That the Left could manage three decades of rule in West Bengal only on inclusiveness and no growth will remain a political enigma. In the process, it has been reduced to a political bonzai and may well stay that way for a long time. The AAP was born amidst the rush of national concerns that both the Congress and the BJP failed to address in their decade-long battle of political one-upmanship. One reason why this fledgling party, though high on spirits, is lost in self-contradictions, unable to identify its core purpose/ideology. Lost in prioritising its agenda, it is internally divided. The good thing is its founders seem to be determined to stick together and the party should duly evolve over time. It is essential it does as the vacuum created by the Left is better filled by a political entity than by the likes of the Arab spring. It was with much effort that political centre-stage was reclaimed by Parliament, from Jantar Mantar!

R Narayanan