Apropos of the article Ensuring a healthy insurance biz by Kala Seetharam Sridhar (FE, October 31), even after a career of a long 23 years as an insurance adviser, I have never encountered such novel ideas as suggested by the writer. Neither the insurers have vouched for them, nor the agents have advocated the same to their valued clients. I sincerely believe that, if seriously implemented, this will open a new vista in the insurance segment and reduce claims ratio to a great extentbe these in the life insurance sector or the general insurance sector. It is naturally expected that the insured fraternity will accept these basic ideas gladly and gradually practise these in their daily lives. Last but not the least, with increased longevity coupled with various diseases/ailments, claims in both life/health insurance are on the rise. But lesser the claims with rising public consciousness about health, the better for the insurers as well as for the common people in general.
Tax income, not purchases
Apropos of Meghnad Desais column Why does black money matter (FE, November 3), the learned economist hits the nail right on the head when he says that getting back money from Swiss banks will hardly have any impact on the Indian economy. Instead, combing the real estate sector, purchases of luxury goods and services, high-priced gifts, etc, could be the best way to filter out the bulk of illegal funds that are already in currency in the domestic economy. On his suggestion to abolish the income tax, however, one will have to disagree because there has to be some tax on gainful employment (above a certain salary bracket) in India. If consumption is to be taxed, as Desai has suggested, it will impact peoples consumption behaviours, leaving out a lot of the potential tax money. It is a bad idea to tax an economic activity that is responsible for the circulation of wealth among citizens. Imagine if incomes were not taxed and savings increased at a drastic rate to avoid consumption taxes, how unsustainable it would become for the banks! If invested in industry to avoid consumption taxes, where will be the takers for what the industry produces It is better to have income tax but more rationally structured so as not to punish the creation of wealth.
Please send your letters to:
The Editor,The Financial Express, 9&10 Bahadur Shah
Zafar Marg, New Delhi-110 002
or e-mail at: email@example.com or fax at