Apropos of your edit “Servicing the fisc”, is it not a better move to actually get rid of many tax relaxations given to the corporate class and also broaden the income tax base by keeping rates low enough to make the cost of evading taxes to relatively rise? There are many innovative solutions the government can look at, starting with divestment, doing away with the failed SEZ concept (and its attendant tax concessions), sale of PSU land banks, etc. The government could also look at reducing costs by offloading some of its security functions to the private sector. Just disbanding the CISF and instead allowing private security firms to bid for and operate existing CISF functions would save the government a lot in terms of salary bills. If the airports can be managed by private parties, why can’t their security be left upto private parties also? Why should the government have to bear that burden? Let the private parties operating airports look after their own security. Similarly, let the government colleges adopt a differential charging model. If you are above a certain income threshold, the fees of your education at an Indian Institute of Management or at an AIIMS will not be subsidised. It is the very people who enjoy most of the government services, from roads to security at airports who have been crying out against these spends. Let them do without.
Apropos of the column on “India’s credit boom, and bust” (FE, December 23), the ballooning problem of bad loans and its impact on credit growth is the biggest challenge. Despite various measures, no improvement is visible in credit growth. Credit management, mitigating risks, timely delivery and loan recovery are very crucial. Banks have to revisit the quality of their manpower and their procedures to plug the loop holes. The government must implement measures in sectors where its policies are the impediments. The banking regulator must strengthen its to have the intended results.
VSK Pillai, Kottayam