EPF tax roll-back
EPF tax roll-back
Without standing on false prestige, the Union finance minister Arun Jaitley has done well to roll back the proposed tax on 60% of withdrawal of EPF amount. The government should explore the possibilities of mopping up tax revenue from sources where people conceal their incomes to evade tax. Taxing on terminal benefits is unfair. Tax base should be expanded without further burdening the existing class of taxpayers, a lot of whom are government employees.
Differential approach for NPAs
Apropos of the editorial “Weak + strong is not equal to strong” (FE, March 9), the consolidation of state-owned banks is not going to immediately deliver the desired results in addressing the deteriorating asset quality problems of these banks. The accumulated non-performing assets are a combination of genuine and non-genuine bad loans. The former is on account of various adverse macroeconomic factors, and the latter is due to the interference of politicians, weak systems of lending and malpractices of unscrupulous borrowers. While state-owned banks have played a pivotal role in economic growth and development of the country, successive governments have not taken adequate care of the deteriorating health of these banks. Due to surging non-performing loans, many banks have become weak, so blaming public sector banks for the current state of affairs is illogical. A differential approach is needed to realise these unpaid bad loans. Sector-specific corrections and reforms need to be speedily executed, particularly in sectors like iron & steel, infrastructure, textiles and power to unlock blocked funds of banks. Loans which became bad because of reasons other than the genuine ones must have to be dealt with tough recovery actions. The government must look for reforms to reduce litigation as well as for avoiding undue delays in courts and debt recovery tribunals in deciding recovery suits. One-time settlements will pave the way for speedy realisation of unpaid loans and also reduce recovery costs. Before looking for consolidation, the government should take into confidence the trade unions to ensure smooth transition.
Creation of a skilled workforce
Apropos of the column “From education to employability to employment” (FE, March 7) by Jayant Krishna, the CEO of National Skill Development Corporation (NSDC), Union Budget FY17 has focused on efforts to strengthen the economy through substantial investments in infrastructural development, healthcare, job creation, skill development and MSMEs. In fact, the Budget even provides us the confidence of bridging the skills gap and placing India in a relatively much better position on the global skills landscape. What is now needed is bringing about industry linkages to schemes such as the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) to ensure employment opportunities to the skilled workforce. The creation of skilled workforce will help meet the needs of the industry and provide growth momentum.