Editorial 1 / Nowhere land
Editorial 2 / Bill of wrongs
To climb a steep gradient firmly
Not disinvestment again, please
Legal reform towards uniform standards
Letters to the editor

The signals were clear. First, the report of the prime minister�s economic advisory council stated that railway finances were in a mess and passenger fares should increase. Second, the Economic Survey made the same point. Third, the president�s address to Parliament took up the refrain of appropriate user charges. Against this background, the minister for railways, Ms Mamata Banerjee, adopted the imagery of railways standing at a crossroads or junction station and made her choice, against the recommendations of railway experts and economists. She avoided the track that leads to reforms, revival and rejuvenation and opted for the one that leads to the nowhere land of crisis and chaos. The railway experts group was set up in 1998 to study railway finances and the interim report is available. However, instead of accepting the argument that subsidies should be direct and transparent and not across the board, Ms Mamata Banerjee has opted to set up another committee headed by Mr Sam Pitroda.

Meanwhile, passenger fares have not been hiked and will certainly not be increased even after the West Bengal elections; there has been a hike in freight rates but essential commodities have been exempted. Seemingly, the hike in freight rates (one to three per cent ) is not much. But considered against the backdrop of earlier hikes and steady loss of freight traffic to road transport, this is a bad idea, especially because the minister herself acknowledges that railways are more environment-friendly. However, new initiatives on freight deserve applause, such as the volume discount scheme, special lump sum rates in merry-go-round circuits or roll-on-roll-off packages, as does the decision not to introduce new lines. What the railways budget seeks to accomplish needs to be considered in the context of what was promised last year.

Last year, the argument behind not increasing passenger fares was that non-traditional sources of earnings would be tapped. Rupees 500 crore was to be through broadband optic fibre cables and RailTel Corporation was set up. Nothing was realized in 2000-01 and in 2001-02, Rs 700 crore is budgeted. This is not inordinately high. Given the lead aggressive private players already have in this sphere, railway dreams are unlikely to materialize. Commercial utilization of railway land was supposed to yield Rs 150 crore. Only Rs 81 crore has come in and out of this, Rs 35 crore is from Delhi Metro; in 2001-02, commercial utilization of land is budgeted to fetch Rs 200 crore. Done properly, much more is possible, but there is no evidence of this being seriously attempted. Much the same can be said of the commercial publicity target of Rs 100 crore and actuals of Rs 30 crore last year and budget estimate of Rs 100 crore. While the Khanna committee on safety received lip service last year, there was not much implementation on upgradation of signalling or telecommunication networks. This year, the required grant of Rs 15,000 crore is being pursued. Meanwhile, pension liabilities are due to go up from Rs 633 crore to Rs 5,800 crore. Other than whining about no support from the general budget and deferring dividend by Rs 1,000 crore, the only options are to increase market borrowings to Rs 4,000 crore and hope for recoveries from hope plants. The upshot is that populism is driving railways into a debt trap from which there is no salvation. While other countries subsidize railways from the general budget because of social compulsions, the general exchequer is not as broke in other countries. Sooner or later, commercial principles will have to be accepted.


Abuse begins at home. Being the flipside of charity, it is practised against women with the expected amount of vengeful intensity. So the proposed bill for the protection of women against domestic violence is being welcomed by women�s groups and lawyers� organizations. Given the differences in education, economic standards, and the generally underprivileged status of women, a law guarding against domestic abuse could be useful as a protective weapon. But a sweeping bill against physical and mental violence in the home creates as many problems as it promises to solve. In the first place, mental abuse within the home is enormously difficult, if not impossible, to define in workable legal terms. Men�s pressure groups have reason to be tetchy. The definition provided in the draft is both vast and vague, including �humiliation� as well as �name-calling, especially with regard to women who do not have a child or particularly a male child�. The moment legislation enters a space as private as the interaction between spouses, it is attempting to standardize the most intimate and individual of human relationships. What is pure fun for one couple may be searingly painful for another; surely a law cannot rule on the �decorum� of domestic exchange.

And here comes the second glitch. While nobody would disagree that the injustice towards women desperately needs correction, no law should provide the wife alone with a weapon. The kind of �insult� or �humiliation� being enumerated in the draft bill can very well be directed against the husband. That, too, would be considered domestic violence by the same logic. Ultimately it is overlegislation that leads to these blind alleys. The apparently numberless laws in India do not seem to have either deterred crime or prevented women from being regularly tortured, burnt, raped, thrown out, dispossessed, murdered. The solution to domestic violence lies in education, improved standards of living through a better growth rate and the spread of awareness among both men and women. However reassuring the bill is, splitting hairs over it is, at one level, futile.


The government of India has proclaimed the new decade a decade of development, during which India will meet bold targets for economic growth and social development. Some of the key policy challenges in meeting these goals need to be discussed. We suggest that the Union budget for 2001-02 should be the operational policy document to lead India�s decade of development. The main parts of the budget strategy should be reduced overall deficit to preserve macro stability and to enhance growth; a shift of budget spending towards social areas and away from subsidy areas, and away from areas where the private sector can substitute the public sector; and finally, focus on the two pillars of policy change � the social and the economic pillars.

The Central government must undertake a fundamental review and reorientation of fiscal policies to support the decade of development. There are three goals. First, the overall fiscal deficit must be reduced sharply. Second, the expenditures should be shifted from economic sectors like infrastructure where the private sector can carry the investment burden, to social sectors like health and education where increased public spending is vital. Third, social programmes should be redesigned to make a maximal impact per rupee spent. This can best be accomplished by replacing generalized subsidies, such as the public distribution system or free electricity for farmers, with targeted programmes such as school meals.

The Central government�s current fiscal deficit is around five per cent of the gross domestic product, and this should be reduced to ensure macroeconomic stability, and to prevent an unmanageable buildup of public debt. At the same time, social spending should rise, including an increase for health and for education. Most of this should come from cuts in existing expenditures rather than from increases in taxation as a per cent of GDP. Current government spending is already around one-third of GDP, which is quite high by comparison with other developing countries in India�s income range. If India were to increase expenditures further as a per cent of GDP, it would have a very difficult time raising the internal tax revenues to cover the spending programme.

The following prime areas of potential expenditure reduction over a three-year period can be identified. Among Central expenditures are disinvestment of public sector units (with revenues used to pay down the public debt). The net worth of Central PSUs is estimated to be Rs 1,324 billion, a little over 6.5 per cent of GDP. The capital employed is around Rs 2,230 billion (estimated savings one per cent of GDP).

The second is closure of loss-making PSUs. Of a total number of 236 PSUs, there are 104 loss-making ones that account for roughly Rs 60 billion in annual losses to the Central exchequer (estimated savings three per cent of GDP)

The third is reduced bureaucracy. A freeze on new employment matched by normal attrition through retirement and death. On an average, about 125,000 Central government employees are taken off the government payroll each year for these reasons. Implementation of such an approach over a period of four years could result in a reduction in the government employment by approximately 12.3 per cent, or a reduction of around half a million employees from the present total of about four million. On an average, the government could save about Rs 20 billion every year on reduced salaries, and the associated reduction in the operating expenses. Over a three-year period, this would imply savings of roughly 0.3 per cent of GDP.

Then, Central power sector undertakings� support to state electricity boards should be looked into. SEBs owe huge sums to the Central power sector undertakings, such as the National Thermal Power Corporation, National Hydro Power Corporation, Damodar Valley Corporation and so on. It is estimated that as of September 1998, the SEBs owed Rs 16,800 crore to these power sector undertakings (estimated savings 0.8 per cent of GDP).

Subsidies should be reduced, including that in the public distribution system and transport (estimated savings 0.5 per cent of GDP). Infrastructure investments can be reduced too by being taken over by private sector projects. Annual infrastructure investment for India is placed at around Rs 650 billion, which is roughly 3.2 per cent of GDP. We figure that a little less than half of this amount can be reduced (1.3 per cent of GDP at the Centre) in investments over three years if the private sector were to take on large scale investments in the infrastructure sector (estimated savings 1.3 per cent of GDP).

Another area of reduction is interest payments. This additional budgetary saving is a result of a reduction in real interest rates that will come from the overall package of contractionary fiscal measures suggested above. Interest payments were placed at Rs 88,000 crore in 1999/00 or 4.6 per cent of GDP (estimated savings 1.0 per cent of GDP).

The estimated expenditure saving that could be achieved by each of these items total to approximately 5.2 per cent of GDP over three years. Of course, these are approximate.

It may seem politically impossible to proceed with such bold cuts, but it should be remembered that these cuts would be combined with substantial increases in public and private spending. Public spending would rise in health and education, including some highly visible and politically popular programmes such as school meals and increased availability of primary health facilities. Private spending in infrastructure would also be politically popular, as it will mean the much faster diffusion of new technologies to rural areas.

Investments in health and education will have direct and beneficial effects on economic growth, by fostering a healthier, better educated, and therefore more productive labour force. But social investments are not enough. Social investments must be combined with a large improvement in the business environment in India in order to promote a more rapid rate of economic growth.

History has shown that export-led growth is a crucial component of overall economic growth. Without rapid export growth, there cannot be rapid growth of imports. But imports are necessary for India to obtain the modern technologies that have been developed abroad. Thus rapid export growth is a sine qua non for rapid economic growth.

Rapid export growth can only be achieved in areas of Indian comparative advantage. These include labour-intensive manufacturing sectors such as apparel and textiles, automotive components, footwear and leather goods, jewellery, processed foods, and electronics assembly. They also include high-technology areas in information technology and biotechnology (like pharmaceuticals) that rely on India�s tremendous scientific and engineering capacity.

India has achieved some success in export led-growth, but much less than many other Asian countries, notably China. China�s exports grew from around $20 billion per year in 1980 to around $200 billion in 2000, roughly increasing tenfold. India�s exports, by contrast, grew from around $17 billion in 1980 to around $35 billion in 2000, or roughly doubling.

India has the resource base, it has the entrepreneurship, it has the access to the sea coast, a vast labour force, and it has everything that coastal China has had except the interest of government. India has underemphasised the role of industrial facilities, underemphasised the role of infrastructure, of land area, of effective port facilities that are needed to be able to compete with China. But this is an area where one could find tens of millions of jobs over the next few years in real, significant foreign exchange earning private sector activity. This would require a change of attitude, a real promotion of these sectors both at the Central and state government levels.

There are several barriers to more rapid export growth. Fortunately, most of these barriers can be overcome by regulatory changes and private investments rather than public money. Some of the crucial steps needed for a faster growth of exports include reform of labour laws to ensure the right of enterprises to hire and fire workers for economic causes, subject to the normal rule of law (for example, prevention of arbitrary dismissals in retribution for union activity). Also, improvement of infrastructure, mainly ports, telecommunications, airports, power, and roads. Then, elimination of remaining administrative barriers to foreign direct investment in export oriented sectors (for example, elimination of need for government approvals).

Moreover, there should be much more active use of special economic zones and export processing zones as incentive schemes for export-oriented enterprises. States and private enterprises should be free to establish export processing zones according to general legislation. Last, remaining reservations for small-scale enterprises should be eliminated, especially in export oriented sectors but also generally in the economy.

India�s infrastructure is notoriously bad. The road networks are insufficient and of very poor quality. Ports are completely inadequate, so that most exports must be transshipped through Singapore or Sri Lanka, rather than shipped directly from Indian ports. Airports are insufficient and the airspace is reserved for just a few carriers. Telecommunications are notoriously poor in quality and coverage. Electricity supplies are irregular, scarce, and of low quality. Water supplies are scarce in many areas, and insufficient for key industries as well as household use.

And in general, neither the government at the Centre or the state levels can afford to upgrade these infrastructure systems out of budgetary funds. Many of these sectors already impose huge fiscal costs as government provides overt and hidden subsidies to these key sectors.

Fortunately, India could enjoy a major � indeed fundamental � improvement in infrastructure quality without major budgetary increases. The key is regulatory change, involving two main steps. First, regulatory and oversight responsibilities for almost all infrastructure should be devolved to the state level. This includes areas now under Central control, such as major ports and airports and telecommunications. The states have a much better idea of their specific infrastructure needs than do the Central bureaucracies.

Second, infrastructure should be provided mainly by privately financed projects without state guarantees. The entire cable TV industry in India has grown up without government subsidy, precisely because it was not regulated. Other key areas � telecommunications, internet, water, power � would similarly expand dramatically if private investors could enter and compete.

Each sector requires its own reforms. Reforms in telecommunications have begun, especially with the end of the Videsh Sanchar Nigam Limited monopoly by 2002 and the intention to disinvest a major part of the government�s holding in the state company. Still, the regulations on local telephony and internet services are blocking a substantial growth of such services throughout the country. Again, barriers to building new airports and to licensing new aviation companies has stymied the development of an efficient and low-priced network of domestic and international flights.

The government of India should therefore take the following steps in infrastructure. First, devolve major regulatory responsibilities to the states in the following areas of infrastructure: ports, airports, power, telecommunications (international long-distance, domestic long-distance, local, data transmission, wireless), internet service, water and sanitation. The individual states should have the powers to liberalize these sectors, permit entry of private firms, and admit foreign investors.

Second, the Centre and the states should set goals for specific areas of infrastructure, including universal village access by 2010 to telephony, electric power, internet connectivity, and roads to major towns and cities, and finally, open each infrastructure sector to private sector competition, including rights of entry in service provision, by both foreign and domestic providers.

Jeffrey D. Sachs is director of the Center for International Development, Harvard University. Nirupam Bajpai is director of the Harvard India Program at the Center for International Development    

As a Gauleiter in the Third Reich, Arun Shourie would have been in his element. In a democracy, he looks like a radish in a cabbage patch. He has as high an opinion of his own integrity as he has a low one of the venality of others. And such an exalted assessment of his intellectual abilities that he is impatient to the point of being dismissive of views that do not gel with his own. In consequence, he gives no answers because he hears no questions. So preoccupied is he with preening before the mirror of his ego (�Mirror, mirror on the wall/ Tell me the greatest of them all�) that he seems incapable of seeing that the dialectic of debate is the essence of democracy.

I have now attempted twice on the floor of the Lok Sabha to make him focus on what is of concern � not to himself but to the other side. He fixes a somewhat glazed look on one and is apparently listening with rapt attention, but when it comes to the reply, all the clich�s that have been bubbling in his brain since long before the argument began are trotted out, with not even the courtesy of an attempt at a reply.

The disinvestment portfolio is the perfect perch for one of his temperament. He does not have to bother about putting together or justifying a policy because maulana Sinha has already issued a fatwa. The fatwa reads that in all but a few defence-related industries and the railways, the government will unload its holdings to no more than 26 per cent � and to much less in most cases. No attempt is made to distinguish between profit-making and loss-making industries. No regard is given to the total revenue receipts from public sector undertakings. The private sector�s delinquency in tax-payments and the ripping off of the banking sector through the building up of non-performing assets are underplayed. With no basis for such an assertion, the private sector is assumed to be �efficient� and the public sector a flop.

Nothing is said about public sector reform. The brilliant 300-page detailed analysis of the comparative performance of the public and private sectors in India, submitted by the government�s own top management � the Standing Conference of Public Enterprises � is ignored, neglected, denigrated. The SCOPE memorandum to Parliament�s committee on public undertakings is put in cold storage. The fact of dwindling public investment in the public sector is never highlighted. The calf is fattened only to be sold. No priorities are established over what should be disinvested first and what later. There is no explanation as to why, if the public sector is to be disinvested because it is loss-making, the profit-making units are being sold and the loss-making ones retained.

No criteria are laid down for what will be sold outright and where partners will be taken to try to run things better. There is apparently no understanding of how through �strategic sales� the government is, in fact, bringing back through the backdoor the hated colonial system of managing agencies, which we abolished by law some four decades ago. Nor is there any litmus test for determining what will be privatized and what merely disinvested. What will be passed on to foreigners and what retained for Indians is also determined ad hoc.

No quarter is given for social concerns and regional balance. And what happens to the proceeds � whether they go into the social sectors or poverty alleviation or revitalizing the public sector or into the prime minister�s knee � is, we are told, none of our business.

When challenged over valuation, as has happened most recently with regard to Balco, government�s stock answer is to challenge the opposition to find a better buyer. But why should we find a �better� buyer for an asset we do not wish to sell at all? The public sector came into existence only because the private sector failed to find the resources for industrialization.

Half a century of Nehruvian socialism has made everyone, including our home-grown capitalists, much richer, but they remain pygmies in the game of international finance. That is why their bids are so derisory. If they have the resources, why are they not investing in enterprises of their own instead of simply buying into assets they had no role in creating? What is the point of foreign-investment-based reforms when the private sector is unable to attract foreign partners and foreign direct investment flows are declining, while the government keeps the private sector alive with freebies such as dis- investments?

Some Rs 5,00,000 crore of national assets, built over half a century, are being put on the chopping block in a completely arbitrary manner, the government insisting that this economic genocide is wholly within the executive realm and no business of Parliament as to what it sells, whom it sells to, when it sells, why it sells, or on what terms it sells.

What Shourie and his ilk choose not to remember is that every paisa of public money invested in our 230-plus Central public sector undertakings was invested with parliamentary approval after parliamentary scrutiny. According to parliamentary logic, therefore, surely parliamentary approval must be taken for auctioning off national assets. But because this is not self-evident to minds not schooled in democratic practice, first they refuse to spell out a policy saying their two-line fatwa is the most the country has the right to expect of them. Second, they refuse to explain this two-line fatwa through a white paper saying that since they have already stated their policy, there is no reason for the country to demand an explanation for that policy. Third, they refuse to cooperate in setting up a standing committee on disinvestment, claiming there are other forums in which such issues could be taken up.

It is this government which has set up a separate department of disinvestment, and it is this government which has made the operations of this department the centre-piece of its economic policies. A standing committee to oversee the liquidation of hundreds of thousands of crores of national wealth is surely not a demand incompatible with the demands of a democracy. Yet, that too is met with an adamant �No�. This government believes a parliamentary majority renders them immune from accountability. That is exactly what Hitler believed.

Such obstinacy would do credit to an Idi Amin, but can only be explained in the 52nd year of our republic as the approach of a governing establishment which had nothing to do with winning us our freedom, nothing to do with elaborating the Constitution, nothing to do with the proclamation of our republic, nothing to do with democratic conventions, nothing to do with nation-building over half-a-century, and everything to do with a naukar who finds himself at home without the sahib and decides to clean out the place. Such governance by stealth must be resisted.


The Trade and Merchandise Marks Act 1958 has proved to be inadequate, especially in the age of economic liberalization and globalization. With second generation reforms under way, corporate laws need to be enacted at par with universal standard. The new Trade Marks Act 1999 (47 of 1999) sought replacement of the Trade and Merchandise Marks Act 1958 to bring trade mark laws in the country at par with international practices and ensure the fulfilment of India�s commitment at the Uruguay round of the final agreement on trade-related intellectual properties .

The Trade Marks Act 1999 broadens the scope and definition of trade mark. It includes things such as marks capable of being represented graphically and which are capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours. The scope of various important terms like �mark�, �registered trade mark�, �collective mark�, �goods�, �permitted use� has been widened so that these conform with international practices.

In the same class

The act provides for classification of goods and services so that this matches the International Classification of Goods and Services standard. Under the present act, �goods� means anything that is the subject of trade or manufacture. �Service� includes banking, communication, education, financing, insurance, chit funds, real estate, transport, storage, material treatment, processing, supply of electrical or other forms of energy, boarding, lodging, entertainment, amusement, construction, repair, conveying of news or information and advertising. The publication of an alphabetic index is also envisaged. The registrar is required to classify goods and services in accordance with the international classification for the purpose of registration of trademarks and in this matter his decision is final.

Don�t fake it

The new act removes the system of registration of trademarks in part A and part B of the old act, thereby abolishing the distinction between enforceability of the marks depending on the part in which it is registered. It provides for a single application for registration in more than one class and increases the registration or renewal period from seven to ten years. It states that international non-proprietory names declared by the World Health Organization or deceptively similar names should not be registered as trademarks.

The penalty for the infringement of a registered trade mark is more stringent under the new law. The new act states that the use of some other person�s registered trade mark as trade name or the use of a similar trade mark for goods or services similar to those covered by registration also amounts to infringement. To supervise the enforceability of these provisions, an intellectual property appellate board has been formed.



Crime and no punishment

Sir � Final round to Hansie Cronje. Not only has the Edwin King commission decided to wind up its proceedings, but if things go according to Cronje�s plan, he might even have the life ban on him by the United Cricket Board of South Africa overturned (�Edwin King closes SA inquiry�, Feb 23). By King�s own admission, he did a hasty winding-up act, fearing that Cronje�s lawyers would challenge him following a constitutional court ruling that a judge could not head a special investigative unit. But what could King possibly have to fear? He was appointed by the government of South Africa. From King�s comments after the announcement of his decision, it seems that the action taken against the guilty cricketers, if any action is taken at all, will be mere tokenism. It may be remembered that the Board of Control for Cricket in India had made a laughing stock of itself by imposing five-year bans on cricketers who have already retired from international cricket, but they also banned cricketers who still had some cricket left in them. The difference is that none of the Indian cricketers came forward with an admission of guilt. So confession does pay rich dividends after all.
Yours faithfully,
Tamal Ganguly, Calcutta

On the day before

Sir � The Union budget for 2001-2002 will be presented tomorrow. Some of the new taxes to be introduced by the finance minister have already been hinted at. For instance, the tax to help rebuild earthquake-stricken Gujarat. But reforms in direct taxes must be introduced immediately with an eye on the economic goals the country expects to reach.

Tax laws must be made stable by announcing a five-year fiscal policy. Corporate tax should be reduced to 30 per cent. At present, the uniform rate of corporate tax for all types of resident companies is 35 per cent, with a surcharge of 10 per cent as a special levy. This is excessive in comparison even to economically weaker countries like Brazil. The rate of corporate tax needs to be lowered to 30 per cent, and ultimately to 25 per cent, to allow for greater tax honesty, better voluntary tax compliance and effective check on black money and its proliferation. Besides, for smaller companies to have better growth prospects, there should be lower rates of tax � 10 to 15 per cent � on individuals and small companies upto a total income of Rs 1 lakh in order to avoid harassment and to prevent tax evasion.

The rate of income tax for partnership firms should be lowered to 30 per cent. The initial slab rate of 10 per cent for personal income tax should be made to apply to incomes between Rs 60,000 and Rs 150,000 and 20 per cent on income between Rs 150,000 and Rs 500,000. The maximum marginal rate of income tax should apply only on income in excess of Rs 500,000.

India would become a welfare state if the educational and hostel allowances of per child of Central government employees are increased to Rs 1,000 and Rs 1,500 per month respectively. The standard deduction for employees should be increased to Rs 50,000. Distinction between the employees of the private and public sectors should be abolished when it comes to the valuation of the perquisite for residential accommodation.

The standard exemption for a minor under section 10(32) of the Income Tax Act should be increased from Rs 1,500 to Rs 10,000. Newly constructed houses under low income group housing schemes should be allowed exemption for five years. The threshold for tax audit under section 44B of the Income Tax Act for business concerns should be raised from Rs 40 lakh to Rs 120 lakh and for professional concerns, from Rs 10 lakh to Rs 30 lakh.

The limit for deduction of bank interest and suchlike, under section 80L should be raised to Rs 25,000. The limit for the operation of tax clearance certificate under section 230A should be raised to Rs 15 lakh. Finally, the interest on refunds, at 1.5 per cent per month should be allowed under section 244A with the provision for charging interest from taxpayers.

Yours faithfully,
R.N. Lakhotia, New Delhi

Sir � The finance ministry�s decision to cut interest rates on small savings is a wrong move (�Small savings rate to be cut 50-70 basis points�, Feb 18). This followed the Reserve Bank of India�s announcement, made the previous day, of reducing the lending rate of banks by half a percentage point. The cut in the lending rate of banks brings down the cost of credit for companies which will boost industrial growth, but also brings down the interest on deposits and small savings schemes.

It is surprising that the Centre never stopped to ponder the repercussion of its decision on the middle and lower income groups. It is true that the option of investing in mutual funds and the stock market is still open. But in a predominantly illiterate and rural country, what percentage of people are even aware of the existence of mutual funds and the stock market? Is it possible for them to use these without the proper awareness and knowhow?

Why is the government hellbent on mobilizing the economy at the cost of the financial security of a group already finding it difficult to make ends meet given the rise in the prices of essential commodities on the one hand and the recent two per cent surcharge on income tax on the other?

Yours faithfully,
Pinaki Majumder, Calcutta

Sir � No matter how much long term gains it can ensure, any hard decision in the Union budget for 2001-2002 will adversely affect the common man. To avoid that, the finance minister should concentrate on a few things while formulating the coming budget. Realization of outstanding income tax should be given top priority. The income in full of the members of parliament and the legislative assemblies should be made taxable at par with the public. The special allocation of Rs 2 crore should be stopped as it has been seen that few MPs and MLAs put this money to good use.

The income tax slab rate for a total income of over Rs 1200,000 should be assessed at, say, 40 per cent. Agriculture income over Rs 1200,000 should be assessed at a nominal rate of 10 per cent for the first time. The surcharge should not be increased.

Standard deduction should be made more meaningful to the lower salaried group by increasing the minimum allowable amount. Those who retired before 1991 from private sector firms and have been getting a fixed pension through the Life Insurance Corporation of India on the annuity system have been suffering owing to spiralling inflation. The finance minister should direct the LIC to review such pension schemes every four years keeping in mind the cost of living index and allow suitable increases without changing the basic benefits to pensioners. Also, industrial units which have got the required Indian Standards Organization certificates for their products may be allowed special relief of duty for showing competitiveness.

Yours faithfully,
Ranendranath Sinha, Howrah

Sir � The economic survey has destroyed the rosy picture of the economy drawn by the finance minister during his pre-budget presentations. In 2000-2001, there was no political instability to speak of. Yet the government failed miserably to put the economy into shape. Whom will the finance minister pick to shoulder the responsibility this time?

Yours faithfully,
Sagarika Dasgupta, Calcutta

Sir � Every year one hears of measures to �kick-start the economy� but the results seldom bear proof of the economy getting started. And in the hands of opportunistic politicians, the kick-start seems a distant dream. There are no solid long-term policies, only short cut measures and a complete mishandling of the taxpayer�s money. What measures have been adopted for farmers who are at the mercy of nature? What remedies has the government thought for the many unemployed? What social welfare has been provided for senior citizens and the physically handicapped? It is time again for Yashwant Sinha to think of ways to skirt these questions.

Yours faithfully,
Aditya P. Chatterjee, Calcutta

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