Funds flow to MSMEs

This refers to ‘A Budget booster for MSMEs’ (July 25). While MSMEs are crucial for all-round economic growth, it is imperative to ensure that funding by financial institutions is sufficient but not excessive to prevent the MSMEs from mis-utilising the funds for unproductive purposes. Conventional lending based on assets, and actual and projected financial statements needs reforms to ascertain and provide funds to meet expenses connected to meeting economic activities, and for the acquisition of assets to support and sustain the economic activities. The financing needs to ensure smooth fund flows.

Though many banks from the private and public sectors have devised their loan products accordingly, reforms are required to prevent the diversion. The end use of the funds is critical and, therefore, it is essential to have fault-free credit delivery and post-disbursement management. As the cash flows of MSMEs are impacted by the business cycles of other business enterprises it is paramount to mitigate those risks for the smooth functioning of MSMEs.

VSK Pillai

Changanacherry, Kerala

Kamala Harris’s chances

Distinguishing between Bidenomics and Kamalanomics is challenging, as their political and economic philosophies are closely aligned. She has little to claim as her own policies. The political scenario in the US is changing everyday. Trump currently holds a favourable position after the shoot-out. Harris’s only path to victory lies in presenting herself as a more credible and reliable candidate. Harris must focus more on highlighting her opponent’s weakness, rather than relying solely on her strengths.

MR Jayanthy

Tiruchi, TN

Spike in I-T filings

This refers to ‘Surge in personal I-T collections’ (July 25). One more factor that has contributed to a surge in personal income tax collections is the increase in the filing of I-T returns. A record number of 8.18 crore ITRs were filed for AY 2023-24 up to December 31 last year as against 7.78 crore in FY 2022-23. The number was 3.80 crore in FY 2013-14, an increase of 104.91 per cent. This has been possible because of the evolution of realistic tax structure and simplification and digitisation of tax filing, assessment process and refund process.

YG Chouksey

Pune

Effect of axing angel tax

The angel tax abolition announced in the Budget would be a great relief for non-resident and foreign investors as well as domestic unlisted companies. This new provision removes the disclosure norms of the excess consideration received by global investors from the sale of unquoted shares over and above the fair market value, hitherto applicable only for domestic investors. However, since billions of dollars in angel funding is likely to flow into Indian start-ups now, it may result in money laundering and round-tripping from the probable substantial capital gains to investors on exit. This warrants need for improved measures for monitoring under PMLA and income tax regulations.

Sitaram Popuri

Bengaluru