Capital gains tax

This refers to ‘Capital gains growth deserves higher taxes: Finance Secretary’ (July 29). While there is no doubt that capital gains growth requires higher taxes, the key issue is the exclusion of the indexation benefit from its calculation. The central bank’s continuous efforts to combat inflation and its management of interest rates underscore the significance of inflation. It is primarily the middle class, often without pension support, that engages in trading securities and mutual fund units to earn some profit. Denying them the indexation benefit on real estate deals and on debt mutual funds taxing them at higher rates could not be construed as a move in the right direction. Targeting the middle class for revenue generation under the guise of fiscal consolidation appears unjustified. Not mandating a fiscal deficit control to 3 per cent of GDP, as seen in EU countries, while comparing capital gains tax increases to those in developed economies, seems like cherry-picking. The removal of the indexation benefit from the real estate sector raises questions about how this measure would be revenue-neutral rather than leading to government revenue gains.

Srinivasan Velamur

Chennai

Railways’ revenues

Apropos the editorial ‘Amber signal’ (July 29), the Railways’ thrust of capital investment in recent years has been directed mostly towards high speed passenger trains and improvement of railway stations, which by itself is an admirable move. But to improve its revenues there is a need to substantially revamp and improve its freight services. The scope for increasing freight volumes is enormous, if the Railways modernises its operations in this sector. Assurance of timely and safe delivery and competitive freight rates are crucial factors that would make a difference. Development of more dedicated freight corridors on the high freight volume routes, prompt and timely strengthening and re-laying of existing tracks, wherever necessary, transforming the communication facilities to ensure faster movement of goods trains, rationalising the freight charges to attract greater volumes and a better PR system would be necessary to increase revenues on the freight front.

Kosaraju Chandramouli

Hyderabad

Farm productivity

Apropos ‘Preparing agriculture for a richer harvest’ (July 29), the government has already taken positive initiatives such as higher MSP, creating a nationwide online platform for marketing, and improving logistics and cold storage facilities. Budget 2024 accords more emphasis on agriculture research, natural farming, creating a well-balanced vegetable supply chain, and increasing the production of pulses and edible oilseeds. While these measures are laudable, Indian agriculture has to overcome monsoon vagaries and climate change constraints to ensure improved production and productivity.

NR Nagarajan

Sivakasi, TN

Celebrating JRD Tata

‘JRD: A team builder exemplar’ (July 29) was a good read and a befitting tribute to the colossus of Indian industry. The excerpted brief urges one to go through the whole book. The painstaking nurturing of steel and many other industries by JRD Tata, achieved against great odds, needs to be etched in golden letters. The talent spotting, mentoring those talents, taking calculated risks all deserve special mention.

Jose Abraham

Vaikom, Kerala