The whole world has vent its spleen on Jet lee I hope more sense will prevail soon. Yes interest rates are linked to inflation, so there is justification in reducing interest rates. Oil prices have gone down in the world, but we want to reduce our Fiscal deficit, so oil prices cannot go down. Sure, that is justified too.
When will the government reduce its expenses? when will we get less government? When will we get better governance?
Look at the amazing luxuries given to the urban poor – compare him to the rural poor. In a city the poor can hope to get free medical in Municipal hospitals. So the village guy migrates for medical treatment – and then has no incentive to go back.
No this is not about what Na Mo should or should not do.
I just want PPF, SCSS, NSS,…and all government schemes to have a formula of how the interest rate is fixed, with an yearly reset. So it could be :
10 year Gsec + 2% for PPF and say 10 year Gsec + 3.5% for scss….
at least we are not surprised, angry or wild. Only objection to this is of course there is no talk about inflation. The other formula could be CPI + 2% – use the inflation index which is used for computing the capital gain indexation.
He should make the following changes:
Income tax slabs should be indexed
all the absolute values should have a one time correction and have indexation. So the capital gains which i can invest in bonds should be revised to say Rs. 1.5 crores + indexation. So if a 75 year old man sells his house in a city and wishes to go to an old age home, he could sell his house in say Mumbai for Rs. 1.5 crores, but a new house in a smaller town for Rs. 50L and put the Rs. 1 crore in such bonds.
Creating a rule helps the common man understand how the whole thing works. Sure the government can say since PPF is getting a tax rebate it will be priced at the inflation rate, fair enough. Just come out with the formula and raise the limit in PPF to say Rs. 10 million keeping the tax benefit to Rs. 1.5L
This will bring transparency…but who is listening?
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