market passion

Friday, February 29, 2008

Why I want to be a Farmer in India?

So it has come and gone. Yes. I am referring to the Union Budget of India for the Financial year 2008-2009. One more annual event for the Country's Finance Minister to show his balancing talents and robinhood heroism. And in my humble opinion he did a commendable act. The reduction of effective rate of income tax by increasing the slab limits will put more money in the hands of the only genuine class of taxpayers -the salaried class. This will act both as a stimulus for consumption and savings, which will help growth. The steep increase in the short term capital gains tax from 10% to 15%, though not liked by market in general and punters in particular, will be good in the long term as investors will learn to hold shares for longer term thus reducing the volatality and providing stability to the market. The only area which disappoiinted me or even made me angry was the write off of agricultural loans to farmers to the extent of Rs.60000 crs. Already most of the states give them free electricity and on top of that loans on soft rates of interest. Again why they should be given a waiver or write off? Then why the whole exercise of loan application,disbursement and all. Simply give them subsidy. Fix an amount for the land they hold and disburse the amount. And if farmers can be given this benefit, why not weavers,auto drivers,rickshawallaws,and so on and so forth. While these people face the risk of their asset(which only gives them the livelyhood) being attached or taken away by the banker for loan defaults, why not the land be confisicated for a farmer's default. And to make the matter more laughable, the F.M announces in his Budget speech in the Parliment itself that these farmers are eligible for new loans. On one side people face tough times in police stations and courts for small amount of defaults of genuine nature. On another side people are openly encouraged to default by the government itself.These kind of preferential treatment only irritate people and make Gandhis turn into Ghotses.

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