Improve Governance standards and remove the structural weaknesses .

This refers to the Article RBI rate cut cannot Hide Structural Weaknesses in Money Life June 2025. The conclusion of the article that 'the economy is doing well, it is for the well off", reflects and captures well of the present state of affairs of the people less well off in the society . The monetary policy no doubt has changed it’s stance from accommodative to neutral but it really accommodates the borrowers particularly in the manufacturing segment and industrialists to think of expanding their investments and go on for enhanced production and employment through cheap credit though the overall cost of production remains unattractive thanks to irrational gst , uncertainties in the geo political conditions , and not so favourable international economic scenario . The fiscal policy needs to be tuned a lot more in tune with monetary policy to strengthen the structural weaknesses in the economy to improve employment , lessen inequality , remove corruption , black money and malpractices seen in governance everywhere All said RBI has been found to be very understanding and accommodative but a lot remains to be done to fully exploit the talents , potential resources and achieve the dream of becoming the most advanced economy by 2047. The vision is encouraging and clear but the path has  many hurdles but manageable provided the needed attention and steps are initiated to strengthen the Governance standards. 

(This comment appeared in Money Life against the Article "RBI  rate cut cannot Hide Structural weaknesses " ) 

RBI All support for the economic growth,

 RBI for boosting the Growth 

Kudos to RBI for having shifted its policy (June 6) stance from accommodative to Neutral and providing the much needed accommodative changes in its Monetary policy announcement made on 6th June 2006. Recognising the fall in inflation seen and expected , the need for giving a boost to the manufacturing segment of the economy which is slowing down,  understanding  the issues on account of geopolitical conditions, and appreciating the domestic  the present economic and environmental circumstances, the RBI has reduced the Repo rate by  0.50 percent and CRR by 1% in four instalments to add liquidity in the system and give a boost to credit growth , The relaxation in gold loans is a boon to give an impetus to Financial Inclusion and enhance the much needed relief to the weaker sections and augment their income through incentivised economic activities. The  only pitfall in the policy may perhaps be in the possible  reduction of FD rates for Senior Citizens, but if inflation is really brought down to 3.70 % as  envisaged and the expected growth in the economy becomes a reality, they may have the patience and tolerance to put up. All said the policy is very  motivating in character and  Hope  the Banks  and NBFCs will pass on the intended benefits in letter and spirit and will activate the wings to perform and realise the dreams. 

T V G Krishnan

6/6/25

Well Done RBI. Keep Going Strong.

 RBI Pleases All and Mints its  well deserved  Recognition. 

Apropos the Article “it is not RBI’s job to please All (June 5),  but traditionally , historically and functionally RBI does it’s job efficiently ,  effectively,  elegantly and eminently is a well established truth accomplished and acknowledged  nationally and internationally .The credit for this goes to almost all the Governors  for their wisdom , knowledge , dynamism to understand the multitasks the institution carries and dances to the tunes set elsewhere but maintaining the rhythm and steps perfectly motivating , developing  the human resources  by  providing the needed skill , knowledge, values and the work culture and unique functions unheard of. Though it is generally believed Charity begins at home but RBI pursues a different kind of charity enriching the nation's economy by adjusting to the tunes of the Government in power, and ensuring welfare for all through Financial literacy, Financial inclusion and keeping the country's reserves and resources in tact with value addition and providing the best of financial infrastructure to meet the national and international  viz  political, economic social and technological challenges admirably. The contribution of RBI's Human Resources is by all means unique and extraordinary but alas,  RBI is not allowed to have its way to perform, enjoying its own independence , wisdom and initiative like other Central banks of the advanced countries is perhaps the only black spot which is  correctible and definitely avoidable as like RBI , there can't be any other support institution serving the Governments in power and the nation to the best of its competence and national spirit. 

     

T.V.Gopalakrishnan

( Personal Views)

Bangalore 

Make Time Management an Inevitable and essential factor of Governance for Economic Growth.

  Make Samayanishth Bharat a necessary and realistic Goal. 

                 Time is very precious and Trifle not with time. Time wasted means erosion of wealth has taken place. 

This refers to the editorial Time has come for samaynisth Bharat ( ET , May 16, 2025). We have no shortage of sayings and literature on Time Management. Time is money, Stitch in time Saves nine, Time and Tide wait for none  and they are all taught, read and heard by all but they are seldom practised or imbibed and understood seriously to put into practice in day to day life is the ground reality. Without realising the material loss that absence of time Management in practice by all segments  of  Governance that matter Viz  Legislation, Judiciary and Executive causing damage to the Economy and Life and all stakeholders of the economy and making them suffer substantially in one way or other, time is wasted or ignored completely is a fact and a misfortune .It does not  appear to be the most important factor among all other factors of production contributing to the growth of the economy and saving cost. If one were to assess the losses caused to men, materials and wealth creation on account of  wastage of time and delay in the achievements  of results in any walk of life, one may get the shock of his life that misses are many and plenty and dreams are only chasing a mirage.Though, Nature, despite changes in global warming and other challenges faced, continues  to maintain its time schedule and provides all seasons, summer, Monsoon, winter and spring without fail, we human beings unfortunately miss out even all our essential  schedules and the targets and achievements. The judiciary is perhaps the worst in the management of time and next comes administration and provision of the required infrastructure to facilitate the fast movement of the economy upward and forward.  Just to cite a very small example of neglecting time value and ignoring the  resultant benefits of accrual to the economy and the people in terms of money , wealth and above all comforts and conveniences , I would like to highlight here that the GAS AUTHORITY OF INDIA Ltd , a public Sector undertaking of high repute has installed pipeline for about 2000 flats some years back  to give piped gas connection, but neither the connection has been given nor given any indications to the community as to when the connection would be given. The continuing  loss suffered by the Public Sector undertaking, the economy, by the society is enormous and nobody seems to be accountable. This is a criminal way of idling money and ignoring the concept of time Management fruitfully. One can cite umpteen examples where time gets completely ignored from the perception of Management and even from Factors of production. This is not to cast aspersion on any one but to highlight the ground reality on how infrastructural  and financial issues get delayed and the economy is made to suffer.    

The  dream and the target envisaged for the economy  to be the  fastest and the most advanced by 2047 can be a reality only if the Concept Time Management is literally understood and put into practice by all segments of the people in all and every aspect of  life  and work with vigour , diligence , commitment, and without waste of time in any manner.       

Loka Samastha Sukhino Bhavanthu. 

T V G Krishnan.

Lovely Editorial _ Very appealing

 Lovely Editorial -Very Appealing

This refers to the editorial India United, All For One, One for All (ET 9/05/25).This is one of the  best editorials of recent times, highlighting the coming together of all party leaders and expressing their solidarity and total support to fight the common adversary . The summing up of the unified state by the Honourable Home Minister Mr Rajnath Singh that “we don't indulge in politics just to form a Government , but we do it to build a country is  highly CLASSIC  and deserves to be displayed in Golden Letters, in Parliament  for all to see always, appreciate and admire about the strength of democracy and the unity in diversity among the parties , in time of need and adversity. The saying that Union is Strength is well demonstrated going by the well meaning statements of the Opposition leaders like AIMIM Chief, Asaduddin Owaisi. Ardent Critic of the Government, Mamata Banerji and Congress President Mallikarjun Kharge. The conclusion that when the going gets tough, the tough get going putting aside all political, ideological differences is indeed a very clear message ensuring that timely toughness is maximised by unflinching support across the country from all parties and the people. May this unity and solidarity remain strong and take the nation forward very fast and make the dream of being the most advanced economy by 2047 a reality. 

T V Gopalakrishnan

Bengaluru         

PSU bank distributes Books at depositor's cost ?

 

I have seen banks indulging in cross sales and make customers to buy insurance products and other financial products though strictly not permitted as per rules and directives from the RBI. Ordering books ultimately at depositors' cost using depositors money to the tune of Rs7.25 crores for distribution across the country through zonal offices is something unheard of and a totally innovative approach to enhance banks quality of customer service perhaps . This only smacks of disrespect and total disregard in understanding the functions of banking, their role and responsibilities in serving the economy, banks deposit customers with whose backing banks survive and earn their bread and butter. It only reflects poorly on the Governance standards and lack of accountability to the regulator and supervisor .

( This comment appeared in Money Life dated 6/5/25 against the article Union Bank under fire over Rs 7.25 crore Book order: Suspends GM). 

TVG Krishnan.

AI in customer Service also needs human interface.

 

AI in Customer Service also needs human interface. 

Very well written and the absence of human interface in the highly digitalised atmosphere , Customers and their real issues get not only ignored but they get harassed and are made to suffer physically , financially and mentally . My recent experience is that a clerical error crept in in entering the date has resulted in rejecting my entitled medical claims and I am made to run around to get the issue sorted out wasting time , energy and undergoing mental strain . The need for human intervention is paramount in dealing with customer oriented services without which there is no great future neither for the businesses nor for the customers . Customer is a king is a forgotten slogan and technology rules the roost and kills all human related sensitivities is the ground reality . The humane touch which is the foundation of any progress of any nation or business or anything that matters is unfortunately missing these days is very sad and pathetic .

( This comment appeared in Money Life dated 2nd May 2025 in response to the article AI in Customer Service Frustration with Glitchy automation and data capture )

Educate and employ people to lead a dignified Life

 

Dear Sir,

                     Educate and employ people to lead a dignified life 

 

  Apropos the article on Decoding India's Conundrum of free food despite falling poverty ( Sunday Times 20th April), the fact remains that elections are  unfortunately fought on the grant / promise of  freebies even after 75 years of independence exploiting, the illiteracy, poverty and absence of thinking capacity of the people and reacting to the failure of the Establishments' economic policies in improving the lots of the  deserving poor people. Neither the data nor the distribution of freebies to the really needy are reliable as the corrupt practices to win elections , be in power and make money at  nation's and taxpayers' cost have unfortunately taken away the ethics and code of democratic values , administrative principles and fair and justifiable judiciary system. The fall in poverty does not keep people from seeking freebies is a misfortune and this needs to be administratively and culturally fought. This needs meaningful Governance, fair distribution of wealth, and demonstrable punishment to those who indulge in all kinds of corruption and malpractices.  

"Loka Samastha Sukhino Bhavanthu. Let noble thoughts and actions come everywhere." 

TVG Krishnan

RBI approach to Monetary policy Be Vigilant and Accommodative.

                     RBI approach to Monetary policy be  Vigilant and Accommodative.

This refers to the monetary policy announced by RBI on the 9th April 2025 in the midst of growing turmoil in the global economy thanks to the jittery and chaos generated by the uncertainties by Mr Trump and his Tariff measures to make America Great Again.  Understanding  the sudden changes seen in global economic conditions and having adverse impact on the  imported inflation front, supply and demand conditions in global trade, and change of position of dollars and Gold as Reserves of world central banks, the RBI has announced its bold monetary policy by changing its stance from Neutral to Accommodative and reduced the repo rate for the second time by 0.25  percent to 6.50%  and expect the MSF and SDF  adjust to 6.75% and 5.75% respectively. However, the GDP growth has been brought down from 6.70% to 6.50% . Though the inflation is stated to be benign as of now and is expected to be under control and within the 4% target , the fact remains that food inflation expectation continues to be a threat and the cost of funds continues to rule high . The widening inequality between the haves and have nots, the irrational rates of GST along with other taxes and levies though expected to soften thanks to the  direct tax reliefs given in the recent budget 2025 26, the cost of goods and services continues to remain very high due to freebies and mis / poor governance and the expectation of high savings, which is unreal. High consumption demands, and increased growth in employment, investment and production seem to be chasing a mirage and for this to be a reality, there is a paramount need to fine tune the fiscal policy with the Monetary policy closely monitored by data collection and effective and meaningful governance. 

      

T V Gopalakrishnan.

 

( This letter sent to Economic Times not published ).

Relate and apply the Great values and Principles of Sanatana Dharma in whatever we do to take the nation forward.

  Relate and apply the Great values and Principles of Sanatana Dharma In  whatever we do to  take the nation forward.Success is sure,  certain and sustainable to enjoy the fruits for all. 

       Let Noble Thoughts and Actions Come from Everyone and Everywhere. 

The PEST (POLITICS, ECONOMICS, SOCIAL ,TECHNOLOGICAL) Control approach seen in vogue now  needs wholesale change and Step by Step movement with a very close and careful monitoring  of every STEP ensuring positive achievement in all areas of man’s progress and accountability to the conscience of 140 and above crores of population. The democracy designed and managed by  Politics, Economics , Social Reforms and Technological advancements keeping in view the welfare of the masses en masse and all living beings and healthy and conducive  environment, universally need to be reviewed and evaluated based on parameters specifically identified . The economic progress,  distribution of wealth and spread of happiness based on health, peace , contentment and environmental conduciveness helping to sustain the well being for all living beings should be the destination of the administration of democracy.     

No doubt democratic path  is an ideal one worth strengthening keeping the faith of all faiths intact and in enviable harmony. The multi religious, multi linguistic, multi culture naturally leaves multitasks to the authorities to achieve the single objective of welfare for all itself is an herculean task with multiplicity of challenges amidst acute poverty, illiteracy, high inflation. laxity in infrastructure, widening gap in the inequality levels in the distribution of wealth generated etc. These limitations  in fact are to be taken as the best of opportunities to reform and perform.        

The democratic system runs with the active support of three main pillars Viz  Legislative, Judiciary and Executive complementing and supporting each other need to be within the broad contours of our highly respected and regarded as the last word in the philosophy of Life i.e. Sanatan Dharma. All the three should be above suspicion and their integrity , commitment, and earnestness to provide welfare, justice, equity and  equality for the humanity as a whole irrespective of language, race, religion or any other sentiments should be foolproof and acceptable to all without any reservations.      

Politics and politicians devoted to national developments cannot be outside the principles of Sanatan  Dharma. Love the nation first and love the living beings, their culture, ancient civilisation and understand the heart and soul of every one,  the county and the entire universe.Get fully convinced that Sanatan Dharma is the code of conduct to be pursued by one and all and all Associated with national development and warfare of all living beings in the entire universe.  

 To quote from “Light of Truth Page 305”(Swami Dayananda Saraswati)

 

“ Those endowed with Sattva attain to the state of the learned, godly men. Those who are possessed of Rajas, become men, while those immersed in Tamas fall into the conditions of lower orders.”   

Manu describes

 

“The possession of true ideas by the soul is declared to be an Indication of Sattva. Ignorance betokens Tamas . Passion of love and hatred signifies Rajas. These three attributes i.e. Sattva, Rajas, and Tamas of the Prakriti are to be found in all things.”

“When a man feels that there is tranquility, peacefulness, and contentment in his mind, and also also his soul is pure as the purest light, let him know then that Sattva predominates; whilst the Rajas and Tamas occupy a subordinate position. “ 

“ When the soul is unhappy, has no peace of mind, is restlessly engaged in the pursuit  of sensual objects, let him  then know  that it is the Rajas that predominates , whilst the Sattva and Tamas are suppressed. “

(page 303 Chap IX) .

Is it not Ok to understand the above essence of Life values and attempt to bring reforms in our day to day Administration and enhance the quality of Life for all Living beings and our environments?

The three main pillars of Democracy Viz Legislative, Judiciary and Executive which bring strength, vigour and dynamism need to  adhere to the principles of Sanatan Dharma in letter and spirit so that the performance and achievements fulfil and satisfy the aspirations of the 140 crores of people without leaving any room for grievances and complaints. Corruption and corrupt practices if minimised or avoided fully in terms of the  code of conduct spelt in Sanatan Dharma can pave the way to put the economy on the right track of growth with equitable distribution of wealth and achieving  equality of social justice to all.Reform the educational and administrative system in such a way that the values highlighted in the Sanatan Dharma become part and parcel of our day to day life and culture. If there is a will there is always a way to achieve whatever we want. 

"Let the Pillars Of Sanatana Dharma form the bedrock of a Prayerful, meaningful existence,, with the awareness of divine interconnectedness of absolutely everything in nature so that we speak our words carefully, use our resources judiciously, to help ourselves and others be grateful for the infinite blessings in our life."

  Bhagavat Gita

Loka Samastha Sukhino Bhavanthu. 

T V G Krishnan

(Personal Views)

Make the Democratic values ideal and memorable. Remove all Freebies.

 Kill the Culture of Freebies , enhance the dignity and quality of Life . Make the democratic Values ideal and memorable. 

Apropos your your editorial How to get broke by freebie-ing Away (March 12), It is time to seriously introspect and consider taking some concrete and sensible steps by all  matured political parties , the bureaucrats, the judiciary and the sensitive organisations like RBI, banks and supply chains involved directly or indirectly in the distribution of freebies at the cost of fiscal discipline and electoral values.  Having adopted democratic values and principles, is it not time  to arrest once for all the freebies culture and save the democracy and the economy from catastrophe. No doubt, this freebie culture not only kills the initiative and work culture but also kills the economy, the enthusiasm of the people and spreads wrong tendencies and attitudes taking away the very charm of hard work, enjoying the rewards for hard work, nurturing all unhealthy and corrupt practices in the very democratisation of election and election processes, thereby distancing many  who are earnest , honest  and committed to be behind the democratic way of taking the nation fast forward, thereby increasing the percentage of absentee voters and voting for none among the contestants.  To make the nation democratically, politically strong, the economy fast growing with all its tremendous potential, socially vibrant and enlightened, technologically a leader of the world, the electoral reforms and election processes need a thorough change without any scope and hope for freebies and their bad effects .           

Loka Samastha Sukhino Bhavanthu. 

T V G Krishnan 

( This letter sent to ET not published.).

 

Lapses in regulation and Supervision erode Trust.

Happy to observe that the author has been tirelessly and vigorously pursuing and fighting as a watchdog to secure the financial system in general and the banking system in particular in public interest to safeguard the stakeholders heavy stake in them as depositors and otherwise . Failures in banks and frauds in banks unfortunately continue to be a regular feature and the stake holders of the economy bear the brunt and depositors of the banks bear the maximum . The coverage of loss of deposits of Rs 5 lakhs by DICGC is a pittance by any reckoning and this cannot be even treated as a relief and safety standard for banks to maintain themselves financially stable and sound . The need for strong regulation and very effective and meaningful supervision independent of political interference in banks particularly cooperative banks is urgent and paramount and the TRUST in Banks and RBI’s supremacy in Regulation and Supervision needs to be reiterated and well established to make the Financial system very strong and supportive to develop the economy fast as envisaged

Loka Samastha Sukhino Bhavanthu.

(This comment is Published in Money Life in response to the Article on New India Coop Bank Ltd Fraud  Feb 28.2025)  

Why Not Family Businesses form Partnerships with other Businesses

 Dear Sir,

Why not  Family businesses form  partnerships  with other Businesses ?

Apropos your editorial , Fresh, New Species of Animal Spirits,(ET 22nd Feb), the need of the hour is definitely to kickstart the economy with all possible Animal  Spirit not only from  existing Family businesses but also developing new families into businesses through encouraging Private Equities  and Start ups by highly skilled professionals from in and around the world. The potential of the economy is so strong and vast , but unfortunately, the animal spirit required to exploit the resources and encash  them through intensive capital and labour oriented physical production of goods and services by enhancing manufacturing activities apart from providing services to satisfy the global demands of all goods and services  keeping the dream of making the economy an advanced one by 2047 is found missing and elusive. It is time for Indian family businesses to identify areas to partner with other entrepreneurial talents and scattered equities  around the world and exploit  fresh business opportunities and give a boost to the economic growth envisaged and make the dream of an advanced economy by 2047 a reality. Opportunities for such joint ventures are plenty and need to be fully encashed benefiting the entire economy and the nation. 

Let there be prosperity all around the universe to make life comfortable and enjoyable for all.         

T V G Krishnan. 

Bengaluru .

( Letter sent to ET but not published. )

ENHANCE THE STATUS OF GST AS THE MOST ACCEPTABLE TAX.

 .GST collections show economy on the mend (ET 2/3/25).

Instead of developing the GST as a goods and services tax to augment the resources of the Government in an irritating manner, is it not better to enhance the status of GST as the most innovative, wonder, equitable and justifiable tax of the Nation enjoying its acceptance and 100 percent compliance . As the honourable PM commented, make it GOOD and SIMPLE TAX literally. The need to  augment revenues for all round development of the economy and welfare of the masses is understandable by all interested in the rapid progress of the nation and THE PEOPLE SEEM TO BE  mentally and emotionally prepared to cooperate and fully comply with the authorities and their requirements.  Making it complicated and discouraging through high rates  without bringing in any value addition in terms of bringing down the widening inequality, simplifying the very and various types of tax structures etc brings only anti climax to the tax system. Simply aiming at  augmenting revenue through all possible ways including GST has a cascading effect on inflation, cost of production , cost of living , ease of doing business and demotivating all interested in the business , economy , nation, politics  and democracy, both Central and State Governments . Earlier this truth is realised and acted upon sensibly and wisely, the better for the Govt , the people , the economy and the nation . The need is, reducing the number of taxes, augmenting Government's revenue, freeing  the Government from the burden of freebies, making 140 crore people as contributors to nation building by happily participating , cooperating and complying with tax requirements and taking the nation forward through  all round economic progress by optimally utilising all the resources at our command . After all , the need is to have a comfortable, peaceful, safe and  happy life enjoying the blessings of nature and  benefiting from the prudential use of the natural  and human resources. Tax cannot and should not act as a burden but should definitely serve as an agent of dependable source of support to ensure the well being of  all living beings.          

Replace all other taxes by reforming the GST and reduce inequality gradually and systematically. Less the number of taxes, more the acceptance and better compliance .  

 

THE WHOLE NATION IS VERY KEEN TO WATCH THE ECONOMY PROGRESS FAST AND REALISE THE DREAM OF REACHING ADVANCED STATUS BY 2047 AND FOR THIS WHAT IS NEEDED IS SIMPLE , AFFORDABLE , FULLY CONFORMABLE AND HAPPILY ACCEPTABLE TAX STRUCTURE BY ALL SEGMENTS OF THE PEOPLE AND BUSINESSES. GST CAN EMERGE AS A WONDER TAX AND BE THE MOST INNOVATIVE INVENTION OF THE NATION AND THE PEOPLE OF INDIA. 

 

LOKA SAMASTHA SUKHINO BHAVANTHU. 

T V G KRISHNAN

14/2/25.

 

                                     Need serious Introspection.

This refers to your editorial Rate Cut Helps, but growth pangs Linger ( ET dated 9/2/25). Despite giving tax relief to the middle class through the Budget of the GOI, and a rate cut in the Repo rate by 0.25% by the RBI in its policy rate, the public sentiments including market sentiments remain depressed  should be  a matter of serious concern for the policy makers. Unfortunately neither the fiscal policy nor the monetary policy find measures to give the much needed boost to kickstart the economy and provide animal spirits to go in for enhanced savings, massive investment, production , intensive employment etc. The major ills which continue to plague the  economy Viz high food inflation, widening inequality,, reluctance to provide the wage increase as suggested by the economic survey, ever increasing cost of production and cost of living thanks, to high interest rate, corruption, black money, some bottlenecks created by the irrational GST, laxity seen in the ease of doing business due to excessive regulatory requirements, and meaningful governance effectiveness affect the production, demand, pricing,  supply and other logistics involved. Even the very sentiments of the people to lead a peaceful, comfortable, affordable life seem to have  been adversely affected for reasons beyond the finance needing psychological,  infrastructural ,social  and technological change in the day to day life.Added to these, the  uncertainties and risks in Geo political scenario also seem to be depressing. Time to introspect at all levels of Legislation, Execution, Judiciary  and show the highest level of wisdom, knowledge, professionalism ,compassion, empathy and a very pragmatic approach to deal with economic issues keeping the ethical values in tact. What we need is good economics and equally good politics to keep the people motivated and realise the dream of an advanced economy by 2047.     

T.V.Gopalakrishnan

Bengaluru 

( This letter was sent to ET) 

Human motivation is the need of the hour

Apropos your editorial Work to Live , Don't Live to Work (ET Jan 10,2025), is it not time for our Corporate leaders like Chairman, CMDs and CEOs to introspect themselves as to what they do constructively to build the nation through adherence to Sanatana Dharma and enriching the contribution of the human resources to mentally attune themselves and be the part and parcel of the Collective effort to fulfil the aspirations of people all around. No doubt, the work culture is a must but the other wrong practices of various kinds prevalent viz being unethical, corrupt, use of black money, LAXITY IN CORPORATE GOVERNANCE , indifferent attitude towards the laws of the country and callousness in the adherence of rules and regulations not only affects the economic growth but also creates a bad image and impression of the Country which needs to be ideally and sensibly eradicated by our corporate HONCHOS. Human motivation is the need of the hour and not definitely by creating a personal image not worthy of anything.Work is worship and working for nation's progress and welfare of the people should be the only motto of the people irrespective of the their faith, political, economic and social status.

Loka Samastha Sukhino Bhavanthu. 

 T V G Krishnan 

BENGALURU . 

( Letter sent to ET in response to the editorial dt 10/1/25.)

Budget 2025-26 Some Thoughts

 Budget 2025–26: Some Thoughts

An egalitarian society cannot thrive if wealth is concentrated in the hands of a few while many remain in poverty. 

As our Honourable Finance Minister Mrs. Nirmala Sitharaman prepares to present her seventh budget, the nation is abuzz with hope, anticipation, and excitement. Everyone—from industry leaders to small farmers, from corporations to everyday citizens—wonders how the budget will shape their future.So far, successive budgets  from the finance Minister have proven beneficial and prudent to the economy  keeping the fiscal deficit under control and propelling the economy towards fast growth. Thanks to a disciplined fiscal stance by the Government of India and innovative monetary policies by the Reserve Bank of India, our nation has weathered global challenges, from the COVID-19 pandemic to geopolitical upheavals. While the achievements are significant and point toward the goal of becoming a top global economy by 2047, we must also acknowledge the widening gap between the rich and the poor. Ensuring that growth uplifts all sections of society remains our collective responsibility.

With this background, there is immense optimism that the upcoming budget could be a true “dream budget,” accelerating progress for everyone. Here are some thoughts which can make a meaningful difference in realising our vision of “Viksit Bharat.”

1. Stimulating Mass Consumption to Drive Growth

Mass consumption of goods and services sparks the virtuous cycle of investment, employment, production, demand, and supply. To sustain this cycle,  there is an urgent need to control Production Costs, Keeping costs low and encouraging  both local and foreign investment.

Manage Inflation: Stable or moderate inflation ensures that increased incomes truly benefit people.

Balance Resource Needs: While the government must mobilise funds for infrastructure and public services, it should do so without unduly burdening ordinary citizens.Achieving this balance is challenging but essential if we want to fulfil our dream of a developed India.

2. Rationalising and Strengthening Tax Policies

To finance our ambitious development agenda, the government needs robust revenue. This calls for:

Review of Tax Rates and Structures: Simplify and rationalise taxes to ensure fairness and sufficient revenue.Curbing Tax Evasion by embracing Technology, Artificial Intelligence, and better regulatory oversight to clamp down on elusive  tendencies and  practices.Promoting Tax Awareness by  educating citizens, businesses, and other stakeholders on the importance of tax compliance , incentivising tax payers,  eliciting cooperation of  informed and enthusiastic  public is key to broadening the tax base.A participative approach—where policymakers, professionals, academics, and industry leaders collaborate—can help craft pragmatic and inclusive policies.

3. Bridging the Gap Between Cost of Production and Cost of Living ; Keeping the cost of production low is a specialised art based on linkages of lots of variables, like, cost of land, materials, labour, interest, time and all connected logistics till the products reach the consumers. The impact of inflation on cost of production is also a factor which cannot be overlooked. Cascading effect of costs on various variables has an inflationary impact affecting the prices, the demand and supply.

 When inflation, particularly in essential commodities, remains high, it disproportionately hurts the less privileged. Aligning Incomes and Inflation is  crucial to ensure wage growth keeping  pace with the rising cost of living so that economic gains reach every household. 

4. Fostering Wealth Creation with Responsible Distribution

While the country’s GDP growth, though a bit low, is impressive, it should translate into tangible benefits for all.Encouraging Wealth creation and its Redistribution calls for all round attention and continuous monitoring. National wealth creation must go hand-in-hand with ensuring equitable distribution. Tax policies should reflect this commitment in letter and spirit. The budget should address narrowing the Rich-Poor Divide by creating an environment that fosters growth for every segment of society, not just the affluent.  Special and very conscious efforts have to be  taken to  address all sorts of Indirect costs, misuse of public funds, corruption, black money, and losses from underperforming institutions that weigh heavily on taxpayers and drive up inflation. Tackling these effectively will free resources for vital public investments.

5. Unleashing the Power of Demand

High-sounding numbers and statistical jugglery have limited effect if people can’t afford the goods and services they need. We must promote Financial Inclusion. Banks and financial institutions should be proactive in expanding credit and supporting enterprises  particularly at grassroots levels.

Boost Consumer Confidence: When consumers have the means to spend, the entire economic cycle—from producers to sellers—thrives, fuelling employment and further consumption.

Leverage Technology: Harness AI and digital solutions to streamline operations and make credit flows quicker, safer, and more inclusive.The budget can introduce targeted incentives for both financiers and borrowers to keep this virtuous cycle running smoothly.

6. Simplifying the Tax Regime

A simpler, more transparent tax system would benefit everyone:

Fewer Tax Categories: Consider consolidating taxes so that citizens face fewer rates and rules.

Transaction Tax + Comprehensive GST: A single transaction tax on all receipts and payments, supported by a holistic and definitely not hostile as at present  GST, could reduce complexity, widen the tax base, and curb evasive practices. People should welcome and volunteer to pay taxes for the nation's progress. 

Income Tax as a Supplement: Let income tax remain only as an additional resource, applied in a clear, justifiable manner.

7. Strengthening Governance and Accountability

Tax collection and distribution should be transparent, traceable, and accountable. This calls for:

Strong Bureaucracy and Efficient Administration: Build a mechanism that ensures fair allocation of tax revenues among states, infrastructure, security, and other national priorities.Disincentive freebies by all means to bring in meaningful and healthy fiscal prudence. Result-Oriented Governance can bring in huge benefits all around.  Link revenue collection and public expenditure to tangible, measurable benefits for citizens. Robust Vigilance and Technology: Leverage advanced tools to eliminate fraud and corruption, thereby safeguarding both citizens and the national exchequer.

8. Embedding Ethical Values in Business and Public Life

High ethical standards—rooted in our cultural heritage—are key to sustainable development. We should:

Encourage Responsible Pricing and Customer Care: Service sectors, from travel to hospitality, must be fair and people-centric.

Reward Compliance and Discourage Freebies: Offer incentives for honest tax practices while disincentivizing wasteful public spending that imposes an unfair burden on taxpayers.

Integrate Social Audits: Eminent social reformers and experienced professionals should help monitor and evaluate the moral and social impact of businesses and public institutions.

When institutions and individuals alike commit to these ethics, the country’s global image and societal well-being both thrive.

Conclusion

To build a strong and equitable economy, we need a budget that inspires all citizens—across every socioeconomic level—to participate in nation-building. By combining technological innovation, simplified tax structures, ethical governance, and a genuine commitment to uplift every Indian, we can ensure that The economy performs , grows equitably and all the segments of the society benefit by minimising  the ugly rich and uplifting the poorest of the poor.  May the budget  bring benefits and welfare measures for all.  

Wish every one a very happy  and wonderful new year 2025.

Loka samastha Sukhino Bhavanthu  

T V Gopalakrishnan

Bengaluru. 

( This article got published in Money Life dt 31/12/2024)