Readers respond to Shekhar Gupta’s column ‘Our poor little rich’ (IE October 8)

• I would think that another classic instance of double standards in the privileged sections of society is the way they treat the average Indian housemaid. This worker category has been exploited thoroughly through the years. It is we in the privileged middle class category who as their employers ensure that they never get a raise for years and yet do not think twice about blowing up thousands of rupees in an expensive restaurant on a single night.

It is high time that the Indian housemaid (I hate the word ’servant’) insist on annual hikes, leave with pay etc before entering into a contract of employment.
—Murali Gopalan

• We often extol the contribution of the NRI community. Besides becoming rich and famous, they contribute to our foreign exchange reserves to the extent of about 35 billion dollars. But guess what is the outgo on this account? 3 billion dollars a year as interest. This is the defence budget of Pakistan! And presumably no taxes to be paid at this end since they pay their taxes abroad. So if you have made a million buck in the US which is not a big deal, then you can retire on an income of over eighty thousand dollars a year which is no mean amount courtesy the Save India Bonds or whatever they are called !

There was a huge outcry when the Finance Minister imposed a meagre Securities Transaction Tax. He had to revise the percentage downward. But since the tax was imposed, long term capital gains on shares has been abolished. So if you have the money to buy shares and hold them for a year, you do not have to pay any capital gains tax! Amazing. However should you sell at a loss then you can offset that loss against short term capital gains if any. If I am not mistaken, you can also carry forward that loss for several years. Cheers. No wonder the stock market is booming. All kinds of sops are given to anyone who shows income from a business or profession. So even if you are dealing in shares or are a ‘consultant’ operating from home, you can offset all your routine expenses like telephone, petrol, newspaper and electricity bills against your business income. Never mind if the income you show is under a lac. Not only that, you can claim depreciation for purchase of a car, airconditioner, furniture, laptop or even a fancy mobile.

Now, you have to have income in the first place to buy all these, so you can take a loan and get further sops. You can even employ your own daughter or wife and show the income paid to them as expenses ! Oh to be in business. Ask me. I am a consultant.
—Col Pavan Nair

• Here’s some food for thought:

Cost of a full cylinder (14.7Kg) of gas (LPG) Rupees 350.00 Lasts 45 days sparingly used otherwise 30 days Used for preparing 3 meals a day or 90 meals a month. 350/90 = Rs 3.88 per meal. If the government charges actuals of Rs 350 + 100 = 450 per cylinder 450/90 = Rs 5.00 per meal. The difference is Rs 1.12.

This insignificant amount has now blown up into a subsidy burden of a few 1000 crores. Why should this be subsidised at all?
—Thomas Tharakan

• Your article touches the core question: Do we really pay for what we get? That question is relevant in higher education as acutely as water, LPG, or tomatoes. I teach in an institute of higher studies where students pay large fees for their B Tech+ degrees (upto 80,000 per year). None of the those are subsidised directly, although some get 25-75% of their fees refunded as scholarships.

Also, on the background the institute enjoys a lot of subsidies in the name of “educational institution subsidies”. These could be for water, electricity, land, material required for buildings, computers, books, etc. This results often in huge wastage (lights remain switched on in the day time, water leaks are not fixed, computers are used for movies, games and internet chat, than information) and creates scarcity in other areas in the neighborhood.

Given that we do not pay for higher education as per market rates, fees are abysmally low for many university degrees. This has resulted in over abundance of MSc/MTech holders. In itself this is not bad. But due to large numbers, it is impossible to main- tain the standards of those MSc degrees.

Also, it results in wastage: my own brother landed up with BTech followed up with MBA; all this because he could afford it. He never used either of his degrees and works for a bank as an officer. Sure, part of his earlier training stands him better than others, but given the amount of background subsidies (water/electricity/ manpower) put in, I believe he is under- utilising his skills hugely, although he may like to differ.

My school fees were about Rs. 100 for entire school education (upto 10th, in 1987). It was just a couple of thousands for 10+2; and was about 2000 for BSc. Including MSc, after which I received fellowships (PhD), I spent no more than 15000 for my entire education. I guess that’s the subsidy you talk about, my family belongs to middle class and could afford to pay more (or I could earn by working.) As I know from my previous experience, many of my batch-mates from MSc days joined the university simply because there was nothing better to do! MSc was a stop-gap arrangement. why, even PhD work is used as a stop gap—— and pays cool 8000 per month if you can clear a couple of interviews. Once you get a better job (an IAS job, like my close friend in PhD days landed up with) you can ditch the PhD project.

My father’s experience during his tenure of teaching in an university has been very similar; he advised students against admission to MSc. Of course, this story has many other angles, most of all, ’cause we confuse between “knowledge” and “skills”. This prepares us to take more degrees and not gain any tools of our own.

Our degree education remains disconnected from the social demands surrounding our universities. Our society further favours a dull man with a masters degree than shy-but-intelligent man with only a single degree (or no degree). What is the solution? We should do away with subsidies (even blanket scholarships supposedly to the needy), but allow more easy loan schemes to students (our institute arranges for such from banks). One can make loans with low interest rates. This makes sure students know how much has gone in investment and they will prize their degrees. It will also make them work hard in order to repay the loans. Americans celebrate their degrees, since they pay for them entirely, unlike ours.

The cancellation of background subsidies would also make sure that managers of large institutions would be careful about investments and focus on efficiency. Of course, this also includes making Universities free of government interference. Congratulations for making some of us think about and fewer to act on some crucial issues.
—Ashish Asgekar

• You literally called a spade a spade! I am a poor little rich man who undeservedly utilisea the benefit of kerosene subsidy.

I was forced to apply for a ration card to be produced before all and sundry government offices as proof of my name, age, sex, address, and what not. While applying for the same, I had declared an income which I believe must be the highest in my servicing ration shop if not the locality. By virtue of the ration card I was issued, I became entitled to two litres of subsidised kerosene every month which I use for my generator. The shop sells somebody else’s subsidised rice at a higher rate to me with which I feed my dog. I am entitled to subsidised sugar only the during festival season, which I fully make use of. I buy the kerosene and sugar only because I am entitled to it and if I do not take delivery of the same, obviously the shop keeper will sell it in the market and make a profit at my expense because he would have already taken delivery of these items from the government godown on my account.

I do not require any subsidy on any item whatsoever. I don’t mind taking these away, but put an end to the cross subsidisation too. Take away the subsidy on kerosene and cooking gas and other petroleum products, but give the corresponding benefit of reduction on prices of petrol and diesel.

Please note that this might be a case more particularly of relevance to the state of Kerala where there is no abject poverty as seen in the north or other parts of India. The gap between the rich and the poor here is very much less here because of the high wages.
—Scaria Nebu George

• What I think is that the government at the Centre and state levels should withdraw all subsidies. Instead of a blank and across-the-board subsidy, we should introduce a system of reimbursing the amount of subsidy to the actually poor and deserving people. This will eliminate the undeserving benefit being enjoyed by the rich people. A subsidy reimbursement will be claimed on things like petrol, diesel, kerosene, LPG, rice, water, electricity etc. only by those poor people who can first prove that they have actually utilised these items.
—Ved Guliani

• It was good to see the editor of The Indian Express come out with the exploitation of the system by our poor rich classes especially so because the media itself expects special treatment in the system. I am happy to contribute to the debate.

The banks were nationalised for ‘Garibi Hatao’ by offering loans to the poor and middle class farmers and entrepreneurs. The biggest defaulters are the rich and influential. Socialistic schemes like these have left the deserving poorer. And the super rich networking is such that all the deals including the loans and new ventures are made while playing golf or amidst flowing wines in the Page 3 parties while the diligent and hard working simple folks are kept out of the network.

• The free use of hospital beds provided for the poor in 5-star hospitals by the rich politicians, bureaucrats and their sundry relatives is too well known. The deserving poor patients are made to run around the uncaring system while the medical directors escort the rich free of charge. How about some senior officers of public sector companies making all the welfare rules just before they retire! It is almost like adhering to what you described best as ‘mammaries’ of the system for life. It is amazing how some senior and well-connected people never retire; they keep getting appointed from one special assignment to the other till they retire to the other world.
—Dr. Ratna Magotra

• There are indeed many such examples, I am happy to include some below :- Indians being to averse to toll taxes: Highways are an important indicator of economic growth. China, EU, South East Asian Economies have built highways that every Indian will envy. But most of us do not appreciate that citizens in these countries pay a heavy sum out of their pocket as toll tax when using these magnificent highways. In fact these superfast highways would not at all have been possible if for the high toll taxes. Except for a select few roads on the NHAI, the toll culture simply hasn’t caught up here cause the politicians think that toll taxes would be anti-populist whereas the average Indian still averse to paying toll tax whereas he is willing to spend lakhs buying an SUV.
—Sushil Mehra