Thursday, 29 December 2016

Farm loan waivers pose risks; corp taxes must be lower

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Demonetisation has pushed the growth recovery by a couple of quarters and it is likely to pick up only in second half of CY17. The full impact of demonetisation will be seen in January and once the cash withdrawal limits are eased, normalcy will return to the market because consumption is a major part of the economy, says Ved. With talks of a farm loan waiver doing the rounds, farmers shouldn't be encouraged not to pay back loans because it would be a bad practice. Instead, there are other tools to help farmers such as support prices, greater access to credit etc which is a better way to solve the crisis; waivers have a systemic risk to a country’s finances.

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