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SGBs: Tax bandaid for a self-inflicted fiscal wound

The Union budget presented by Nirmala Sitharaman on 1 February indirectly acknowledges a simple fact: that the government goofed in giving citizens a free ride on sovereign gold bonds (SBGs). SGBs currently have a tenure of eight years, but they are completely free from long capital gains tax (LTCG) if held to maturity. The interest, of 2.5 percent, is taxable. But Sitharaman now wants to ensure that these bonds pay LTCG unless they were bought at the time of original issue and held till maturity. It means that those who bought SGBs from the market have to pay capital gains tax. LTCG is charged at the rate of 12.5 percent. Sitharaman said in her budget speech: “It is proposed to provide that the exemption from capital gains tax in respect of sovereign gold bonds shall be available only where such bonds are subscribed to by an individual at the time of original issue and are held continuously until redemption on maturity. It is also proposed to provide that this exemption applies unifor...
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What govt can learn from the corrupt: efficient delivery of outcomes

Three major things have happened over the last 10 days that have brought forth renewed economic excitement. First, we had the India-European Union “mother-of-all-trade-deals”, followed by a forward-looking and non-populist Union budget which strikes all the right notes, and, last of all, the Indo-US trade “deal” whose contours are not fully clear yet. There could be some worms in the fineprint, but overall it can’t be negative to India’s growth story. But here’s the problem: outlays do not automatically lead to outcomes, and trade deals do not automatically deliver on their promises of mutual benefit. So how does one ensure that there is no slip between the cup and the lip? How do deals move forward from pious intention to effective implementation? There is a lot one can learn from the corruption economy - which works on the simple principle that wheels must be greased to ensure the right outcome for the party paying for a specific outcome (Eg: getting a driver’s licence). The middlema...
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UGC guidelines or caste conflicts, Hindutva is failing at a fundamental level

The eruption of protests among general category (GC) students over the new University Grants Commission (UGC) equity regulations speaks poorly of the kind of thinking that goes in the supposedly “Hindutva-oriented” government of Narendra Modi. In particular, it shows Union HRD Minister, Dharmendra Pradhan, who has to own up these guidelines, in a very poor light. Either he is complicit, or he was sleeping on the job. It is pointless to mouth political slogans like “ batenge to katenge ” and “ ek hain to safe hain ”, when actions like the UGC guidelines achieve the exact opposite. These guidelines will not only promote inter-caste conflict, but will do nothing to eliminate the real discrimination that some castes face, whether in society or on campuses. It is nobody’s case that discrimination is a thing of the past, but it is counter-productive to pretend that discrimination will end by tilting the scales against GCs. As this Swarajya report points out, the guidelines, which single out...
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Welcome to the Midi Powers Club, Mark Carney, and thanks for speaking the truth at last

Mark Carney, Prime Minister of Canada, made a remarkable speech at Davos, where the World Economic Forum (WEF) has been in session. Shorn of nuances, it sounds almost exactly like how India would frame its choices and actions in today's world - or even the one that was gradually emerging before Donald Trump took over and made things nasty. The three main points Carney made were the following: One , there is no point pretending that the rules-based order still prevails. The rules-based order exists only to the extent one is willing to subordinate one's will to that of the hegemons. He said it simply. We must accept reality and "stop invoking rules-based international order as though it still functions as advertised. Call it what it is - a system of intensifying great power rivalry, where the most powerful pursue their own interests, using economic integration as coercion." (Read the full text of his comments here ). Two, while it would be sensible for all countries to...
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Method of Vodafone bailout may come back to bite govt in the butt

Vodafone Idea, the beleaguered telecom operator, received a strong lifeline from the government earlier this month. Under the relief package, 95 percent of the dues of Rs 87,695 crore owed to the government will be frozen for a decade. Vodafone will pay only Rs 124 crore per annum for six years starting March 2026, and then Rs 100 crore for the next four, before paying up the balance 95 percent in six equated monthly instalments after the department of telecom recomputes what Vodafone owes it on account of adjusted gross revenues (AGR).In a judgment delivered in September 2019, the Supreme Court ruled in favour of the government’s definition of AGR, which meant that telecom companies had to shell out massive amounts for past dues. While all telcos were impacted, Vodafone Idea was the worst affected, thanks to its massive debts and accumulated losses.  In the quarter ended September 2025, Vodafone reported losses of Rs 5,524 crore, and its total debt amounted to Rs 2.39 lakh crore....
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The importance of being Deva Bhau

The recently-concluded municipal elections in Maharashtra, where the BJP-led Mahayuti won 24 out of 29 civic bodies, including the all-important Brihanmumbai Municipal Corporation (BMC), has catapulted Chief Minister Devendra Fadnavis (Deva Bhau to his political fans) as one of the front-runners in the race to succeed Narendra Modi, whenever that happens.  Of the three potential contenders for the top job in Delhi, assuming the BJP remains in power in 2029 and beyond, Fadnavis is 55, Yogi Adityanath 53, and Amit Shah 61. All have age on their side since there is unlikely to be a vacancy at Lok Kalyan Marg in the near future. Of the three, Fadnavis has the additional advantage of being from Nagpur, the headquarters of the Rashtriya Swayamsevak Sangh (RSS). The Sangh is favourably inclined towards him, though it is also warming up to Yogi. Shah’s strength is his indispensability to the organisation as its main election strategist, and by virtue of his indirect control of the organisa...
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As GST cuts boost vehicle sales, the case for urban congestion charges gets stronger

Among India's many policy failures, the failure to emphasise public transport over private is surely one of its biggest. In calender 2025, thanks to goods and services tax (GST) cuts, Indians bought 4.5 million four-wheelers and over 20 million two-wheelers , adding to urban congestion and pollution at a time when urban living conditions are worsening. Put simply, the GST reforms - while welcome for breathing life into automobile assembly lines - have a clear downside. This does not mean the tax cuts should not have been done, but that the negative social and economic effects of forcing people to depend more on private transport must be dealt with as an urgent issue. There are two ways to tax private vehicles: one is to tax them at source though indirect taxes (like GST), and the other is to tax them at local levels through registration charges, higher parking fees and tolls. While tolls are a ubiquito by us feature on highways, they don't exist inside cities, which are at the...
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