Letters: Tax sops to public

This refers to ‘The Housing Imperative’, February 9. The three types of interventions mentioned by Subir Gokarn in the article seem to be impractical during these times. The importance of housing to pep up the economy is accepted, considering its linkages with 230-odd different industries and the multiplier effect that it can create to boost the economy. The first proposition of taking over small projects by the government is fraught with fiscal, procedural and all sorts of political implications during these times. Hence, that suggestion seems to be a non-starter.

Similarly, the suggestion to acquire undeveloped land also seems to be impractical. The purpose of the government intervention should be to boost economic activity during periods of economic weakness by increasing short-term aggregate demand. Hence, I feel the government should act in the demand side of the problem. Giving more tax sops to public for buying houses is similar to the tax credit system to all home buyers proposed by the US. This will help boost demand, which will ensure the flow of funds to builders and will also boost the short-term demand.

Gopi Kumar V, Cochin

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