The story on the impending GST raised pertinent questions

The story on the impending Goods and Services Tax (Will it Help Cut Prices? December 2009) raised pertinent questions on the impact of the new tax structure on consumers. However, these concerns are not reason enough for the government to set up a commission to ensure that companies pass on the benefit of reduced costs to consumers. There is hardly any sector that is monopolistic and such a move could set a bad precedent of formal state intervention in pricing. It would be better to let the market forces take care of the problem.
- Raman Kumar, Ahmedabad

Your argument is valid because monopoly is not a major concern in any sector today. However, one cannot ignore the tendency towards cartelisation within an industry to control price movements. Hence, complete government indifference is also not desired. A middle ground could be reached if instead of appointing a commission, the government resorts to subtle measures like tweaking tariff barriers in order to nudge errant companies to toe the line.

The stance of the Life Insurance Agents Federation of India on the Swarup Committee's suggestions was a rare insight into their perspective (Agents of Discontent, December 2009). I agree that agents should not be solely held accountable for mis-selling a product. Insurance companies consider them more as salesmen than advisers and impose difficult sales targets. In such a case, the agent cannot be blamed entirely for mis-selling a product to meet his target. A better option would be to incentivise selling the most suitable insurance policy.
- Mrinalini Sehgal, Delhi

Yes, insurance companies are also to blame for driving the agents too hard. However, buyers should not act as hapless victims either. They must make an effort to find out about various insurance plans and understand that insurance is primarily for protection, not for saving tax or earning high returns.

The monthly format of Money Today seems very bland without the regular 'Model Portfolios' managed by Dipen Sheth. It was the most soughtafter section among my friends. Please consider reintroducing it.
- Vishwas Mehendaley, e-mail

We are glad to know that the section was popular. In a monthly format, the time lag is too high to maintain the portfolios. However, we shall try to put it up on our Website soon.

The section on stock valuation tools is very informative for readers who want to hone their technical analysis skills. The latest story on price to sales ratio (The Sales Impact, December 2009) mentioned that this tool is ideal for evaluating cyclical stocks. Please explain why.
- Gaurav Jain, Allahabad

The PSR is best suited to cyclical companies as their sales volumes are less volatile than their earnings. So it is unfair to compare their performance across cycles merely on the basis of profit, which varies due to cost pressures.