Articles

COP28: High on rhetoric, less on action

The COP 28 offers no credible action. On meeting the ‘funding gap’, save a token amount for Loss and Damage Fund (LaDF), there was nothing to show The just concluded 2023 United Nations Conference of the Parties (COP28), in Dubai, has pledged to “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, to achieve net zero by 2050 in keeping with the science”. The ‘net zero’ refers to a scenario wherein the emission of greenhouse gases (GHGs) into the atmosphere equals their removal. Historically ‘indiscriminate’ and ‘excessive’ use of fossil fuels – a generic term for major fuels such as coal, oil and natural gas – mostly by...
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FDI in export–linked e-tailing is a bad idea

When the government expects the foreign companies to do almost everything that a retailer do, how can the former deny the latter the right to sell The government is considering allowing foreign direct investment (FDI) in inventory-based models of e-commerce, subject to the rider that these will be solely aimed at export markets. A comprehensive policy on FDI in e-commerce has been under deliberation since 2018. In fact, during discussions with representatives of e-commerce firms and a domestic traders’ body viz. Confederation of All India Traders (CAIT) held on August 2, 2023, the Department for Promotion of Industry and Internal Trade (DPIIT) in the Ministry of Commerce and Industry made a presentation on the ‘fundamentals’ of the proposed e-commerce policy....
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RBI should loosen the monetary lever

RBI’s decision to keep the policy rate unchanged could pose a serious risk to growth due to a rise in lending rates and higher-cost of loans to industries The Reserve Bank of India (RBI) six-member Monetary Policy Committee (MPC) on December 8, 2023, decided to keep the policy rate (the interest rate at which the RBI lends to banks) unchanged at 6.5 per cent. The MPC has also said that the actions of the RBI will remain “actively disinflationary”. The decision is a continuation of a trend wherein the RBI has been overly obsessed with the management of inflation and aggressively used the two prime monetary policy instruments in its armoury namely the policy rate and liquidity (a jargon for...
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G7 sanctions slip through the cracks

Russia is the third-largest producer of crude oil, with over 12 per cent of global crude production, and the second-largest exporter after Saudi Arabia. An oil and gas industry worker walks during operations of a drilling rig at Zhetybay field in the Mangystau region, Kazakhstan. Credit: Reuters Photo The reports of the US Treasury Department imposing sanctions on two ship owners in October 2023 for allegedly transporting Russian oil at $75 and $80 per barrel, while relying on US-connected service providers, demonstrate a feeble attempt to achieve the lofty goal set by the G7 in mid-2022. The group, consisting of the United States, Germany, France, Britain, Italy, Canada, and Japan, aimed to punish Russia for its military actions against Ukraine by...
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SC should declare poll freebies a corrupt practice

When a candidate uses his money to bribe the voter, it is treated as corrupt practice, but when his party bribes voters using ‘public money’ it is not treated the same way Taking a cue from the practice of mesmerizing voters with freebies – an acronym for “something is given free of charge” – started by the Aam Aadmi Party (AAP) in the February 2020 Delhi elections, early this year, in Karnataka elections, the grand old party (GOP) gave five guarantees (a more respectable nomenclature for freebies) on a grand scale. These delivered the intended result. In the just concluded elections in Madhya Pradesh (MP), Rajasthan, Chhattisgarh and Telangana, the guarantees have occupied the centre stage in the manifestos of...
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Cut out red tapism in public sector share sale

The lengthy and cumbersome process of approval and bureaucratic red tape undermines the chances of the Government selling CPSU shares to willing investors In the Budget for 2023-24, Finance Minister Nirmala Sitharaman had set a target of Rs 51,000 crore for proceeds of the sale of Union government shareholding in central public sector undertakings (CPSUs). As per available indications, the government may fall short of this target by Rs 30,000 crore. An overwhelming share of the shortfall is due to delays in the disinvestment plans of IDBI Bank (the government plans to sell 30.48 per cent of its stake as well as 30.24 per cent shareholding of LIC aggregating to a total stake sale of 60.72 per cent) and state-owned...
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India’s major subsidies bill balloons. And, it was set to happen

The underachievement of targets is a manifestation of an attempt by the ruling dispensation to artificially suppress the BE in order to show a better picture of the fiscal deficit. The Union government may end up spending Rs 50,000 crore more than the budget estimate (BE) on the three major subsidies — fertiliser, food and cooking gas — during the current financial year. The maximum slippage of Rs 25,000 crore would be in fertiliser subsidy where the revised estimate (RE) is likely to be Rs 2 lakh crore against a BE of Rs 1.75 lakh crore. Food subsidy will increase by Rs 15,000 crore with the RE rising to Rs 2.12 lakh crore against the BE of Rs 1.97 lakh crore....
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Giving a safe passage to delinquent SEZs

Development of Enterprise and Service Hubs (DESH) bill, gives a ‘safe passage’ to all those SEZ units that haven’t been able to fulfil their export commitments The government is planning to make a few amendments to the Special Economic Zones (SEZ) Act 2005 in the winter session of Parliament, with a view to giving more operational flexibility to units in these tax-free enclaves, especially when it comes to sales in the domestic tariff area (DTA). It had intended to overhaul the SEZ regime by bringing in the Development of Enterprise and Service Hubs Bill (DESH) announced in the budget for 2022-23. Since DESH is facing delays, the government is keen to address some of the concerns under the extant regime...
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NPAs: Setting the record straight

The Modi Government has made unstinted efforts to make the defaulters pay up and also ensured that no new NPAs are created As per the information shared by the Reserve Bank of India (RBI) in reply to the RTI question, scheduled commercial banks (SCBs) had written off non-performing assets (NPAs) – an acronym for loans that have gone bad – worth over Rs 10,57,000 crore in the last five years. This amount is often cited by the opposition in particular, the grand old party (GOP) to lambast Modi – government for having given what they term as ‘loan waiver’ to big industrialists and businessmen. Has Modi granted favours to the big-wigs? To address this, we need to answer two fundamental...
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Has free ration become a political compulsion?

Under ‘open-ended’ procurement, Govt buys from farmers unlimited quantities at MSP. Apart from high stocks, this adds to the food subsidy bill substantially Addressing a poll rally in Chhattisgarh, Prime Minister Narendra Modi has announced an extension of the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) free ration scheme for another five years. Launched in April 2020 to deal with the situation triggered by the Covid-19 pandemic, PMGKAY provided 5 kg of rice or wheat per person per month for “free” to 820 million, as well as 1 kg of pulses per family per month to people covered under the National Food Security Act (NFSA). Run for three months initially, the scheme got six extensions till December 31, 2022. On...
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