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Public stockholding – is it end of the road for ‘permanent solution’?

The 11th WTO [World Trade Organization] ministerial which started on December 10, 2017 in Buenos Aires with pomp and show has ended in whimper. After four days of marathon deliberations [in the plenary, group meetings and bilateral], even the efforts by director general, Roberto Azevedo to draft a declaration – a bare minimum for any such conference – did not bear fruit. The main reason for the failure was diametrically opposite stance taken by USA and India. While, the latter pressed for the most contentious issue under the Doha Development Round [DDR] viz. finding a permanent solution for public stockholding programs for food security, the former did not even allow it to be put on the table [earlier in November...
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Electricity reforms – missing the wood for the trees

On the eve of a meeting with state power ministers to discuss comprehensive reforms in the power sector, in a free-wheeling interview with a leading business daily, union power minister, RK Singh has come up with four ideas viz. (i) cross-subsidy will be restricted to 20% from fiscal year 2019-20; (ii) tariff hike to cover losses of state electricity boards [SEBs]/power distribution companies [PDCs] will be capped at 15% from April 2019; (iii) innovative measures to reduce technical and commercial [T&C] loss of SEBs/PDCs and (iv) direct benefit transfer [DBT] of power subsidy. If, the multitude of problems facing the power sector including huge recurring losses of SEBs/PDCs could be solved by issuing diktats, this could have been achieved long ago. During...
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Developed countries ride piggy back on WHO to thwart Indian drug export

In 2008, more than a dozen shipments carrying off-patent generic drug from India were detained by customs authorities in European Union [EU] countries on grounds of alleged infringement of EU intellectual property. The consignments were destined for Brazil transiting through the European ports and airports. India together with Brazil had taken the issue to WTO’s [World Trade Organization] disputes settlement body in May 2010 against the EU and Netherlands, where the shipments were detained. Other countries viz. Canada, Ecuador, China, Japan and Turkey had joined the dispute. India argued that the seizures violated the multilateral Trade Related Intellectual Property Rights [TRIPS] agreement of the WTO, as the medicines were off-patent both in India as well as the country [read Brazil] to...
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Demonetization – were banks used to convert black into white?

Dwelling on the success of demonetization [announced on November 8, 2016], Prime Minister Modi informed the nation from the ramparts of historic Red Fort on August 15, 2017 that the government had cancelled the registration of over 200,000 shell companies [nick name for entities which are engaged in laundering black money]. He reiterated this on October 5, 2017 in his speech at the annual function of the Institute of Company Secretaries of India [ICSI] alluding to the axe falling on another about 100,000 such companies. These companies were identified while examining data on deposits made post-demonetization using advanced data analytics technique. Taking the process forward – in its all out war against black money and corruption – the government had...
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Urea – Modi’s clarion call may lead to its under-use

Addressing the 38th edition of ‘Mann Ki Baat’, the prime minister said, “Can our farmers take a pledge to bring down urea use by half by 2022? If they promise to use less urea in agriculture, the fertility of the land will increase. The lives of farmers will start improving.” Modi made the statement in the backdrop of ‘World Soil Day’ on December 5 and deteriorating health of the soil world over, an overarching factor contributing to this is excessive use of urea. The positive correlation between excessive use of urea and erosion in soil health is an incontrovertible fact proven by several studies and also acknowledged in the Economic Survey and other official documents. This is a phenomenon that...
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Taking on willful defaulters – Modi’s knock-out punch

The union government has promulgated an ordinance seeking to amend the Insolvency and Bankruptcy Code [IBC] – a law that was passed by the parliament last year aimed at faster and time-bound resolution of non-performing assets [NPAs] of commercial banks nearly 75% of which are with public sector banks [PSBs]. The resolution process involves the lender [read: bank] – under directions from the Reserve Bank of India [RBI] – making a reference of defaulting borrower to the National Company Law Tribunal [NCLT] which appoints interim resolution professional [IRP] for conducting the process. Under it, potential bidders make a bid for the company and the amount thus realized is used to pay back the loan. The process involves banks taking a...
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India’s stance on food security at WTO – Prabhu does a volte face

The union minister of commerce and industry, Suresh Prabhu has stated that “he won’t take up the issue of finding a permanent solution for public stock-holding programs for food security at the upcoming WTO ministerial in Buenos Aires next month”. This should be music to the ears of developed countries particularly USA, EU, Canada, Australia and Japan as this was a major item on the agenda of the Doha Development Round [DDR] – started in 2001- which they are hell bent on dumping. In fact, during a meeting at WTO, Geneva [July, 2017], they had rejected a proposal submitted by G-33 Group of developing countries [with India in the lead] on (i) public stock-holding for food security; (ii) special safeguard mechanism [SSM]...
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Anti-profiteering Authority – will it deliver or just a postmortem

On November 16, 2017, the Union Cabinet approved setting up of a National Anti-profiteering Authority [NAA] under Goods and Services Tax [GST] so as to ensure the benefit of the tax reaches consumers. Besides, the chairman, it will include four technical members. A five-member committee, under Cabinet Secretary P K Sinha, has been entrusted to finalize the list. If, a consumer feels that the reduction in the incidence of tax under GST dispensation is not being passed on, he/she can register a complaint with the authority. The anti-profiteering mechanism provides for setting up of ‘screening committee’ at the state-level and ‘Standing Committee’ at national level. The complaints will be first sent to ‘screening committee’/‘Standing Committee’ depending on whether it is of...
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US law makers game plan to kill H-1B jobs

On April 18, 2017, President Donald Trump signed an  executive order called “Buy American, Hire American”, directing federal agencies to review the H-1B visa program with the aim to end alleged ‘fraud’ and ‘abuse’ and ensure only the “most-skilled and highest-paid applicants” were successfully processed. [H-1B visas are issued to foreigners who have ‘theoretical’ and ‘technical’ expertise in specialized areas to work in local [read American] companies for temporary period.] As a follow up, the US Citizenship and Immigration Services [USCIS] which administers these visas, is already implementing measures which severely restrict or delay grant of such visas. These include inter alia stop ‘premium’ processing of applications, more rigorous interview/procedural requirements, denial of employment to spouses of those already working...
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Fiscal glide path, to change or not – Jaitely’s dilemma

Having stuck to the fiscal consolidation road-map for three consecutive years beginning 2014-15 and put up a brave front in regard to remaining on course during the current year at least until recently, finance minister has now alluded to what he termed as ‘changing the glide path to meet the challenges emerging from structural reforms’. The statement was made at Morgan Stanley investor meet in Singapore. However, in the wake of Moody’s Investors Service revising India’s sovereign rating from Baa3 to Baa2 and outlook from ‘positive’ to ‘stable’, Jaitely has retracted from the above and exuded confidence that the government will stick to fiscal consolidation road-map. Yet, it is necessary to analyze the reasons for his discomfiture and assess whether...
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