Interacting with global leaders from the energy sector that included ministers of Saudi Arabia and UAE – prominent members of OPEC [Organization of Petroleum Exporting Countries] – besides CEOs of leading MNCs on October 15, 2018 in New Delhi, prime minister, Narendra Modi flagged three major issues:- First, expressing concern over the steep increase in the international price of crude oil [and concomitant increase in prices of all petroleum products viz. diesel, petrol, ATF, LPG etc], he urged all leading producers/exporters to be more responsible in fixing the price to bring it down from current high to reasonable level. Second, keeping in mind the overarching need to increase domestic production India, he asked them to consider investing in exploration and...
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Aadhaar survives court scrutiny
Ever since, prime minister, N Modi – a crusader against corruption, nepotism and black money – took charge in 2014, those who had been in this game for decades having defrauded the country by gargantuan sums have unleashed an orchestrated plan to frustrate his attempts to cleanse the system. An important component of this plan was to kill Aadhaar card which Modi has been using to give subsidy on food, fertilizers and LPG, pay wages under Mahatma Gandhi National Rural Employment Guarantee Act [MGNREGA], release pension and scholarship, file income tax returns and a host of other areas where there is evidence of misuse and misappropriation of funds. First, a few words on how this foundation document [as Modi would...
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Empowering the poor – shun subsidies, build assets
Recently, during launch of a book, union finance minister, Arun Jaitely concurred with the author [an economist] that increase in capital formation in agriculture is a far better way of helping the farmers instead of the extant system of giving subsidies. The increase in investment – be it in soil conservation and improvement in its health, irrigation and water conservation, agricultural implements, infrastructure for storage/handling/quality testing, information technology, marketing infrastructure and use of modern technology for crop production – lays the foundation for sustainable increase in the income of farmers. This is in sharp contrast to subsidies on agricultural inputs viz. fertilizers, seeds, pesticides, power, credit, fuel etc whose positive impact is felt only as long as these are given....
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Addressing farmers’ woes – middleman holds the key
In recent years, the Modi – government has increasingly faced the wrath of farmers all over the country with the last year alone having seen over half-a-dozen protests. On October 2, 2018, in a major show of strength, thousands of farmers from Uttar Pradesh [UP], Haryana, Punjab, Uttarakhand had congregated on Delhi border with close to dozen demands. These included:- Implementation of Dr MS Swaminathan headed Nation Commission on Farmers recommendations; Purchase of all of farmers produce at notified minimum support price [MSP]; Greater role to farmers producer organizations [FPOs] in food procurement; Waiver of all outstanding farmers loans; Payments of all outstanding arrears to sugarcane farmers; Enforcement of minimum wage for all farm workers; Giving pension to all farmers...
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Power cross-subsidy – Modi proposes, Kejri disposes
The center has mooted far reaching amendments to the Electricity Act [2003] which after incorporating the comments from states [the draft was sent to them on September 7, 2018 and they have 45 days] will be taken up for consideration and approval in the winter session of the parliament. The 4 key amendments are:- (i) capping the cross-subsidy to consumers within a distribution area to 20% immediately to be followed by complete elimination progressively within 3 years [section-61]; (ii) if a state wants to give subsidy to a particular category of consumers, the same should be given as direct benefit transfer [DBT] [section-45]; (iii) all sale/purchase of power shall be through long/medium/short-term power purchase agreements [PPAs] –– as per a...
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FDI in retail – policy void and unfounded fear
Recently, a task force [TF] on e-commerce under the then commerce secretary, Rita Teaotia had recommended 49% FDI [foreign direct investment] in Indian retail in online marketplaces that hold inventory and sell directly to consumers [B2C]. However, this is subject to only 100% made-in-India products being sold through such platforms. Further, the platform must be promoted by resident Indian and controlled by Indian management. This had led to consternation among Indian companies in the organized retail such as Reliance Retail Limited [RRL], Futures Group etc who opined that this would violate guidelines as encapsulated in Press Note [PN] 3 [2016-17] which bars foreign investment in B2C. The foreign majors operating in on-line market place viz. Amazon, Flipkart etc also protested...
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Shutting NRIs/PIOs-run FPIs – a bad idea
Faced with shortage of domestic capital and compelling need to accelerate the rate of economic growth, successive governments have taken steps to attract foreign investment. Strictly speaking, the capital inflows to India should be sourced from income generated from business or otherwise – by persons located in foreign jurisdictions. The persons could be foreigners or non-resident Indians [NRIs] or persons of Indian origin [PIOs] or overseas citizens of India [OCIs]. In case however, the inflow happens to be Indian money which left our shores in a clandestine manner and comes back in the garb of foreign capital [also known as ‘rounding tripping’ in common parlance] then, it raises many eyebrows. Until a few years ago, the extant policy and regulatory...
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Modi’s onslaught on shell companies/ghost directors
A marathon exercise initiated by the ministry of corporate affairs [MCA] early this year which got consummated on September 15, 2018 on KYC [know your customer] norms for company directors has thrown up results that tell a lot about the existence of a monstrous ghost economy and the manner in which the present dispensation led by Modi is endeavoring to stem the rot. The exercise reveals that a total of 5000,000 DINs [director identification number] were issued by the authorities. On records, these were the number of directors serving on the companies. Out of these, only 3300,000 were ‘active directors’ implying that the balance 1700,000 were inactive or ‘defunct’. Put in simple terms, an inactive/defunct director is a person who...
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Rafale deal – looking for corruption where there is none
During the last four-and-a-half years of his term, prime minister, Modi has brought about a metaphorical change in the very institution of governance – its central point being ‘honesty’ and complete ‘transparency’ in its wheeling-dealing with all stakeholders and the public at large. The running theme in all the governance processes is zero tolerance for corruption which is very aptly encapsulated in the euphemism coined by him ‘naa khaoonga, naa khane doonga’ [neither, I will take bribe nor let anyone else take]. Modi has not merely talked about it but demonstrated through his actions. Even his most ardent critics are unable to pinpoint a shred of evidence about corruption or nepotism in any of the departments/ministries or undertakings/agencies coming under...
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Fuel woes – CED cut could be catastrophic
With the petrol and diesel prices crossing a new landmark of Rs 80 per litre and Rs 70 per liter [in Delhi], there is a big hue and cry in political circles. The sharks prowling for an opportunity to lambast Modi – government are demanding a steep cut in the central excise duty [CED] to enable corresponding reduction in the price to consumers. They argue that during the last 4 years, the centre allegedly mopped Rs 1100,000 crore from increase in CED. A portion of this money could be used to giver relief, they contend. The international price of crude had declined from US$ 117 per barrel in November 2014 to US$ 28 per barrel in January 2016. Leveraging this,...
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