Frequent elections impose enormous social and economic costs on the nation, which leads to corruption and disruption The Union Government has set up a committee under the chairmanship of the former President of India, Ramnath Govind to examine holding simultaneous elections to the Lok Sabha (LS), state assemblies, panchayats and other local bodies. Even as the committee has kicked off the deliberations (its first meeting is scheduled for September 23, 2023) the idea is being staunchly opposed by many political parties. The opposition isn’t new as in 2019 when Prime Minister Narendra Modi convened a meeting on June 19 that year to discuss ‘One Nation, One Election’ (ONOE), it was boycotted by about 50 per cent of the parties who...
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Category: Governance reforms
Countering the menace of corruption
Funds siphoned off from welfare schemes, meant for the benefit of the poor, is also an act of corruption and must be dealt with with a heavy hand Setting aside the anticipatory bail granted by the Gujarat High Court to an IRS officer in a corruption case on April 17, 2023, the Supreme Court said “Corruption poses a serious threat to society and must be dealt with an iron hand as it not only leads to abysmal loss to the public exchequer but also tramples upon good governance”. The observation of the top court has catapulted to the centre stage a malady that has afflicted India for generations. The Government of India’s standards of financial propriety lays down that “no...
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Corporate governance – Sebi’s volte face
Based on the recommendations of Uday Kotak committee on corporate governance (2018), the stock markets watchdog, Securities Exchange Board of India (SEBI) had asked listed companies to separate the positions of Chairperson and Managing Director (MD)/Chief Executive Officer (CEO). The requirement was mandatory. The companies were required to implement the order by April 2020. However, based on representations received from the industry, an additional two years was given for compliance. In April last year, SEBI chairman Ajay Tyagi goaded them to ensure that the April 2022 deadline is not missed. Now, that even this deadline is barely a month away, the regulator has done a volte face. On February 15, 2022, the SEBI has decided to implement the requirement on...
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Asset monetization – will it take off
In her maiden budget presented to Parliament on July 5, 2019, Finance Minister Nirmala Sitharaman laid a roadmap for catapulting the Indian economy to $5 trillion by 2024-25, its most crucial component being investment in infrastructure to the tune of a mammoth Rs 100,00,000 crore (US$1.4 trillion) over a period of five years (read: 2020-21 to 2024-25). As for funding, 39% of this amount was to come from the Union Government and States each and the balance 22% from the private sector. The Centre’s contribution at 39% works out to around Rs 40,00,000 crore over 5 years or Rs 800,000 crore per annum. Against this, the revised estimate (RE) for capital expenditure during 2020-21 was Rs 439,000 crore. Even assuming...
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Freebies: Why it is a road to fiscal disaster
Freebies provided by state governments need to consider the fiscal burden they will lead to, and must not be used to woo voters. AK has literally mesmerised Delhi voters by promising free/heavily subsidised electricity—24×7—and free water. —————————————————- In the just concluded elections in Delhi, the electorate has returned Arvind Kejriwal (AK) to the coveted position of chief minister with a thumping majority with Aam Aadmi Party (AAP), winning 62 out of a total of 70 assembly seats. AK has literally mesmerised Delhi voters by promising free/heavily subsidised electricity—24×7—and free water, besides several add-ons such as free bus ride for women, free Wi-Fi, full reimbursement of hospitalisation expenses in case of accident on an actuals basis, free testing and diagnostic services—if the facility is...
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Poll promises mock at fiscal discipline
Delivering a lecture at the Foundation for Democratic Reforms, Bharat Institute of Public Policy and Hyderabad University on January 9, 2020,Vice President and Rajya Sabha Chairman Venkaiah Naidu stressed the need for a law to check “reckless and unsustainable populist” promises of political parties – on the lines of the Fiscal Responsibility and Budget Management Act [FRBM]. The FRBM Act was passed by the Parliament in 2003 for institutionalizing financial discipline and reducing the fiscal deficit [FD] to a manageable limit to improve the overall financial health. Under the Act – as amended vide the Finance Bill [2018-19], union government has set for itself fiscal deficit [FD] target of 3% of gross domestic product [GDP] for 2020-21 and debt limit...
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No cover-up for black cash
Making RBI the issuing authority will ensure that the Centre won’t enjoy the sole discretion on information use, which is possible now with SBI being the issuing authority For long, widespread use of black or unaccounted money in elections has been the fountainhead of corruption. Fighting elections — be it a Member of Parliament (MP) or Member of the Legislative Assembly (MLA) or any other elected body — costs huge sums which a candidate/political party is unable to garner. Businessmen and industrialists (even other entities engaged in undesirable activities) exploit this vulnerability of candidates and political parties to give contributions, expecting good returns, either by way of favourable policies or support in other forms such as award of contracts and so on....
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Growth hit by ‘fear’ and ‘distrust’ – really!
In the wake of further deceleration in GDP [gross domestic product] growth to 4.5% during the second quarter ending September 30, 2019 on top of a low of 5% during first quarter ending June 30, 2019, the former Prime Minister, Dr Manmohan Singh has launched a virulent attack on Modi – government squarely blaming the latter for what he terms as ‘disastrous policies’ and creating a palpable climate of ‘fear’ and ‘distrust’ in our society. While, delivering his valedictory address at the national conclave on economy organized by the New Delhi based Rajiv Gandhi Institute for Contemporary Studies, Dr Singh observed:- “There is a palpable climate of fear in our society today. Many industrialists tell me they live in fear...
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Electoral Bond Scheme – the ‘transparency’ puzzle
For long, widespread use of black or unaccounted money [income on which tax has not been paid or even money generated from dubious sources] in elections has been considered to be the fountainhead of corruption. Fighting elections – be it member of parliament or member of legislative assembly or any other elected body – costs huge sums which a candidate [or the party on whose ticket he/she is contesting] is unable to garner on his/her own. Businessmen and industrialists [even other entities engaged in undesirable activities] exploit this vulnerability of candidates and political parties to give contributions expecting favors in return – under quid pro quo arrangement – either by way of favorable policies or favors in other forms such...
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PSBs – capital erosion continues unabated
During her second interactive session with the media on the state of the Indian economy and measures to give a boost, finance minister, Nirmala Sitharaman announced a number of bold reforms in the banking sector with major focus on consolidation of 10 public sector banks [PSBs] into 4 big entities – an overarching objective being to make them globally competitive and act as a foundation for achieving US$ 5 trillion milestone. Sitharaman informed about a substantial reduction in their gross non-performing assets [GNPAs] from 11.6% of total loans as on March 31, 2018 to 10.3% on March 31, 2019 [courtesy, huge recovery of over Rs 300,000 crore made possible largely by concerted action under the Insolvency and Bankruptcy Code (IBC)...
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