Category: The Financial Express

Why irresponsible registration of pesticide companies must be reined in

The Parliamentary standing committee on agriculture in its 2015-16 report—Impact of chemical fertilisers and pesticides on agriculture and allied sectors in the country—has expressed serious concern over unscientific, excessive use of pesticides. The Parliamentary standing committee on agriculture in its 2015-16 report—Impact of chemical fertilisers and pesticides on agriculture and allied sectors in the country—has expressed serious concern over unscientific, excessive use of pesticides. It laments that associated problems have not been properly addressed by central and state governments. Even as the committee exhorts the Centre for ‘a comprehensive action plan for ensuring environment sustainable manufacturing, import, sale and use of pesticides’, review of the Insecticides Act (IA),1968 and setting up of Pesticides Development and Regulation Authority (PDRA), it has...
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Neem-coated urea: Why is Narendra Modi govt waiting for 5 years to make India self-sufficient in fertilisers?

Addressing the 9th Global Agriculture Leadership Summit on September 8, 2016, chemicals and fertiliser minister, Ananth Kumar proclaimed that neem-coating of all urea supplies meant for use by farmers has resulted in elimination of diversion to chemical industries and smuggling to neighbouring countries. If, the claim is true, it will have a profound impact on the larger picture of demand-supply balance, self-sufficiency in fertilisers, dependence on import, subsidy pay-out, demand for hydrocarbons especially gas and impact on the environment. The total consumption of urea is about 30 million tonnes annually, including 22 million tonnes indigenous and 8 million tonnes of imported product. Since, all of this is sold by manufacturers/importers at a low ‘controlled’ price, excess of cost of production/import...
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Government cap on GM tech royalty hurt the farmer; here’s how

The ministry’s decisions reflect a mindset that views MMBL as an exploitative monopoly. This perception is flawed and out of sync with ground realities Under CSPCO, the ministry fixed the price of cottonseed sales at an ‘uniform’ level and the maximum trait-fee payable to the technology-provider (TP). Given GM Bt cotton accounts for 98% total cottonseeds used in India, the decision was directed primarily at this segment. On July 6, 2016, Mahyco-Monsanto Biotech India (MMBL) withdrew its application for environment clearances for commercial cultivation of cottonseeds carrying its Bollgard II Roundup Ready Flex (B-II-RRF) technology, which uses genes that not only kill pests but also imparts resistance to the herbicide, Roundup. MMBL has attributed its decision to the “uncertainty in...
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GST will boomerang on fertilisers

Even if the lower end of 12% is applied to fertilisers, it would be double the existing duty Given the critical role of fertilisers in ensuring food security, for decades, the government has followed a policy of controlling their prices at low level—unrelated to cost of supply—and reimbursing the excess as a subsidy to the manufacturers. The Goods and Services Tax is being billed as transformative reform that has the potential to drastically reduce transaction costs — owing to elimination of cascading effect of tax-on-tax and withdrawal of a host of local levies— and substantially increase efficiency across the supply chain as interface with multiple authorities over a number of geographical locations gets eliminated. For the fertiliser industry, however, the...
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FDI policy for e-commerce, just a cosmetic change

The problem lies in the government de facto shutting the door for FDI in multibrand offline retail. The department of industrial policy and promotion (DIPP)—the nodal authority for issues relating to foreign direct investment (FDI)—has notified guidelines for FDI in e-commerce. Under these, 100% FDI through the automatic route will be allowed in the ‘marketplace’ format of e-commerce retailing, but not in the ‘inventory-based’ model. Under a marketplace model, an e-commerce entity provides an IT platform on a digital and electronic network to act as a facilitator between buyer and seller. The company may provide support services to sellers in terms of warehousing, logistics, order fulfillment, call centre, payment collection and other services. Post-sales, delivery of goods to the customers...
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DBT for fertilisers is a hoax

Prime Minister Narendra Modi is perceived to be a crusader when it comes to plugging leakages from the subsidy distribution pipeline. Prime Minister Narendra Modi is perceived to be a crusader when it comes to plugging leakages from the subsidy distribution pipeline. He has amply demonstrated this in the case of LPG (liquefied petroleum gas), wherein the government implemented direct benefit transfer (DBT) and saved about R15,000 crore annually. However, when it comes to fertilisers, similar initiatives are conspicuous by their absence. During 2015-16, out of an allocation of R73,000 crore on fertiliser subsidy, as much as R50,300 crore was on urea. The subsidy is administered through manufacturers who are directed to sell urea at a fixed uniform maximum retail...
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India must protect its agricultural support

It needs to get ERPs updated and purchases from poor farmers excluded from product-specific subsidy maths. The World Trade Organization’s (WTO) draft declaration for the ongoing ministerial meeting at Nairobi, Kenya, on December 15-18, 2015, promises to “address all aspects of agriculture reform as a matter of priority”, but does not mention anything about finding a ‘permanent solution’ to India’s concerns on food security. While declaration is just cleverly-worded rhetoric, the fact that India’s concerns remain unresolved is a setback. But, for any one tracking the events since the 9th ministerial meeting, at Bali in December, 2013, this should not come as surprise. It is abundantly clear that, from day-1, developed countries were never serious about finding a permanent solution....
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The unabated food and fertiliser worries

With reforms in fertilisers and food stuck in a groove, it is but natural that the government is shirking from paying subsidy arrears Hamstrung by its inability to achieve target for divestment proceeds from public sector undertakings (PSUs) and lower-than-expected collection from direct tax revenues, the government has resorted to hard posturing with regard to release of subsidy payments under major heads—fertilisers and food. As far as fertilisers are concerned, against a budget allocation of R73,000 crore for the current year, the requirement is expected to be around R80,000 crore. Even as the ministry of finance is likely to provide for additional R7,000 crore, it is in no mood to release arrears of about R30,000 crore from previous year. The...
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Drug licensing must recognise patents

Once patent-linkage gets embedded in our law, cheap drugs won’t get market entry Nearly 30 months back, US drug multinational Merck Sharp & Dohme (MSD) had petitioned the Delhi High Court to restrain Indian firm Glenmark Pharmaceuticals from manufacturing and selling its anti-diabetes drugs viz., Zita and Zita-Met, which violated MSD’s patents. The drugs contain sitagliptin, for which MSD holds a patent in India. Though Glenmark claimed that it had used sitagliptin phosphate, on which MSD held no patent, the court remained unimpressed with the Indian pharma company’s attempt to paint the two compounds as fundamentally distinct. In its October 7 judgment, the High Court restrained Glenmark “by permanent injunction” from making, using, selling, distributing, advertising, exporting, offering for sale or dealing...
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Add 100% FDI to the cart

Allowing 100% FDI in e-tail will make it easier for tax authorities to bring e-com firms under the tax net. In 2012, the UPA had permitted 51% FDI in multi-brand retail (MBR) with riders. The riders included sourcing 30% of requirements from small enterprises, a minimum investment of $100 million, besides giving full leeway to states on whether to grant permission or not. The policy was as bad as saying ‘no’ to FDI in MBR. The Modi government has continued with that policy decision. Finding that the direct route of entering MBR was choked, foreign investors have been looking for opportunities to make inroads. They found one in e-commerce where business was growing leaps and bounds. How did they manage...
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