The scheme mooted by the Delhi Government will only create more avenues for the middlemen to make money at the cost of the taxpayer Arvind Kejriwal, Chief Minister, National Capital Territory (NCT) of Delhi has justified his much-trumpeted scheme for door-step delivery of ration on the ground that this will help rein in what he describes as ‘ration mafia’ while ensuring that every grain of the subsidized food reaches the person (read: the poor) for whom it is intended. Who is this ‘ration mafia’? How does it plunder the subsidized food? Can the scheme prevent it? Under the National Food Security Act, 2013, the Union Government directs the Food Corporation of India and other state agencies to procure food from...
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Articles
India gets poorer, investors richer
Imagine if all of Rs 2100,000 crore under Atmanirbhar package had been distributed among 40 crore workers in the informal sector; it would have boosted demand The Corona pandemic may have brought about sharp deceleration in India’s economic growth – the sharpest ever during the last four decades or so – but has yielded a bonanza for the investors. The wealth of investors in the stock market as represented by the market capitalization of Indian equities (market value of shares multiplied by their number) almost doubled from around Rs 113 trillion (a trillion equals 100,000 crore) as on March 31, 2020 to Rs 226 trillion as on March 31, 2021. In contrast, India’s GDP at current prices declined from Rs...
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Person in control: New entity in charge
SEBI wants to shift focus from promoters to controlling shareholders or the so-called ‘person in control’ (PIC), but is the new breed willing to take charge? Paving the way for a major change in the way the promoters and over 4,700 listed corporates function in the country, in a consultation paper, the Securities and Exchange Board of India (SEBI) has proposed doing away with the concept of promoters and moving to ‘person in control’ (a three-year transition is recommended for the switch over). It has also suggested doing away with the current definition of promoter group with a view to rationalize the disclosure burden. The other proposals include (i) reducing the minimum lock-in period(the time period an investor can hold on...
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Covid-19 vaccine pricing: Modi has got it wrong
The Centre should make vaccination ‘free for all’ and conduct centralised purchases from the manufacturers Under the ‘Liberalised Pricing and Accelerated National Covid-19 Vaccination Strategy’ (LPANCVS), which kicked off on May 1, the Centre has plans to vaccinate all adults aged 18 and above — about a billion people. Given the mammoth task ahead, the vaccine pricing strategy has to be guided by two overarching considerations, namely (i) People should have absolutely no hesitation whatsoever in coming forward to get vaccinated, which, among other things, requires that this be done ‘free of charge’; and (ii) Manufacturers and suppliers should be willing to arrange for supplies of at least two billion doses within the shortest possible time frame, say, not extending...
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Making urea that is not needed: New Talcher urea project will further worsen the unsustainable fertiliser subsidy burden
The new urea project at Talcher will worsen the already unsustainable fertiliser subsidy burden as retention price at this project may surpass the current high of $350/tonne The RP in turn, is calculated taking into account efficiency norms such as capacity utilisation, energy consumption, capital related charges (CRC), other fixed cost, delivered cost of gas and other inputs, etc. The Cabinet Committee on Economic Affairs (CCEA) has recently approved subsidy for urea to be produced by Talcher Fertilizers (TFL) —a joint venture of four PSUs: Coal India Limited (CIl), GAIL, Rashtriya Chemicals and Fertilizers (RCF), and Fertilizer Corporation of India (FCI). TFL is setting up the capacity of 1.27 million tonne per annum at Talcher, Odisha, at an estimated investment of Rs 13,277...
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Patent waiver alone won’t help
There are three ways to overcome the issues facing us in our anti-COVID fight Amidst exponential increase in demand for vaccination, Indian policy makers are looking for all possible options to ramp up supplies. A major hindrance in the way is the intellectual property rights (IPRs) associated with new drugs which are mostly discovered and developed by multinational pharmaceutical companies. For instance, Covishield was discovered and developed by Astra-Zeneca in collaboration with Oxford University; a license for its manufacture has been given to Pune-based Serum Institute of India (SII). The most crucial of these rights relates to patent. The patent granted to an innovator company for a new drug gives a period of ‘market exclusivity’ during which no other firm can...
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NEP: A bundle of pious intentions
The Government should avoid overambitious targets that will result in gross underutilisation or even scrapping of the assets already created In yet another attempt to improve the power sector, the Modi Government has come up with a new draft National Electricity Policy (NEP), the major objectives being to promote clean energy such as power based on renewable and gas without debunking coal; revitalise power distribution companies (discoms) and developing an efficient market for electricity distribution. All the three objectives are laudable. These are crucial to development of an efficient, competitive and sustainable power sector to meet the needs of the economy on a high growth trajectory while at the same time, meeting the environment goals (especially India’s commitments under the...
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Make the COVID jabs free for everyone
There is a dire need to vaccinate at least one billion people within a short time and, given the pitfalls of differentiated pricing, the Centre should opt for inoculating everyone free of cost Under the ‘Liberalised Pricing and Accelerated National Covid-19 Vaccination Strategy (LPANCVS)’, announced on April 19, which was kicked off from May 1, the Centre has plans to vaccinate all adults above 18 years of age. Before this, the inoculation drive that was launched on January 16, covered healthcare and frontline workers and people above 50 years of age and those with comorbidities. In the second phase of the drive the age limit was brought down to those above 45. Vaccine manufacturers were giving all their supplies to...
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A flawed idea that the US must abandon
Imposing a global corporate minimum tax will interfere with the right of a country to determine its tax policy and impair its ability to galvanise the policy to achieve certain objectives The Joe Biden Administration is pushing for a Global Corporate Minimum Tax (GCMT) rate under the new international tax rules being coordinated by it with G20 countries. In 2017, the erstwhile Donald Trump Administration had introduced the US corporate offshore minimum tax called the Global Intangible Low-Taxed Income (GILTI). It is applied on the offshore incomes of US multinationals (MNCs) having subsidiaries in low-tax countries, at 10.5 per cent, which is half the Domestic Corporate Tax Rate (DCTR) of 21 per cent. US President Biden wants to double GILTI...
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Export subsidies face WTO challenge
The leeway to withdraw subsidies was meant for those developing nations which in 1995 had GNI in excess of $1,000 per capita. It can’t be availed by India, which is in a different category The Coronavirus pandemic played havoc with the economy of the country during the first half of last year. However, exports were beginning to look up in March — touching a record $34 billion which was higher than $33 billion in March 2019 — and signalling a sharp increase during the current fiscal. But now, the exporters face a triple whammy. First, they have not received export benefits worth approximately Rs 35,000 crore under the Merchandise Export from India Scheme (MEIS). Under the MEIS, which was withdrawn...
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