There is a compelling case for disbanding all forms of support and replacing them by ‘universal basic income’ (UBI) so that people can live with dignity At an interaction organized by the Confederation of Indian Industry (CII) on July 7, 2023, Chief Economic Advisor (CEA) V Anantha Nageswaran ruled out Universal Basic Income (UBI) for India saying this may create ground for “perverse incentives” and dissuade people from seeking income-generating opportunities. So, “UBI is not something that should be on the agenda in the near term”. In contrast, in the Economic Survey (2016-17) presented on January 31, 2017, the then CEA Arvind Subramanian had advocated UBI to substitute a plethora of extant subsidies. He couched the idea in Mahatma Gandhi’s...
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Articles
Delhi power tariff will only go North
Delhi’s electricity bill cannot be reduced unless reforms such as de-licensing of the distributors, breaking the monopoly of a few discoms is undertaken In its order dated June 22, 2023, the Delhi Electricity Regulatory Commission (DERC) has allowed the power distribution companies (discoms) in the national Capital viz. BSES Yamuna Power Limited (BYPL), BSES Rajdhani Power Limited (BRPL) and New Delhi Municipal Council (NDMC) to charge 9.42 per cent, 6.39 per cent and 2 per cent respectively in PPAC (Power Purchase Agreement Cost) on top of the prevailing rates of 22.18 per cent, 20.69 per cent and 28 per cent. Earlier on June 7, 2023, Tata Power Delhi Distribution Limited or TPDDL (earlier NDPL) was allowed an additional PPAC of...
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The success of PM PRANAM depends on reducing urea usage by farmers
The government has rightly emphasised the need for shifting away from chemical fertilisers, reducing imbalance in nutrient use and rejuvenating the soil. But this won’t be possible till the existing policy framework is changed The announcements on urea perpetuate their use by emphatically stating that the extant pricing and subsidy policies will continue. The Union government made three major policy announcements on June 28, 2023 — continuation of the urea subsidy scheme up to 2025-26 with an outlay of Rs 3.68 lakh crore, continued availability of urea to the farmers at the maximum retail price of Rs 242 per 45 kg bag and a new scheme PM-PRANAM (PM programme for restoration, awareness, nourishment and amelioration of mother earth). The first...
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Fertiliser subsidies are not the solution
Instead of pumping more subsidies the Government should push for nano fertilisers which are efficient and cost-effective The Union Minister of Health and Family Welfare and Chemicals and Fertilizers Mansukh Mandaviya has stated that during 2023-24, around Rs 46,000 crore would be needed for fertilizer subsidy payments over and above Rs 175,000 crore being the budget estimate (BE) given by the Finance Minister Nirmala Sitharaman in the budget presented on February 1, 2023. On the other hand, the Ministry of Finance (MoF) feels, payments could be even less than BE. Fertilizer subsidy is payments made to manufacturers or importers to cover the excess of the cost of production/import and distribution (or cost of supply) over a low maximum retail price...
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MSP guarantee will spell disaster for farmers
The hapless farmers must be liberated from the stranglehold of cartel licenced traders by giving them options to sell their produce wherever they want Union leaders may have called off farmers’ agitation in Haryana over Minimum Support Price (MSP) for sunflower seeds following the State government’s decision to agree to their demand. However, they maintain that their protest for securing legal guarantees for MSP across the country will continue. A legal guarantee for MSP was a major demand of the farmers mainly from Punjab, Haryana and western Uttar Pradesh during the year-long protest in 2020/2021 over the three Central farm laws. That protest ended when Prime Minister Narendra Modi announced on November 19, 2021, the repeal of those laws. Do...
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Tax reforms are yielding good results
The Income Tax Department has successfully used technology to reach out to the assesses in non-intrusive ways A major factor that has helped the Modi – government keep up the tempo of investment in building infrastructure and other development activities and continues with welfare schemes in desired measure without causing any slippage in fiscal deficit target has to do with a steep rise in tax collection. The gross tax revenue (GTR) – including total direct tax collection, proceeds from Goods and Services Tax or GST, customs and excise duty – net of refunds – surged from around Rs 21,11,000 crore during the financial year (FY) 2019-20 to Rs 30,50,000 crore during 2022-23 – an increase of about 50 per cent....
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E-commerce policy conundrum
The government must provide a level playing field to all. It should legitimize 100 per cent FDI in retail, online and offline, big and small Referring to the national e-commerce policy, the Secretary Department for the Promotion of Industry and internal trade (DPIIT) in the Ministry of Commerce Rajesh Kumar Singh has said it will “put in place a streamlined regulatory framework for the ease of doing business, adoption of modern technologies and the integration of supply chains”. It will seek to create “a conducive environment for the overall development of the sector and boost exports”. According to the foreign trade policy, the Union government is aiming at an e-commerce export potential of $200 billion to $300 billion annually by...
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The war against NPAs isn’t over yet
The government should strengthen mechanisms to give a fair deal to MSMEs According to a joint report by ASSOCHAM and Crisil Ratings, gross non-performing assets (NPAs) – an acronym for loans that have gone bad – of banks have declined by 0.9 to less than 5 per cent during the financial year ending March 31, 2023, and are expected to decline by another 1 per cent to a decadal low of less than 4 per cent by March 31, 2024. In respect of loans given to the corporate sector, gross NPAs are expected to be less than 2 per cent by March 31, 2024, down from a peak of 16 per cent as on March 31, 2018. The public sector...
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Can Nano propel fertiliser reforms?
In this backdrop, let us look at the long-pending reform that was recommended by several committees in the past Successive governments have not initiated meaningful reforms in the fertiliser sector due to the significant gap between the cost of fertilisers and the price paid by farmers. Consider this: Currently, the cost of supplying a 45 kg bag of urea, the most widely used nitrogen fertiliser, is Rs 2650, against only Rs 240 paid by the farmer. In the case of diammonium phosphate, or DAP, the cost of a 50 kg bag is Rs 4000, against Rs 1350 paid by farmers. The excess cost over the price of Rs 2410 in the case of urea and Rs 2650 for DAP is paid...
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Rs 2k note exchange: Demonetisation 2.0
Rs 2000 note exchange will not have any impact on black money. It will only help hoarders by exchanging Rs 2000 notes without disclosing their identity In its decision to withdraw Rs 2000 currency notes from circulation announced on May 19, 2023, the Reserve Bank of India (RBI) has stated that they will continue to be legal tender. The notification issued in this regard states:- “…in pursuance of the “Clean Note Policy” of the RBI it has been decided to withdraw the Rs 2000 denomination banknotes from circulation. The banknotes in Rs 2000 denomination will continue to be legal tender.” From the above, prima facie one gets a sense that it is not a demonetization exercise as it happened over...
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