During his first term [2014-19], Modi had focused on governance reforms, cutting bureaucratic red tape, simplifying procedures, expediting approvals and improving the ease of doing business. The government also spent its energy on effective implementation of welfare schemes ensuring that the assistance reaches the beneficiaries in full vide the direct benefit transfer [DBT] to their bank accounts using the JAM [Jan Dhan – Aadhaar – Mobile] platform. Now, that the public has given him a resounding mandate to rule for another term in the just concluded general elections, he should use the opportunity to crack the whip on long pending reforms. The key sectors crying for immediate attention including food, fertilizers, oil, gas, power, irrigation, credit etc. At present, all...
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Shun populism, salvage discoms
During the financial year 2018-19, 31 State-run electricity distribution companies [discoms] are reported to have incurred financial losses of Rs 21,658 crore. Coming as it does after a declining trend in their losses during the previous two years [from about Rs 52,000 crore during 2015-16 to Rs 32,000 crore during 2016-17 and further down to about Rs 17,000 crore during 2017-18], this raises concerns. To understand the reversal during 2018-19, it is important to analyze as to why their losses declined in the previous two years. In November 2015, Modi – government had launched Ujwal DISCOM Assurance Yojna [UDAY] to revive the ailing discoms. Under it, they were given a financial restructuring package [FRP] that involved takeover of 75% of...
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GM seeds unauthorized use – now it is Bt-brinjal
For India having limited land resource in the face of increasing demand for food [for rapidly expanding population and increased nutritional intake], there is an urgent need for manifold increase in crop output from every unit cultivable land area to increase supply. The use of genetically modified [GM] crops offers the possibility of reducing crop loss [and resultant increase in yield] by killing pests and combating disease in a manner which saves substantially on pesticide use and is environmentally benign. Yet, Bt cotton is the only GM crop so far allowed for cultivation in India. It is a genetically modified plant in which a gene from the soil bacterium, bacillus thuringensis [Bt], is inserted into the genome of cotton. It...
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Crossing environment hurdle under Modi era
On May 7, 2019, the ministry of environment and forest [MoEF] released a compilation of official documents on environment impact assessment [EIA] related issues. It encapsulates crucial notifications or office memoranda on the guidelines/procedures for environmental clearance for projects across industrial sectors. The compilation covers the period between December 2014 and January 2019 under the present dispensation led by prime minister, N Modi. The document looks mundane but is a window to see through momentous changes which have helped transform the economic landscape of India and have been greatly instrumental in putting the economy on to a high growth trajectory. To get an idea as to how, let us take a look at some of the key changes. On March...
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Now, the Tribunal helps start-ups evade tax
In a major ruling that will have a profound impact on the way companies are taxed, the Income Tax Appellate Tribunal [ITAT] has upheld the validity of the discounted cash flow [DCF] method for arriving at the fair market value of a company’s share. The order says “the DCF method is a recognized method though it is not an exact science and can never be done with arithmetic precision”. The order needs to be viewed in the backdrop of the tax demands raised on hundreds of companies [besides assessment notices on thousands of them] issued by the Income-Tax [IT] department for payment of tax on the extra capital raised through the issue of shares over and above their fair market...
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The job loss theory – a hoax
For more than an year, Congress has been running a orchestrated campaign to dent Modi’s image, its main focus being on the allegation that ‘he had failed to deliver on his promise of generating 20 million jobs every year’. At the outset, it is important to ascertain whether the prime minister really promised 20 million jobs a year? While, he stressed on creating jobs – a major poll plank of the party he leads viz. BJP – the figure found no mention neither in its election manifesto nor in any of his speeches. So, from where did this come? Delivering a speech in 2013, Modi had taken potshot at the then UPA – regime for closure of factories all over...
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WTO talks on e-commerce – why India must join
As many as 76 members of the World Trade Organization [WTO] who constitute nearly half the WTO’s membership have begun a process of framing rules governing cross-border e-commerce. The initiative is being spearheaded by the United States, China, the European Union and Japan – the four largest trading nations – and has the tacit support of leading multinational companies [MNCs] viz Amazon,Walmart/Flipkart, Alibaba etc in the e-commerce market place. India has strongly objected to the above move ostensibly on the ground that the WTO being a multilateral body wherein all decisions regarding international trade and investment are taken by consensus involving all members, the agenda cannot be driven only by a section of the membership. This may be sheer posturing....
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Consumers fleeced – MNCs disingenuous methods
In a market-driven economy, the actions of all stakeholders in the supply chain viz. manufacturers, importers, distributors, retailers etc [including in the e-commerce segment] are driven by age-old dictum ‘consumer is the king’. They are all expected to ensure that the consumers get access to goods at competitive/low price besides providing quality services. On their part, successive governments have introduced reform measures during the last over three decades overarching focus being on removal of controls and liberalization. Additionally, 99% of the sectors have been opened to foreign investment to increase competition and bring more benefits to the consumers. Yet, it is ironical that in their zeal to increase profits, manufacturers including multinational companies [MNCs] have resorted to ‘disingenuous’ ways to...
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IPRs – what prompts US see India as violator
The US Trade Representative [USTR] has placed India on its Priority Watch List [PWL] [besides 10 other countries, including China, Indonesia, Russia etc] alleging lack of “sufficient measurable improvements” to its intellectual property [IP] framework on long-standing and new challenges that have negatively affected American right holders over the past year. The USTR acknowledges that over the past year, India took steps to address intellectual property challenges and promote IP protection and enforcement, but laments that many of the actions have not yet translated into concrete benefits for innovators and creators, and long-standing deficiencies persist. The countries on the PWL for multiple years [India being one of them] will be the subject of increased bilateral engagement with the USTR to ...
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RBI must expose willful defaulters
In 2015, the Supreme Court [SC] had held that the Reserve Bank of India [RBI] cannot withhold information on defaulters and other issues covered under the RTI [Right to Information] Act under the “guise” of confidence or trust with financial institutions [FIs] and is accountable to provide information sought by general public. The apex court had opined that the banking regulator was duty bound to furnish all information relating to its annual inspection report [AIR] on banks and other material under the RTI Act unless the material is exempted from disclosure under the law. It had also ordered that RBI should take rigid action against those banks and FIs indulging in “disreputable business practices”. Yet, under its “Disclosure Policy” [it...
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