Amidst reports of millions of retailers facing heat from the e-commerce majors such as Amazon, Walmart/Flipkart etc, the announcement by Reliance Industries Limited [RIL], chairman, Mukesh Ambani – at the Vibrant Gujarat Summit on January 18, 2019 to make a foray into e-commerce business on a mega scale involving its 3 million merchants [besides its own 7,500 retail stores, 350 million customers and 215 million Jio subscribers] should bring cheer to them all. In a first step towards launching its e-commerce portal, it will sell over a million PoS [point of sale] machines in Gujarat alone as it targets 1.2 million small retailers through e-commerce play. Available at a refundable security deposit of Rs 3,000/-, these machines would help them...
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Black money – the myth around ‘fifteen lakh’
Ever since Modi took charge in May 2014, the opposition parties have been incessantly lambasting him for failing to redeem his promise [as they perceive it] of bringing the black money held by Indians in tax haven jurisdictions abroad and depositing Rs 15 lakh in the account of each citizen. Now, with general elections a few months away, the intensity of their missives has increased manifold. The idea of every Indian getting Rs 15 lakh [for an overwhelming majority this is a mammoth amount] sounds like day dreaming. It is monumental absurdity. With so much money in his/her account, interest income @ 8% on this will be Rs 10,000/- per month. With a regular source of income assured [albeit without...
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Want UBI, shun subsidies
Reportedly, the union government is contemplating to give universal basic income [UBI] of Rs 4000 per acre to each land owning farmer to soothe the nerves of farming community who gave a befitting blow to the Modi – dispensation in assembly elections held in three Hindi heartland states for ignoring their interest. Whether, this will help BJP [the party that Modi leads] during the upcoming general elections remains to be seen. Meanwhile, it is important to understand its full ramifications, in particular, how it stacks up vis-à-vis existing support mechanisms for the farmers. With a view to make fertilizers, irrigation, power, credit etc affordable to farmers, the government gives subsidy on these inputs and is routed through their manufacturers/suppliers. The...
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GM seeds – controls block access to new solutions
Bt [Bacillus thuringiensis] cotton – the only genetically modified [GM] crop so far allowed for cultivation by farmers in India – is genetically tweaked to kill bollworms that ravage cotton crops. It promises substantial increase in return by saving on pesticide use and increase in crop yield. At the price paid for Bt cotton seed including technology fee [this is less than what the innovator viz. Monsanto charges even in China], farmers get handsome returns. Since, introduction [2002] the use of Bt cotton in India has increased manifold with area under coverage leapfrogging from a mere 50,000 hectare then to around 12 million hectare covering major states such as Gujarat, Andhra Pradesh, Maharashtra etc. At present, 98 per cent of...
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Quota in jobs – go for economic criteria only
The decision of the Modi – government to give 10% reservation to ‘economically weaker section’ [EWS] of the society in educational institutions and government jobs [a constitutional amendment bill in this regard was passed on January 8/9, 2019] prima facie looks politically motivated. This is because the decision was taken towards the fag end of its term and impending general elections in April/May, 2019. Indeed, the 124th constitutional amendment bill was presented for consideration and passage by Lok Sabha [LS] in its last sitting on January 8, 2019. Further, the session of Rajya Sabha [upper house] was extended by a day to ensure its passage. The political significance of the decision can also be gauged from the fact that in...
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Unshackle public sector banks
Banking is an inherently hugely profitable business. To get a sense, all that one needs to do is to look at the hundreds of thousand crore that a bank gets in savings account on which it pays a meager 3.5%-4% interest and earns a minimum of 10% by lending. Even on the funds it garners by way of term deposits [6.25%-7.5% depending on period], there is room for making good money. Yet, Indian banks especially public sector banks [PSBs] have posted huge losses in recent years leading to corresponding erosion in their capital and resultant impairment in their capacity to continue with lending. 11 out of a total of 21 PSBs were even put under Prompt Corrective Action [PCA] framework...
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Modi dismisses loan waiver, empowers farmers
The ‘chowkidar chor hai’ [a euphemism to describe prime minister, Modi as thief in the context of allegations against him on the controversial Rafale deal] jibe hurled by Rahul Gandhi during his election campaign in three Hindi heartland states ad infinitum – a charge that caught the imagination of the electorate – was a major factor contributing to BJP defeat [Supreme Court judgement exonerating Modi from the charge came after voting was over]. The other reason for the grand old party staging a come-back was a promise by its President for waiving farm loans. This was too much of a temptation for the farmers. Even those farmers who were in a position to repay decided not to pay in the...
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GST – keep it simple to maximize revenue
An overriding criterion for assessing the impact of the Goods and Services Tax [GST] introduced from July 1, 2017 is the revenue garnered under the new dispensation. The collection during the 8 months of the last financial year [March, 2018 is excluded as revenue on tax levied in that month would accrue only in the following month i.e. April] Rs 89,000 crore per month. Given unavoidable glitches during the initial phase of implementation of any new system and it takes time for it to stabilize, collections during this period may not be a good indicator. However, during 2018-19, one would have expected an unprecedented surge. This is all the more when one takes into account implementation of anti-evasion measures such...
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Farmers’ distress, rising sops, depleting treasury
After its defeat in three Hindi heartland states Madhya Pradesh [MP], Rajasthan and Chattisgarh, Modi – dispensation has gone into introspection mode. The top brass has recognized that a major factor behind the set-back was growing resentment among the farmers over its policies and schemes which they felt are responsible for their stagnating/declining income. Sensing that this could seriously affect party’s fortunes in upcoming general elections, it is brainstorming over alternate policies which could address their concerns. Taking cue from Telengana’s Rythu Bandhu under which the state gives Rs 4000 per acre to each farmer – as crop neutral investment support – before the start of the season Kharif [April-September] and Rabi [October-March], an idea is to give farmers assured...
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Ailing discoms render industry uncompetitive
The uninterrupted supply of requisite units of power at competitive rate to industries helps them reduce the cost of production. This along with lower cost of other infrastructure such as transport, storage and handling etc can give them the strength to compete in the domestic and international markets. This will also enable them temper their resistance to multilateral trade agreements such as the Regional Comprehensive Economic Partnership [RCEP] – between the 10 members of ASEAN plus 6 countries outside the group viz. Australia, New Zealand, Japan, South Korea, China and India – which promise manifold increase in access to markets but are stymied by fear of low cost import consequent to elimination of customs duty mooted under these agreements. Yet,...
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