At the recently concluded ASEAN [Association of South East Asian Nations] Summit in Singapore [November 11-15, 2018], prime minister, N Modi called for early conclusion of the Regional Comprehensive Economic Partnership [RCEP] agreement to facilitate signing of the deal by early 2019. The RCEP is a conglomeration of the 10 members of ASEAN [Malaysia, Indonesia, Thailand, Vietnam, Singapore, Philippines, Myanmar, Brunei, Laos and Cambodia] plus 6 countries outside the group viz. Australia, New Zealand, Japan, South Korea, China and India. This will be a giant grouping covering a population of 3.6 billion or 50% of the world and GDP at US$ 25 trillion or nearly one-third of the global. Under Modi’s Act East policy with focus on promoting economic cooperation...
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Amazon/Flipkart flouting FDI norms – really!
During hearing on a public interest litigation [PIL] in Delhi High Court [DHC], on October 31, 2018, the Enforcement Directorate [ED] informed that it is investigating alleged violation of the Foreign Exchange Management Act [FEMA] against foreign majors such as Amazon and Flipkart. The specific charge is that these companies have violated the extant norms for foreign direct investment [FDI] guidelines as contained in Press Note [PN] 3 [2016-17]. The PN 3 allows 100% FDI in the ‘market-place’ model for e-commerce. An entity working on this model offers a platform to sellers and buyers to conduct transactions. It acts as a facilitator by offering them services such as booking order, raising invoice, arranging delivery, collecting payments, handling rejections etc. It...
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Demonetization – the poor backs Modi
On the second anniversary of demonetization [on November 8, 2016, the prime minister, Modi had declared the old 1000/500 rupee notes invalid], the opposition parties led by grand old Congress continue to demonize this far reaching policy reform alleging that it has led to precipitous decline in economic growth, caused unprecedented miseries to the poor even as the rich continue to add to their wealth and have even got away scot free converting their black money/unaccounted cash into white. There was some short-term disruptive effective [Modi himself had anticipated at the time of announcement and even requested the citizens to bear this pain for the sake of long-term gains] which was manifest in decline in GDP [gross domestic product] during...
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Rs 3.6 trillion demand – should RBI accept?
The malicious propaganda campaign launched by the grand old party [read: Congress] to discredit prime minister, Modi and tarnish his image has reached a crescendo with its President, Rahul Gandhi now alleging that the former is hell bent on plundering the Reserve Bank of India [RBI] to the tune of Rs 360,000 crore to deal with the mess created by his policies and actions. Rahul Gandhi’s indictment is two-fold. First, he holds Modi – dispensation squarely responsible for the mess. Second, he questions the logic of the center asking RBI to give a mammoth sum. On both counts, his diatribe is untenable and preposterous. As for the mess, he is essentially referring to the banks’ non-performing assets [NPAs] – a...
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Power battles – the consumer loses, yet again
In a bid to give a boost to power generation in India and make it available at ‘affordable’ and ‘stable’ rate to the consumers, in the first decade of 2000s, the then government had mooted the idea of ultra mega power projects [UMPP]. Two such plants were bagged by Tata Power Ltd [TPL] and Adani Power Ltd [APL] under tariff-based competitive bidding [TBCB] each with installed capacity of 4000 MW and 4620 MW respectively. While, TPL is based entirely on imported coal, APL uses 70% domestic and 30% imported coal. The projects were committed to supply power to state electricity boards [SEBs]/power distribution companies [PDCs] at fixed tariff all through project’s operational life. The tariff in case of TPL was...
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Ballooning food subsidy, looming debt trap
Even as the union finance minister, Arun Jaitely exudes confidence that the government will be able to stick to the fiscal deficit target for the current year, it is battling the consequences of ballooning food subsidy. In particular, it is making all possible efforts to shield the former from the negative effects of the latter. The food subsidy arises because of the overarching commitment of the government under the National Food Security Act [NFSA] to provide food to over 2/3rd of the population at heavily subsidized price of Rs 1/2/3 per kg for coarse cereals, wheat and rice. The cost of procurement, storage and distribution being much higher, the differential amount represents the subsidy. The Food Corporation of India [FCI]...
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Fertilizer tantrums, farmers’ woes
The woes of farmers refuse to go away. This time around, the steep increase in price of fertilizers – key input used in crop production – during the current year has increased their miseries. During Kharif [April-September] 2018, the price of di-ammonium phosphate [DAP] – a major source of ‘phosphate’ or ‘P’ nutrient supply – increased by 30% over Kharif [April-September] 2017. Likewise, the price of complexes and muriate of potash [MoP] – main source of ‘phosphate’ and ‘potash’ or ‘K’ nutrient – increased by 15-60% during Kharif 2018 over Kharif 2017. The escalating trend has continued during Rabi [October 2018-March 2019] season as well. The price of DAP has increased by a further 12-13% during Rabi [Oct 18-March 19]...
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Oil retailing – end PSUs monopoly
At the current juncture, when the economy is battling the consequences of the steep increase in the international price of crude [India depends on imports for over 80% of its oil requirements] and there is an urgent need to mitigate the adverse effects, logically the focus has to shift to explore all potential areas for cost reduction. An important area relates to enticing private sector in marketing of petroleum products which today is the monopoly of public sector undertakings [PSUs]. The infrastructure for storage, handling, import terminals, transportation, marketing and distribution of petrol, diesel, LPG, kerosene etc is dominated by oil PSUs viz. Indian Oil Corporation Limited [IOCL], Bharat Petroleum Corporation Limited [BPCL] and Hindustan Petroleum Corporation Limited [HPCL]. Out of...
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Trim sops, create jobs
For a decent living, a person needs a house [reasonable size], a power connection, supply of clean fuel, access to food at affordable price, medical facilities and basic education. A person who has a good source of income on a sustainable basis is well equipped to make arrangement for all these basics. But, what about those who are not so blessed? Indeed, an overwhelming proportion of our population belong to this category and they are the ones who look to the government for providing help in arranging for these. Prime Minister, N Modi has often said that unlike the previous dispensations who promised these things in bits and pieces – that too keeping an eye on elections – and failed...
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Trump is hell-bent on decimating WTO
Ever since, Donald Trump took charge, he has made systematic efforts to demolish the very foundation of World Trade Organization [WTO] which is the epitome of ‘free’ and ‘fair’ trade based on transparent and non-discriminatory rules. At the 11th WTO ministerial conference held in Buenos Aires during December 10-13, 2017, the USA rejected the demand of developing countries for finding a ‘permanent solution’ to stockholding for food security which was agreed to four years ago in the 9th ministerial held in Bali. Still worse, it has dumped the Doha Development Agenda [DDA] which has been assiduously pursued by all members of WTO ever since 2001. Second, in complete defiance of rules under WTO, it has hiked import duty on steel...
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