Last month, the Devendra Fadnavis government approved amendments to the Maharashtra Agricultural Produce Marketing [Development & Regulation] Act, 1963 to bring it in line with the Centre’s Model Agricultural Produce and Livestock Marketing –[Promotion & Facilitation] Act, 2017. As per the amendment, the entire state is declared as a single market instead of the earlier rule of notifying “market areas” where sale/purchase of farm commodities could take place. Henceforth, a trader will need a single license enabling him to purchase agricultural produce from any mandi within Maharashtra. This is a good decision that can help farmers realize a better price. In yet another decision, the Maharashtra government has made purchase of a farm commodity below the official minimum support price [MSP] a...
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Royalty/cess on oil – Modi ends a bizarre practice
In the past, governments have used profit making public sector undertakings [PSUs] in the oil and gas sector viz. Oil and Natural Gas Corporation [ONGC] and Oil India Limited [OIL] for reining in fiscal deficit that was getting out of control – most of the times – due to profligacy in revenue expenditure triggered by sheer populism to garner votes. The prominent measures used were asking them to give discounts on sale of their crude output to downstream oil PSUs such as Indian Oil Corporation [IOCL], Bharat Petroleum Corporation [BPCL] and Hindustan Petroleum Corporation [HPCL] so that the latter in turn, could sell petroleum products viz. LPG, kerosene et at subsidized price to the consumers; insisting on high revenue share...
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Demonetization forces tax compliance on Indians
Nearly two years after the demonetization [November 8, 2016] announced by the prime minister, N Modi, the Reserve Bank of India [RBI] has released – in its Annual Report for 2017-18 – the numbers on the value of the demonetized old 500/1000 rupee notes that were not returned to the banking system. This is about Rs 10,700 crore out of a total of Rs 1541,000 crore which were with the public as on November 8, 2016. This has triggered waves of exhilaration among the critics of demonetization [especially the main opposition party Congress] who have been quick to point out that this was a flop show. They contend that it achieved nothing in terms of its stated objective of denting...
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Fertilizer subsidy payments assured within a week – a joke!
Considering the crucial role played by fertilizers in increasing food production and the overarching need to make it affordable to farmers, the union government has followed a policy of controlling their maximum retail price [MRP] at a low level unrelated to their cost of production and distribution which is higher. To ensure that production is viable at this price, it gives subsidy to the manufacturer to reimburse the difference between the two. The amount of reimbursement is known as subsidy. In case of urea, the subsidy varies from unit to unit and is administered under the New Pricing Scheme [NPS] whereas for decontrolled complex fertilizers, a ‘uniform’ subsidy fixed on per nutrient basis is given to all manufacturers under the...
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Falsehoods – It’s all about grabbing power
Having ruled the country for several decades – either directly or indirectly under coalition arrangement with pliable parties – the grand old party [read: Congress] can’t not relish the idea of someone coming from a humble background N Modi being at the helm. That Modi’s party BJP alone got a majority of its own [never seen before during the last 30 years or so], is of no consequence as the Gandhi family ruled Congress has arrogated to itself an eternal right to govern. This is the only interpretation of Indian democracy that the party understands. It is this anathema for any other leader [in this case, Modi who arouses maximum hatred] that made Dr Manmohan Singh – following his master’s...
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MSMEs – the twin reforms boost
The micro, small and medium enterprises [MSMEs] occupy a pivotal position in the Indian economy. The sector consists of a total of 63 million units which employ around 111 million people. It contributes about 30 per cent to the GDP, accounts for 45 per cent of manufacturing output and about 40 per cent of total exports. Considering its huge job creating potential [next only to agriculture and allied activities] and the power to increase income across a wide spectrum of the populace, it fits well into the inclusive development agenda of Modi. The best way to fully leverage the demographic dividend [65% of India’s population is below 35 years] is to create opportunities for growth in MSMEs. The health and...
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Economic growth – NDA has distinct edge over UPA
The report of a committee under Dr Sudipto Mundle – set up by the National Statistical Commission [NSC] under the Ministry of Statistics and Program Implementation [MoSPI] – whose task was primarily to generate back-series data on growth in GDP at factor cost using the new base year 2011-12 has sent the grand old national party [read: Congress] into a jubilation mode. The cause for the outburst is GDP growth in double digit [10.08% to be precise] projected by the committee for the year 2006-07. That happened to be the third year under the first tenure of then UPA – government led by Dr Manmohan Singh. For a party having got jolts elections-after-elections, there is hardly any reason to cheer....
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Reining in subsidies – controls must go
If, there is any political dispensation that has carried out administrative reforms in the true sense of the term, it is the present NDA – government led by Narendra Modi. He has delivered governance whose hallmark is ‘transparency’ and ‘honesty’. These traits have glided him towards a policy driven state, maximum focus on e-governance, minimizing use of discretion and elimination of physical interface. The results are there for all to see in terms of efficient delivery of services and reaching financial assistance and subsidies in full to the beneficiaries by leveraging technology especially direct benefit transfer [DBT]. This has also saved tens of thousands crore every year. That money is being re-deployed for building roads, highways, rails, ports, hospitals, schools...
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Shun differential pricing of gas
Prime Minister Narendra Modi has set an ambitious target of cutting India’s import dependence for oil from existing around 80% to 67% by 2022 and further down to 50% by 2030. To meet the target, his government has taken several initiatives to create a conducive ‘policy’ and ‘regulatory’ environment for boosting domestic production of hydrocarbons. A path-breaking policy initiative was introduction in July, 2017 of the Hydrocarbon Exploration and Licensing Policy [HELP] in place of the subsisting New Exploration and Licensing Policy [NELP] that was launched in 1999. Also dubbed as Open Acreage Licensing Policy [OALP], under HELP, bidders can get a single license for exploration and production of conventional hydrocarbons such as oil, natural gas as well as unconventional including shale...
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Power NPAs – don’t bail out defaulting promoters
In a bid to resolve mounting non-performing assets [NPAs] of public sector banks [PSBs] in a time bound manner, on February 12, 2018, the Reserve Bank of India [RBI] had issued an order requiring banks to initiate resolution of stressed assets – the so called special mention account [SMA-2] wherein either the loan or interest is in default for 60-90 days. As per the above circular, as soon as there is a default in the borrower’s account with any lender, all lenders – singly or jointly – shall initiate steps to cure the default. The resolution plan [RP] may involve any actions/reorganization including, but not limited to, regularization of the account by payment of all over dues by the borrower entity,...
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