In the current times, the consumers of a variety of items from FMCG to electronics to consumer durable etc are having a hey day with access to these at substantially low price from e-commerce platform. Several products are available at a discount as high as 50% [or even higher] over the maximum retail price [MRP]. Juxtaposed with the fact that the requested item is delivered right at the doorsteps of the consumer makes the buy from the platform all the more attractive. But, there is a darker side to it. A close look at the very dynamics of how such heavy discounts are given would show it up. At the very outset, it is important to understand that MRP is...
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Oil price puzzle – has government run out of options?
Reportedly, the three public sector undertakings [PSUs] in the downstream oil segment viz. Indian Oil Corporation [IOCL], Hindustan Petroleum Corporation Limited [HPCL] and Bharat Petroleum Corporation Limited [BPCL] were directed not to give effect to hike in price of petrol and diesel by Rs 1 a liter each that had become necessary due to increase in the international price of these products. The prices of these products were decontrolled, petrol in June 2010 and diesel in November 2014 and since then, the oil PSUs set their prices on the basis of movement in their international price [using import parity price and export parity price in the 90:10 ratio]. Whereas, up to May 31, 2017, these were revised fortnightly, from June...
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Assuring MSP – MAS hugely negative for centre and state budgets
Stung by depressed price realization by farmers much below the minimum support price [MSP] and impending general elections next year, Modi – government announced in the Union Budget for 2018-19 that henceforth, they will be assured MSP which is at least 1.5 times the cost of production. Mere assurance of a remunerative price is of no use unless the farmer is able to sell his entire produce at this price. Keen to ensure that this happens, the government asked NITI Aayog to come up with suggestions. The latter prescribed three alternatives viz. market assurance scheme [MAS]; deficiency payments and incentives to private sector to buy farmers produce at MSP. Under MAS, agencies of the state buy the produce directly from...
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Don’t kill Aadhaar at the altar of privacy
The Comptroller and Auditor General [CAG] has exposed diversion of subsidized food meant for poor households under the National Food Security Act [NFSA] in Delhi – using fraudulent means such as fake ration cards, fake mobile numbers etc – causing loss of over Rs 7000 crore to the exchequer. This is one among several such scams resulting in massive leakage from Rs 145,000 crore being the food subsidy spent by the union government annually. Likewise, there are monumental leakages from other welfare schemes such as fertilizer subsidy, LPG subsidy, MGNREGA [Mahatma Gandhi National Rural Employment Guarantee Act], education subsidy, pension, power subsidy etc. In other areas such as real estate, a handful of persons appropriate public land in prime locations...
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GST/Demonetization/IBC – the trio behind inclusive growth
While, presenting the budget for 2017-18, the finance minister, Arun Jaitely had fixed a target of Rs 9.8 lakh crore for collection of direct tax. Against this, the government has already touched Rs 9.95 lakh crore and is expected to reach Rs 10 lakh crore by the time figures for the last few days of March, 2018 get confirmed. Under the Goods and Services Tax [GST] rolled out on July 1, 2017, out of total collection of Rs 7.20 lakh crore till February, 2018, centre’s share is Rs 4.60 lakh crore which is Rs 16,000 crore higher than the target [Rs 4.44 lakh crore]. This is despite the fact that various tax evasion and safety measures such as electronic-way [e-way]...
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IPR protection – why India ranks poorly?
According to the annual report prepared by the Global Innovation Policy Centre [GIPC] of the US Chambers of Commerce, India has increased its score in the International Intellectual Property [IIP] Index, from 25 per cent [8.75 out of 35] in the 5th edition of the Index to 30 per cent [12.03 out of 40] in the 6th edition. India now ranks 44th among 50 nations up from 43rd out of 45 countries last year. The report analyses the intellectual property [IP] climate in 50 world economies based on 40 unique indicators that benchmark activity critical to innovation development surrounding patent, trademark, copyright, and trade secrets protection. The improvement in the score reflects positive reform efforts on patentability of computer-implemented inventions [in July...
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Salvaging failed banks – don’t punish depositors
The unsustainable high NPAs [non-performing assets] of banks – most of these with public sector banks [PSBs] – have caused massive erosion in their capital. This in turn, has forced the government to come out with massive infusion of fresh capital to bail them out. But, this has led to serious concern about the impact it will have on the center’s balance sheet and its fiscal consolidation efforts. No wonder, international financing agencies such as International Monetary Fund [IMF] and World Bank as also rating agencies have flagged ballooning NPAs as major area that could mar the prospects of India embarking on a high growth trajectory [notwithstanding fundamental reforms such as demonetization and GST implemented by Modi – government]. The...
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Telecomm – is the regulator siding with predator?
A little over 18 months ago, in a bizarre move rarely seen before in any part of the world, a Greenfield 4G operator viz. Reliance Jio [RJ] entered the Indian telecomm market with ‘free’ and ‘unlimited’ voice calls and low-cost data. After launching an introductory offer in September, 2016 for free – both data and voice for 6 months, from April, 2017, it charged data at throwaway price Rs 50 per GB, even as voice calls continue to be free ad infinitum. For a conglomerate [read: RJ] investing hundreds of thousands crores in laying infrastructure and paying heavily for purchase of spectrum, an attempt to sell services virtually for free was a brazen case of ‘predatory’ pricing with the sole...
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Rising gas price, fledgling fertilizer reform
The price of domestic gas is expected to go up from existing US$ 3.21 per million British thermal unit [mBtu] [on net calorific value basis] to US$ 3.40 per mBtu for six month period beginning April 1, 2018. The hike taking the price back to the level reached two years ago – has brought to the fore some niggling questions which successive ruling dispensations have dodged for several decades. First, who pays for the extra price that user industries – mainly fertilizers [besides power, CNG and PNG] – shell out? The urea industry alone requires over 45 million standard cubic meter [mmscmd] of gas as against total domestic supply of 90 mmscmd. The maximum retail price [MRP] of urea is...
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Rule based global trade – are there any takers?
The 11th WTO [World Trade Organization] ministerial conference held in Buenos Aires during December 10-13, 2017 had ended up in a fiasco as there was not even a customary declaration not to talk of specific mandate/work program to take things forward. Meanwhile, Indian commerce minister, Suresh Prabhu held an informal meeting of the members of the WTO in New Delhi on March 19-20, 2018 [delegates from as many as 52 countries, including the US and China participated] to “find ways to identify common ground for strengthening and re-invigorating the Organization”. Even as these efforts go on to ensure that WTO stays relevant, Donald Trump is leaving no stone un-turned in demolishing the very foundation of this multilateral body. In Buenos Aires,...
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