At a FICCI seminar on ‘Unleashing India’s Domestic Exploration and Production Potential’, minister for petroleum and natural gas, Dharmendra Pradhan ruled out giving statutory powers to upstream oil and gas regulator Directorate General of Hydrocarbons [DGH]. He was responding to a suggestion made in a presentation by McKinsey that DGH should be given powers similar to the Securities and Exchange Board of India [SEBI] – an independent body which regulates the activities in securities market. DGH is a technical arm of the oil ministry which currently manages hydrocarbon resources, assists the government in auctioning oil and gas exploration fields and monitoring production sharing contracts [PSCs] – those are signed with private contractors who get the fields under the auction process....
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Are credit institutions helping poor farmers?
Even as elections in India have turned into a day-in-day-out affair, two issues that political parties invariably focus on are (i) alleviating farmers distress and (ii) promoting inclusive development taking all sections of farming community on board. Yet, what is happening on the ground is the reverse of what is proclaimed. The more parties promise addressing farmers’ plight, the more the latter end up getting further impoverished. The more they harp on ameliorating the conditions of farmers from backward classes, the more they get entrenched in backwardness. A vivid manifestation of this dichotomy between what is preached and what is in practice is available from a research paper by Chirala Shankar Rao [an assistant professor at the Council for Social...
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Fiscal slippage real worry, not growth
At this critical juncture when the next general election is just about a year away and in a month from now, Modi – government will be presenting its last full fledged budget, prime minister faces two major challenges viz: deceleration in GDP [gross domestic product] and slippage in fiscal deficit. After registering fairly impressive growth during the first three years of its stint [2014-15: 7.5%/2015-16: 8.0%/2016-17: 7.1%], the current year is expected to end with a significantly lower growth of 6.5%. Though, according to the chief statistician, the figure may be revised a bit upward [on receipt of more data], that may not alter the position drastically. However, the government is not unduly perturbed. In fact, from its perspective, the...
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Free power to farmers – a sham, nothing to glorify
The government of Telangana has decided to give 24×7 free power to all farmers in the state from January 1, 2018. A member of parliament [MP] from Telangana Rashtra Samithi [TRS] – the ruling party in the state – wanted the prime minister, Modi to recognize this singular achievement that has never been seen before in any other state. The union minister for railways and coal, Piyush Goyal even while respecting the decision of state government [in deference to the federal character of the constitution] nonetheless advised the latter to make adequate provision in its budget to subsidize the losses resulting from its decision to supply free power. What Goyal was alluding to requires elucidation. Assume that the power consumed...
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Correcting imbalance in fertilizer use – SHC alone won’t help
In 2015, prime minister, Modi had launched National Soil-Health-Card [NSHC] scheme with the objective of galvanizing farmers to replenish seriously degraded soils caused by excessive fertilizer use over several years. It seeks to promote a more judicious mix of fertilizers by testing soil samples of each farm household across the country on 12 parameters and prescribing recommendations on use. To test soil, the country’s cropped area is divided into grids of 10 hectares (ha) for rain-dependent farms and 2.5 ha for irrigated land. One soil sample from each grid is taken and test results are distributed to farmers whose lands fall under the relevant grid. These show which ingredients are depleted or are present in excess. Their soils need to...
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GST – flip flop over inclusion of oil and gas
Once again, there are reports alluding to the possibility of the GST Council – all powerful body mandated to decide on tax rates, inclusions/exclusions, exemptions etc – taking up for consideration inclusion of natural gas within the ambit of GST. The prefix ‘once again’ has a loaded connotation. Even prior to launch of the Goods and Services Tax [GST] on July 1, 2017, finance minister, Arun Jaitely had given a hint that this would be considered in the 18th meeting of the Council to be held just before the launch. But, that was not to be. Six months since then, we are still hearing about its likely consideration! The issue needs to be seen in a much larger perspective. Natural...
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Removing judicial hurdles to accelerate growth
Recently, the Union Cabinet approved amendments to the Specific Relief Act, 1963, and a Bill viz. The Specific Relief [amendment] Bill, 2017 was introduced in the parliament on December 22, 2017. It deals with specific fulfillment of a contract as part of the Government’s ease of doing business policy. The amendments proposes that after two parties enter into an agreement and one of them breaks the contract, the affected party will have the freedom to get the contract executed by a third party. Also, the affected party can get costs and other expenses recovered from the party which broke the agreement [under the existing law, the courts grant monetary compensation in exceptional circumstances]. In case, the contract relates to infrastructure...
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Food – why consumers pay more but farmers get less?
In the just concluded Gujarat assembly elections, BJP got yet another chance to form the government for the sixth time in a row. But, unlike in the past, when it won by a comfortable margin, this time it barely scraped through getting 99 seats in the house strength of 182. A major reason was its dismal performance in rural areas. In particular, the farmers voted against the party expressing resentment over anti-farmer policies followed by the state government resulting in meager income even leading to suicide in some cases. A vivid manifestation of this is available from the Saurashtra-Kutch region where BJP got only 23 out of a total of 54 seats. The farmers suffered due to increase in cost...
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2G scam – CBI court exonerates the corrupt
December 21, 2017 will be remembered as a black letter day in India’s fight against corruption that started over three-and-a-half years ago with prime minister, Modi taking charge in May, 2014. This is a day when the corrupt politicians and their cronies thronged the roads of Delhi and Chennai celebrating – shouting slogans and distributing sweets – following the judgment of a special CBI court that heard the cases of those involved in the infamous 2G scam. The court acquitted all persons – the politicians, ex-bureaucrats and top industry executives – against whom the Central Bureau of Investigation [CBI] and Enforcement Directorate [ED] had framed charges under the Supreme Court [SC] monitored investigations. In his order, the judge OP Saini...
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Curbing tax evasion – why involve the e-portal?
The decision of the GST [Goods and Services Tax] Council – the all powerful body to decide the tax architecture and rates on various items – to require e-commerce companies to levy 1% tax on all transactions made on their platform has led to widespread consternation. So much so, it has been forced to defer its implementation until March 31, 2018. The idea is not new. Even under the erstwhile state sales tax/VAT [value added tax] dispensation, the Karnataka commercial taxes department had directed e-commerce companies to deduct 1% of the money payable to the merchant towards tax and remit the same to the department. The merchant/dealer in turn, could then claim credit or refund on this amount while discharging his/her...
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