One day morning, my maid informed me that a lady in another flat in the cooperative society [where I live] had offered her Rs 50,000/- to deposit in her account which should be returned in due course. She wanted my advise as to what she should do? I told her emphatically not to fall prey to such machination. The issue brought to my attention is resonating in millions of homes all over India. After prime minister, Modi announced on November 8 [8 PM], 2016 demonetization of 1000 and 500 rupee notes effective from zero hours of November 9, those holding un-accounted income/wealth or ‘black money’ [as it is known in common parlance] have been desperately look for means to convert...
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Demonetization of 500/1000 notes – body blow to black money
When, the 4 months window [June 1- September 30, 2016] for declaring black money under income declaration scheme [IDS] was open [under it, a person could pay 45% of disclosed amount (30% tax plus 15% penalty) and thus convert black in to white], prime minister Modi had issued a veiled but stern warning to tax dodgers. He opined that persons who do not come clean now, will be dealt with a heavy hand after September 30, 2016. Based on information collected from various sources viz., banks, property registration offices, jewelers and other platforms where big ticket transactions are done, finance ministry had compiled a list of 9 million persons who spent up to Rs 1 crores in previous year but...
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Poorly enforced contracts shatter Modi’s dream
On assumption of office, prime minister, Modi made a huge commitment to substantially improve the ease of doing business in India. He set a very ambitious target of catapulting India’s ranking in this regard to amongt top 50 countries. That was in the mid – 2014. Two-and-a-half years since then, India continue to languish at number 130 out of 189 countries in the ease of doing business as per World Bank’s Doing Business Report 2016 [a mere 4 places up from last year’s adjusted ranking of 134]. When, seen in the backdrop of far reaching reforms implemented by NDA – government [all aimed at achieving the goal set by Modi] in almost all areas of governance, this is a big...
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Good governance – slaughtered in Bombay House
The revelations made by Cyrus Mistry ex-Chairman, Tata Sons immediately following his dismissal point towards corporate governance in India reaching a new low. This is a matter of serious concern to investors/shareholders – including foreign investors – who has stakes in Indian companies. If, it can happen in one of India’s leading conglomerates which has a turnover of close to Rs 700,000 crores, market capitalization of Rs 850,000 crores, operations in more than 100 countries and has about 700,000 employees on its rolls, this speaks volumes about the extent of degeneration that has set in corporate board rooms. So, what is so disconcerting about recent events at Bombay House? The most worrying point is the brazen display of muscle flexing...
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Gains from neem coating urea – real or imaginary!
The exhortations by prime minister, Modi and his cabinet colleague, chemicals and fertilizer minister, Ananth Kumar regarding the success of neam coating of urea [ordered by Modi last year to cover all of domestic production and import] could have much deeper ramifications than mere stoppage of diversion to industrial use and smuggling to neighboring countries. The total consumption of urea in India is about 30 million tons annually including 22 million ton indigenous and 8 million tons imported. Since, all of this is sold by manufacturers/importers at a low ‘controlled’ price under the Fertilizer Control Order [FCO], the excess of cost of production/import and distribution over this price is reimbursed to them as subsidy by Government of India [GOI]. For...
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GST – don’t fiddle with its soul
The GST Council created via the constitution amendment act on GST [Goods and Services Tax] that includes the finance ministers of all states and headed by union finance minister, Arun Jaitely is currently having brainstorming sessions to decide on the rate structure, slabs, exemptions etc. In this regard, all crucial numbers are expected to be finalized in its next meeting slated for November 3-4, 2016. Meanwhile, from deliberations thus far, a consensus view appears to be emerging in favor of 4 rates viz., 6% for essential and daily use items, two standard rates of 12% and 18% respectively and the highest rate 26% on so called de-merit goods such as luxury cars, aerated beverages, pan masala and tobacco products etc....
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Darkness amidst sunshine
At present, India is the fastest growing economy [registering a growth rate of around 7.5% for two consecutive years viz., 2014-15 & 2015-16 and likely to be even higher during the current year as well] at a time when majority of economies – developed and developing – are either stagnating or caught in low growth trap. That makes us feel really very proud and confident. An equally heartening fact is the increase in the number of high net-worth individuals [HNI: defined as a person having wealth of US$ 1 million] to over 200,000 during 2015 [from 180,000 in 2014]. That makes India home to ‘Fourth’ largest population of HNIs in Asia-Pacific [APAC] region. Together, these HNIs account for US$ 797...
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Fiscal consolidation – Jaitely is on course
The much touted spectrum auction has ended in a fiasco. As against an astronomical over Rs 560,000 crores being the expected proceeds from the auction, the actual sale has been a little over 10% or Rs 65,000 crores. Of this, around Rs 32,000 crores will be available during the current year. Critics aver that this will cast a shadow on the ability of finance minister, Arun Jaitely to achieve the fiscal deficit target of 3.5% of GDP [gross domestic product] during the current year. This is because under this head alone, there will be a shortfall of Rs 32,000 crores vis-à-vis the projected level of Rs 64,000 crores. Significant shortfall is also expected in proceeds from divestment of government equity...
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Gas pricing – keep it formula driven
Following the downward revision in the price of domestic gas by 18% to US$ 2.5 per million British thermal unit [mBtu] – on gross calorific value [GCV] basis – from October 1, 2016, the two public sector undertakings [PSUs] in the upstream oil & gas segment viz., Oil and Natural Gas Corporation [ONGC] and Oil India Limited [OIL] have raised a big hue and cry about its likely impact on continued viability of their operations. The ONGC/OIL duo have contended that the revised price at US$ 2.78 per mBtu on net calorific value [NCV] basis [corresponding to US$ 2.5 per mBtu on GCV] is even lower than their cost of production at US$ 3.59 per mBtu and US$ 3.06 per...
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Reining in LPG subsidy – ‘surgical strike’ needed
Hon’ble Prime Minister, N Modi has made pronouncements ad infinitum that subsidies will be rationalized to take these away from the rich/better-off and given to the poor besides plugging leakages. While, on the latter, the government has made significant progress, in regard to former, there is little action on the ground. Even in LPG [liquefied petroleum gas] where it has performed an extraordinary feat of virtually eliminating leakages and saving about Rs 15,000 crores annually under PAHAL [Pratyaksha Hastaantarit Laabh] for direct benefit transfer [DBT] of subsidy [under it, a record 30 million bogus/fictitious users were excluded from the list of beneficiaries], it has done little to meaningfully address the overwhelming bias towards the rich, much less eliminating it. According...
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