It is generally said that elections are won on ‘perception’ – an impression [or interpretation] based on one’s understanding of something. If, a particular party and its leader is perceived to be good then people vote for it en mass – irrespective of the situation on the ground in regard to its contribution to their welfare and economic development. This is also true of the process of policy formulation which too is guided by impressions formed over a period of time and get assimilated in an institutional set up. The perception influences the decision making process even transcending individuals who sit at the helm. The making of monetary policy is a classic example. Thus, for generations, there has been a...
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Making Indians pay tax – IDS shows way
The income declaration scheme [IDS] announced by finance minister, Arun Jaitely in the Union Budget for 2016-17 and launched on June 1, 2016 with a tenure of 4 months ended on September 30 which witnessed unprecedented action in major collection centers especially in metropolitan cities. IDS was contemplated in the backdrop of mountain of black money circulating in the economy and the determination of Modi – government to sternly deal with it. There was a great deal of expectation that the scheme would help in flushing out thousands of crores of concealed income and property and bolstering revenue. The expectations have borne fruit. At a press conference, Jaitrly informed that undisclosed income and property of Rs 65,250 crores has been...
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Sick fertilizer PSUs – revival or day-dreaming
NITI Aayog has come up with a blue print for 74 loss making and sick public sector undertakings [PSUs]. Of these, it has recommended ‘strategic’ sale of 6, closure of 26 and revival of 22. The selection of units for revival will be based on a three-fold criteria: (i) ‘public purpose’; (ii) revival program is already under-way and (iii) ‘market principle’. While, the first two do not instill confidence, whether the third will actually be practiced is suspect. As regards (i), in this era of reforms and liberalization when the Modi – dispensation has gone that far to open even railways and defense sectors [considered to be exclusive preserve of the state for decades] to private sector including foreign investment...
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Service tax demand on OVL – wholly unwarranted
The tax department is reported to have slapped service tax demand of over Rs 6,100 crore [Rs 2,816.31 crore for April 1, 2006 to March 31, 2010 and Rs 3,286.36 crore for April 2010 to March 2015] on ONGC Videsh Ltd [OVL] – an overseas arm of central government undertaking viz., Oil and Natural Gas Corporation [ONGC]. Including interest and penalty, the liability will be much higher. This has caused much consternation at a time when OVL is already financially stressed. OVL had reported a net loss of Rs 2,093.5 crore in 2015-16 fiscal against a net profit of Rs 1,904.2 crore in 2014-15 despite increase in production of oil and gas. Such humongous demand will seriously impair return from...
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DBT for fertilizers – where is the ‘road-map’?
Inaugurating the 9th Global Agriculture Leadership Summit on September 8, 2016 in New Delhi, the union minister for chemicals and fertilizers, Ananth Kumar said that the government is committed to implement direct benefit transfer [DBT] of subsidy on fertilizers but avoided giving a time frame. Drawing a parallel with LPG [liquefied petroleum gas] where DBT has already been successfully implemented, he opined that things are much more complex here and the government will take a call on this only after successful conduct of trial runs which are currently under way in certain districts of the country. All that is fine but every stakeholder viz., farmer, manufacturer, importer, distributor/dealer etc has a right to know as to how he/she will be...
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Pesticide woes – urgent need to rein in “Me-Too”
The Parliamentary Standing Committee on Agriculture in its report for the year 2015-16 entitled “Impact of chemical fertilizers and pesticides on agriculture and allied sectors in the country” has expressed serious concern over un-scientific and excessive use of pesticides. It laments that associated problems have not been addressed properly by the Government of India [GOI] and State Governments. Even as the committee exhorts GOI for ‘a comprehensive action plan for ensuring environment sustainable manufacturing, import, sale and use of pesticides’, review of the Insecticides Act [IA] [1968] and setting up of Pesticides Development and Regulation Authority [PDRA], it has skirted an innocuous section 9(4) in IA which lies at the root of the mentioned problems. The Registration Committee [RC] –...
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Break doles – ‘poverty line’ nexus
About a year and half back, Modi – government had constituted a 16-member Task Force [TF] under the chairmanship of Dr Arvind Panagariya, vice chairman, NITI Aayog to define an official “poverty line” [a threshold income; a person whose earning is below the threshold is considered poor] which will enable determination of how many people in India are poor? In its report, the TF has stated:- “In view of this lack of consensus (among states), the Task Force recommends that an expert group consisting of the country’s leading specialists on poverty consider the issue in-depth and recommend the poverty line India must adopt for tracking of poverty.” The recommendation is ‘unusual’ and ‘puzzling’. If, a high power committee headed by...
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Collegium system flawed, restore NJAC
On October 16, 2015, a five-judge Constitution Bench of the Supreme Court [SC] vide a majority vote of four-to-one quashed the 99th Constitution Amendment which established the National Judicial Appointment Commission [NJAC] for appointment of judges to the apex court and High Courts. The court also resurrected the collegium system which NJAC Act had replaced on April 13, 2015. Following this, the SC advised the Union government to draft a Memorandum of Procedure [MoP] for appointment of judges. But, it has been repeatedly turning down suggestions made by latter. Those rejected include (i) government reserving the right to reject names recommended by Collegium if they are not in ‘national interest’ and (ii) recording in writing dissent, if any, expressed by...
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Electricity reforms – ‘open access’ stymied by populism
An over-arching component of prime minister Modi’s good governance mantra is effective implementation of the laws and policies & programs of the government. He has amply demonstrated this in several areas viz., DBT [direct benefit transfer] of LPG subsidy, Jan Dhan Yojna [JDY], MGNREGA etc with substantially positive outcomes. However, electricity reforms is one area where proper execution is hamstrung primarily due to non-cooperation from states. At the core of reforms initiated by present dispensation in the power sector is improvement in the functioning of state electricity boards [SEBs], greater regulatory oversight over SEBs and power generators besides creating conditions for enhanced competition in the sector so that consumers get the benefit in terms of lower tariff and better quality...
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Gas fiasco – India’s energy security compromised
In its report submitted in November, 2015, De-Golyer and MacNaughthon [D&M] – a consultant appointed by Union government [following dispute between Oil and Natural Gas Corporation’s [ONGC] and Reliance Industries Limited [RIL] over alleged migration of gas from former’s G4PML and D1/E1 discoveries in KG-DWN-98/2 to latter’s D1 and D3 fields in KG-DWN-98/3 off Andhra coast [better known as KG-D6]] – estimated that 0.4 trillion cubic feet [tcf] of gas had migrated from ONGC ‘idle fields’ to RIL. Following this, the government set up a committee under justice A P Shah in December, 2015 to examine the matter and recommend measures to be taken against RIL for “the unjust benefit” it received from the migration of gas taking in to...
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