On August 15, 2014 the prime minister had announced government’s intent to trifurcate Food Corporation of India (FCI) in to three entities each devoted to procurement, handling and distribution. Being a cosmetic exercise and far from making a dent on maladies afflicting the sector, the announcement failed to enthuse analysts. In a (pleasant) surprise turn of events, a committee constituted up under chairmanship of Mr Shanta Kumar – a senior leader of BJP and ex-minister in the NDA government under Vajpayee – has come up with recommendations which are out-of-the-box and hold a promise of bringing about a ‘paradigm shift’ in India’s food economy. It recommends:- (i) drastic curtailment in the role of the state/government in addressing food needs...
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ONGC – no more ‘milching’ please
Presenting his first maiden budget in July 2014, finance minister Arun Jaitely had accepted a daunting challenge of 4.1% fiscal deficit for 2014-15. On February 28, 2015, while presenting budget for 2015-16, Jaitely reported that the target had been achieved. The achievement was at the cost of massive reduction in plan expenditure from budget estimate (BE) of Rs 575,000 crore to about Rs 468,000 crore as per revised estimate (RE), a fall of Rs 107,000 crore. For this, one can’t fault present government as it inherited a weak economy which resulted in equally massive drop in tax receipts from about Rs13,64,000 crore (BE) to Rs 1251,000 crores (RE), a fall of Rs 113,000 crores. During the last 9 months of...
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Fertilizer subsidy – direct transfer ‘miles away’
Those of us expecting big bang announcement in budget for 2015-16 in regard to fertilizer reforms may have been disappointed. The budget for 2014-15 had mentioned that the government would set up an Expenditure Reforms Commission (ERC) on rationalizing subsidies. ERC under Dr Bimal Jalan ex-governor, RBI submitted its interim report about a month back which heightened the possibility of major initiatives being taken in this budget. Yet, in his speech, finance minister maintained a stout silence. Are we then to conclude that government has missed an opportunity to reform the sector yet again? Such a conclusion may be a bit premature if one were to take a cue from post-budget briefing of Chief Economic Adviser (CEA), Arvind Subramanian and...
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Modi’s dream budget – 2015/16
Borrowing from cricket terminology, media is agog with description of Modi – government first full-fledged budget 2015-16 as a ‘super-budget’. There could not be a more apt description. Finance minister Jaitely has delivered wholeheartedly on the hopes and aspiration of 1.25 billion people of India who only 9 months ago had given Team Modi a resounding mandate to govern and extricate them from the deep economic morass they were plunged in to, courtesy a decade of mis-management and policy paralysis. People gave command to Team Modi on five major planks viz., (i) inclusive development; (ii) building infrastructure; (iii) social safety net (iv) poverty alleviation and (v) countenancing the menace of corruption. On all these counts, the team has delivered without...
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Land acquisition ordinance is pro-farmer
The entire opposition is up in arms against the Land Acquisition ordinance promulgated by Modi – government in December, 2014 which the latter is now seeking to replace by a legislative enactment. The opposition is lambasting Modi for making amendments to the Act passed by the erstwhile UPA dispensation in 2013 which they allege, are pro-industry/business and anti-farmer. The allegations are without any valid basis. These are political statements aimed primarily at embarrassing a government which is committed to inclusive development. Modi’s agenda aims at increasing employment and income to improve lot of poor including farmers. The amendments to 2013 Act are guided by this over-arching objective. Yet, why does opposition think otherwise? The 2013 Act required prior consent of 70%...
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Stop cult of power freebies
Inaugurating the first Renewable Energy Global Investors Meet (RE-Invest), prime minister Modi castigated political parties for promising to supply power at reduced rates saying how could they make such promises when the concerned states are dependent on electricity supply from outside. The remark was targeted at Aam Aadmi Party (AAP) which in its election manifesto, had promised to cut electricity bills by half even as Delhi meets nearly 70% of its power requirements from other states. In 2015-16, its total requirement is expected to be over 6000 MW; so it will draw 4200 MW from other states. However, it would be imprudent to dismiss this as a political statement directed at AAP alone. Cutting across party lines, Modi was making...
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Modi’s juggernaut is unstoppable
Kejriwal led Aam Aadmi Party (AAP) has registered a thunderous victory in the just concluded Delhi assembly elections. AAP has won a monumental 67 out of a total of 70 seats that translates to a scorecard of 96%, a feat rarely seen in elections the world over. While, Congress has been decimated securing a big zero, BJP is reduced to a trifle 3, down from 31 it won in December, 2013. Critics have interpreted this to be a referendum on Modi and even surmised that this will stop his juggernaut. Such interpretation is figment of one’s imagination. It reflects a mindset of his opponents who suffered ignominy of defeat in general elections last year and were desperately looking for a...
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Patent linkage and data exclusivity – are they TRIPs plus?
The testimony of Michael Froman, US Trade Representative (USTR) before Senate Finance Committee mentioning commitments given by prime minister Modi on intellectual property rights (IPR) issues during former’s recent visit to India has evoked strong reaction from domestic pharmaceutical industry and pro-health groups. The industry alleges that the government has given commitments that go much beyond India’s obligations under TRIPS (trade related intellectual property rights) agreement of WTO. The two areas of specific concern raised by it are (i) data exclusivity (ii) patent linkage; better known as TRIPs plus. The allegations are without basis. All that government promised was that concerns expressed by US industry over alleged poor enforcement of IPR laws will be brainstormed in the Working Group set...
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Unleashing reforms in food sector
Prime Minister, Modi has directed the food ministry to take a look at the recommendations of the Shanta Kumar committee on restructuring and re-orientation of food procurement, handling and distribution system and prepare action points for consideration by the cabinet committee on economic affairs (CCEA). The committee was set up in the back drop of Modi’s statement in his Independence Day address on August 15, 2014 that his government was considering to trifurcate the operations of monolith Food Corporation of India (FCI) in to three distinct entities each focusing on procurement, handling and distribution with a view to improve efficiency and reduce cost. This had left an impression that the existing dispensation of government buying ‘unlimited’ quantities of food from farmers...
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Undermining patents – now vide price control
A couple of years back, an internal committee of the department of pharmaceuticals (DoP) in the Ministry of Chemicals & Fertilizers had recommended a negotiated price mechanism for patented medicines in respect of government purchases and for use by insurance companies. This was junked. In January, 2014 government constituted an inter-ministerial committee with a much wider mandate to examine negotiating prices of patented medicines before these are allowed entry in the Indian market. Apart from DoP, this included representatives of health ministry, drug price regulator and department of industrial policy and promotion (DIPP) in Ministry of Commerce. The committee is actively pursuing this idea and has even asked manufacturers to submit all relevant data viz., costs, prices (in India and...
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