Instead of a vehicle’s age, let’s use fitness as the criterion for determining whether it’s allowed to ply on the roads or not Whether a vehicle is fit to run or otherwise, a lot depends on how well it is maintained, its timely upkeep; this needs to be tested instead of pronouncing it as unfit merely because it has reached a certain age. (Representative image/ File photo) ———————————————————————– On March 18, 2021, the Union minister for Road Transport and Highways, Nitin Gadkari, announced a ‘voluntary’ vehicle scrappage policy to (1) mitigate vehicular pollution and (2) more than double the turnover of Indian automobile industry from the current Rs 4.5 lakh crore to Rs 10 lakh crore in a few years....
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Category: Growth & employment
Banning old vehicles – a retrograde order
On March 18, 2021, Union Minister for road, transport and highways Nitin Gadkari announced a ‘voluntary’ vehicle scrappage policy to (i) mitigate vehicular pollution and (ii) more than double the turnover of Indian automobile industry from the present Rs 450,000 crore to Rs 1000,000 crore in a few years. At present, there are 5100,000 vehicles which are older than 20 years, 3400,000 vehicles more than 15 years old but < 20 years and 1700,000 > 15 years, but without renewed fitness certificate. The policy architecture is founded on two pillars viz. incentivize their scrapping and dis-incentivize hanging on to them. The owner going for scrap will get 4-6% of ex-showroom price of the new vehicle as compensation; 5% discount on...
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India gets poorer, investors richer
Imagine if all of Rs 2100,000 crore under Atmanirbhar package had been distributed among 40 crore workers in the informal sector; it would have boosted demand The Corona pandemic may have brought about sharp deceleration in India’s economic growth – the sharpest ever during the last four decades or so – but has yielded a bonanza for the investors. The wealth of investors in the stock market as represented by the market capitalization of Indian equities (market value of shares multiplied by their number) almost doubled from around Rs 113 trillion (a trillion equals 100,000 crore) as on March 31, 2020 to Rs 226 trillion as on March 31, 2021. In contrast, India’s GDP at current prices declined from Rs...
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India gets poorer, investors richer
The Corona pandemic may have brought about sharp deceleration in India’s economic growth – the sharpest ever during the last 4 decades or so – but has yielded a bonanza for the investors. The wealth of investors in the stock market as represented by the market capitalization of Indian equities (market value of shares multiplied by their number) almost doubled from around Rs 113 trillion (a trillion equals 100,000 crore) as on March 31, 2020 to Rs 226 trillion as on March 31, 2021. In contrast, India’s GDP at current prices declined from Rs 203 trillion during 2019-20 to Rs 197 trillion during 2020-21. As a result, the market capitalization to GDP ratio almost doubled from 56% during 2019-20 to...
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Person in control: New entity in charge
SEBI wants to shift focus from promoters to controlling shareholders or the so-called ‘person in control’ (PIC), but is the new breed willing to take charge? Paving the way for a major change in the way the promoters and over 4,700 listed corporates function in the country, in a consultation paper, the Securities and Exchange Board of India (SEBI) has proposed doing away with the concept of promoters and moving to ‘person in control’ (a three-year transition is recommended for the switch over). It has also suggested doing away with the current definition of promoter group with a view to rationalize the disclosure burden. The other proposals include (i) reducing the minimum lock-in period(the time period an investor can hold on...
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‘Person in control’ in lieu of ‘promoter’
Paving the way for a major change in the way the promoters and over 4,700 listed corporate function in the country, in a consultation paper, the Securities and Exchange Board of India (SEBI) has proposed doing away with the concept of promoters and moving to ‘person in control’ (a three-year transition is recommended for the switch over); It has also suggested doing away with the current definition of promoter group with a view to rationalize the disclosure burden and bring it in line with post-issue disclosure requirement. The other proposals include (i) reducing the minimum lock-in period (the time period an investor can hold on to the shares) post an initial public offer (IPO) for promoters’ share of minimum 20%...
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Nix sovereign guarantee clause for the NaBFID
To bail out an entity majority-owned and controlled by private parties using the taxpayers’ funds is a bad idea In her Budget speech, Finance Minister (FM) Nirmala Sitharaman had proposed setting up of a new Development Financial Institution (DFI) termed the National Bank for Financing Infrastructure and Development (NaBFID). The Government passed a Bill to establish the NaBFID, its objective being “to coordinate with the Centre and States, regulators, financial institutions (FIs), institutional investors and other relevant stakeholders, in India or outside India, to facilitate building and improving the relevant institutions to support the development of long-term non-recourse infrastructure financing in India, including the domestic bonds and derivatives markets.” The NaBFID will also be involved “in lending or investing, directly or indirectly,...
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NaBFID – drop sovereign guarantee clause
In her Budget speech for 2021-22, the Finance Minister (FM), Nirmala Sitharaman had proposed setting up of a new Development Financial Institution (DFI) termed the National Bank for Financing Infrastructure and Development (NaBFID). In the following month, it passed a bill to establish the NaBFID, its objective being “to coordinate with the central and state governments, regulators, financial institutions (FIs), institutional investors and other relevant stakeholders, in India or outside India, to facilitate building and improving the relevant institutions to support the development of long-term non-recourse infrastructure financing in India including the domestic bonds and derivatives markets”. The NaBFID will also be involved “in lending or investing, directly or indirectly, and seek to attract investments from private sector investors and...
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Bank fraud: No fetters on CBI, please!
A sweeping order that the CBI will look only at frauds involving a certain amount, or higher, will send out a wrong signal. It is tantamount to glossing over the wrongdoings Even as the Government is making all efforts to ensure that the Gross Domestic Product (GDP) — after witnessing 8 per cent contraction during 2020-21— returns to a high growth trajectory, it is concerned about the tepid recovery in credit availability which is considered to be the sine qua non of growth. According to the latest data by the Reserve Bank of India (RBI), the annual non-food bank credit growth in January this year was at 5.7 per cent compared to 8.5 per cent in the same period last...
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Bank frauds – no fetters on CBI please
Even as the Government is making all out efforts to ensure that the GDP (gross domestic product) – after contracting by 8% during 2020-21 – returns to a high growth trajectory, it is concerned at the tepid recovery in credit availability which is considered to be the sine qua non of growth. According to the latest data of the Reserve Bank of India (RBI) annualized non-food bank credit growth in January this year was slower at 5.7% compared to 8.5% in the same period last year. Credit to industry, however, contracted by 1.3% in January 2021 as compared to 2.5% growth in January 2020. A major (perceived) bottleneck is the reluctance of bank officials to sanction loans who fear they...
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