A few days back, Prime Minister, Narendra Modi asked senior bureaucrats to point out deficiencies in government policies. In response, some officials have zeroed in on ‘the freebies promised by winning party in state elections’. In the past, freebie – an acronym for “something given free of charge” – found a place in a corner of the manifesto of parties. In recent years, this has occupied the centre-stage and holds the key to winning elections. For instance, in February 2020, the Aam Aadmi Party (AAP) led by Arvind Kejriwal (AK) mesmerised Delhi voters by promising freebies. They returned AAP to the seat of power with a thumping majority giving it 62 out of a total of 70 assembly seats. Then, the...
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Category: Welfare schemes
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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Covid-19 vaccine pricing: Modi has got it wrong
The Centre should make vaccination ‘free for all’ and conduct centralised purchases from the manufacturers Under the ‘Liberalised Pricing and Accelerated National Covid-19 Vaccination Strategy’ (LPANCVS), which kicked off on May 1, the Centre has plans to vaccinate all adults aged 18 and above — about a billion people. Given the mammoth task ahead, the vaccine pricing strategy has to be guided by two overarching considerations, namely (i) People should have absolutely no hesitation whatsoever in coming forward to get vaccinated, which, among other things, requires that this be done ‘free of charge’; and (ii) Manufacturers and suppliers should be willing to arrange for supplies of at least two billion doses within the shortest possible time frame, say, not extending...
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Make the COVID jabs free for everyone
There is a dire need to vaccinate at least one billion people within a short time and, given the pitfalls of differentiated pricing, the Centre should opt for inoculating everyone free of cost Under the ‘Liberalised Pricing and Accelerated National Covid-19 Vaccination Strategy (LPANCVS)’, announced on April 19, which was kicked off from May 1, the Centre has plans to vaccinate all adults above 18 years of age. Before this, the inoculation drive that was launched on January 16, covered healthcare and frontline workers and people above 50 years of age and those with comorbidities. In the second phase of the drive the age limit was brought down to those above 45. Vaccine manufacturers were giving all their supplies to...
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Vaccination – make it free for all
Under a “Liberalised Pricing and Accelerated National Covid-19 Vaccination Strategy (LPANCVS)”, Covid-19”announced on April 19, 2021 to be implemented from May 1, 2021, Modi – Government plans to vaccinate all persons above 18 years age. Until hitherto, the vaccination drive (launched in January, 2021) covered healthcare workers, frontline workers and people above the 45 years of age. Vaccine manufacturers were making all their supplies to the Government of India (GOI) charging Rs 150 per dose even as the latter was arranging for inoculation of the eligible persons free at Government vaccination centers (GVCs); however, those opting to get vaccinated at private hospitals needed to pay Rs 250 per dose. GOI incurred subsidy on vaccination done at GVCs equal to Rs...
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Paratroop reforms on the ground
Of crucial importance is the need to actually execute reforms and make them work on ground zero. Unfortunately, this is not happening Unlike the Economic Survey for 2019-20, which was prepared keeping in mind the ambitious target of achieving a $5 trillion economy by 2024-25, this time around, the overarching theme revolves around demonstrating how brilliantly the Government has managed the Coronavirus pandemic. Through lucid elaboration on the details and modeling with facts and figures — using international as well as inter-State comparison within India, Chief Economic Adviser (CEA) Krishnamurthy Subramanian has given ample justification for the “early” and “stringent” lockdown from March and thereafter calibrated lifting of restrictions from June onward. Tacitly, he has also admitted that this led to compression...
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Many a slip…
It is natural to expect an economic rebound in FY 2021-22. But it is vital to take a pragmatic view based on an objective assessment of how the situation unfolds on ground zero The green shoots seen in October, in particular the rise in the Index of Industrial Production (IIP) by 3.6 per cent, have prompted agencies to revise their growth assessment for the current financial year (FY) from the minus 9.5-10.5 per cent projected earlier to minus 7.5-8.5 per cent, now. For the FY 2021-22, when the impact of the virus is expected to subside to a large extent due to the availability of the vaccine, it is only natural to expect an economic rebound. However, it is necessary...
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A mixed bag
The labour law reforms are being bandied about as the most crucial second generation amendments that will make it easier to do business but must not compromise workers The Narendra Modi Government recently passed three Bills on labour reforms enshrined in three labour codes, namely The Industrial Relations Code, 2020, The Occupational Safety, Health and Working Conditions Code, 2020 and The Code on Social Security, 2020. Along with The Code on Wages, 2019, passed by the Parliament last year, these four labour law reforms are being bandied about as the most crucial second generation amendments that will make it easier to do business, improve the competitiveness of the Indian industry, make it a manufacturing hub and pursue the “Make in...
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Don’t bank on banks
There’s no pressing need for a firm hit by the crisis to rush to banks for relief. To enjoy the fruits when the going is good and come to the bank or Govt for help when in crisis is unacceptable On March 27 the Reserve Bank of India (RBI) Governor, Shaktikanta Das, announced a comprehensive action plan to resuscitate the economy devastated by the Coronavirus. Apart from measures to increase availability of credit and reduction in the cost of capital, the plan sought to ease the stress of loan repayments on businesses and individuals. Among others, this included a three-month moratorium on payment of instalments in respect of all term loans outstanding on March 31. On May 22, Das announced extension of...
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