Unshackling of discoms will take away the leverage parties enjoy to serve their populist goal of giving cheap/free power to people at election time Since last year, there have been several announcements regarding the reformation of power distribution companies (discoms). They include the Electricity (Amendment) Act, 2020,Reforms-Linked, Result-Based Scheme for Distribution (RLRBSD), and a special loan of Rs 90,000 crore(subsequently raised to Rs 130,000 crore)to discomsin 2020, and the new draft National Electricity Policy, 2021. The key reform measures included (i) developing an efficient market for electricity distribution; (ii) de-license the distribution business, bring in competition, and give the consumer power to choose supplier (or “open access”); (iii) direct benefit transfer (DBT) of subsidy; (iv) putting a cap on the...
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News & Media
FDI in retail: Clear the maze
The government should legitimise direct selling by foreign companies in Indian retail without any riders In the backdrop of complaints by the Confederation of All India Traders (CAIT) regarding violation of the Foreign Direct Investment (FDI) policy by global e-commerce players, Amazon and Walmart-owned-Flipkart etc, the Ministry of Consumer Affairs has proposed a set of new rules called Consumer Protection (e-commerce) Rules, 2020 which the government proposes to implement after factoring in the views of all stakeholders. The rules require all e-commerce entities that are not established in India, but intending to operate here: (i) register with the Department for Promotion of Industry and Internal Trade (DPIIT) in the Commerce Ministry; (ii) bar affiliated entities from selling on e-commerce platform...
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Missing the woods for the trees
The thrust of the proposed pesticides Bill should be on incentivising innovators to invest in R&D and bring new crop protection solutions A major factor that could make or mar the Modi government’s mission of doubling farmers’ income has to do with the loss of anywhere between 10 and 30 per cent damage to crop production due to pests and disease. The use of pesticides is the most effective way of stemming these losses. The manufacture, import, distribution, and use of pesticides is regulated under the Insecticides Act, 1968, its main objective being ‘to prevent risk to human beings or animals and for matters connected therewith’. The government wants to replace this with a new law. The Pesticides Management Bill, introduced last...
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The ball lies in the farmers’ court
The demand for repeal of the Central laws is unwarranted. They open up multiple options that farmers can leverage for increasing price realisation While staying the implementation of the three farm laws enacted by the Union Government in January 2021, the Supreme Court had hoped that this would create a congenial atmosphere for the protesting farmers to come to the negotiating table and arrive at an amicable settlement. However, the purpose is far from achieved as certain farmers’ bodies are insisting on ‘repeal’ of the laws. This is overshadowed by yet any other demand that the Union Government should guarantee a minimum support price (MSP) backed by a law enacted by parliament. As the wording suggests, MSP is the minimum...
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Tackling the fiscal slippages: Any takers?
The way the Govt executes its revenue plans with scant regard for accountability, it is unlikely that it will correct the imbalance between revenue receipts and expenditure For several years, the Narendra Modi government has faced a high fiscal deficit. The unusually high FD of 9.5 per cent of Gross Domestic Product during 2020-21 as per the revised estimate is attributed to the devastating effect of the Coronavirus pandemic on economic activity. However, even when there was no aberration, like in 2017-18, 2018-19, and 2019-20, the fiscal deficit was in the 5.5 to six per cent range- significantly higher than the targets set for those years. This is because, in respect of both expenditure and revenue, the government of the day...
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FDI in retail: Remove the smokescreen
A pragmatic approach would be one wherein the Modi Govt legitimises direct selling by foreign companies in Indian retail in all forms For the last couple of years, the Confederation of All India Traders (CAIT) was complaining about a blatant violation of the Foreign Direct Investment (FDI) policy and the Foreign Exchange Management Act (FEMA) by global e-commerce players like Amazon and Walmart-owned-Flipkart, etc. Addressing their concerns, the Ministry of Commerce and Industries in December 2020 asked the Reserve Bank of India and the Enforcement Directorate to take action against these global giants. Earlier this year, Commerce Minister Piyush Goyal promised to ensure that the e-commerce sector works “in the true spirit of the law”. As a follow-up, the Ministry of Consumer...
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Taxing MNCs — G-7 formula is erroneous
The source country should have the freedom to decide the tax rate it deems fit in sync with its policy imperatives The agreement reached by the Finance Ministers of advanced economies at the G-7 meeting on taxing MNCs stands on two main pillars, viz., a global minimum corporate tax (GMCT) rate of 15 per cent and secondly, “reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20 per cent of profit exceeding a 10 per cent margin for the largest and most profitable multinational enterprises”. They also agreed that while coordinating international taxation rules around these two pillars, concurrent efforts will be made for the removal of all Digital Services...
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Banning old vehicles is retrograde: Vehicle’s fitness, not age, should be the criteria for scrapping
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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Fertiliser subsidy policy is skewing crop yields, soil health
A major factor fuelling resentment among farmers is the spiralling prices of fertilisers that are critical in the production of agricultural products. There are two types of fertilisers: Urea— the predominant source of nitrogen or ‘N’ nutrient supply— and phosphate and potash fertilisers— the source of ‘P’ nutrient and ‘K’ nutrient; there are 22 grades of such fertilisers and the most widely used are Di-Ammonium Phosphate (DAP) and Muriate of Potash (MOP). The Maximum Retail Price (MRP) of urea is controlled by the Centre at a low level and is unrelated to the cost of production and distribution which is higher (the excess amount is reimbursed to the manufacturers via the subsidy on a ‘unit-specific’ basis under the New Pricing...
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Dealing with Delhi CM Kejriwal’s ‘ration mafia’
The scheme mooted by the Delhi Government will only create more avenues for the middlemen to make money at the cost of the taxpayer Arvind Kejriwal, Chief Minister, National Capital Territory (NCT) of Delhi has justified his much-trumpeted scheme for door-step delivery of ration on the ground that this will help rein in what he describes as ‘ration mafia’ while ensuring that every grain of the subsidized food reaches the person (read: the poor) for whom it is intended. Who is this ‘ration mafia’? How does it plunder the subsidized food? Can the scheme prevent it? Under the National Food Security Act, 2013, the Union Government directs the Food Corporation of India and other state agencies to procure food from...
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