The unabsorbed input tax credit dilemma in the Goods and Services Tax is something that the Council needs to address urgently In the backdrop of the collection under the Goods and Services Tax (GST) not coming up to the expected level and the consequential inability of the Central Government to meet its obligations towards compensation to the States as committed under the GST Compensation Act, 2017 (it provides for compensation for five years i.e. till 2021-22 to be calculated as the difference between actual collection and the revenue it would have got with growth at four per cent over the 2015-16 level), the GST Council is undertaking a comprehensive review of the existing rate structure and the implementation mechanism. Meanwhile, a contentious...
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News & Media
Why PM Modi must not give up on fertiliser DBT
DBT will save the government quite a lot on the subsidy by eliminating misuse and ensuring better targeting through Aadhaar linkage The manufacturers of non-urea fertilisers are given ‘uniform’ subsidy (on per nutrient basis) under the nutrient based scheme (NBS). —————————————————————————————————– According to a survey by NITI Aayog, nearly two-thirds of the farmers don’t favour direct benefit transfer (DBT) of fertiliser subsidy. If this is also the thinking of our policymakers, then it would leave one shell shocked as it would be tantamount to a complete reversal of the process set in motion a couple of years ago. In FY17, the government launched pilot projects for linking subsidy payments to producers, for the sale of fertilisers to farmers by retailers...
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Allow 100% FDI in online, offline retail in all sectors
The Confederation of All India Traders (an umbrella organisation of small traders and businesses), has complained to the government that global e-commerce majors – Amazon and Flipkart – are giving huge discounts, selling exclusive brands and controlling inventory of sellers etc. All these are prohibited under the extant policy on foreign direct investment (FDI). Promising action, Minister for Commerce and Industry Piyush Goyal has ordered collection of data on their financials, business model and operating practices. This is not a new development. Ever since the guidelines permitting 100% FDI in the ‘market-place’ model of e-commerce were issued in early 2016 (Press Note 3), complaints of violations had been pouring in even as the then minister Suresh Prabhu promised action. The...
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The dawn of a new era
Slowly but surely, India has manoeuvred its way through digital transformation. It must build on this success and the communication revolution to a new level for the creation of a vibrant economy Having missed the first and second industrial revolution of the 19th and early 20th century (courtesy the subjugation of India to colonial rulers of those times) and even the third technology-driven revolution (this one was primarily due to the “protectionist” and “inward-looking” Government policies, which were not conducive to embracing technology), India is at the forefront of leading the fourth industrial revolution — a digitally driven one —with speed and scale. The digital revolution calls for a shift from mechanical and analogue electronic technology to digital electronics, which...
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No cover-up for black cash
Making RBI the issuing authority will ensure that the Centre won’t enjoy the sole discretion on information use, which is possible now with SBI being the issuing authority For long, widespread use of black or unaccounted money in elections has been the fountainhead of corruption. Fighting elections — be it a Member of Parliament (MP) or Member of the Legislative Assembly (MLA) or any other elected body — costs huge sums which a candidate/political party is unable to garner. Businessmen and industrialists (even other entities engaged in undesirable activities) exploit this vulnerability of candidates and political parties to give contributions, expecting good returns, either by way of favourable policies or support in other forms such as award of contracts and so on....
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Price control: The gas on gas price deregulation
Under a special package for deep/ultra-deep, high-pressure/high-temperature (HP/HT) fields announced in March 2016, the supplies therefrom are allowed ‘premium’ price, linked to the prices of alternate fuels, including fuel oil, naphtha, and imported liquefied natural gas (LNG). The government has initiated discussions to ‘lift price restrictions on domestically produced natural gas’. However, it intends to do it ‘gradually’. It wants to continue with regulated gas pricing for at least three more years. However, in the interregnum, producers will be given freedom to sell a portion of the total output under ‘negotiated pricing deals’ with their customers. Will it help? Under the guidelines in effect since November 1, 2014, for all domestic supplies from fields given under the new exploration and...
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A scandalous waste
Successive Governments have reiterated their unflinching commitment to rationalise subsidies and reduce the unsustainable burden they put on the country’s Budget, yet they have failed to do so Millions of people (including many undeserving ones) are getting a variety of subsidies from the Central Government and States. These cost crores, impairing the ability of the Centre and States to rein in fiscal deficit (excess of total expenditure over total revenue) within the range mandated under the Fiscal Responsibility and Budget Management (FRBM) Act. These subsidies are administered in an “ad-hoc” and “arbitrary” manner and this leads to misallocation of resources, promotes inefficiency in production, distribution and use, encourages misuse and diversion of funds and makes way for controls. Successive Governments,...
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Too little and a little too late
The Govt has put a moratorium on pending spectrum payments for telecoms without altering the overall timeline of clearing all dues by 2030-31. But, given the huge amount to be paid, this won’t be of much help Vodafone Idea Limited (VIL) — a joint venture between UK-based Vodafone and KM Birla-owned Idea Cellular — and Bharti Airtel have reported a staggering loss of Rs 51,000 crore and Rs 23,000 crore respectively for the second quarter of the current financial year ending September 30, 2019. This is primarily due to a recent order of the Supreme Court (SC) directing telecom companies to give “unpaid” dues towards licence fee and spectrum usage charges (SUC). The order is the culmination of a long-drawn court...
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Shed the protectionist mindset
Keeping in mind the criticality of being an integral part of the global supply chain to achieve a $5 trillion economy, India needs to reconsider its decision on RCEP The Regional Comprehensive Economic Partnership (RCEP) is a conglomeration of 10 members of the Association of South East Asian Nations (ASEAN) viz. Malaysia, Indonesia, Thailand, Vietnam, Singapore, The Philippines, Myanmar, Brunei, Laos and Cambodia plus six others viz. Australia, New Zealand, Japan, South Korea, China and India. If it really sees the light of day with all 16 members intact, the group will cover 3.6 billion people or almost 50 per cent of the world’s population and account for nearly 40 per cent of the global GDP (Gross Domestic Product). India is...
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Is the oil sector ready for competition?
Last year, Petroleum Minister Dharmendra Pradhan had set up an expert committee under Kirit Parikh to “look at various issues related to implementation of existing guidelines for grant of marketing authorization of market fuels —petrol, diesel and aviation turbine fuel (ATF), identify entry barriers, if any, for expansion of retail outlets for private marketing companies and recommend easing of fuel retailing licensing rules.” On October 23, the government announced major changes in the licensing rules. These include dispensing with the requirement of minimum investment of Rs 2,000 crore in oil or gas infrastructure — in hydrocarbon exploration and production, refining, import terminals, transportation, etc. Henceforth, “the applicant needs to have minimum net-worth of Rs 250 crore and commit to invest...
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