In all probability, the Government must not tread the path of giving legal backing to MSP. Already, it is struggling to find resources for food subsidy under NFSA. An alternative path is to find platforms where farmers can sell their produce On November 30, 2018, tens of thousands of farmers congregated in the national capital to protest against their financial distress arising out of non-remunerative price for their agricultural output and ever-increasing farm debt burden. They wanted a special session of Parliament to discuss their problems and demanded the passage of two laws (i) to guarantee Minimum Support Price (MSP) for all crops based on the recommendations of the National Commission on Agriculture under MS Swaminathan (2006) and (ii) ‘one-time’...
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News & Media
No relief in sight for fertiliser prices
India is overwhelmingly dependent on imports for meeting its requirements. That makes us vulnerable to the changing global demand-supply scenario. The Government, will, therefore, need to explore innovative ways to increase self-reliance Farm distress refuses to go away. This time around, the steep rise in prices of fertilisers — a key input used in crop production — during the current year has increased farmers’ miseries. During Kharif (April-September) 2018, the price of di-ammonium phosphate (DAP), a major source of phosphate or ‘P’ nutrient supply, increased by 30 per cent over Kharif (April-September) 2017. Likewise, the price of complexes and muriate of potash (MoP) — main source of ‘P’ and ‘potash’ or ‘K’ nutrient —increased by 15-60 per cent during Kharif 2018...
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Amazon, Flipkart flouting FDI norms. Really, ED?!
During hearing on a public interest litigation in Delhi high court on October 31, the Enforcement Directorate (ED) said it is investigating alleged violation of the Foreign Exchange Management Act (FEMA) against Amazon and Flipkart. The charge is that these companies have violated the extant norms for foreign direct investment (FDI) guidelines as contained in Press Note (PN) 3 (2016-17). The PN 3 allows 100% FDI in the ‘marketplace’ model for e-commerce. An entity working on this model offers a platform to sellers and buyers to conduct transactions. It acts as a facilitator by offering them services such as booking orders, raising invoices, arranging deliveries, collecting payments, etc. It can’t own stocks and can’t sell directly to the consumer. The...
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More than meets the eye
In a power battle between the providers and consumers of electricity, the latter lose, yet again During the first decade of the 2000s, in a bid to boost power generation and to make it available at ‘affordable’ and ‘stable’ price to consumers, the then Government had mooted the idea of ultra mega power projects. Two such plants were bagged by Tata Power Ltd (TPL) and Adani Power Ltd (APL) under tariff-based competitive bidding (TBCB), each with an installed capacity of 4,000 MW and 4,620 MW, respectively. While the TPL is based entirely on imported coal, APL uses 70 per cent domestic and 30 per cent imported coal. Under long-term power purchase agreements (PPAs), they committed to sell to power distribution companies at...
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Responsible oil pricing is the key
There are limits to the influence that can be brought to bear on the actions of oil producers. Enticing MNCs to participate in Indian exploration efforts and working towards alternative payment arrangements, however, is doable Interacting with global leaders from the energy sector on October 15, 2018, in New Delhi, Prime Minister Narendra Modi flagged three major issues: First, while expressing concern over the steep increase in international price of crude oil, he urged all leading producers/exporters to be more responsible in fixing the price to bring it down from the current high to a reasonable level. Second, keeping in mind the overarching need to increase domestic production India, he asked them to consider investing in exploration and development of...
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Trump is hell-bent on decimating WTO
Ever since Donald Trump took charge as US President, he has made systematic efforts to demolish the very foundation of the World Trade Organisation (WTO) which is at the centre of ‘free’ and ‘fair’ trade based on transparent and non-discriminatory rules. At the 11th WTO ministerial conference held in Buenos Aires in December 2017, the US rejected the demand of developing countries to find a “permanent solution” to stockholding for food security which was agreed to four years ago at the 9th ministerial in Bali. Worse, it has dumped the Doha Development Agenda (DDA), which has been assiduously pursued by all members of WTO since 2001. Second, in complete defiance of rules under WTO, it has hiked import duty on...
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Cure worse than the disease
The Maharashtra Government’s bid to ensure good crop price for farmers is laudable but this must not be done by excessively penalising errant traders. Other options must be explored In August, the Devendra Fadnavis Government approved several amendments to the Maharashtra Agricultural Produce Marketing (Development & Regulation) Act, 1963, to bring it in line with the Centre’s model of Agricultural Produce and Livestock Marketing (Promotion & Facilitation) Act, 2017. As a result, the entire State was declared as a single market. Now, instead of the earlier rule, where traders would require separate licences for operating in each ‘notified’ APMC market, they will now need a single license that will enable them purchase agricultural produce from any mandi within the State. This is a good...
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Shutting out NRI/PIO-run funds, a bad idea
Faced with a shortage of capital and a compelling need to boost economic growth, successive governments have taken steps to attract foreign investment. But when the inflow happens to be of Indian money that left our shores in a clandestine manner and is coming back in the garb of foreign capital — ‘rounding tripping’ in common parlance — it raises many eyebrows. Until a few years ago, the extant policy and regulatory environment hugely facilitated ‘rounding tripping’. There was little regulatory oversight on money leaving and there were tax havens ever ready to attract it. The shell companies, set up in those havens by the people to whom the money belonged, would then invest in India, fully leveraging benevolent tax...
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Subsidy sops must stop
The very bane of public policy has been the Government’s interference in subsidising goods and services. Subsidies must be replaced with direct cash transfers The Modi Government has revolutionised the way subsidies are disbursed to beneficiaries by leveraging technology, especially the use of direct benefit transfer (DBT) on the Jan Dhan-Aadhaar-Mobile platform. This has made a dent on pilferage, and gargantuan resources, thus saved, are being used for development and enhanced funding of welfare schemes for wider and deeper coverage. But large-scale pilferage still continues. This happens in ways that even escape the radar of our ever alert Prime Minister. At the fundamental level, it can be sourced to the very existence of controls in sectors, such as food, fertilisers,...
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Fertiliser subsidy:policy reforms needed, not tinkering
Considering the crucial role played by fertilisers in increasing food production and the overarching need to make it affordable to farmers, the union government has followed a policy of controlling their maximum retail price (MRP) at a low level, unrelated to the cost of production and distribution. To ensure that production is viable at this price, it gives subsidy to the manufacturer to reimburse the difference between the two. In case of urea, the subsidy varies from unit to unit and is administered under the New Pricing Scheme (NPS) whereas for decontrolled complex fertilisers, a ‘uniform’ subsidy fixed on per nutrient basis is given to all manufacturers under the Nutrient Based Scheme (NBS). Since this is subject to submission of...
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