If the Government is serious about making a dent on subsidy, it should dismantle controls and give subsidy directly to target beneficiaries (the poor) under direct benefit transfer. This will pave the way for many players, increase supply, offer more choices and foster competition In the Medium Term Expenditure Framework (MTEF) statement (a statutory requirement under the Fiscal Responsibility and Budget Management Act, 2003) presented by the Modi Government, expenditure on fertiliser subsidy during 2018-19 and 2019-20 was kept unchanged at Rs 70,000 crore. The provision was the same in this year’s budget. Allocation for food subsidy has been increased from Rs 145,000 crore during 2017-18 to Rs 175,000 crore during 2018-19 and further to Rs 200,000 crore in 2019-20....
More No comments
News & Media
Don’t switch-on DBT for power without reforms
Recently, during an interaction with a leading economic daily, Union power secretary Ajay Kumar Bhalla gave an indication of the government’s intent to launch direct benefit transfer (DBT) to disburse power subsidy. Alluding to a clutch of pilot projects for DBT-Power to be launched soon, he exuded confidence that this will help curb wasteful electricity consumption, limit subsidies to the really needy, stem losses of state electricity boards (SEBs) and power distribution companies (PDCs) and reduce tariff for industries. The move is prompted by the claimed success of DBT for giving LPG subsidy and similar initiatives in fertilisers and food grains. Has the idea yielded the desired outcome in LPG? What is the current status in other areas? Is it...
More No comments
STANDING FIRM ON FOOD SUBSIDIES
With India-China having jointly petitioned WTO, it is expected that both will reach at a permanent solution to address anomalies surrounding food procurement In a joint paper submitted to the World Trade Organisation (WTO) committee on agriculture on July 17, India and China lambasted the developed countries, including the United States, the European Union and Canada for consistently giving trade-distorting subsidies to their farmers at levels much higher than the ceiling applicable to developing countries with respect to such subsidies. According to the paper, “Developed countries corner more than 90 per cent of global Aggregate Measurement of Support (AMS) — a technical jargon for trade-distorting subsidies — entitlements amounting to nearly $160 billion, which is beyond their de minimis (maximum permissible level of AMS)....
More No comments
Privatization is the way forward for AI
‘Branded generics’, where patients are fleeced
The 2017 Trade Policy Agenda unveiled by the Trump administration on March 2, 2017 pushed for a stricter regime for intellectual property rights (IPRs) and patents. While agreeing that India’s reforms on IPR are encouraging, it said “India’s new National Intellectual Property Rights Policy [NIPRP] should protect US innovations”. India’s defence is based primarily on the flexibilities available to the developing countries under WTO agreement on Trips [trade-related intellectual property rights] to ensure availability of drugs to patients [majority of them are poor] at ‘affordable’ prices. If the concern for the poor is so overwhelming, then the government must ensure that on ground zero, patients should get medicines at prices they can afford. Are they really getting? The manufacturers of...
More No comments
APATHETIC ATTITUDE RUINING BUSINESS
The fertiliser industry, in India is slumping due to the burden on investors to sell at low price and delayed payment of subsidy dues by the Government Last year, Tata Chemicals Limited (TCL) sold its urea business viz plant in Babrala, Uttar Pradesh to Yara Fertilisers India Private Limited [YFIL] — Indian arm of Norway’s Yara lnternational ASA — for a sum of Rs 2,670 crore. This was a distress sale. Then, it had also alluded to selling its complex fertiliser business (including Haldia unit). Now, the TCL are in advanced negotiations with India-born Indonesian billionaire Prakash Lohia of Indorama Corporation to sell Haldia unit — on a slump sale basis for Rs 600-800 crore. The sale will include the plant and other fixed assets and...
More No comments
TELECOM INDUSTRY IN SELF-DESTRUCT MODE
A good deal of the problems that the telecom sector faces today has been solely created by service providers. They must keep it in mind that public interest cannot be won by just keeping price low. It’s important to maintain quality of service Arundhati Bhattacharya, chairperson of the State Bank of India, recently sounded alarm bells over troubles surrounding the telecom sector. She wrote to the Government about the “highly unsustainable levels” of debt mobile companies face today. The industry’s debt to the banking sector is estimated at four lakh crore rupees. In a letter to the telecom secretary, Aruna Sundararajan, Bhattacharya stated that “stress in the sector has reached highly unsustainable levels after the entry of new players and launch...
More No comments
Exporters’ trail of woes continues under GST
Some relief is offered via input credit. But a seamless tax credit chain is inevitable in a regime of taxes coming under different jurisdictions On the midnight of June 30, 2017, the government flagged off the most revolutionary economic reform, viz. the Goods and Services Tax (GST), ever undertaken post-independence. Even as expectations run high, the GST Council is having a tough time dealing with a plethora of exemptions particularly in the export sector — a baggage that got deeply entrenched under the existing system of taxation. Under the extant system, the Indian industry had to pay multiple taxes such as Excise Duty, Countervailing Duty (CVD), Special Additional Duty (SAD), Central Sales Tax (CST), Value Added Tax (VAT), and a...
More No comments
Too early to look for jobs
SEARCH FOR THE RIGHT SOLUTION
Loan waivers and written-offs given to corporates or farmers are totally unacceptable. They impact viability of banks and erode their capital base In the last session of the Parliament, members of the Opposition alleged that, while the Government had no qualms in waiving loans worth hundreds of thousand crore rupees given to industrialists and corporates, it showed little inclination to extend the same relief to farmers who are unable to pay back loans for no fault of theirs. The treasury benches responded by saying loans given to corporates are not waived; instead, they are written-off. To a layman, write-off and waiver would appear to convey the same meaning — in both, lender decides not to recover unpaid loans from borrower....
More No comments