The real problems are the policies and regulatory environment that have favoured one player even while targeting others Telecom operators including Airtel, Vodafone Idea or Vi and Reliance Jio have submitted a charter of demands to the Centre. They primarily relate to licence fees: reducing the license fee from three per cent of adjusted gross revenue (AGR) to one per cent, USOF (Universal Service Obligation Fund) contribution from five per cent of AGR to one per cent, spectrum usage charge (SUC) from 3-6 per cent (depending on when the operator acquired spectrum in respective bands) to a uniform three per cent for all operators, A demand is also to extend the tenure of leased spectrum to operators from 20 years...
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Articles
Fuels under GST: Illogical proposition
Given the yawning gap between the existing tax rate and the maximum that can be levied under GST (28%), the shifting of fuels to the new regime is impractical In a recent discussion with economists and industry experts on transition of energy products into the Goods and Services Tax (GST),NITI Aayog proposed a formula for bringing two motor fuels, petrol and diesel, besides electricity under the new regime. Under it, the Centre could keep the two fuels in the highest slab of 28 per cent and electricity in the 18 per cent slab. To compensate states for the loss of revenue resulting from the shift to the GST dispensation – fully in case of electricity and partially for petrol and...
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Self-reliance in gas is the way forward
The objective of gas-based economy is laudable but the existing regime of gas allocation and administered prices has to be dismantled first Delivering the 75th Independence Day address, Prime Minister Narendra Modi set the country a target to achieve self-reliance in energy production through a mix of electric mobility, gas-based economy and making the country a hub for hydrogen production by 2047. Electric mobility and hydrogen are futuristic areas. About gas-based economy, pursuit of this goal will involve increase in gas consumption to meet additional energy needs for sustaining high growth and replacing polluting fuels such as coal. This could result in increased dependence on gas import which is already high at 50 per cent. So, there is need for...
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Taxing MNCs: G-7 formula is flawed
The agreement reached by the finance ministers of the advanced economies at the G-7 meeting on taxing MNCs stands on two main pillars: one, a global minimum corporate tax (GMCT) rate of 15%, and two, “reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises.” Concurrently, efforts are to be made for the removal of all Digital Services Taxes (DST) imposed on these companies by several countries. The move is prompted by MNCs registering in low-tax jurisdictions such as the Netherlands, Ireland and Luxembourg, and showing all their revenues and profits in those jurisdictions regardless of...
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Farm loan waiver: An unhealthy practice
Such sops largely benefit the undeserving, bring the Union and States’ budgets under stress and increase NPAs of banks The reports of a district administration ordering the auction of the land of several farmers in Rajasthan to recover their dues to public sector banks are shocking. Land is the only asset that a farmer, especially small and marginal, has and if it is taken away, this will lead to permanent incapacitation impairing the person’s ability to earn a livelihood. The dues piled up because the farmers did not pay back because in the run-up to the 2018 assembly elections, then Congress President Rahul Gandhi had promised loan waiver and that too within ten days of his party Government taking charge....
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Sun-set on LPG subsidy
The overarching focus of the Government should be on giving relief to consumers sans subsidy as that will be in sync with fiscal consolidation From June, 2020, the Union Government stopped depositing LPG subsidy in the accounts of eligible beneficiaries and the position continues till date. Even as the budget for 2021-22 has provided for Rs 14,000 crore under this head (down from Rs 36,000 crore during 2020-21), it is unlikely that any payments will be made during the current year. What has prompted this move? Was it orchestrated earlier but put into effect only now? To understand, let us reflect on some basic facts. Since January 1, 2015, the Modi–government has been running a scheme for direct benefit transfer of LPG....
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Bank NPAs — the inevitable monster
A loan taken with the sole intention of siphoning off funds for personal gains is bound to irreversibly damage the bank’s image According to a statement by the Minister of State for Finance, Bhagwat K Karad, in Parliament, non-performing assets (NPAs) or bad loans of banks declined from a high of around Rs 1036,000 crore as on March 31, 2018, to Rs 896,000 crore on March 31, 2020, and further down to Rs 834,000 crore on March 31, 2021. The choice of March 31, 2018 has special significance. Under the UPA, particularly during its second tenure 2009-2014, banks recklessly gave loans to corporate houses and businesses without assessing the viability of the projects and conducting due diligence. The ability of...
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Power reforms — a distant dream
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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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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