The Government’s launch of the KUSUM programme to promote solar power bodes well for farmers, DISCOMs and the environment. But there are impending challenges, including a huge financial liability on farmers themselves. Moreover, will they really be willing to join the scheme? In a recent interview, Minister of State for Power and Renewable Energy RK Singh informed about a scheme viz the Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM), which the Government proposes to implement over a period of three years. Intended to promote the use of solar energy in rural areas, KUSUM allows a farmer to use his barren land — currently lying fallow — to set up a solar plant on it for 1 MW or so (in...
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Articles
How sugar turns bitter for the consumer…
The Cabinet Committee on Economic Affairs (CCEA) has approved a proposal of the food ministry for creation of four million tons of sugar buffer stock between August 1, 2019 and July 31, 2020. The government will spend Rs 1,674 crore towards the cost of carrying the stock. The amount will be directly credited into farmers’ accounts on behalf of sugar mills against their cane price dues. It has also decided to keep the Fair and Remunerative Price (FRP) of sugarcane unchanged at Rs 275 per quintal. FRP is the minimum price which mills have to pay farmers to buy sugarcane – the raw material for making sugar. The price is applicable to sugarcane purchases made during the sugar marketing year...
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A tightrope walk
Instead of mobilising funds through overseas sovereign bonds, the Government must focus on making its balance sheet more robust and improve the quality of fiscal discipline In the Union Budget presented on July 5, Finance Minister Nirmala Sitharaman proposed an “overseas sovereign borrowing plan” to partly fund an ambitious investment programme that will involve a mammoth spending of Rs 100,00,000 crore ($ 1.4 trillion) for the building of infrastructure to make India a $ 5 trillion economy by 2024-25. During the current year, the Government intends to raise $ 10 billion from this source. The contours of the plan are expected to be finalised by October. In sync with the character of the many infrastructure projects such as roads, highways/expressways, railways, ports,...
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Change the narrative
Asking the super-rich to pay a little extra is a modest step in reducing inequalities. Instead, the Government must work towards bringing such citizens under a tax net In the Union Budget 2019-20 presented by Finance Minister Nirmala Sitharaman on July 5, the Government levied a new surcharge on individuals, Association of Persons (AOP) and trusts with an annual income between Rs 2 crore and Rs 5 crore from the existing 15 per cent to 25 per cent and on individuals/AOS/trusts with income an income more that Rs 5 crore from the existing 15 per cent to 37 per cent. Post the hike, the effective incidence of tax will be 39 per cent on earners between Rs 2 crore and Rs 5...
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Disinvestment: half-truths and clever babudom so far
Union Finance Minister Nirmala Sitharaman has set an ambitious target of Rs 1.05 lakh crore as proceeds of disinvestment of government shares in public sector undertakings (PSUs). She has also proposed aggressive pursuit of ‘strategic’ disinvestment by reducing government’s shareholding in PSUs to below 51% on a case-by-case basis. The route to garnering one-third of this target, or Rs 35,000 crore, has been set. This includes proceeds from divestment of Air India, which could not go through last year, courtesy the government’s decision then to retain 24% shareholding with itself (besides other riders such as a three-year lock-in period on disposition of shares by the acquirer) which discouraged prospective bidders. Strategic disinvestment involves transfer of a sizeable portion of ownership and...
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Opt for a reformist approach
The Government’s failure to bring a comprehensive set of reforms for the fertiliser sector is a missed opportunity. Glaring anomalies need to be fixed to harness long-term potential. Having returned to power for a second term with a thumping majority, it was expected of the Modi Government to kick off immediate reforms for the fertiliser sector. Being just the beginning of the five-year term, now is the golden opportunity for it to opt for big bang reforms as any adverse fall-out in the short-run (inevitable when harsh measures are implemented) won’t pose any threat to the Government. Alas, it missed the opportunity. Finance Minister Nirmala Sitharaman’s Budget, too, had no mention whatsoever of substantive issues pertaining to the fertiliser policy even as...
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Growth a priority, finally
The RBI has lived up to people’s expectations by cutting the repo rate. It should avoid being glued to inflation. Instead, the interest rate policy should propel growth In its bi-monthly monetary policy report, announced on June 6, the Reserve Bank of India (RBI) reduced the repo rate/the policy rate (rate at which the RBI lends money to commercial banks) from the subsisting 6.0 per cent to 5.75 per cent. Together with a reduction of 0.25 per cent, each notified in the previous two reviews (February and April ), it has cut the rate by 0.75 per cent in less than six months. In another significant move, the RBI has changed its policy stance from hitherto being “neutral” to “accommodative.” Whereas a...
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A subsidy policy hamstrung by a desire to contain it
The government has approved transportation of fertilisers through coastal shipping and inland waterways. This is a welcome move as it offers the possibility of significant reduction in freight cost, besides lesser time in reaching the material to consumption points and being environment friendly as well. It has also approved freight subsidy to manufacturers on the cost incurred on movement of fertilisers via this mode. In case of single mode or multi-modal transportation, which includes coastal shipping, ‘the freight subsidy will be restricted to railway charges or the actual freight incurred, whichever is less’. Further, ‘only movement of subsidised indigenous fertilisers, viz., urea and phosphate and potash fertilisers – through coastal shipping/inland waterways will be eligible for payment of freight subsidy...
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Some merit in ‘one poll’ idea
Both the Centre and States should focus on governance for a full five years without any distraction and implement structural reforms for sustainable development besides saving tens of thousands of crores in election expenses. Let’s at least debate the idea The Prime Minister’s idea of “one nation, one election” is being staunchly opposed by many political parties, mainly on the grounds of it being undemocratic and an assault on the federal polity and, hence, unconstitutional. Opposition parties have argued that in the case of simultaneous poll to both Parliament and State Assemblies, national issues will dominate over State-specific subjects. This may yield fortuitous benefit to the dominant national party as the voter won’t be able to clearly articulate his/her choice...
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Draw the line on tax evasion
While there can be no two opinions on the overarching need to increase funding for start-ups, the Government must not do anything which compromises its fight against black money. The DCF valuation method is not sustainable and must be challenged In a major ruling that will have a profound impact on the way companies are taxed, the Income Tax Appellate Tribunal (ITAT) has upheld the validity of the Discounted Cash Flow (DCF) method for arriving at the fair market value of a company’s share. The order says “the DCF method is recognised; though it is not an exact science and can never be done with arithmetic precision.” The order needs to be viewed in the backdrop of tax demands raised...
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