As many as 76 members of the World Trade Organisation (WTO) — nearly half the WTO’s membership — have begun a process of framing rules governing cross-border e-commerce. The initiative is being spearheaded by the United States, China, the European Union and Japan — the four largest trading nations in the world economy — and has the tacit support of leading multinational companies (MNCs) in the e-commerce space such as Amazon, Walmart/Flipkart and Alibaba. India has strongly objected to the move. The objection stems primarily from an apprehension that in the event of India being a part of the negotiations, it will have to commit itself to harmonised WTO rules on e-commerce which will take away the ‘policy space’ currently...
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Articles
Imperatives for a new India
Now that the BJP Government has received mandate for another term, will it will play hard ball and bring the much-needed reforms in crucial sectors? During his first term (2014-19), Prime Minister Modi focussed on governance reforms, cutting bureaucratic red tape, simplifying procedures, expediting approvals and ease of doing business. The Government also spent its energy on effective implementation of welfare schemes, thus ensuring that assistance reaches the beneficiaries in full vide the Direct Benefit transfer (DBT). Now that the public has given him a resounding mandate to rule for another term, he should crack the whip on long-pending reforms. The key sectors crying for immediate attention include food and fertilisers, oil, gas, power, irrigation, credit to name a few. At present,...
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Bridge the gap on patent rights
It’s unfortunate that the USTR, the US trade body, has put India on a ‘priority watch list’ for intellectual property rights violations. For now, the rift appears too wide and requires adjustments by both sides. Protection of IP rights isn’t always inimical to public interest The US Trade Representative (USTR) has placed India on its Priority Watch List (PWL), alleging lack of “sufficient measurable improvements” to its Intellectual Property (IP) framework on long-standing and new challenges that have negatively affected American right holders. It has warned of enforcement actions under Section 301 of the Trade Act or pursuant to the World Trade Organisation (WTO) or other trade agreement dispute settlement procedures, necessary to combat unfair trade practices. The long-standing IP challenges facing...
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With WTO in view, take up restructuring subsidy regime
There is trouble brewing for India at World Trade Organisation (WTO) – the multilateral body which binds member countries to a common set of rules with regard to trade in goods and services with ‘fairness’ and ‘non-discrimination’ as its underlying principles. To get a sense of where it is heading, let us put things in perspective. In May, 2018, in a hard hitting submission made to WTO Committee on Agriculture (CoA), the United States had lambasted India for indulging in substantial under-reporting of its market price support (MPS) programme for wheat and paddy farmers alleging that the sops given by government far exceed the permissible limit. This was a counter to the latter’s notification to WTO in March, 2018. Under...
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Direct action needed for direct benefits
In its present form, the fertiliser DBT scheme has many loopholes. In the interest of the farmers, the policy needs an overhaul so that they can put subsidy to best use and enhance fertiliser-use efficiency. Will the new Government have the will to do so? The Ministry of Finance and NITI Aayog are working towards preparing a roadmap to directly transfer fertiliser subsidy to the farmers. The data being used to give Rs 6,000 per year to 120 million small and marginal farmers under the Pradhan Mantri Kisan Samman Nidhi will be used for this purpose. The subsidies on fertilisers along with PM Kisan deposits will serve to give a quasi-universal basic income transfer to the farmers. The proposal will be put...
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Incentivise, don’t destroy business
The Government’s brazen attempt to increase the profits of MSMEs by letting them retain a good portion of tax collected from consumers is illogical The Goods and Services Tax (GST) Council has adopted a liberal stance towards small businesses, keeping in mind their potential to generate employment and increase workers’ income. The bearing is particularly reflected in its decision to (i) exempt businesses having a turnover below a certain threshold of Rs 4 million from registering under GST and paying tax; (ii) allowing a manufacturer having a turnover less than Rs 15 million opt for ‘composition scheme’ under which he will pay tax @1 per cent and face minimal compliance viz returns to be filed quarterly against monthly for regular assesees; (iii)...
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India’s sugar imbroglio
The Government’s irresistible desire to control sugar prices is doing much harm to the industry. Upholding market dynamics should be the way forward In the run-up to the Assembly elections in Uttar Pradesh in 2017, the BJP had promised immediate payment of all sugarcane arrears (money that sugar mills owe to the Government for cane supplies). For future purposes, too, it had assured to release all dues by the 14th day, counting from the day the sugarcane is delivered to the mill. The BJP Government has been in office in Uttar Pradesh for over two years now and has since ensured payments of a whopping Rs 50,000 crore, which includes Rs 10,500 crore for the marketing year October 1, 2016-September 30, 2017;...
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Where are the funds?
The Congress has assured regular income for the poor but how will it identify the beneficiaries? And won’t the NYAY scheme burden the economy? During its over five decades of rule, the Congress institutionalised the culture of doles in the name of its much trumpeted garibi hatao (poverty alleviation) programme even as majority of the people continued to remain poor. Even Prime Minister Modi continued with doles but changed the narrative with a pledge to empower the poor, create jobs and increase their income to ensure that these benefits reached the beneficiaries in full. Besides, under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme, his Government is giving Rs 6,000 per year to 120 million small and marginal farmers. With general elections...
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In GST, a tale of two obnoxious levies
From the start on July 1, 2017, the implementation of the Goods and Services Tax (GST) has been plagued by several anomalies. The GST Council — the all-powerful body to decide the tax architecture and rates on various items — could have adopted a proactive stance, anticipated problems and taken steps to nip them in the bud. Unfortunately, most of the time, it has been reactive. As a result, it continues to grapple with unending problems. Two such contentious issues are (i) including the TCS (tax collected at source) amount — levied under the provisions of the Income-Tax Act, 1961 — in the value of goods for the purpose of determining the GST liability; (ii) requiring e-commerce companies to deduct tax at the rate...
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A case against shareholder interests
The idea floated by high-profile entrepreneurs, seeking dual-class share structure along with differential voting rights for founder-promoters of startups, is flawed. The Government must look for better ways to help small businesses An advocacy group, IndiaTech, representing some of the most high-profile entrepreneurs, has made a submission to the Ministry of Corporate Affairs (MCA) and the markets regulator, Securities Exchange Board of India (SEBI), seeking a dual-class share structure along with differential voting rights for founder-promoters of start-ups that can encourage the country’s most valuable companies to get listed on the domestic stock exchanges instead of overseas exchanges such as Nasdaq and New York Stock Exchange (NYSE). At present, the Companies Act 2013, permits firms having consistent track record of distributable profits...
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