The Cabinet has approved direct benefit transfer (DBT) of fertiliser subsidy. However, the subsidy will continue to be routed through fertiliser manufacturers. They will receive 100% of the subsidy amount after fertiliser is delivered to the farmer and his identity, namely Aadhaar (and other details such as plot size, crop, nutrient use), is captured on the electronic point of sale (e-PoS) machine. At present, manufacturers sell urea at the maximum retail price (MRP), which is controlled by the Union government at a low level, and get subsidy reimbursement on unit-specific basis under the new pricing scheme (NPS). On the other hand, manufacturers of non-urea fertilisers are theoretically given ‘uniform’ subsidy (on per nutrient basis) under the nutrient-based scheme (NBS). However,...
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Articles
ANOTHER EMPTY PROMISE TO FARMERS?
The Government’s commitment to ensure a MSP for crops that is equal to 1.5 times the cost of production is much ado about nothing. Interests of farmers are well protected under the existing mechanism of fixing MSP. The need is to focus on ensuring that they get it on ground zero In its 2014 poll manifesto, the Bharatiya Janata Party had promised to guarantee farmers a price equal to 1.5 times the cost of production. However, the promise came too late, when Union Finance Minister Arun Jaitely made the announcement in the Budget speech for 2018-19. Later, replying to a debate in Parliament, Jaitely clarified that the production cost would be taken as actual paid out cost plus imputed value of family...
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Fiscal roadmap abandoned midstream
In his budget speech for 2016-17, finance minister, Arun Jaitley had announced the government’s intent to review Fiscal Responsibility and Budget Management (FRBM) Act with a view to make the target flexible to make it range bound instead of a fixed number as had been the position hitherto under the extant Act in vogue since 2003. Accordingly, a committee under NK Singh was set up to examine this issue besides revamping of the Act. The committee recommended a fiscal deficit target of 2.5% of gross domestic product (GDP), revenue deficit of 0.8%, a combined centre-state debt ceiling of 60% and a central debt ceiling of 40% by fiscal 2022-23, under a six-year medium-term fiscal roadmap. It also recommended a fiscal...
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PUBLIC STOCKHOLDING IS A PRIORITY ISSUE
India’s current aggregate measurement support must not lull us into a state of complacency as the scenario may change, putting us in a vulnerable zone. Hence, the focus has to be on changing the rules of the game to make them fair and equitable The 11th World Trade Organisation (WTO) ministerial held in Buenos Aires during December 10-13, 2017 failed to produce even a declaration — a bare minimum for any such conference. The reason for the failure was diametrically opposite stance taken by the US and India. While the latter pressed for finding a permanent solution for public stockholding programmes for food security — the most contentious issue under the Doha Development Round (DDR) — the former did not even allow...
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GST Council should drop idea of 1% tax on online sales
The decision of the GST Council, the all-powerful body to decide the tax architecture and rates on various items, to require e-commerce companies to levy 1% tax on all transactions made on their platforms has led to widespread consternation. So much so, it was forced to defer its implementation indefinitely. But the idea is not new. Even under the erstwhile state sales tax/VAT (value-added tax) dispensation, the Karnataka commercial taxes department had directed e-commerce companies to deduct 1% of the money payable to the merchant towards tax and remit the same to the department. The merchant/dealer, in turn, could claim credit or refund on this amount while discharging his liabilities. The move was triggered by tens of thousands of dealers...
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Soil health: change NPK balance through incentives
Delivering the 38th edition of his ‘Mann ki Baat’, Prime Minister Narendra Modi said, “Can our farmers take a pledge to bring down urea use by half by 2022? If they use less urea in agriculture, the fertility of the land will increase. The lives of farmers will start improving.” Modi made the statement in the backdrop of ‘World Soil Day’ on December 5 and the deteriorating health of soil the world over, a key factor contributing to this being the excessive use of urea. The positive correlation between excessive use of urea and the erosion in soil health is an incontrovertible fact proven by several studies and finds repeated reference in official documents, including the Economic Survey that is...
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NPAs – crack the whip on defaulters
BAND-AID SOLUTIONS WON’T WORK
The cost of supplying fertilisers has increased due to a hike in cost of feedstock/raw materials, rupee depreciation, capital cost, transport and so on The Cabinet Committee on Economic Affairs (CCEA) has accorded the ex-post facto approval for special banking arrangement (SBA) for Rs 10,000 crore for payment of outstanding claims on account of fertiliser subsidy in the year 2016-17. It also approved that, in future, Department of Fertilisers (DoF) would avail the SBA with concurrence of Department of Expenditure (DoE). Faced with fertiliser subsidy arrears of around Rs 35,000 crore by end of financial year 2016-17, Union Minister for Chemicals and Fertilisers, Ananth Kumar had in January, 2017 sought from the Finance Ministry SBA for Rs 20,000 crore. Against this, DoF...
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Anti-profiteering Authority: an unworkable mechanism
In mid-November, the Union Cabinet approved setting up of a National Anti-profiteering Authority (NAA) under the Goods and Services Tax (GST) so as to ensure that the benefit of lower taxes reaches consumers. If a consumer feels that the reduction in the incidence of tax under GST is not being passed on, she can register a complaint with the authority. The anti-profiteering mechanism provides for setting up of a ‘screening committee’ at the state-level and a ‘standing committee’ at the national level. The complaints will be first sent to ‘screening/standing committee’, depending on whether it is of local nature or of national import. If the complaint has merit, the respective committee would refer the case for further investigation to the...
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