In an unprecedented move, the government has exonerated its undertakings in the oil sector — Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL) from a potential liability of about Rs 22,000 crore in royalty dues to Gujarat and Assam governments. ONGC had to pay Gujarat Rs 8,392 crore and Assam Rs 1,404 crore in royalties for the period April 1, 2008 and January 2014. Together with interest Rs 2,868 crore, the total liability was Rs 12,664 crore. OIL had to pay to Assam Rs 4,902 crore in royalty dues plus Rs 4,355 crore in interest adding to Rs 9257 crore. The Union government has settled this pending liability of ONGC and OIL by paying the royalty amount...
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Articles
‘PEACE CLAUSE’ THAT BRINGS PROSPERITY
New Delhi should engage proactively with the WTO to ensure that issues of concern to developing countries, primarily related to agriculture, are addressed Roberto Azevedo, Director General of World Trade Organisation (WTO), who was recently in Delhi to explore and understand India’s perspective on issues for taking up in the 11th WTO ministerial scheduled for December 11-14, 2017, stated that “one has to be patient for a permanent solution and asked not to undermine the efficacy of the peace clause”. Azevedo’s exhortation is unmindful of the vulnerabilities of developing countries inherent in the ‘peace clause’. When, the provision itself stands on a slippery foundation, there is impatience. At the 9th ministerial in Bali (December, 2013), developed countries had agreed to...
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GST architecture is only getting worse
Union Finance Minister Arun Jaitley and chairman, GST (Goods and Services Tax) Council must be credited with spearheading requisite efforts like draft of all related laws — Central GST (CGST), state GST (SGST), integrated GST (IGST), legislation on compensation to states for loss of revenue, delineation/apportionment of powers for administering the tax, determination of rate structure etc in a time-bound manner to ensure that this revolutionary tax reform is kicked off from April 1, 2017. The pace at which the GST Council was progressing, it was almost certain that the government would meet the deadline. But, the announcement by Prime Minister Narendra Modi on November 8, 2016 to demonetise Rs 1,000 and Rs 500 currency notes came as a spoke...
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DOLES TO ELECTRICITY BOARDS DAMAGING
States must bring an end to ‘competitive populism’ and discipline loss-making power boards. They should check their monopoly over power distribution The Union Government has set up a committee to look into restructuring tariff to reduce the burden on industrial units, by making domestic and commercial consumers of electricity pay more (most States categorise those consuming more than 800 units a month as large domestic consumers). The committee will work on classifying consumers in two to three categories and sub-categories to bring transparency in power billing. What is the trigger? At the outset, it is important to know as to (i) why industrial consumers are currently paying more, and (ii) what is the justification for seeking reduction in tariff applicable...
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Will DBT work?
The version of DBT being tried in pilot districts is flawed. It will provide no proper assessment of the scheme’s effectiveness. Alluding to the direct benefit transfer (DBT) of fertiliser subsidy, in budget speech for 2016-17, Finance Minister Arun Jaitley had stated: “We have already introduced DBT in LPG. Based on this successful experience, we propose to introduce DBT on pilot basis for fertiliser in a few districts in the country with a view to improving quality of service delivery to the farmers.” The focus on the DBT has its link to a revelation made in Economic Survey (2015-16). It stated that “24% of the fertiliser subsidy is spent on inefficient producers, 41% is diverted to non-agricultural uses and 24%...
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Modi’s New Year gift to the underprivileged
After a protracted wait, India has got a Prime Minister who has risen from the ranks and hails from the majority of the poor. The other redeeming feature is that PM Narendra Modi leads a party that has an absolute majority in the Lok Sabha. This makes a happy combination. It ensures that every policy decision taken by the present dispensation is guided by the overriding concerns of the poor and the common man of India and seeks to benefit them. At the same time, the absolute majority of the ruling party ensures that people-friendly legislations (for instance, the Bill giving statutory backing to the Aadhaar card) have a smooth passage in the House. Demonetisation, announced on November 8, 2016,...
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Viewpoint: Expedite subsidy reforms
By Uttam Gupta, New Delhi 05/01/2017 After protracted wrangling, members of the Organization for Petroleum Exporting Countries (OPEC) agreed on November 30, 2016 to reduce their combined output by 1.2 million barrels a day. Likewise, 11 non-OPEC countries led by Russia decided on December 10, 2016 to knock off over 550,000 barrels from their supplies. The agreement is effective from January 1, 2017. These developments need to be viewed in the backdrop of a steep drop in the price of crude from its peak of US$ 114 per barrel in mid-2014 to US$ 27 per barrel in February, 2016 and had recovered only marginally to US$ 40 per barrel by November-end. The price of LNG which follows the trend in...
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Rajan’s legacy continues
Much like his predecessor, RBI Governor Urjit Patel too sees interest rate as a potent instrument of reining in inflation. In the first monetary policy review under the Monetary Policy Committee (MPC) dispensation announced on October 4, 2016, Reserve Bank of India Governor Urjit Patel had reduced the policy rate (interest rate at which RBI lends money to commercial banks) by 0.25%. He had then maintained an ‘accommodative’ policy stance thereby alluding to apex bank intent for reducing it further. However, in the second policy review announced on December 7, Patel has dashed this hope by keeping the repo rate unchanged. Concurrently, he has also revised downwards its earlier estimate of GDP for 2016-17 from 7.6% to 7.1% now factoring...
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Can India survive Trump bombshell?
The election of Republican Party candidate Donald Trump as the next President of the US has sent shock waves across the world. All along, America has been a strong protagonist of free flow of international trade and investment in goods and services. If Trump acts on his electoral pronouncements, this will tantamount to a reversal of the existing US policy stance. It will herald an era of “protectionism”. So what are the major areas of concern for India? President-elect Donald Trump wants American companies to operate from within the US and achieve this aim by imposing an import tariff of 35% on those who set up manufacturing facilities in other countries. Such a high tariff will seriously impact India where...
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SHEDDING TEARS FOR THE WRONG ‘VICTIMS’
A great deal of misinformation is being spread by vested interests to demonise demonetisation. Positive results of the Government’s courageous move will be seen soon A couple of days ago, Revenue Secretary Hasmukh Adhia had alluded to a good chunk of over Rs15,00,000 crore cash embodied in Rs1,000/500 notes (these were declared invalid by Prime Minister, Narendra Modi from November 8-9 midnight) coming back to the banking system. This was interpreted to mean that the ‘entire’ cash would return by December 30, when the scheme closes. Extrapolating from here, critics (opposition parties included) argue that demonetisation has been a monumental failure as there was either no black money, or that whatever existed, hoarders managed to get this converted into ‘white’....
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