Prime Minister Modi’s demonetisation drive is a master-stroke which will lay the foundation for double-digit growth When the four-month window (June 1 to September 30) for the declaration of black money under the Income Declaration Scheme (IDS) was open (under it, a person could pay 45 per cent of disclosed amount (30 per cent tax plus 15 per cent penalty) and thus, convert black in to white), Prime Minister Narendra Modi had issued a veiled but stern warning to tax dodgers. He opined that persons who do not come clean now will be dealt with a heavy hand after September 30. Based on information collected from various sources viz, banks, property registration offices, jewellers and other platforms, where big ticket...
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Don’t fiddle with GST soul
NEW RATE STRUCTURE In its meetings held on Nov 3-4, 2016, the GST (Goods and Services Tax) Council arrived at a consensus on the rate structure even as it failed to hammer an agreement on an equally contentious issue of who (read Centre or states) will exercise administrative control over which tax. For now, the next meeting has been deferred till Nov 23, thus casting shadow over the government’s ability to meet the April 1, 2017 deadline to kick off the new tax regime. The Council has opted for four rates – 5% for essential and daily use items, two standard rates of 12% and 18% and highest rate 28% on so called de-merit goods such as luxury cars, aerated...
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FINDING THE MONEY FOR CHANGES
The Union Finance Minister has reason to both feel happy and worried. There have been considerable savings on account of subsidy slippages and earnings through spectrum sale. But there still are strains on revenue generation In the wake of the recently concluded spectrum auction yielding around Rs 32,000 crore less than the budgeted amount of Rs 64,000 crore for the current year, Union Minister for Finance , Arun Jaitley exuded confidence that this would not come in the way of his achieving the fiscal deficit target of 3.5 per cent of GDP set for the year. Jaitley’s confidence stems primarily from the success of the Income Declaration Scheme (IDS) announced in the Budget for 2016-17 and launched on June 1,...
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Bias towards the rich
REINING IN LPG SUBSIDY : The Centre should get into a ‘surgical strike’ mode now and enforce exclusion of all rich/better-off from the ambit of LPG subsidy. Prime Minister Narendra Modi has made pronouncements several times that subsidies will be rationalised to take them away from the rich/better-off and given to the poor besides plugging leakages. While the government has made significant progress on the latter, there is little action on the ground in regard to the former (subsidies). In LPG distribution, the government has performed an extraordinary feat of virtually eliminating leakages and saving about Rs 15,000 crore annually under PAHAL (Pratyaksha Hastaantarit Laabh) for direct benefit transfer (DBT) of subsidy as under it, a record 30 million bogus...
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Stymied by populism
ELECTRICITY REFORMS : One major reform that has been sacrificed at the altar of populism is the provision for ‘open access’ under the amended Electricity Act (2003). Under the Narendra Modi dispensation, even as reforms are progressing on several fronts, ironically, electricity is one area where implementation is hamstrung by political establishments in majority of the states, including the BJP-ruled ones. The reason being they are embracing populism in the form of supply to certain segments such as farmers, poor households at low tariff, or even free, and letting thefts happen. One major reform that has been sacrificed at the altar of populism is the provision for ‘open access’ under the amended Electricity Act (2003). Under this policy, which was...
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MAKING DBT FERTILISER A REALITY
Considering the perceptible impact of DBT for fertiliser subsidies on stakeholders, it is imperative that the Government comes out with a roadmap so that the beneficiaries get adequate time to prepare for the transition Speaking at the inaugural session of the ninth Global Agriculture Leadership Summit on September 8, in New Delhi, Union Minister for Chemicals and Fertilisers, Ananth Kumar said that the Government was committed to implement direct benefit transfer (DBT) for fertiliser subsidy to farmers. But he failed to give a time-frame. Drawing a parallel with liquefied petroleum gas where DBT has already been successfully implemented, he opined that things are much more complex in the fertiliser case. He said the Government would take a call on this...
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BENEFITS OF A NEW CALENDAR
Advancement of the Budget date will ensure completion of all legislative works before the start of financial year In 2000, the NDA Government, under the then Prime Minister Atal Bihari Vajpayee, switched the timing of the presentation of the Budget from the customary 5 pm to 11 am. While this move was symbolic, the current NDA dispensation has now taken a major step by de-linking this exercise from the vestiges of colonial raj. The Modi Government is likely to advance the presentation of the Budget from the last day of February to the last week of January or the first week of February. This will unleash huge benefits. Under the existing arrangement, by the time the Finance Bill and the...
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Energy security at stake
THE GAS FIASCO In its report submitted in November, 2015, De-Golyer and MacNaughthon (D&M) – a consultant appointed by the Centre following the dispute between the Oil and Natural Gas Corporation (ONGC) and the Reliance Industries Limited (RIL) over alleged migration of gas from former’s oil field discoveries in KG basin to latter’s fields in the same basin off Andhra coast – estimated that 0.4 trillion cubic feet (tcf) of gas had migrated from ONGC’s ‘idle fields’ to RIL. Following this, the government set up a committee under Justice A P Shah in December, 2015 to examine the matter and recommend measures to be taken against RIL for “the unjust benefit” it received from the migration of gas taking in...
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Government cap on GM tech royalty hurt the farmer; here’s how
The ministry’s decisions reflect a mindset that views MMBL as an exploitative monopoly. This perception is flawed and out of sync with ground realities Under CSPCO, the ministry fixed the price of cottonseed sales at an ‘uniform’ level and the maximum trait-fee payable to the technology-provider (TP). Given GM Bt cotton accounts for 98% total cottonseeds used in India, the decision was directed primarily at this segment. On July 6, 2016, Mahyco-Monsanto Biotech India (MMBL) withdrew its application for environment clearances for commercial cultivation of cottonseeds carrying its Bollgard II Roundup Ready Flex (B-II-RRF) technology, which uses genes that not only kill pests but also imparts resistance to the herbicide, Roundup. MMBL has attributed its decision to the “uncertainty in...
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Policy mess getting worse
FDI IN RETAIL : While the Centre wants to welcome FDI, it does not want to displease its core constituency of traders, opposed to FDI per se. The government has set up a committee under the Niti Aayog CEO to look into all issues including the Foreign Direct Investment (FDI) norms pertaining to the fast growing e-commerce industry. Since much of e-commerce is in retail, and trade via this route is a portion of overall retail wherein also contentious issues relating to FDI are involved, it would be apt if the committee examines investment norms in a holistic framework covering both online and offline. At present, the retail sector in India is hamstrung by a policy maze which gives too...
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