At the current juncture, when the economy is battling the consequences of the steep increase in the international price of crude [India depends on imports for over 80% of its oil requirements] and there is an urgent need to mitigate the adverse effects, logically the focus has to shift to explore all potential areas for cost reduction. An important area relates to enticing private sector in marketing of petroleum products which today is the monopoly of public sector undertakings [PSUs]. The infrastructure for storage, handling, import terminals, transportation, marketing and distribution of petrol, diesel, LPG, kerosene etc is dominated by oil PSUs viz. Indian Oil Corporation Limited [IOCL], Bharat Petroleum Corporation Limited [BPCL] and Hindustan Petroleum Corporation Limited [HPCL]. Out of...
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Trim sops, create jobs
For a decent living, a person needs a house [reasonable size], a power connection, supply of clean fuel, access to food at affordable price, medical facilities and basic education. A person who has a good source of income on a sustainable basis is well equipped to make arrangement for all these basics. But, what about those who are not so blessed? Indeed, an overwhelming proportion of our population belong to this category and they are the ones who look to the government for providing help in arranging for these. Prime Minister, N Modi has often said that unlike the previous dispensations who promised these things in bits and pieces – that too keeping an eye on elections – and failed...
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Trump is hell-bent on decimating WTO
Ever since, Donald Trump took charge, he has made systematic efforts to demolish the very foundation of World Trade Organization [WTO] which is the epitome of ‘free’ and ‘fair’ trade based on transparent and non-discriminatory rules. At the 11th WTO ministerial conference held in Buenos Aires during December 10-13, 2017, the USA rejected the demand of developing countries for finding a ‘permanent solution’ to stockholding for food security which was agreed to four years ago in the 9th ministerial held in Bali. Still worse, it has dumped the Doha Development Agenda [DDA] which has been assiduously pursued by all members of WTO ever since 2001. Second, in complete defiance of rules under WTO, it has hiked import duty on steel...
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Urgent need for ‘responsible’ oil pricing
Interacting with global leaders from the energy sector that included ministers of Saudi Arabia and UAE – prominent members of OPEC [Organization of Petroleum Exporting Countries] – besides CEOs of leading MNCs on October 15, 2018 in New Delhi, prime minister, Narendra Modi flagged three major issues:- First, expressing concern over the steep increase in the international price of crude oil [and concomitant increase in prices of all petroleum products viz. diesel, petrol, ATF, LPG etc], he urged all leading producers/exporters to be more responsible in fixing the price to bring it down from current high to reasonable level. Second, keeping in mind the overarching need to increase domestic production India, he asked them to consider investing in exploration and...
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Aadhaar survives court scrutiny
Ever since, prime minister, N Modi – a crusader against corruption, nepotism and black money – took charge in 2014, those who had been in this game for decades having defrauded the country by gargantuan sums have unleashed an orchestrated plan to frustrate his attempts to cleanse the system. An important component of this plan was to kill Aadhaar card which Modi has been using to give subsidy on food, fertilizers and LPG, pay wages under Mahatma Gandhi National Rural Employment Guarantee Act [MGNREGA], release pension and scholarship, file income tax returns and a host of other areas where there is evidence of misuse and misappropriation of funds. First, a few words on how this foundation document [as Modi would...
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Empowering the poor – shun subsidies, build assets
Recently, during launch of a book, union finance minister, Arun Jaitely concurred with the author [an economist] that increase in capital formation in agriculture is a far better way of helping the farmers instead of the extant system of giving subsidies. The increase in investment – be it in soil conservation and improvement in its health, irrigation and water conservation, agricultural implements, infrastructure for storage/handling/quality testing, information technology, marketing infrastructure and use of modern technology for crop production – lays the foundation for sustainable increase in the income of farmers. This is in sharp contrast to subsidies on agricultural inputs viz. fertilizers, seeds, pesticides, power, credit, fuel etc whose positive impact is felt only as long as these are given....
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Addressing farmers’ woes – middleman holds the key
In recent years, the Modi – government has increasingly faced the wrath of farmers all over the country with the last year alone having seen over half-a-dozen protests. On October 2, 2018, in a major show of strength, thousands of farmers from Uttar Pradesh [UP], Haryana, Punjab, Uttarakhand had congregated on Delhi border with close to dozen demands. These included:- Implementation of Dr MS Swaminathan headed Nation Commission on Farmers recommendations; Purchase of all of farmers produce at notified minimum support price [MSP]; Greater role to farmers producer organizations [FPOs] in food procurement; Waiver of all outstanding farmers loans; Payments of all outstanding arrears to sugarcane farmers; Enforcement of minimum wage for all farm workers; Giving pension to all farmers...
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Power cross-subsidy – Modi proposes, Kejri disposes
The center has mooted far reaching amendments to the Electricity Act [2003] which after incorporating the comments from states [the draft was sent to them on September 7, 2018 and they have 45 days] will be taken up for consideration and approval in the winter session of the parliament. The 4 key amendments are:- (i) capping the cross-subsidy to consumers within a distribution area to 20% immediately to be followed by complete elimination progressively within 3 years [section-61]; (ii) if a state wants to give subsidy to a particular category of consumers, the same should be given as direct benefit transfer [DBT] [section-45]; (iii) all sale/purchase of power shall be through long/medium/short-term power purchase agreements [PPAs] –– as per a...
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FDI in retail – policy void and unfounded fear
Recently, a task force [TF] on e-commerce under the then commerce secretary, Rita Teaotia had recommended 49% FDI [foreign direct investment] in Indian retail in online marketplaces that hold inventory and sell directly to consumers [B2C]. However, this is subject to only 100% made-in-India products being sold through such platforms. Further, the platform must be promoted by resident Indian and controlled by Indian management. This had led to consternation among Indian companies in the organized retail such as Reliance Retail Limited [RRL], Futures Group etc who opined that this would violate guidelines as encapsulated in Press Note [PN] 3 [2016-17] which bars foreign investment in B2C. The foreign majors operating in on-line market place viz. Amazon, Flipkart etc also protested...
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Shutting NRIs/PIOs-run FPIs – a bad idea
Faced with shortage of domestic capital and compelling need to accelerate the rate of economic growth, successive governments have taken steps to attract foreign investment. Strictly speaking, the capital inflows to India should be sourced from income generated from business or otherwise – by persons located in foreign jurisdictions. The persons could be foreigners or non-resident Indians [NRIs] or persons of Indian origin [PIOs] or overseas citizens of India [OCIs]. In case however, the inflow happens to be Indian money which left our shores in a clandestine manner and comes back in the garb of foreign capital [also known as ‘rounding tripping’ in common parlance] then, it raises many eyebrows. Until a few years ago, the extant policy and regulatory...
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