If, there is any political dispensation that has carried out administrative reforms in the true sense of the term, it is the present NDA – government led by Narendra Modi. He has delivered governance whose hallmark is ‘transparency’ and ‘honesty’. These traits have glided him towards a policy driven state, maximum focus on e-governance, minimizing use of discretion and elimination of physical interface. The results are there for all to see in terms of efficient delivery of services and reaching financial assistance and subsidies in full to the beneficiaries by leveraging technology especially direct benefit transfer [DBT]. This has also saved tens of thousands crore every year. That money is being re-deployed for building roads, highways, rails, ports, hospitals, schools...
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Shun differential pricing of gas
Prime Minister Narendra Modi has set an ambitious target of cutting India’s import dependence for oil from existing around 80% to 67% by 2022 and further down to 50% by 2030. To meet the target, his government has taken several initiatives to create a conducive ‘policy’ and ‘regulatory’ environment for boosting domestic production of hydrocarbons. A path-breaking policy initiative was introduction in July, 2017 of the Hydrocarbon Exploration and Licensing Policy [HELP] in place of the subsisting New Exploration and Licensing Policy [NELP] that was launched in 1999. Also dubbed as Open Acreage Licensing Policy [OALP], under HELP, bidders can get a single license for exploration and production of conventional hydrocarbons such as oil, natural gas as well as unconventional including shale...
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Power NPAs – don’t bail out defaulting promoters
In a bid to resolve mounting non-performing assets [NPAs] of public sector banks [PSBs] in a time bound manner, on February 12, 2018, the Reserve Bank of India [RBI] had issued an order requiring banks to initiate resolution of stressed assets – the so called special mention account [SMA-2] wherein either the loan or interest is in default for 60-90 days. As per the above circular, as soon as there is a default in the borrower’s account with any lender, all lenders – singly or jointly – shall initiate steps to cure the default. The resolution plan [RP] may involve any actions/reorganization including, but not limited to, regularization of the account by payment of all over dues by the borrower entity,...
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Make in India – can’t be at farmers cost
Under its “Make in India” initiative, Modi – government is pulling all stops to give a boost to indigenous industry even if it means cutting down on imports. While, use of WTO compatible measures such as increasing import duty is welcome, it would raise many eyebrows if the government starts giving orders to stakeholders even with regard to their production/import decisions. This is precisely what it has done to manufacturers/importers in the agro-chemical sector. Before we look at the diktat, at the outset, a bit of background check is in order. According to a statement by the then Union Agriculture Minister, Sharad Pawar in Parliament, nearly 10-30 per cent of crop production — valued at about Rs.1,50,000 crore a year —...
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FDI in retail – return of ‘license raj’
A discussion paper released by the commerce ministry on the draft policy for e-commerce has led to more confusion in regard to the role of foreign direct investment [FDI] in Indian retail. At the outset, let us take a look at a major policy announcement in 2016-17 regarding e-commerce – commonly referred to as Press Note [PN] 3. The guidelines notified vide PN-3, allow 100% FDI in the so called ‘market-place’ model for e-commerce – an IT platform where sellers and buyers conduct transactions. An e-commerce company working on this model merely acts as a facilitator by offering to them services such as booking order, raising invoice, arranging delivery, collecting payment, stocking goods etc. It does not own stocks and...
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Pruning subsidies – sustainable solutions needed
The union government seems to have made a good beginning in regard to achieving its fiscal consolidation goals for the current year. During the first quarter ending June 30, 2018, the fiscal deficit [excess of total receipts over total expenditure] is Rs 429,033 crore which is 68.5% of the annual target set in the budget. The corresponding figure for the first quarter of last year was 81%. This is commendable when seen in conjunction with a substantial jump in capital expenditure to about Rs 87,000 crore during the quarter ending June 30, 2018, an increase of 27% over the corresponding quarter of last year. This is 29% of the full year target. A key feature of the emerging trend is...
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Modi’s photo-up with industrialist – it’s all about transparency
Ever since Prime Minister, Narendra Modi took charge, the grand old party, the Congress has repeatedly attacked him for allegedly being in the company of “corrupt” industrialists and businessmen even while accusing him of neglecting the farmers and the poor. To buttress its charge, the latter has blasted the former of waiving loans of the defaulting industrialists and showing no sensitivity whatsoever towards the mounting debt of the farmers. All of this is encapsulated in the ever resonating jibe of Congress President, Rahul Gandhi ‘soot boot ki sarkar’ – a euphemism for a government that is obsessed with advancing the businesses of the industrialists. In his first ever blunt rebuttal, while launching as many as 81 investment projects worth over Rs...
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Bt cotton – unapproved in, approved out
It is ironical that despite prime minister, N Modi’s exhortation to stakeholders for embracing new technology in all spheres of economic activity for accelerating growth, at the ground level, the innovators face huge resistance from the very institutions which are expected to provide a supportive environment. The introduction of genetically modified [GM] crops provides a classic example of how the administrative authorities, regulatory bodies and the institution of judiciary have orchestrated a game-plan to throttle attempts to bring in new technologies that hold huge potential for increasing agricultural productivity and farmers’ income. Bt [Bacillus thuringiensis] cotton [the only GM crop so far allowed for cultivation by farmers in India] is genetically tweaked to kill bollworms that ravage cotton crops. It...
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Stop using RBI as a ‘milch cow’
The union government has invariably rode piggy back on profit making public sector undertakings [PSUs] and public sector banks [PSBs] to boost its non-tax revenue [using a variety of means such as high dividend/special dividend, divestment of its stake at premium etc] for the purpose of keeping fiscal deficit [excess of total revenue over total expenditure] within the set target. However, little is known about a subtle role that Reserve Bank of India [RBI] – India’s central bank – plays in helping central government in its fiscal consolidation drive. It does so by transferring huge surpluses to the centre year-after-year. During the last three years viz. 2015-16, 2016-17, 2017-18, it transferred Rs 65,900 crore, Rs 40,600 crore and Rs 58,000 crore...
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Inclusion of oil and gas in GST – long way to go
Replying to the debate in the parliament on July 20, 2018 on the no-confidence motion against his government, prime minister, N Modi gave a comprehensive account of the various schemes, reform measures and achievements during the last 4 years of its stint. A prominent reform measure listed by Modi was the Goods and Services Tax [GST] launched on July 1, 2017. Dwelling on the contentious issue of 5 hydrocarbon products natural gas, crude oil, petrol, diesel and aviation turbine fuel [ATF], he opined that under the UPA – version of the constitution amendment bill [2010], these products were excluded. If, that bill were to be enacted into a law then there would have been no possibility to include them at...
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