In the just concluded Gujarat assembly elections, BJP got yet another chance to form the government for the sixth time in a row. But, unlike in the past, when it won by a comfortable margin, this time it barely scraped through getting 99 seats in the house strength of 182. A major reason was its dismal performance in rural areas. In particular, the farmers voted against the party expressing resentment over anti-farmer policies followed by the state government resulting in meager income even leading to suicide in some cases. A vivid manifestation of this is available from the Saurashtra-Kutch region where BJP got only 23 out of a total of 54 seats. The farmers suffered due to increase in cost...
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2G scam – CBI court exonerates the corrupt
December 21, 2017 will be remembered as a black letter day in India’s fight against corruption that started over three-and-a-half years ago with prime minister, Modi taking charge in May, 2014. This is a day when the corrupt politicians and their cronies thronged the roads of Delhi and Chennai celebrating – shouting slogans and distributing sweets – following the judgment of a special CBI court that heard the cases of those involved in the infamous 2G scam. The court acquitted all persons – the politicians, ex-bureaucrats and top industry executives – against whom the Central Bureau of Investigation [CBI] and Enforcement Directorate [ED] had framed charges under the Supreme Court [SC] monitored investigations. In his order, the judge OP Saini...
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Curbing tax evasion – why involve the e-portal?
The decision of the GST [Goods and Services Tax] 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 platform has led to widespread consternation. So much so, it has been forced to defer its implementation until March 31, 2018. 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 then claim credit or refund on this amount while discharging his/her...
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Public stockholding – is it end of the road for ‘permanent solution’?
The 11th WTO [World Trade Organization] ministerial which started on December 10, 2017 in Buenos Aires with pomp and show has ended in whimper. After four days of marathon deliberations [in the plenary, group meetings and bilateral], even the efforts by director general, Roberto Azevedo to draft a declaration – a bare minimum for any such conference – did not bear fruit. The main reason for the failure was diametrically opposite stance taken by USA and India. While, the latter pressed for the most contentious issue under the Doha Development Round [DDR] viz. finding a permanent solution for public stockholding programs for food security, the former did not even allow it to be put on the table [earlier in November...
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Electricity reforms – missing the wood for the trees
On the eve of a meeting with state power ministers to discuss comprehensive reforms in the power sector, in a free-wheeling interview with a leading business daily, union power minister, RK Singh has come up with four ideas viz. (i) cross-subsidy will be restricted to 20% from fiscal year 2019-20; (ii) tariff hike to cover losses of state electricity boards [SEBs]/power distribution companies [PDCs] will be capped at 15% from April 2019; (iii) innovative measures to reduce technical and commercial [T&C] loss of SEBs/PDCs and (iv) direct benefit transfer [DBT] of power subsidy. If, the multitude of problems facing the power sector including huge recurring losses of SEBs/PDCs could be solved by issuing diktats, this could have been achieved long ago. During...
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Developed countries ride piggy back on WHO to thwart Indian drug export
In 2008, more than a dozen shipments carrying off-patent generic drug from India were detained by customs authorities in European Union [EU] countries on grounds of alleged infringement of EU intellectual property. The consignments were destined for Brazil transiting through the European ports and airports. India together with Brazil had taken the issue to WTO’s [World Trade Organization] disputes settlement body in May 2010 against the EU and Netherlands, where the shipments were detained. Other countries viz. Canada, Ecuador, China, Japan and Turkey had joined the dispute. India argued that the seizures violated the multilateral Trade Related Intellectual Property Rights [TRIPS] agreement of the WTO, as the medicines were off-patent both in India as well as the country [read Brazil] to...
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Demonetization – were banks used to convert black into white?
Dwelling on the success of demonetization [announced on November 8, 2016], Prime Minister Modi informed the nation from the ramparts of historic Red Fort on August 15, 2017 that the government had cancelled the registration of over 200,000 shell companies [nick name for entities which are engaged in laundering black money]. He reiterated this on October 5, 2017 in his speech at the annual function of the Institute of Company Secretaries of India [ICSI] alluding to the axe falling on another about 100,000 such companies. These companies were identified while examining data on deposits made post-demonetization using advanced data analytics technique. Taking the process forward – in its all out war against black money and corruption – the government had...
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Urea – Modi’s clarion call may lead to its under-use
Addressing the 38th edition of ‘Mann Ki Baat’, the prime minister said, “Can our farmers take a pledge to bring down urea use by half by 2022? If they promise to 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 deteriorating health of the soil world over, an overarching factor contributing to this is excessive use of urea. The positive correlation between excessive use of urea and erosion in soil health is an incontrovertible fact proven by several studies and also acknowledged in the Economic Survey and other official documents. This is a phenomenon that...
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Taking on willful defaulters – Modi’s knock-out punch
The union government has promulgated an ordinance seeking to amend the Insolvency and Bankruptcy Code [IBC] – a law that was passed by the parliament last year aimed at faster and time-bound resolution of non-performing assets [NPAs] of commercial banks nearly 75% of which are with public sector banks [PSBs]. The resolution process involves the lender [read: bank] – under directions from the Reserve Bank of India [RBI] – making a reference of defaulting borrower to the National Company Law Tribunal [NCLT] which appoints interim resolution professional [IRP] for conducting the process. Under it, potential bidders make a bid for the company and the amount thus realized is used to pay back the loan. The process involves banks taking a...
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India’s stance on food security at WTO – Prabhu does a volte face
The union minister of commerce and industry, Suresh Prabhu has stated that “he won’t take up the issue of finding a permanent solution for public stock-holding programs for food security at the upcoming WTO ministerial in Buenos Aires next month”. This should be music to the ears of developed countries particularly USA, EU, Canada, Australia and Japan as this was a major item on the agenda of the Doha Development Round [DDR] – started in 2001- which they are hell bent on dumping. In fact, during a meeting at WTO, Geneva [July, 2017], they had rejected a proposal submitted by G-33 Group of developing countries [with India in the lead] on (i) public stock-holding for food security; (ii) special safeguard mechanism [SSM]...
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