On November 16, 2017, the Union Cabinet approved setting up of a National Anti-profiteering Authority [NAA] under Goods and Services Tax [GST] so as to ensure the benefit of the tax reaches consumers. Besides, the chairman, it will include four technical members. A five-member committee, under Cabinet Secretary P K Sinha, has been entrusted to finalize the list. If, a consumer feels that the reduction in the incidence of tax under GST dispensation is not being passed on, he/she can register a complaint with the authority. The anti-profiteering mechanism provides for setting up of ‘screening committee’ at the state-level and ‘Standing Committee’ at national level. The complaints will be first sent to ‘screening committee’/‘Standing Committee’ depending on whether it is of...
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US law makers game plan to kill H-1B jobs
On April 18, 2017, President Donald Trump signed an executive order called “Buy American, Hire American”, directing federal agencies to review the H-1B visa program with the aim to end alleged ‘fraud’ and ‘abuse’ and ensure only the “most-skilled and highest-paid applicants” were successfully processed. [H-1B visas are issued to foreigners who have ‘theoretical’ and ‘technical’ expertise in specialized areas to work in local [read American] companies for temporary period.] As a follow up, the US Citizenship and Immigration Services [USCIS] which administers these visas, is already implementing measures which severely restrict or delay grant of such visas. These include inter alia stop ‘premium’ processing of applications, more rigorous interview/procedural requirements, denial of employment to spouses of those already working...
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Fiscal glide path, to change or not – Jaitely’s dilemma
Having stuck to the fiscal consolidation road-map for three consecutive years beginning 2014-15 and put up a brave front in regard to remaining on course during the current year at least until recently, finance minister has now alluded to what he termed as ‘changing the glide path to meet the challenges emerging from structural reforms’. The statement was made at Morgan Stanley investor meet in Singapore. However, in the wake of Moody’s Investors Service revising India’s sovereign rating from Baa3 to Baa2 and outlook from ‘positive’ to ‘stable’, Jaitely has retracted from the above and exuded confidence that the government will stick to fiscal consolidation road-map. Yet, it is necessary to analyze the reasons for his discomfiture and assess whether...
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Power reforms – piecemeal measures won’t work
The union power minister, RK Singh has convened a meeting of state power ministers to discuss comprehensive reforms in the power sector to discuss among others measures (i) to uphold sanctity of power purchase agreements [PPAs] between generators and state electricity boards [SEBs]/power distribution companies [PDCs]; (ii) curbing wasteful electricity consumption; (iii) remove cross-subsidy surcharge and (iv) direct benefit transfer [DBT] of power subsidy. Before discussing the reforms at the outset, it is important to take cognizance of the problems facing the sector and the source of their origination. First, SEBs/PDCs, the life-line of power sector are incurring huge losses – a phenomenon seen for over two decades. Unable to make timely payments to power generators – public sector undertakings...
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GST – single rate, key to harnessing its potential
In its meeting held on November 9/10, 2017, GST Council has brought about a major restructuring of GST architecture. It has moved 180 items from the 28% slab [178 to 18% and 2 to 12%] leaving only 50 items in the highest slab. Besides, there has been some shuffling of items in other slabs: 19 items from 18% [13 to 12% and 6 to 5%]; 8 items from 12% to 5% and 6 items from 5% to zero. The exodus of items en mass from the 28% slab – a large number of these being items of common use such as detergents, soaps, shampoos, chocolates, nutrition food etc shows that there was something fundamentally wrong in designing architecture in the...
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Demonetization – Modi changed goal post, really!
The opposition parties observed November 8 – the day demonetization was announced by Prime Minister, Modi last year – as a black day. It has castigated the government for changing the goal post if only to camouflage its alleged failures. A senior member of the Congress observed that increase in search and seizure, de-registration of shell companies, increase in the number of persons filing income-tax returns, digitalization etc have nothing to do with demonetization. They aver that the original objective of the exercise was only to destroy the black money which has not been achieved. Nothing could be farther from the truth. True, the government had estimated that Rs 300,000 crores won’t come back to the system thereby representing a...
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Unshackle farmers from subsidy and control raj
Dr Ramesh Chand, Member [Agriculture], NITI [National Institute for Transforming India] Aayog – the new incarnation of erstwhile Planning Commission – has reiterated that prime minister’s commitment to double farmers’ income by 2022 is doable. The average income of a farmers’ family in India is about Rs 6400 per month, but the variations across states are huge. For instance, in Punjab the average income is a high of Rs 18,000 per month, in Bihar, Odisha and Jharkhand, it is less than Rs 5000 per month. This may point towards the possibility of increasing farmers’ income manifold [even more than 100%]. If, farmers of Punjab can do it, there is no reason why those in other states cannot come up. But,...
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Fertilizer subsidy arrears – shun band-aid solutions
The Cabinet Committee on Economic Affairs (CCEA) has accorded the ex-post facto approval for special banking arrangement [SBA] for Rs 10,000 crore for payment of outstanding claims on account of fertilizer subsidy in the year 2016-17. It also approved that, in future, Department of Fertilizers [DoF] would avail the SBA with concurrence of Department of Expenditure [DoE]. Faced with fertilizer subsidy arrears of around Rs 35,000 crore by end of financial year 2016-17, the union minister for chemicals and fertilizers Ananth Kumar had in January, 2017 written to the finance minister asking for SBA for Rs 20,000 crore to provide loan to cash starved fertilizer companies at reasonable rates. Against this, Department of Fertilizers [DoF] was allowed to raise a...
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Targeting Modi – lacks substance
In a first ever, we have a prime minister, who on taking charge declared himself as ‘Pradhan Sewak’ and has been working relentlessly [he works 18-20 hours] in the service of 125 crore people. Yet, Modi’s critics hell bent on showing him in poor light interpret the statement trivially to argue ‘so what, almost every leader who occupies this coveted position works that long and there is nothing special about him’. They are making a grave mistake. Juxtaposing deliverable [as they see] versus promises, their blast is on 4 counts: (i) where is Rs 15 lakh that Modi had promised to be deposited in the account of every Indian; (ii) demonetization was a disastrous policy decision that brought miseries to...
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Want subsidy reforms – hold simultaneous elections
Recently, Arvind Kejriwal, Chief Minister, Delhi vehemently opposed the hike in fare for travel by Metro Rail and even offered to sharing the financial burden equally with union government to ensure that commuters are not penalized. About 3 years back, he had decided to give heavily subsidized power to households consuming up to 400 units a month. Then, also he vowed to bear its financial burden from the state government budget. Kejriwal is not alone in giving freebies using tax payers money. During the last 5 decades of governance – be it at the center or states – successive political establishments have built a super-structure of subsidies such as on fertilizers, food, kerosene, LPG, irrigation, power, credit, seeds etc. When given...
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