Every now and then, one hears talk of agrarian distress and farmers committing suicide. They are heavily indebted and are unable to earn enough to make both ends meet and repay the loan. The average monthly income of farmer is about Rs 5000 whereas for many, it is even below Rs 2000. It is also a fact that the government spends gargantuan amounts on subsidizing agricultural inputs viz., fertilizers, seeds, irrigation etc and makes huge quantum of credit available to them through public sector banks [PSBs] at subsidized rate of interest. Yet another truth is that barring present dispensation under Modi, government of the day had granted sumptuous increase in minimum support price [MSP] – a bare minimum price that...
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Poverty alleviation – Modi vs Congress
Modi’s political opponents have often accused him of dovetailing his policies and programs for the benefit of industrialists and businessmen ignoring farmers and workers. Nothing could be farther from the truth. If, there is any prime minister who has devoted maximum time to this vast constituency, it is none other than Modi. For generations, poor farmers, landless workers and millions of others were made to survive on subsidies even as a big slice of that never reached them as stated by former prime minister Rajiv Gandhi in a most condescending manner “only 15 paise out of Rs 1 allocated under welfare schemes actually reaches the beneficiaries”. There was not even a whisper of making them economically self-reliant. Modi has brought...
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Power conundrum – robbing Peter to pay Paul
In April, 2013, Central Electricity Regulatory Commission (CERC) in its interim order, allowed a ‘compensatory tariff’[CT] of Rs 0.524 per unit to Tata Power Ltd (TPL) 4000 MW ultra mega power project (UMPP) based on imported coal in Mundra, [Gujarat] for all its buyers. Likewise, for Adani Power, UMPP [4620 MW] it allowed CT of Rs 0.851 per unit and Rs 0.364 per unit for supplies to utilities in Gujarat and Haryana respectively. The CT was meant to neutralize increase in price of imported coal consequent to decision of Indonesian Government in September 2011, imposing a minimum ‘benchmark’ price below which coal cannot be exported. Not quite satisfied with the quantum of relief given by CERC, the Adani/Tata petitioned the...
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Taxing dividend – shareholders face triple whammy
Signalling a major change in the way dividend income is taxed, the finance minister, Arun Jaitely proposed in the Union Budget for 2016-17 that if dividend income earned by a resident individual, HUF [Hindu Undivided Family] or firm exceeds Rs 10 lakh, it will be taxed at the rate of 10 percent in the hands of the recipient. This is over and above the dividend distribution tax [DDT] currently paid by firms @ 16.995 percent [inclusive of surcharge and education cess] of the dividend amount so declared, distributed or paid. With the grossing up [as per Finance (No.2) Bill, 2014, dividend paid is grossed up with income distributed for computing DDT], the effective tax rate is even higher at 20.47%....
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IPRs – How India can escape ‘PWL’ tag?
India has time and again reiterated that it is in full compliance with its obligations under the multilateral agreement on trade related intellectual property rights (TRIPs) of the World Trade Organization [WTO]. At another extreme, the office of the US Trade Representative (USTR) argues with equal alacrity that there has been substantial deterioration in our intellectual property rights [IPR] regime. USTR has placed it under Priority Watch List [PWL] for two years in a row [2014 & 2015] under the Special 301 report on trade and industry practices. Meanwhile, US based multinational companies [MNCs] in pharmaceutical, biotechnology and agrochemical segments who invest billions of dollars in discovery and development of new products are putting pressure on USTR to continue India...
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Guidelines for FDI in e-commerce – an act of skulduggery
The Department of Industrial Policy and Promotion (DIPP) – nodal authority for issues relating to foreign direct investment [FDI] – has notified guidelines for FDI in e-commerce. Under these, 100 per cent FDI through automatic route will be allowed in the “marketplace” format of e-commerce retailing but not in “inventory-based” model of e-commerce. Under a marketplace model, an e-commerce entity provides an IT [information technology] platform on a digital and electronic network to act as a facilitator between buyer and seller. The company may provide support services to sellers in respect of warehousing, logistics, order fulfilment, call centre, payment collection and other services. Post-sales, delivery of goods to the customers and customers satisfaction will be responsibility of the seller. Any...
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Uttarakhand – President’s rule fine but, dissolve assembly
Ever since the grand old party [read Congress] faced an unprecedented defeat in the general election [2014], it is following a pre-meditated action plan to embarrass Modi – government at the slightest available opportunity. The latest in the series is the imposition of President’s rule in Uttarakhand which it has described as “murder of democracy” and even challenged in the court. The party is harping on the fact that the Union Cabinet made a recommendation to this effect even before the test of strength of the incumbent government on the floor of assembly slated for March 28, 2016 [the recommendation was made on March 27, 2016 and the same day, President gave his assent]. It justified its stance citing the...
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Aadhaar – key to plugging leakages in welfare schemes
On March 11, 2016, the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 was passed by the Lok Sabha [LS]. In the following week, the Bill was returned by the Rajya Sabha [RS] with five key amendments, but these were turned down and the LS passed it as a Money Bill. The Aadhaar Bill plans to use the identification number issued by the Unique Identification Authority of India (UIDAI), to deliver State subsidies directly into the hands (or actually, bank accounts) of beneficiaries. Aadhaar was first mooted as the Indian equivalent to the Social Security Number in the US. Aadhaar isn’t compulsory yet. The Bill is careful in stating that every resident is ‘entitled’ to...
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Doubling farmers income – not a mere slogan
Prime Minister Modi’s promise to double farmers income by 2022 [the 75th anniversary of India’s independence] is being looked at with lot of scepticism in opposition quarters as also among some critics who look with a microscope every single opportunity to embarrassment him and his government. What is the basis for such scepticism? First, driven by a pre-meditated mindset, they are unable to see or not wanting to see any action happening on the ground. Second, they cite no increase in minimum support price [MSP] of food under Modi – dispensation to infer as to how then, farmers income could be doubled? Both points require careful scrutiny. To see what happens to MSP alone can be misleading. This is because...
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EPF withdrawal – hasty retreat from well crafted move
The proposal mooted by finance minister, Arun Jaitely in the Union Budget for 2016-17 to tax 60% of withdrawal from EPF [employees provident fund] and other superannuation funds has caused Modi – government much embarrassment. It faced flak from all quarters including from its own support base forcing Jaitely to withdraw the decision lock stock and barrel. The budget announcement was bandied as anti-salaried class/ common man by all and sundry. But, that is completely out of sync with the DNA of prime minister who – from the day of assuming charge – has consistently vowed to devote every moment of his work to improving the welfare of the 1.25 billion people especially the poor and down-trodden. How could his...
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