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...
More
No comments
Category: Governance reforms
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...
More
No comments
PSB woes – lasting solution miles away
India is the only bright spot with a high growth rate of around 7.5% in an otherwise turbulent world with major economies either decelerating or remaining flat. But, there is a dark spot on Indian economic landscape which if not removed urgently, could prove to be a major drag. This pertains to increase in non-performing assets [NPAs] of banks to unsustainable level. Currently, NPAs [loans which do not yield return] of Indian banks are about Rs 400,000 crores. Including restructured assets [bad loans made to look like normal assets by relaxing terms], the total stressed assets are Rs 800,000 crores or 11.25% of gross advances. For public sector banks [PSBs] alone, this is much higher at 14%. The problem has...
More
No comments
A thing of the past
RETROSPECTIVE TAX About a fortnight ago, the income tax (I-T) department sent a reminder notice to the UK-based Vodafone Group Plc to pay Rs 14,300 crore in tax dues and threatened to seize the assets in case of non-payment. Foreign investors have taken umbrage to it. Vodafone termed this as an act completely out of sync with Prime Minister Narendra Modi’s promise “Retrospective tax is a matter of past… We are ensuring that neither this government nor future governments can open this chapter” made during India – France Business Summit in January, 2016. Others opined this is return of tax terrorism, a phrase coined in the wake of a retrospective amendment in tax laws initiated by then finance minister Pranab...
More
No comments
Will PSBs survive Rajan’s surgery?
The carnage seen on the Indian bourses on February 11, 2016 leading to erosion in market capitalization by a whopping Rs 300,000 crores [around US$ 44 billion] was led primarily by plunge in the stocks of public sector banks [PSBs]. Even as the near recessionary trends globally precipitated by deceleration in Chinese growth rate has been the undercurrent contributing to decline in Sensex/Nifty, steep fall in PSBs stocks in particular, is due to poor results of the third quarter [October-December, 2015] of the current financial year. State Bank of India [SBI] – biggest of all PSBs in terms of size and market capitalization – reported a steep fall of around 60% in net profit for the quarter. Punjab National Bank...
More
No comments
POLICY MUDDLE IN FDI RETAIL
The Government’s unrealistic policy of barring foreign direct investment in the business-to-consumer segment has pushed e-commerce retailers to camouflage themselves as market places to access funds from abroad The Delhi High Court is hearing a plea filed by the All-India Footwear Manufacturers and Retailers Association, regarding the alleged flouting of foreign direct investment rules by e-commerce companies. In its affidavit to the court, the Department of Industrial Policy and Promotion has argued that its job is to formulate policy — not monitor implementation. The DIPP added that it has already laid down a ‘transparent’ and ‘predictable’ policy which permits 100 per cent FDI in business-to-business transactions in e-commerce, but only prohibits in the business-to-customer segment. Further, it does not recognise...
More
No comments
India’s growth narrative – hits Rajan’s speed breaker
While, presenting the budget for 2015-16, finance minister, Arun Jaitely had taken a conscious decision to deviate from the fiscal consolidation road-map drawn by his predecessor and reiterated by him in budget for 2014-15. Accordingly, he fixed the fiscal deficit target as 3.9% of GDP as against 3.6% as per the road-map. The rationale behind this decision was to give a big boost to public investment in infrastructure viz., roads, highways, rails, power, port, airport etc in the backdrop of sluggish investment by the private sector [groaning under heavy debt and low margins]. The idea was to resurrect growth and push it in to double digit orbit. For 2016-17, in view of industry clamoring for continued boost in public spending...
More
No comments
PSU divestment – judiciary should keep away
Thanks to a decade of mis-governance and policy inaction under the erstwhile UPA dispensation, the judiciary has made deep inroads in to the executive domain. The most recent manifestation of this interference is the order of the Supreme Court [SC] to the Government of India [GOI] not to sell its residual stake in Hindustan Zinc Limited [HZL]. In 2002, GOI had sold 26% shares in HZL to a Vedanta Group company Sterlite Opportunities & Ventures. In the following year, it parted with another 18.92% under a ‘call option’ available to latter. A further 25.5% was offloaded [but not before a long-drawn arbitration battle between then UPA-regime and Vedanta over legality of ‘call and put’ options] taking total divestment to 70.5%....
More
No comments
Modi’s economic diplomacy – yields rich dividend
The die-hard critics of Prime Minister, Modi especially his political adversaries have dismissed his incessant foreign visits as mere “pleasure trips” bringing hardly any relief to the common man though some of them reluctantly acknowledge his role in raising India’s stature in the comity of world nations. They cannot see any other benefit as they are just not willing to see. But, for someone who is not wearing colored glasses, the unprecedented economic benefits these have brought to India are pretty evident. One of the major gains of economic diplomacy unique to his style relates to re-negotiation of a long-term gas purchase deal with Qatar that was terribly dis-advantageous to India. To better understand what it means to us, let...
More
No comments
FDI in retail – policy muddle confounded
The Delhi High Court (DHC) is hearing the plea of Retailers Association of India [RAI] and All India Footwear Manufacturers & Retailers Association [AIFMRA] regarding alleged violation of rules relating to foreign direct investment [FDI] in multi-brand retail by e-commerce companies. The writ petitions were filed by the two associations in May, 2014 and August, 2014 respectively. In its affidavit submitted to DHC, the department of industrial policy and promotion [DIPP] has argued that its job is to formulate policy and has nothing to do with its implementation. It added that it has already laid down a ‘transparent’ and ‘predictable’ policy which permits 100% FDI in B2B [business-to-business] transactions in e-commerce but prohibits in B2C [business-to-customer]. Furthermore, it does not...
More
No comments