In his budget speech for 2016-17, finance minister, Arun Jaitely announced the government’s intent to review Fiscal Responsibility and Budget Management [FRBM] Act with a view to make the target flexible to make it range bound instead of a fixed number as had been the position hitherto under the extant Act in vogue since 2003. Accordingly, a committee under Mr NK Singh, Chairman, Fifteenth Finance Commission, was set up to examine this issue besides revamping of the Act. The committee recommended a fiscal deficit target of 2.5% of gross domestic product [GDP], revenue deficit of 0.8%, a combined centre-state debt ceiling of 60% and central debt ceiling of 40% by fiscal 2022-23, end point of its six-year medium term fiscal road-map. It also recommended...
More
No comments
Category: Growth & employment
National Health Protection Scheme – an election gimmick
In yet another demonstration of his commitment to take care of majority of the poor, in the last budget [2018-19] of its term before the next general elections in 2019, Modi government has announced a National Health Protection Scheme [NHPS]. Touted as the world’s largest public health care program [bigger than even Obamacare in USA], it seeks to provide health insurance cover of up to Rs 500,000/- to 100 million poor and vulnerable families. Taking an average family size of 5 persons, the benefits are expected to reach 500 million individuals or 40% of India’s population. In his budget speech, the finance minister, Arun Jaitley quipped “It is taking health care to a new aspirational level as it is going...
More
No comments
Can pakoda seller be at par with beggar?
In an exhaustive interview given to a news channel on the eve of the New Year 2018, prime minister, Modi cryptically observed “won’t you consider a vendor selling ‘pakodas’ [a most preferred snack consumed all over India] and earning Rs 200 per day as a job”. The observation has added fuel to a raging debate over the employment generation record of the NDA government. The grand old national party, Congress is not tired of lashing out at the government for its alleged failure to redeem its election promise of generating 20 million jobs every year. Reacting to Modi’s observation, P Chidambaram, a senior Congress leader and former finance minister under UPA has opined “if selling pakoda is tantamount to creating...
More
No comments
Building an egalitarian society – Modi alone can’t do
Just around the time Prime Minister, Modi was hard selling India as a preferred investment destination during his inaugural address at the 48th World Economic Forum [WEF] Annual Meeting, Davos – citing its far reaching economic reforms, expanding market opportunities, huge demographic dividend and inclusive development agenda, the annual Oxfam survey has brought to the fore a glaring statistics regarding on income inequalities in India. According to Oxfam, about 73% of the wealth generated during 2017 was appropriated by a 1% of the population [a steep jump of 15% over the corresponding figure 58% during 2016]. At the same time, almost 50% Indians – covering mostly the poor – saw their income increase by mere 1%. These numbers are out...
More
No comments
Will SEBI protect minority shareholders of Tata entities?
The Securities and Exchange Board of India [SEBI] is looking at whether Tata Sons’ plan of becoming a private limited company from a public one would impact shareholders, especially minority shareholders of listed Tata entities that own shares in Tata Sons. Meanwhile, new structure has also been challenged before National Company Law Tribunal [NCLT]. Tata Sons Limited [TSL] is the primary holding company of over US$ 100 billion conglomerate having presence in almost every major sector viz. power, steel, automobiles, telecomm, chemicals, information technology [IT] etc. It has controlling interest in high profile companies such as Tata Motors Ltd [TML], Tata Steel Ltd [TSL], Tata Consultancy Services [TCS], Tata Power Ltd [TPL], India Hotels Co. [IHC], Tata Chemicals Ltd [TCL] [to name a...
More
No comments
Fiscal slippage real worry, not growth
At this critical juncture when the next general election is just about a year away and in a month from now, Modi – government will be presenting its last full fledged budget, prime minister faces two major challenges viz: deceleration in GDP [gross domestic product] and slippage in fiscal deficit. After registering fairly impressive growth during the first three years of its stint [2014-15: 7.5%/2015-16: 8.0%/2016-17: 7.1%], the current year is expected to end with a significantly lower growth of 6.5%. Though, according to the chief statistician, the figure may be revised a bit upward [on receipt of more data], that may not alter the position drastically. However, the government is not unduly perturbed. In fact, from its perspective, the...
More
No comments
GST – flip flop over inclusion of oil and gas
Once again, there are reports alluding to the possibility of the GST Council – all powerful body mandated to decide on tax rates, inclusions/exclusions, exemptions etc – taking up for consideration inclusion of natural gas within the ambit of GST. The prefix ‘once again’ has a loaded connotation. Even prior to launch of the Goods and Services Tax [GST] on July 1, 2017, finance minister, Arun Jaitely had given a hint that this would be considered in the 18th meeting of the Council to be held just before the launch. But, that was not to be. Six months since then, we are still hearing about its likely consideration! The issue needs to be seen in a much larger perspective. Natural...
More
No comments
Removing judicial hurdles to accelerate growth
Recently, the Union Cabinet approved amendments to the Specific Relief Act, 1963, and a Bill viz. The Specific Relief [amendment] Bill, 2017 was introduced in the parliament on December 22, 2017. It deals with specific fulfillment of a contract as part of the Government’s ease of doing business policy. The amendments proposes that after two parties enter into an agreement and one of them breaks the contract, the affected party will have the freedom to get the contract executed by a third party. Also, the affected party can get costs and other expenses recovered from the party which broke the agreement [under the existing law, the courts grant monetary compensation in exceptional circumstances]. In case, the contract relates to infrastructure...
More
No comments
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...
More
No comments
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...
More
No comments