Opposition parties are lambasting government for enacting legislation through promulgation of ordinances. Some of them like CPI (M) have even urged the President not to give his assent to recommendations of the Union Cabinet in this regard. What has prompted them to get in to get in to a belligerence mode? Are they justified in leveling such allegations? Does government’s action violate the constitutional provisions? Could it not wait for the bills to be passed by the parliament? The immediate trigger for these provocations is government’s decision to re-promulgate Coal Mines (Special Provisions) Ordinance and promulgate an Ordinance to give effect to provisions of Insurance Act (Amendment) bill to raise FDI (foreign direct investment) limit from extant 26% to 49%....
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Category: Infrastructure
LET’S HAVE THAT RATE CUT, PLEASE
The Modi Government’s focus is on creating assets. With this, fiscal deficit will be under control and there will be no risk of banks’ money landing in pockets which could destabilise the economy and aggravate inflatio For the sixth time in succession, Reserve Bank of India Governor Raghuram Rajan has refused to budge. In its monetary policy stance released early this month, the RBI has retained the repo rate (rate at which banks borrow from RBI) at eight per cent. This is despite a retail inflation during November at 4.3 per cent (wholesale inflation has plunged to ‘zero’) already hovering at just half the eight per cent benchmark set by the RBI for January, 2015, below which, a cut in...
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Cleansing the maligned coal sector in India
In August/September, 2014 when Supreme Court (SC) declared all 218 coal blocs allotted since 1993 ‘illegal’ followed by de-allocation of ‘all’ except 4 [2 of these are with PSUs viz., NTPC and SAIL and other 2 are for ultra mega power projects (UMPP) given under competitive bidding], this led to a hue and cry. The associations representing the beneficiaries of illegal allotments – in their presentations before SC – submitted that investment to the tune of about Rs 250,000 crores in development of coal mines and another Rs 400,000 crores in setting up of end use projects viz., power, steel, cement etc would be at risk. Commentators too joined the chorus opining that this will affect availability of domestic coal...
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Leveraging MGNREGA for inclusive growth
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) – a flagship welfare scheme of the erstwhile UPA dispensation launched in 2005 – has come under rigorous scrutiny by Modi government with a view to bring it in line with its agenda for inclusive development. Already, based on an examination of all facts regarding working of the scheme, the ministry for rural development (MoRD) has finalized a note for consideration by the cabinet. So, what are proposed changes? Before we take a look at that, a few words about basics of MGNREGA are in order. MGNREGA provides for ‘guaranteed’ employment to a member of a poor family for a minimum of 100 days in a year and pay wage @ Rs...
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Modi’s road to prosperity for ‘Neo-Middle Class’
During his power packed visit to USA with over 3 dozen engagements/meetings, the irresistible Indian prime minister, Narendra Modi held a brainstorming session with high profile American think-tank viz., Council on Foreign Relations (CFR) in New York on September 28, 2014. Apart from discussing Indo-US relations as also India’s relations with its neighbours and other countries, Modi used the opportunity to share his philosophy [contrary to what some of his die hard critics may say, he does not carry any ideological baggage allegedly linked to his association with Rashtriya Swayamsevak Sangh (RSS), mentor & guide of BJP] and approach to development. Thus, during his opening address at CFR, he stated “there is a ‘Neo-Middle Class’ in our country, one which...
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Modi’s 3 D mantra for inclusive development
Among foremost economic reasons for disastrous performance of erstwhile UPA led by Congress in the general elections (May, 2014) was the dismal employment scenario. Price rise and slump in growth were other key factors. This led to huge disenchantment among youth who vented their anger against then ruling UPA dispensation. They also gave an overwhelming mandate to Modi who promised them jobs through his mantra of inclusive development. During the last decade (2004-2014) of UPA rule, employment increased by a meager 15 million which is one-fourth of an increase of 60 million during the 6 year stint of NDA (1998-2004) led by charismatic Vajpayee. Ironically, manufacturing sector – long perceived as the harbinger of employment – is languishing at just...
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RBI’s ‘back foot’ play – wholly unwarranted
In 2014, there has been an unprecedented surge in investment by foreign institutional investors (FII) with a total of over US$ 20 billion having already come in during January-June. But, RBI governor Raghuram Rajan has sounded a note of caution advising government to be circumspect in spending money. Rajan’s warning is based on the premise that ‘FIIs who bring in money can also take it back’. He observed that apart from continuing wind down of QE (quantitative easing), US Federal Reserve may also increase interest rates triggering reverse flow of funds. As custodian of balance of payments (BoP), governor’s caution is understandable. However, to aver that there could be flight of capital is bit of an exaggeration! This may even...
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Coal thieves chanting growth mantra
On August 25, 2014, the Supreme Court (SC) pronounced 194 coal blocks allocated since 1993 ‘illegal’ as all these allocations suffered from what it described as ‘vice of arbitrariness’ and showed no concern what so ever for public/national interest. The judgement vindicates findings of Comptroller and Auditor General (CAG). In its report (August, 2012), CAG had estimated loss due to such arbitrary allocations made during 2006-2011 to be Rs 186,000 crores or US$ 31 billion (based on price at which coal is sold by CIL). This would be many times more if computation is done using price of imported coal. At another level, the judgement has created consternation among beneficiaries of illegal allotments. They are crying horse if these allocations...
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Vacillating BJP on FDI in multi-brand retail
During parliament debate in 2012, BJP had vehemently opposed foreign direct investment (FDI) in multi-brand retail (MBR) arguing that this would affect millions of traders besides small and medium enterprises. In run up to general elections, BJP’s prime ministerial candidate, Narendra Modi hinted at reviewing party’s stance when he opined that our traders should gear up to face competition from organized retail. He exuded confidence they can do! However, in its manifesto released on April 7, 2014 BJP categorically ruled out FDI in MBR while welcoming it in all other sectors to give a boost to jobs, build assets especially infrastructure and access to niche technology and special expertise. Now, Nirmala Sitharaman, Minister of State with independent charge (MoS-IC) for...
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Why BJP must cross the ‘272’ milestone?
Poll surveys conducted by various agencies/new channels are unanimous in giving a clear lead to BJP in ensuing Lok Sabha elections during April/May, 2014. The chances are bolstered by a perception that there is a ‘Modi wave’ all over India. ‘Modi wave’ is a euphemism for majority of people expressing a strong feeling that a government led by Modi can fulfil their aspirations in regard to increasing employment, reducing inflation, combating corruption and ensuring rapid development. An emboldened BJP is pulling all stops to sustain the momentum till voting is completed in every parliamentary constituency by May 12, 2014. It’s objective is to cross 272 mark on its own to ensure that new government is not hamstrung by compulsions of...
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