Instead of a vehicle’s age, let’s use fitness as the criterion for determining whether it’s allowed to ply on the roads or not Whether a vehicle is fit to run or otherwise, a lot depends on how well it is maintained, its timely upkeep; this needs to be tested instead of pronouncing it as unfit merely because it has reached a certain age. (Representative image/ File photo) ———————————————————————– On March 18, 2021, the Union minister for Road Transport and Highways, Nitin Gadkari, announced a ‘voluntary’ vehicle scrappage policy to (1) mitigate vehicular pollution and (2) more than double the turnover of Indian automobile industry from the current Rs 4.5 lakh crore to Rs 10 lakh crore in a few years....
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Category: Economic outlook
Banning old vehicles – a retrograde order
On March 18, 2021, Union Minister for road, transport and highways Nitin Gadkari announced a ‘voluntary’ vehicle scrappage policy to (i) mitigate vehicular pollution and (ii) more than double the turnover of Indian automobile industry from the present Rs 450,000 crore to Rs 1000,000 crore in a few years. At present, there are 5100,000 vehicles which are older than 20 years, 3400,000 vehicles more than 15 years old but < 20 years and 1700,000 > 15 years, but without renewed fitness certificate. The policy architecture is founded on two pillars viz. incentivize their scrapping and dis-incentivize hanging on to them. The owner going for scrap will get 4-6% of ex-showroom price of the new vehicle as compensation; 5% discount on...
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India gets poorer, investors richer
Imagine if all of Rs 2100,000 crore under Atmanirbhar package had been distributed among 40 crore workers in the informal sector; it would have boosted demand The Corona pandemic may have brought about sharp deceleration in India’s economic growth – the sharpest ever during the last four decades or so – but has yielded a bonanza for the investors. The wealth of investors in the stock market as represented by the market capitalization of Indian equities (market value of shares multiplied by their number) almost doubled from around Rs 113 trillion (a trillion equals 100,000 crore) as on March 31, 2020 to Rs 226 trillion as on March 31, 2021. In contrast, India’s GDP at current prices declined from Rs...
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India gets poorer, investors richer
The Corona pandemic may have brought about sharp deceleration in India’s economic growth – the sharpest ever during the last 4 decades or so – but has yielded a bonanza for the investors. The wealth of investors in the stock market as represented by the market capitalization of Indian equities (market value of shares multiplied by their number) almost doubled from around Rs 113 trillion (a trillion equals 100,000 crore) as on March 31, 2020 to Rs 226 trillion as on March 31, 2021. In contrast, India’s GDP at current prices declined from Rs 203 trillion during 2019-20 to Rs 197 trillion during 2020-21. As a result, the market capitalization to GDP ratio almost doubled from 56% during 2019-20 to...
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Person in control: New entity in charge
SEBI wants to shift focus from promoters to controlling shareholders or the so-called ‘person in control’ (PIC), but is the new breed willing to take charge? Paving the way for a major change in the way the promoters and over 4,700 listed corporates function in the country, in a consultation paper, the Securities and Exchange Board of India (SEBI) has proposed doing away with the concept of promoters and moving to ‘person in control’ (a three-year transition is recommended for the switch over). It has also suggested doing away with the current definition of promoter group with a view to rationalize the disclosure burden. The other proposals include (i) reducing the minimum lock-in period(the time period an investor can hold on...
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Covid-19 vaccine pricing: Modi has got it wrong
The Centre should make vaccination ‘free for all’ and conduct centralised purchases from the manufacturers Under the ‘Liberalised Pricing and Accelerated National Covid-19 Vaccination Strategy’ (LPANCVS), which kicked off on May 1, the Centre has plans to vaccinate all adults aged 18 and above — about a billion people. Given the mammoth task ahead, the vaccine pricing strategy has to be guided by two overarching considerations, namely (i) People should have absolutely no hesitation whatsoever in coming forward to get vaccinated, which, among other things, requires that this be done ‘free of charge’; and (ii) Manufacturers and suppliers should be willing to arrange for supplies of at least two billion doses within the shortest possible time frame, say, not extending...
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‘Person in control’ in lieu of ‘promoter’
Paving the way for a major change in the way the promoters and over 4,700 listed corporate function in the country, in a consultation paper, the Securities and Exchange Board of India (SEBI) has proposed doing away with the concept of promoters and moving to ‘person in control’ (a three-year transition is recommended for the switch over); It has also suggested doing away with the current definition of promoter group with a view to rationalize the disclosure burden and bring it in line with post-issue disclosure requirement. The other proposals include (i) reducing the minimum lock-in period (the time period an investor can hold on to the shares) post an initial public offer (IPO) for promoters’ share of minimum 20%...
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Make the COVID jabs free for everyone
There is a dire need to vaccinate at least one billion people within a short time and, given the pitfalls of differentiated pricing, the Centre should opt for inoculating everyone free of cost Under the ‘Liberalised Pricing and Accelerated National Covid-19 Vaccination Strategy (LPANCVS)’, announced on April 19, which was kicked off from May 1, the Centre has plans to vaccinate all adults above 18 years of age. Before this, the inoculation drive that was launched on January 16, covered healthcare and frontline workers and people above 50 years of age and those with comorbidities. In the second phase of the drive the age limit was brought down to those above 45. Vaccine manufacturers were giving all their supplies to...
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Vaccination – make it free for all
Under a “Liberalised Pricing and Accelerated National Covid-19 Vaccination Strategy (LPANCVS)”, Covid-19”announced on April 19, 2021 to be implemented from May 1, 2021, Modi – Government plans to vaccinate all persons above 18 years age. Until hitherto, the vaccination drive (launched in January, 2021) covered healthcare workers, frontline workers and people above the 45 years of age. Vaccine manufacturers were making all their supplies to the Government of India (GOI) charging Rs 150 per dose even as the latter was arranging for inoculation of the eligible persons free at Government vaccination centers (GVCs); however, those opting to get vaccinated at private hospitals needed to pay Rs 250 per dose. GOI incurred subsidy on vaccination done at GVCs equal to Rs...
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A flawed idea that the US must abandon
Imposing a global corporate minimum tax will interfere with the right of a country to determine its tax policy and impair its ability to galvanise the policy to achieve certain objectives The Joe Biden Administration is pushing for a Global Corporate Minimum Tax (GCMT) rate under the new international tax rules being coordinated by it with G20 countries. In 2017, the erstwhile Donald Trump Administration had introduced the US corporate offshore minimum tax called the Global Intangible Low-Taxed Income (GILTI). It is applied on the offshore incomes of US multinationals (MNCs) having subsidiaries in low-tax countries, at 10.5 per cent, which is half the Domestic Corporate Tax Rate (DCTR) of 21 per cent. US President Biden wants to double GILTI...
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