While, presenting the budget for 2015-16, finance minister, Arun Jaitely had fixed an ambitious target of Rs 69,500 crores for proceeds of divestment in public sector undertakings [PSUs] during the current fiscal. Of this, Rs 41,000 crores was to come from divestment of ‘minority’ stakes and balance Rs 28,500 crores from ‘strategic’ sale. The target was pretty ambitious considering that during 2014-15, as against a target of Rs 58,000 crores [including Rs 43,000 crores from sale of minority stake and Rs 15,000 crores strategic sale], the actual realization was only Rs 26,000 crores. Of this, Rs 22,000 crores came from sale of 10% stake in Coal India Limited [CIL] alone. During the first 7 months April-October, the government has so...
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Category: Regulatory environment
Social Security Agreement – US should shed intransigence
In a just concluded meeting of the Trade Policy Forum [TPF] attended by commerce minister, Nirmala Sitharaman from India and US Trade Representative [USTR], Michael Froman, US has emphatically rejected India’s request for signing a Social Security Agreement [SSA] – nick named totalisation pact. The possibility of signing the Agreement – pending for long – had got a boost early this year when prime minister, Modi raised the issue with President Obama during his January, 2015 visit to India. As a follow up, in August a ‘negotiating forum’ was set up to discuss a possible SSA between India and US. Though the forum is still active, in view of rejection at highest policy making level, chances of getting US agree...
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NJAC WAS AN IMPROVEMENT
The collegium system is flawed, and the apex court has admitted it. Yet, the court has endorsed the process On October 16, 2015, a five-judge Constitution Bench of the Supreme Court of India vide a majority vote of four-to-one quashed the 99th Constitution Amendment which established the National Judicial Appointment Commission for the appointment of judges to the apex court and the High Courts. The court also resurrected the collegium system which the NJAC Act had replaced on April 13, 2015. The judges took umbrage to the NJAC being an onslaught on the independence of the judiciary. Their primary discomfiture was with inclusion of the Law Minister and two eminent persons in a committee of six (the other three being...
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Revival of ‘Collegium’ – onslaught on Constitution, yet again
On October 16, 2015, a 5-judge Constitution bench of the Supreme Court [SC] of India by majority vote of 4 has quashed the 99th constitution amendment and follow-on enactment setting up the National Judicial Appointment Commission [NJAC] for appointment of judges of SC and High Courts [HCs]. With this, the SC has also resurrected the erstwhile “Collegium” system which NJAC had replaced. It has invited suggestions on how to improve upon the Collegium which will be taken up in its next hearing on November 3. The setting up of NJAC was the outcome of a marathon exercise – that started with the recommendation of Justice Venkatachaliah Committee in 2002 [set up by NDA-I] that appointment of judges be made by...
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WHERE ARE THE BIG BANG REFORMS?
The Modi Government should be applauded for bringing in key changes, but action is missing in vital areas such as fertilisers, food, power and kerosene. There is a need for reforms in these sectors which are loaded with subsidies Prime Minister Narendra Modi should be applauded for bringing in governance reforms, liberalising foreign direct investment and increasing ease of doing business, but action is missing in vital areas such as fertilisers, food, power and kerosene. These areas are in dire need of big bang reforms. Inefficiency, cost padding/gold plating, pilferage/leakages and corruption are rampant in these sectors, leading to the ballooning of subsidies and associated difficulties, in adhering to fiscal discipline. An expenditure management commission, headed by former Reserve Bank...
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Supreme Court renders ‘Aadhaar’ dysfunctional
Believe it or not but it is true. From October 7, 2015 onwards if a person wants to open an account in a bank using Aadhaar card, he cannot do so. If, he wants to buy an insurance policy using this card as proof of identity, he can’t. If, he wants to draw pension on its strength, he can’t. A recent order of the apex court has brought all these and a host of other very basic activities to a grinding halt. Let us look at the facts. Aadhaar card is a bio-metric identification card issued by Unique Identification Authority of India [UIDAI]. So far, over 900 millions cards have been issued which is many times more than any other...
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Continue rate cut
ECONOMIC GROWTH : Having made a good head start (though belated), the RBI must not stop as there is potential for another 50-75 basis points reduction Prior to the fourth bi-monthly monetary policy review on September 29, RBI Governor Raghuram Rajan had come under unprecedented pressure to cut the policy repo rate [interest rate at which the apex bank lends money to commercial banks] to help government’s efforts in giving a fillip to the economy and putting it on a higher growth trajectory. Almost all stakeholders – industry and commerce, investors, experts/ economists – were unanimous in demanding a cut. While refraining from taking any position [lest this be misconstrued as interference in RBI’s autonomy], the government had nonetheless given...
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Add 100% FDI to the cart
Allowing 100% FDI in e-tail will make it easier for tax authorities to bring e-com firms under the tax net. In 2012, the UPA had permitted 51% FDI in multi-brand retail (MBR) with riders. The riders included sourcing 30% of requirements from small enterprises, a minimum investment of $100 million, besides giving full leeway to states on whether to grant permission or not. The policy was as bad as saying ‘no’ to FDI in MBR. The Modi government has continued with that policy decision. Finding that the direct route of entering MBR was choked, foreign investors have been looking for opportunities to make inroads. They found one in e-commerce where business was growing leaps and bounds. How did they manage...
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E-tailers and retailers – Allow 100% FDI for both
In 2012, the erstwhile UPA dispensation had permitted 51% FDI [foreign direct investment] in multi-brand retail [MBR] with riders. The riders include sourcing 30% of requirements from small enterprises, a minimum investment of US$ 100 million besides giving full leeway to states on whether to grant permission or not. The policy was as bad as saying ‘No’ to FDI in MBR. Modi – government which took charge in May, 2014 has continued with that policy decision. Finding that the direct route of entering MBR was choked, foreign investors have been looking for opportunities to make in-roads. And, they found one in e-commerce where business was growing leaps and bounds. So, how did they manage to grab this opportunity? Under the...
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Rajan should partner in unleashing growth
On the eve of next bi-monthly monetary policy review [September 29, 2015], RBI governor, Raghuram Rajan is under unprecedented pressure to cut the policy repo rate [interest rate at which the apex bank lends money to commercial banks] to help government’s efforts in giving a fillip to the economy and putting it on a higher growth trajectory. Almost all stakeholders viz., industry and commerce, investors, experts/economists are unanimous in demanding a cut. The government has thus far, restrained from taking any position and has left it to the governor to take an appropriate view [giving full respect to RBI’s autonomy]. But, in a recent statement, finance minister, Arun Jaitely made his intent very clear when he opined “common sense requires...
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