In the Economic Survey [2016-17] presented in the parliament on January 31, 2017, chief economic advisor [CEA], Dr Arvind Subramanian advocated universal basic income [UBI] instead of a plethora of subsidies given under extant dispensation. But, the idea found no mention in finance minister [FM], Arun Jaitely’s budget speech for 2017-18 presented on February 1, 2017. Meanwhile, in an interview given to a group of economic editors on February 1, 2017, Jaitely opined that “UBI is an idea whose time should come but, politics of this country is not mature yet for its implementation”. He could have taken the idea on board at least on a trial basis but avoided. So, what are the constraints and what will be the...
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Category: Welfare schemes
Was Modi’s demonetization a flop show?
When, demonetization [scrapping of 1000/500 notes] was announced by prime minister, Modi on November 8, 2016, the expectation was that about Rs 350,000 – 400,000 crores out of a total Rs 1544,000 crores [embedded in these notes] would not come to the banks. This was taken to mean tremendous success of this policy decision. Apart from meting out sternest punishment to the hoarders of black money [all of their illegal wealth accumulated over the years would be reduced to a worthless piece of paper], this would give a bonanza to Reserve Bank of India [RBI] by way of extinguishment of its liabilities to the extent of amount not returned. Being owner of RBI, the money will eventually flow to coffers...
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Shun populism to spur development
Nearly 30 months ago, prime minister, Modi was catapulted to lead India primarily on the plank of promoting ‘development’ and eliminate ‘corruption’. He has utilized every bit of this period to over-zealously pursue these objectives; those efforts and achievements are very much visible on the ground to everybody except those [opposition parties and his die-hard critics in media and intellectual fraternity] who have a vested interest in not taking note of these. Bringing development agenda on to the center-stage is something unique to Modi – dispensation since 2014. Prior to that, for decades, successive governments [barring 6 years stint of NDA (National Democratic Alliance) – government 1998-2004 then under Vajpayee] had only harped on giving doles to the poor. Even...
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Modi’s New Year gift to the underprivileged
After a protracted wait, India has got a Prime Minister who has risen from the ranks and hails from the majority of the poor. The other redeeming feature is that PM Narendra Modi leads a party that has an absolute majority in the Lok Sabha. This makes a happy combination. It ensures that every policy decision taken by the present dispensation is guided by the overriding concerns of the poor and the common man of India and seeks to benefit them. At the same time, the absolute majority of the ruling party ensures that people-friendly legislations (for instance, the Bill giving statutory backing to the Aadhaar card) have a smooth passage in the House. Demonetisation, announced on November 8, 2016,...
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Viewpoint: Expedite subsidy reforms
By Uttam Gupta, New Delhi 05/01/2017 After protracted wrangling, members of the Organization for Petroleum Exporting Countries (OPEC) agreed on November 30, 2016 to reduce their combined output by 1.2 million barrels a day. Likewise, 11 non-OPEC countries led by Russia decided on December 10, 2016 to knock off over 550,000 barrels from their supplies. The agreement is effective from January 1, 2017. These developments need to be viewed in the backdrop of a steep drop in the price of crude from its peak of US$ 114 per barrel in mid-2014 to US$ 27 per barrel in February, 2016 and had recovered only marginally to US$ 40 per barrel by November-end. The price of LNG which follows the trend in...
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Modi’s New Year gift to under-privileged/marginalized
It is a matter of deep satisfaction that after generations, India has got a prime minister who has risen from the ranks and hails from among majority of the poor. The other redeeming thing is that he leads a party that has absolute majority in Lok Sabha [lower house of parliament]. This makes a deadly combination. It ensures that every policy decision coming from Modi is guided by the overriding concerns of the poor and the common man and seeks to benefit him. At the same time, absolute majority of BJP ensured that several people-friendly bills [for instance, bill giving statutory backing to Aadhaar card] had a smooth passage Demonetization [announced on November 8, 2016] was meant to help poor...
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Demonetization – myths versus reality
In the aftermath of demonetization announced by prime minister, Modi on November 8, 2016, the air resonates with a tsunami of charges/allegations regarding its alleged ill-effects. It is time to assess the credibility of these charges. The government has plundered resources of poor The resources with the poor include (i) money held by him/her in cash [notes of various denominations] or (ii) savings in bank/post office if he/she has an account. As regards (i), he got 50 days time to exchange cash held in 1000/500 denominations for new notes at banks and another 3 months at RBI. As for (ii), this money is owned by him/her and shall remain so; all that the government did was to put restriction on...
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Subsidies – forget targeting, even cash transfer not in sight
In an exclusive interview given to a leading economic daily, Dr Arvind Panagariya, deputy chairperson, NITI Aayog has exalted the virtues of targeted cash transfer [TCT] instead of universal cash transfer [UCT] opining that opting for the former would help in reaching out more of state financial assistance or subsidy to the poor. This is stating the obvious. A given amount of subsidy if distributed among a lesser number of persons say, those living below the poverty line [their number is naturally less than the population universe] will result in each person getting more than the amount he would get if that given subsidy amount were distributed amongt the entire population. Yet, its reiteration by none other than Dr Arvind...
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SHEDDING TEARS FOR THE WRONG ‘VICTIMS’
A great deal of misinformation is being spread by vested interests to demonise demonetisation. Positive results of the Government’s courageous move will be seen soon A couple of days ago, Revenue Secretary Hasmukh Adhia had alluded to a good chunk of over Rs15,00,000 crore cash embodied in Rs1,000/500 notes (these were declared invalid by Prime Minister, Narendra Modi from November 8-9 midnight) coming back to the banking system. This was interpreted to mean that the ‘entire’ cash would return by December 30, when the scheme closes. Extrapolating from here, critics (opposition parties included) argue that demonetisation has been a monumental failure as there was either no black money, or that whatever existed, hoarders managed to get this converted into ‘white’....
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Forget deal, Modi has trapped all black cash
Ever since the proclamation by prime minister, Modi on 1000/500 note ban on November 8, 2016, the opposition parties have unleashed a ‘no-holds-bar’ and virulent campaign against the move – both inside and outside the parliament. There is no theme or objective behind this campaign. Even as virtually none from among the public standing in the long queues in front of the banks is complaining [indeed, majority of them have welcome the move and are prepared to live with some inconvenience], almost every parliamentarian in opposition camp wants the world to believe that they are suffering a lot. Sadly, a section of media is lending credence to what they say. There is an urgent need to look at the dynamics...
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