Three important highlights of the Interim Budget presented by Piyush Goyal at the beginning of this month are: (i) Under PM Kisan Samman Nidhi, the Centre will give Rs 6,000 per year to small and marginal farmers (land holding up to two hectares) to be deposited directly in their account to benefit a total of 120 million. The support is with effect from December 1, 2018, and the first installment of Rs 2,000 was transferred to beneficiaries last Sunday; (ii) Under PM Shram Yogi Mandhan, persons working in the unorganised sector and earning less than Rs 15,000 per month will get a pension of Rs 3,000 per month on attaining 60 years. For this, a worker joining at the age...
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Category: Welfare schemes
India’s burden of fiscal dilemma
Allocation for welfare schemes have not kept pace with an increase in revenues due to which the Government had to resort to a window dressing of accounts In the interim Budget presented on February 1, the Government reported a minor slippage of 0.1 per cent in fiscal deficit for 2018-19 against the target of 3.3 per cent of the GDP. For 2019-20, the fiscal deficit is pegged at 3.4 per cent. The Finance Ministry has indulged in skullduggery to restrict the deficit to 3.4 per cent, which itself is off the three per cent mark for 2018-19, as per the fiscal consolidation road-map (albeit original). With regard to proceeds from disinvestment of shares in Public Sector Undertakings (PSUs), the Government had set...
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Stopping pilferage, enhancing welfare, boosting growth
Addressing NRIs and Indian-origin people at the inauguration of the 15th Pravasi Bharatiya Divas convention in his parliamentary constituency of Varanasi in Uttar Pradesh on January 22, 2019, Prime Minister Narendra Modi referred to former premier Rajiv Gandhi’s remarks on corruption in the country saying Congress that ruled for years did nothing to stop the “loot”, while his Government put an end to it and transferred about Rs 5,80,000 crore directly to the people under various schemes. Modi recalled what Rajiv Gandhi had stated “of the funds Central Government sends, only 15 per cent of that reaches the people. If one rupee is sent from Delhi, only 15 paise reaches the villages, 85 paise disappear. Even as the country’s middle...
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Lies – newly found enemy of development
Even as the Congress camp is filled with jubilation over the defeat of BJP in the three heartland states viz. Madhya Pradesh [MP], Rajasthan and Chattisgarh, there is a pall of gloom among all the right thinking citizens of India. They are visibly upset over the consequences of the reins of powers in these three important states going into the hands of those who plundered the scarce national resources – epitomized by a spate of scams during 2004-2014 [when UPA led by Congress was in command at the national level] – and pushed the country into a state of ‘policy paralysis’ and shattered the economy. That it would mend ways and deliver good governance in these states is wishful thinking....
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Subsidy sops must stop
The very bane of public policy has been the Government’s interference in subsidising goods and services. Subsidies must be replaced with direct cash transfers The Modi Government has revolutionised the way subsidies are disbursed to beneficiaries by leveraging technology, especially the use of direct benefit transfer (DBT) on the Jan Dhan-Aadhaar-Mobile platform. This has made a dent on pilferage, and gargantuan resources, thus saved, are being used for development and enhanced funding of welfare schemes for wider and deeper coverage. But large-scale pilferage still continues. This happens in ways that even escape the radar of our ever alert Prime Minister. At the fundamental level, it can be sourced to the very existence of controls in sectors, such as food, fertilisers,...
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Modi’s onslaught on shell companies/ghost directors
A marathon exercise initiated by the ministry of corporate affairs [MCA] early this year which got consummated on September 15, 2018 on KYC [know your customer] norms for company directors has thrown up results that tell a lot about the existence of a monstrous ghost economy and the manner in which the present dispensation led by Modi is endeavoring to stem the rot. The exercise reveals that a total of 5000,000 DINs [director identification number] were issued by the authorities. On records, these were the number of directors serving on the companies. Out of these, only 3300,000 were ‘active directors’ implying that the balance 1700,000 were inactive or ‘defunct’. Put in simple terms, an inactive/defunct director is a person who...
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POLL SOPS DERAIL FISCAL CONSOLIDATION
The Government must shun the practice of giving sops through loan-waivers or the country will plunge into a fiscal disaster, inviting miseries for the poor In elections-after-elections, it has become normal for political parties to promise farm loan-waiver in order to swing votes to their favour. Last year, in Uttar Pradesh, loan waiver to small and marginal farmers promised by the Bharatiya Janata Party (BJP) Government was a major factor in catapulting it to power in the State. It cost the State exchequer around Rs 36,000 crore. In Punjab, the Congress won the election on the promise of waiving all outstanding loans to the farmers. Recently, in Karnataka, the coalition Government led by the Janata Dal (Secular) leader, HD Kumaraswamy,...
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Stop using RBI as a ‘milch cow’
The union government has invariably rode piggy back on profit making public sector undertakings [PSUs] and public sector banks [PSBs] to boost its non-tax revenue [using a variety of means such as high dividend/special dividend, divestment of its stake at premium etc] for the purpose of keeping fiscal deficit [excess of total revenue over total expenditure] within the set target. However, little is known about a subtle role that Reserve Bank of India [RBI] – India’s central bank – plays in helping central government in its fiscal consolidation drive. It does so by transferring huge surpluses to the centre year-after-year. During the last three years viz. 2015-16, 2016-17, 2017-18, it transferred Rs 65,900 crore, Rs 40,600 crore and Rs 58,000 crore...
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Poll sops derail fiscal consolidation
In elections-after-elections to state assemblies, it has become normal practice for political parties of all hues to promise waiver of farm loans in a bid to swing votes in their favor. They even succeed in forming government. Last year, in Uttar Pradesh [UP], loan waiver to all small and marginal farmers promised by BJP was a major factor in catapulting it to power in the state. But, it cost the state exchequer around Rs 36,000 crores. In Punjab, Congress won elections on the promise of waiving all outstanding farmers bleeding the state by thousands of crore. Recently, in Karnataka, the coalition government led by JD [Secular] leader, HD Kumaraswamy has announced a loan waiver [albeit partial] costing the state about...
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THE MYTH AROUND JOBLESSNESS
Contrary to popular belief, the Modi Government has not failed to deliver on job creation. It’s just that we need to get reconciled to the idea of self-employment Prime Minister Modi (allegedly) failed on his pledge to create around 20 million jobs annually. To demonstrate the point, critics have often point to hundreds and thousands of youth submitting applications for a few vacancies of peon/clerk in Government offices. They cite this yawning gap as an indicator of joblessness in the country. The underlying assumption behind this inference is that all those youths who applied for the available vacancies do not have any work at hand or any source of income. Such an assumption is fallacious. Had it been so — millions of...
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