On completion of three years in office, even as Team Modi gears itself to celebrate with focus on disseminating to public at large its achievements, opposition parties [mainly Congress] have projected a counter narrative purportedly to show it in poor light. Picking on BJP’s promise of creating 10 million jobs every year, they point towards a few hundred thousand jobs generated during the last 3 years to proclaim that the performance of this government is dismal. Coming from a party whose own record on all crucial economic parameters [including jobs] was abysmal, such criticism is laughable. During a decade [2004-2014] of UPA rule led by Congress, employment increased by a meager 15 million which is one-fourth of an increase of...
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Category: Welfare schemes
Rating agencies are biased but, India needs to introspect
The chief economic adviser [CEA] to Government of India [GOI], Dr Arvind Subramanian has lambasted international rating agencies for their continuing to give low sovereign rating to India despite surging growth, substantial improvement in its macro-economic fundamentals and reforms gathering momentum. At the same time, they continue to give high ratings to countries such as China despite deceleration in growth, deteriorating macro-economic fundamentals and fiscal situation [for instance, debt to GDP ratio in China is 250% as against 69% in India]. Even in developed countries viz. USA, France, Spain, UK etc debt to GDP ratio is well above 90% and yet, they enjoy high rating. The rating assigned by these agencies not merely reflects on relative standing of India vis-à-vis...
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SAVING THE RURAL JOB SCHEME FROM DEATH
Modi has pressed all the right buttons to ensure that MGNREGS becomes an instrument of promoting his Government’s inclusive development agenda In a stunning revelation, Amarjeet Sinha, Secretary, Ministry of Rural Development (MoRD), revealed that the Government had cancelled nearly 10 million fake ‘job cards’ under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Including the fake beneficiaries struck off from the scheme earlier, the total number of such cards cancelled thus far is more than 31 million. Under MGNREGA — a flagship welfare scheme launched by erstwhile UPA dispensation in 2005 — ‘guaranteed’ employment is provided to a member of a poor family in rural areas for a minimum of 100 days in a year and wage paid...
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Aadhaar use for nation building – vetoed by judiciary
Vide the Finance Bill for 2017-18, the union government amended the Income Tax Act [1961] by inserting Section 139AA to make seeding of PAN number with Aadhaar mandatory. Henceforth, for financial year 2016-17 [assessment year 2017-18] onwards, it won’t be possible to file IT return using PAN not authenticated with Aadhaar. Further, no fresh PAN will be issued unless the applicant submits his/her Aadhaar number. The validity of the above amendment has been challenged in the Supreme Court [SC] who has questioned government’s decision to make Aadhaar card mandatory in view of its earlier order to make it ‘optional’. At the outset, it is important to ask as to why the government was forced to take such a decision. It...
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Why PMGKY was a fiasco?
Within a month of historic and revolutionary decision of demonetization [scrapping of 1000/500 rupee notes] announced by prime minister Modi on November 8, 2016, the government launched an ambitious scheme called Pradhan Mantri Garib Kalyan Yojna [PMGKY] on December 16, 2016 ending on March 31, 2017. The scheme was contemplated in the backdrop of an unprecedented amount of cash held by the public in these high denomination currency notes having been deposited in banks. The perception of the authorities – very rightly so – was that this could not be pure transaction money kept by public to meet routine requirements [or savings of housewives, they normally keep in cash]. Considering that the amount deposited in excess of Rs 200,000/- in...
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MGNREGA under Modi – has it ceased to be epitome of corruption?
In a stunning revelation, Amarjeet Sinha, secretary, ministry for rural development (MoRD) has revealed that the government has cancelled nearly 10 million fake ‘job cards’ under the Mahatma Gandhi National Rural Employment Guarantee Act [MGNREGA]. Including the fake beneficiaries struck off from the scheme earlier, the total number of such cards cancelled thus far is more than 31 million. Under MGNREGA – a flagship welfare scheme launched by the erstwhile UPA dispensation in 2005 – ‘guaranteed’ employment is provided to a member of a poor family in rural areas for a minimum of 100 days in a year and wage paid @ Rs 100 per day. For this purpose, one job card is given to each family. A card holder...
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Disband subsidy delivery mechanism, switch over to UBI
In the Economic Survey (2016-17) presented in Parliament on January 31, 2017, Chief Economic Advisor 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 Arun Jaitley’s Budget for 2017-18, presented on February 1, 2017. Meanwhile, in an interview given to a group of economic editors on February 1, Jaitley 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 it. So, what are the constraints? What will be the opportune time? Will it come at...
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POPULIST MEASURES CAN DERAIL GROWTH
In the just-concluded Assembly election in Uttar Pradesh, Prime Minister Narendra Modi promised to waive loans for all small and marginal farmers and to extend fresh credit at zero interest rate. He also vowed to clear all outstanding arrears of sugarcane farmers and ensure that they get paid on the 14th day from the date of delivering cane. His party was also not averse to offering other freebies viz reducing electricity tariff, smart phone/lap top etc, to match the offer by its opponents. Modi is known for his unique philosophy of shunning doles and instead, empowering the poor. Towards this end, the Prime Minister has taken several measures for the financial inclusion of the farmers (eg the opening of 270...
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A tsunami of NPAs in the making
Even as the public sector banks [PSBs] are struggling to cope with the disastrous consequences of unsustainable high level of non-performing assets [NPAs] [over Rs 600,000 crores on last count] on their balance sheet as also choking flow of credit, political establishments in almost all states as also at the central level are at work to make life even tougher for them. In the just concluded elections in Uttar Pradesh [UP], prime minister Modi promised loan waiver to all small and marginal farmers. The commitment was reiterated in almost every election speech ad infinitum. Now, that BJP has got a resounding mandate with ¾th majority, the state government will have no escape from having to redeem this pledge. This will...
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Competitive populism can derail growth
Last year, Congress Vice President, Rahul Gandhi took an extensive tour of Uttar Pradesh [UP] visiting tens of thousands farmers households in the run up to assembly elections in February/March 2017 [currently underway]. During the visits, he issued a certificate [call it ‘promissory note’] to every farmer promising waiver of his/her farm loan if voted to power in the state. As the election process got kicked off early this month, he reiterated the commitment in all his speeches ad infinitum. Additionally, he has promised cut in electricity tariff by 50% and increase in price offered to farmers for their agricultural produce. In this, he is joined by Akhilesh Yadav, National President, Samajwadi Party [SP] contesting election in alliance with Congress....
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