BAD SUBSIDIES : The only way to remove fertiliser subsidy is through direct benefit transfer in place of routing subsidy through the industry. Addressing a global business summit recently, Prime Minister Narendra Modi for the first time, shared at length his thinking on subsidies. He said, “We have to eliminate bad subsidies, whether or not they are called subsidies. But, some subsidies may be necessary to protect the poor and the needy and give them a fair chance to succeed. Hence, my aim is not to eliminate subsidies but to rationalise and target them.” He continued: “I am referring to cooking gas, fertiliser and kerosene subsidies. I must confess that I am surprised by the way words are used by...
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Category: Deccan Herald
Dashing innovators’ hopes
Govt needs to shed its current intransigence. It should stop viewing patent laws from a prism that ‘only MNCs benefit from these’. Interacting with America’s top CEOs [including MNCs in pharmaceutical and agrochemical sectors] in September, 2015, Prime Minister Narendra Modi had assured “we are committed to protecting Intellectual Property Rights [IPRs] which is essential to fostering creativity”. These MNCs spend billions of dollars on research and development to discover and develop new medicines and crop protection products and have a fundamental interest in the protection of IPRs. They had flagged Section 3[d] of Patent [Amendment] Act 2005 and provision relating to grant of compulsory licenses as major concerns. However, from the draft of new National IPR policy, it appears...
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Too little too late
PM Modi needs to shed his soft-pedalled approach displayed in the “GiveItUp” campaign and bring the LPG subsidy to a full halt. The government has announced that from January 1, those earning more than Rs 10 lakh per annum will forgo subsidy on LPG on a self-declaration basis. This appears to be a grandiose announcement but in terms of reforms, it is a typical case of “too little too late”. At present, there are a total of 163 million registered LPG customers. Of these, 147 million people are availing subsidy. The remaining 16 million is accounted for by about 10 million–bogus/ fictitious persons–who were eliminated following the government’s drive to credit subsidy directly into the bank account of customers under...
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Doha agenda cast aside
WTO Nairobi Ministerial : The US has been asking India to supply all sorts of data which tantamount to virtual surveillance on our food security system In a brazen display of ‘might is right’ in the just concluded World Trade Organisation’s (WTO) 10th ministerial meeting at Nairobi, Kenya between December 15-19, the developed countries led by the US and the EU literally junked the Doha Development Agenda (DDA). On the two issues of critical importance to developing countries viz., (i) public stock holding for food security and (ii) special safeguards mechanism (SSM) in agriculture, they were merely handed out hollow assurances. At the 9th ministerial in Bali (December, 2013), developed countries had agreed to a ‘peace clause’ under which, if...
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US should shed rigid stand
In a just concluded meeting of the Trade Policy Forum, United States Trade Representative (USTR) Mic-hael Froman, emphatically rejected India’s request for signing a Social Security Agreement (SSA), nick named totalisation pact. The US argued that, “India did not meet the legislative requirement of minimum social security net (SSN) for 50 per cent of its population.” When Commerce Minister Nirmala Sitharaman drew his attention to the Atal Pension Yojna, Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana in addition to Employees Provident Fund Organisation, the US official’s reaction was that being “non-mandatory”, those schemes did not qualify for social security. The USTR opined that he is open to discussing new social security schemes that India may...
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Why falling imported gas price brings no relief
As per reports, Petronet LNG Limited, a consortium of four PSUs (ONGC, GAIL, IOCL and BPCL) is shelling out Rs 400 crore every quarter in demurrage charges for ships idling because of its PSU buyers are refusing to purchase expensive imported gas. This is just the tip of iceberg. At the outset, let us capture a few facts. Petronet had entered in to a long-term 25 year contract with RasGas of Qatar for import of 7.5 million tonnes a year LNG or around 30 million standard cubic metre per day (mmscmd). For transportation to its terminal at Dahej, it had entered in to a time-charter agreement with Mitsui OSK Lines et al. The PSUs (sans ONGC) had committed to buy...
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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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Don’t override judicial process
Any apprehension that judicial process would take time is ill-founded. The matter is slated for hearing by the SC this month itself. While, presenting the budget for 2015-16, Union Finance Minister Arun Jaitley had announced the government’s decision not to levy minimum alternate tax [MAT] on capital gains made by foreign portfolio investors [FPIs] from investment in securities from April 1, 2015. In his speech, he had proposed to rationalise MAT provisions for FPIs whereby profits corresponding to their income from capital gains on transactions in securities, which are taxed at a lower rate, would not be subject to MAT. Since the exemption was intended to be applicable only prospectively from financial year 2015-16, the income tax department served show -cause...
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Gas policy: Don’t drag courts into executive domain
The Union government has received a notice from the Supreme Court (SC) on a petition filed by Independent Gas-based Power Producers Association (IGPPA) seeking priority in allocation of gas produced from the Reliance Industries Limited (RIL) operated Krishna – Godavari (KG) basin. The IGPPA has contended that the gas allocated from the KG basin was not allotted to them on priority basis but was given to fertilizer units. The Federation of Farmers Associations (FFA) has also filed a PIL in SC backing the IGPPA demand. Earlier, in its order delivered in January, 2015, the Andhra Pradesh High Court (APHC) had refused to interfere with the government policy decision on the issue, saying the Centre has powers to fix priorities as...
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