PM-KISAN’s benefits are being extended to many who don’t deserve them, but they elude the needy According to a statement made by the government in Parliament, the number of farmers receiving income transfers under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) Scheme declined from 104 million during 2021-22 to 80 million during 2022-23. There has been a corresponding reduction in payments from Rs 67,032 crore during 2021-22 to Rs 57,646 crore in 2022-23. Launched by Prime Minister Narendra Modi on February 24, 2019, and made effective from December 1, 2018, PM-KISAN is a central sector scheme. Under it, the Union government gives Rs 6,000 a year to each farmer with a valid enrolment. It is paid in three instalments of...
More
Comments are closed
Category: Deccan Herald
Fiscal target gliding away from its path
To reset the targets at a significantly relaxed level and then claim that fiscal numbers are well on track looks amusing In the Union Budget for 2022–23, Finance Minister Nirmala Sitharaman kept the Budget Estimate (BE) for the fiscal deficit (FD) at 6.4% of GDP. She described this as ‘advancing on the road to fiscal consolidation,’ citing the target of 4.5 % to be achieved by 2025–26 (this was announced in her budget speech for 2021-22). As per the revised estimate (RE) given while presenting the budget for 2023–24, she has precisely achieved this number. For 2023–24, she has kept the target at 5.9%, and for 2025–26, one would get the sense that the Union government is proceeding at the...
More
Comments are closed
Subsidies will derail fiscal deficit target
The shift from giving food at Rs 2/3/1 per kg to “free” would lead to an additional outgo of about Rs 13,000 crore In the Union Budget for 2023–24, Finance Minister Nirmala Sitharaman has stuck to the fiscal deficit (FD) target of 6.4 per cent of GDP in the revised estimate for 2022–23. She has kept the target for 2023–24 at 5.9 per cent. However, payments on major subsidies such as fertilisers and food, which account for a significant share of the Union government’s total expenditure, could play spoiler. Fertiliser subsidy—payments made to manufacturers or importers to cover the excess of the cost of production/import and distribution of fertilisers over the low maximum retail price (MRP) fixed by the government—was budgeted...
More
Comments are closed
Is free food welfare or a freebie?
During FY 2021–22, the economy rebounded, with the GDP registering a growth of 8.9% On January 1, 2023, the Union Government terminated the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY). Accordingly, in the Union budget 2023-24, it has reduced allocation for food subsidy from Rs 287,000 crore during 2022-23 (RE) to Rs 197,000 crore. Beginning in April 2020, PMGKAY provided 5 kg of rice or wheat per person per month for “free” via the Public Distribution System (PDS), as well as 1 kg of pulses per family per month to around 820 million families. Run for three months initially, the scheme got six extensions till December 31, 2022. In the unprecedented situation triggered by the Covid-19 pandemic of large-scale job and income...
More
Comments are closed
Baby steps will not help rein in fertiliser subsidies
The government should pursue major reforms which can force suppliers to cut costs, stop leakages, and farmers to improve fertiliser efficiency Faced with a steep rise in international fertiliser prices caused by the Ukraine war, the Modi government has implemented two cost-cutting policies: (i) the “One Nation, One Fertilizer” (ON, OF) scheme, under which all fertiliser companies will sell all subsidised fertilisers under a single brand “Bharat”; and (ii) hiring an aggregator like GAIL India Limited to procure the fuel on their behalf or buying from gas exchanges and incentivizing companies The Centre controls the maximum retail price (MRP) of urea at a low level unrelated to the cost of production, which is higher. The excess of cost over the MRP...
More
Comments are closed
Delink pricing of natural gas, crude
An annual increase of $0.5 per mmBtu is consistent with its proposal to offer free pricing beginning January 1, 2027 In September 2022, the Ministry of Petroleum and Natural Gas (MPNG) formed a committee led by Dr Kirit Parikh to review the current pricing formula for domestically produced natural gas (NG) and make recommendations to restructure the formula in order to ensure “a fair price to the end consumer.” It has recommended linking the price of NG from legacy fields to the price of imported crude oil with a floor and ceiling. The floor price will be $4 per million British thermal units (mmBtu), and the ceiling price will be $6.5 per mmBtu, with an annual increase of $0.5 per...
More
Comments are closed
Nano urea and some tall claims
Can nano urea help in achieving the stated objective? Can it help to make a dent in the subsidy? The government spends huge sums on fertiliser subsidy — the likely expenditure during the current financial year being about Rs 2,50,000 crore. Credit: AFP Photo Launching an ambitious programme for the promotion of liquid nano fertilisers at the two-day ‘Kisan Samman Sammelan’ at the Indian Agricultural Research Institute (IARI) on October 17, Prime Minister Narendra Modi exuded confidence that it would help attain self-sufficiency in the crucial sector and help farmers enhance their income while substantially reducing the impact on the environment. Already, the Indian Farmers Fertiliser Cooperative Limited (IFFCO) — a major fertiliser manufacturer — is producing indigenously-developed nano urea at its Nano Biotechnology Research...
More
Comments are closed
Shun freebies, avoid bankruptcy
The reckless spending of taxpayers’ money on ‘freebies’ is neither recognised policy/custom nor sanctioned in a court of law. Credit: DH File Photo Hearing a PIL seeking directions against ‘freebies’ on August 3, the Supreme Court sought suggestions on the composition of a committee that can go into the issue “dispassionately” and make recommendations. It gave a sense that it is for Parliament, besides the Election Commission, to take the initiative to enact a law on curbing freebies. The Union government’s standards of financial propriety clearly lays down that “no authority shall exercise its powers of sanctioning expenditure to pass an order which will be directly or indirectly to its advantage; and the expenditure from public moneys should not be...
More
Comments are closed
Eschew greed, boost demand
Irrespective of their size or industry sector, all businesses are structured to result in concentration of income in the hands of their owners Even as industries and businesses — both domestic and foreign-owned large corporations — expect the government to formulate policies and take fiscal measures to stimulate aggregate demand to put the Indian economy on an ‘accelerated’ and ‘sustained’ growth trajectory. A key question that needs serious introspection is: What are they doing in pursuit of this overarching goal? An analysis of the financials of India’s largest companies — those comprising the BSE 500 index — with focus on revenue, profits and dividend payouts, over the past five financial years (FY) gives us some clues. The profits of corporations...
More
Comments are closed
All price support systems are unviable
Whether it is MSP-based regime or DPPS, both are open-ended, susceptible to ever-increasing subsidy burden, and vulnerable to charge of violation under the WTO Two recent statements by the top brass give a clue as to how the Modi government intends to deal with pricing of farmers’ produce. First, addressing a conference on ‘Getting Agricultural Markets Right’ (July 6), Niti Aayog member Ramesh Chand proposed the adoption of deficiency price payment system (DPPS) as an alternative to the existing system of minimum support price (MSP). Next, the Union Agriculture Minister ruled out a legal guarantee for MSP. Under the existing system, agencies of the government, such as the Food Corporation of India (FCI), buy agri-produce, such as wheat, rice/paddy, coarse...
More
Comments are closed