Despite a Supreme Court ruling highlighting the impact of freebies on election fairness, political parties continue to leverage public funds for electoral gain In the Maharashtra Budget for 2024-25 presented by Deputy Chief Minister Ajit Pawar, the BJP-led MahaYuti has announced financial assistance of Rs 1,500 per month for eligible women between 21 to 60 years of age, a stipend up to Rs.10,000 per month for youth in industrial and non-industrial sectors, electricity bill waiver for farmers etc. Unambiguously, these are freebies – an acronym for something given by the State free of charge – aimed at garnering votes during the State assembly elections later this year. In a July 2013 order in S Subramaniam Balaji vs Government of Tamil...
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Category: Pioneer
Focus shifts to prudent public wealth management
The new Govt is overhauling India’s disinvestment policy. It is supporting non-profit enterprises, and maintaining a strong presence of State-run firms in strategic sectors The new National Democratic Alliance (NDA) government led by Prime Minister Narendra Modi is reviewing the existing disinvestment policy to shift its focus from selling central public sector undertakings (CPSUs) to ‘prudent public wealth management (PWM), supporting not-for-profit enterprises, and ensuring strong presence of state-run firms in strategic sectors’. A CPSU is an undertaking in which the Union government has majority share holding meaning it holds more than 50 percent of its shares. Disinvestment is fancy nomenclature for sale of these shares to private investors. When, disinvestment results in reduction of the government’s shareholding in the...
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Water crisis in Delhi is entirely man-made
The ruthless exploitation of natural endowments and that too when resources are being put to misuse is unconscionable The gravity of water crisis facing Delhiites has forced the Delhi government to approach the Supreme Court (SC) seeking its intervention to direct neighboring states Haryana, Uttar Pradesh, and Himachal Pradesh (HP) to provide additional raw water supply to the national capital. Initially, the SC directed HP to release 137 cusecs of raw water which translates to 70 million gallons per day (MGD) of more water for the city. It also asked Haryana to make arrangements for ensuring its free flow to Delhi. But, now with HP claiming that it can’t release more than what it is already giving (70 MGD), the...
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Populism cripples revival of discoms
The twin problems of AT&C losses and under-recoveries on sale to certain households or farmers in some States have existed for close to a quarter century The Centre is planning to launch ‘another’ scheme to enable public sector power distribution utilities (discoms) to cut technical losses via “transition financing” of the required capital expenditure. The discoms stand at the core of the power supply and distribution network in the country. Mostly owned and controlled by State Governments, they buy electricity from the generating companies (call them gencos) in the public sector such as National Thermal Power Corporation (NTPC) etc and gencos in the private sector commonly referred to as independent power producers (IPPs) and supply to the consumers. Technical losses...
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The long and short of Modi’s welfarism
The Govt is doing a good job of supplying food, fuel and fertiliser at subsidised cost but the largesse recipients are unlikely to make space for other deserving people An overarching policy instrument Prime Minister Narendra Modi uses in relentless pursuit of a welfare State is his unflinching commitment to ensuring adequate supply of three essential items, namely fertilisers, food and fuel, to the target beneficiaries/consumers at ‘throwaway’ price or even for free. In fact, he tells them about his intentions in this regard well in advance. Look at these facts: Urea is a widely used fertiliser that supplies primary nutrient nitrogen or ‘N’ and constitutes nearly half of India’s total fertiliser consumption. To make it affordable to farmers, the...
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RBI dividend aids Government finances
The RBI’s dividend transfer provides a substantial fiscal cushion to the cash-strapped Government, but it must be prudent in fiscal management and resource allocation In the amendment to the Fiscal Responsibility and Budget Management (FRBM) Act through the Finance Bill 2018-19 (the amendment was based on the recommendations of Dr N K Singh’s committee mandated to review the FRBM Act (2003)), the Modi – the Government had pledged to achieve fiscal deficit or FD (excess of total expenditure over total receipts) of 3 per cent of gross domestic product (GDP) by the FY 2020-21. Following the Corona pandemic that played havoc with the economy leading to plunging revenue and ballooning expenditure during 2020-21 and the resultant zooming of FD to...
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Do not withdraw capital support for oil PSUs
The Government slashes equity infusions for three major oil sector CPSUs by 50 per cent, contradicting its 2023–24 budget commitments In the Budget for the financial year 2023-24 (April 1, 2023, to March 31, 2024) presented on February 1 last year, the Union Finance Minister Nirmala Sitharaman announced an equity infusion of Rs 30,000 crore in three Central public sector undertakings (CPSUs) viz. Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL), are majority-owned by the Government of India (GOI). She had also proposed Rs 5,000 crore for buying crude oil to bolster its strategic reserves (SRs) in underground storages at Mangalore in Karnataka and Visakhapatnam in Andhra Pradesh. The equity infusions in...
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Stopping thieving through DBT
A lot of pilfering from fertiliser subsidies is happening due to policy flaws. This can be curbed if only the subsidy is given under Direct Benefit Transfer On January 22, 2019, addressing NRIs and Indian-origin people at the inauguration of the 15th Pravasi Bharatiya Divas convention in Varanasi (Uttar Pradesh), Prime Minister Narendra Modi recalled what Rajiv Gandhi had Stated “Of the funds the 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 class kept giving tax honestly, this “loot” of 85 per cent also continued”. Modi added “I also want to tell you today’s truth...
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Rationalise regulations for e-commerce
When the Government expects foreign companies to do almost everything that a retailer does, how can it deny these firms the right to sell? Way back in 2019, Delhi Vyapar Mahasangh (DVM) an organisation of retail traders in the national capital had lodged a complaint with the Competition Commission of India (CCI) alleging anti-competitive behaviour by Amazon Seller Services (ASS) and Flipkart Internet Private Limited (FIPL). The CCI is an authority established under the Competition Act, of 2002. The Act prohibits anti-competitive agreements and abuse of dominant position by enterprises and regulates mergers, amalgamations acquisitions etc to ensure that there is no adverse effect on competition. Amazon and Flipkart are global giants operating e-commerce marketplaces in India through their subsidiaries,...
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Plug leakages in fertiliser subsidy
The real reason behind the leakage is control of the MRP at an artificially low level. Dubious players have a huge incentive to divert and rake in the moolah As part of the 100-day agenda of Modi 3.0, the Government intends to administer fertiliser subsidies more effectively and cut down on leakages and diversions to build on the success of neem-coated urea. It intends to conduct a pilot in a few districts on a modified version of the direct benefit transfer (DBT) that seeks to establish a linkage between the land holding of a farmer and nutrient consumption. A proposal in this regard mooted in 2020 is being resurrected. To make urea – a widely used fertiliser that supplies primary...
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