Despite Government efforts to boost domestic production, policy constraints and pricing caps continue to stifle the energy sector’s growth According to the Petroleum Planning and Analysis Cell under the Ministry of Petroleum and Natural Gas (MPNG), during the first six months of the current financial year (FY) September 2024, India’s consumption of natural gas (NG) increased by almost 12 per cent to 36.850 billion metric standard cubic meters (bmscm) over the corresponding period last FY. However, the import of NG (it is imported in a liquefied form commonly known as LNG) increased by 23 per cent to 18.975 bmscm during this period. Taken as a proportion of consumption, imports were 51.5 percent during April-September 2024 up from 46.8 percent during...
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News & Media
Unlocking the full potential of GatiShakti
The PM GatiShakti initiative is revolutionising India’s infrastructure by integrating digital planning tools to expedite project completion and improve multimodal connectivity According to the Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), Amardeep Singh Bhatia, as many as 208 big-ticket infrastructure projects including roads (101), railways (73), urban development (12) and oil and gas (4) worth Rs 1539,000 crore have been recommended for approval under the PM GatiShakti initiative so far. These projects have been recommended by an inter-ministerial group known as the Network Planning Group (NPG) constituted under the PM GatiShakti National Master Plan (NMP). Launched in October 2021, the PM Gati Shakti NMP is a transformative Rs 100 lakh crore initiative aimed at revolutionising the...
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Compensation cess should go
In its meeting held early this month, the Goods and Services Tax Council decided to set up a Group of Ministers (GoM) to suggest “how to go about” the GST compensation cess, which is levied on luxury, sin and demerit goods after the loans taken to meet the revenue shortfall of states during Covid-affected years are repaid. Reports that the Group of Ministers will be “reworking its nomenclature” suggest policymakers intend to continue the levy even after the March 31, 2026 deadline, when it is supposed to be withdrawn as per the subsisting arrangement. Why should the levy be continued? Following the Constitution Amendment Act, 2016, which introduced the GST, the Union Government also introduced the GST Compensation Act, 2017. It...
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Why RBI should not look at food inflation
Concerns over persistent food price volatility and the need for economic growth support have prompted the Reserve Bank of India to keep its options open On October 9, 2024, the Reserve Bank of India (RBI) Governor Shaktikanta Das announced the decisions taken by the six-member Monetary Policy Committee (MPC) in its fourth bi-monthly meeting of the current financial year (FY). It has kept the policy rate (the interest rate at which the RBI lends to banks) unchanged at 6.5 per cent. However, it has altered its policy stance from “withdrawal of accommodation” to a neutral stance. In 2016, the Union Government put in place an institutionalised framework to enable the MPC to formulate monetary policy and determine the key interest...
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Will the three farm laws be revived?
Were the laws a missed opportunity to address the deep-seated issues faced by millions of India’s struggling farmers and consumers? Recently, a BJP Member of Parliament talked of resurrecting the three national Farm Laws. Faced with criticism from the opposition parties, a spokesperson of the BJP clarified that ‘her statement does not represent the party view’. Modi – The government doesn’t intend to bring back these laws. What were those laws? Enacted in September 2020, the most far-reaching of these laws was the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020. It allowed the Centre to regulate inter-State trade and intra-State trade, providing for freedom of choice to the farmer or trader to conduct trade and commerce while...
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Can India become a manufacturing hub?
Growth is driven by strong domestic demand, export potential, government infrastructure efforts, private sector investment, and initiatives like ‘Make in India’ According to a Study Report by IDBI Capital, India is set to add US$ 1 trillion to its gross domestic product (GDP) every 18 months over the next six years. It goes on to say that “with this momentum, the country is on track to become a US$ 10 trillion economy positioning itself as the world’s third-largest economy by 2030”. Currently, India has a GDP of US$ 4 trillion. The report has also highlighted that “India’s accelerated growth will be driven primarily by the manufacturing sector, which is projected to contribute 32 per cent to the incremental Gross Value...
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GST cess extension: Is it Justified Beyond 2026?
With loans likely to be repaid by January 2026, the question arises—can the continued levy of the cess be logically justified in light of buoyant tax collections In its meeting held early this month, the GST Council had decided to set up a Group of Ministers (GoM) to suggest ‘how to go about the GST compensation cess, which is levied on luxury, sin and demerit goods such as automobiles, aerated drinks and tobacco, after the loans taken to meet the shortfall in revenue of states during Covid-affected years are repaid. The GoM will be headed by Union Minister of State for Finance Pankaj Chaudhary and include members from states. The statement ‘how to go ……’ together with reports suggesting that...
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Privatisation off the table for banks
With stalled reforms and limitations of coalition politics, PSBs remain shackled by govt control In her Budget speech for the financial year 2021-2022, Union Finance Minister Nirmala Sitharaman announced the Modi government’s policy on disinvestment of central public sector undertakings (CPSUs). She mentioned plans to privatise two public sector banks (PSBs) and one insurance company. A PSB is a bank where the central government holds a majority share of over 50%. Disinvestment refers to the sale of these shares to private investors. When such a sale reduces the government’s shareholding in a PSB below 50% and ownership and management control are transferred to a private entity, it is termed privatisation. Has there been any follow-up action to the finance minister’s...
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Unified pension scheme: Balancing the old and new
Modi Government unveils unified pension scheme to bridge old and new, aiming to satisfy Central and State employees On August 24, 2024, the Union government announced the new Unified Pension Scheme (UPS) for central government employees. In fact, what looked like a well-orchestrated action plan, on the following day the BJP-led government in Maharashtra approved the implementation of the Scheme for its employees. Madhya Pradesh government is likely to implement the UPS soon. The above announcements are in response to the earlier decisions of Opposition-ruled States, including Rajasthan, Chhattisgarh (before the November 2023 elections), Jharkhand, Himachal Pradesh (HP) and Punjab to revert to the old pension system (OPS) which it felt tilted the electoral pendulum towards those parties, particularly in...
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E-commerce giants versus mom-and-pop stores
Amazon’s aggressive pricing strategies could lead to a massive e-commerce expansion, capturing half of India’s retail market within the next decade At the launch of the Pahle India Foundation’s report ‘Net Impact of E-Commerce on Employment and Consumer Welfare in India’ on August 21, 2024, Union Commerce and Industry Minister Piyush Goyal took pot shot at the world’s biggest e-tailer Amazon, for selling products directly to consumers and indulging in “predatory pricing” that could lead to massive growth of e-commerce capturing half of Indian retail market ten years from now. This would adversely impact an estimated 100 million small retailers across the country and in turn, lead to “social disruption”. E-commerce, put simply, is the practice of buying and selling...
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