There is trouble brewing for India at World Trade Organisation (WTO) – the multilateral body which binds member countries to a common set of rules with regard to trade in goods and services with ‘fairness’ and ‘non-discrimination’ as its underlying principles. To get a sense of where it is heading, let us put things in perspective. In May, 2018, in a hard hitting submission made to WTO Committee on Agriculture (CoA), the United States had lambasted India for indulging in substantial under-reporting of its market price support (MPS) programme for wheat and paddy farmers alleging that the sops given by government far exceed the permissible limit. This was a counter to the latter’s notification to WTO in March, 2018. Under...
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News & Media
Direct action needed for direct benefits
In its present form, the fertiliser DBT scheme has many loopholes. In the interest of the farmers, the policy needs an overhaul so that they can put subsidy to best use and enhance fertiliser-use efficiency. Will the new Government have the will to do so? The Ministry of Finance and NITI Aayog are working towards preparing a roadmap to directly transfer fertiliser subsidy to the farmers. The data being used to give Rs 6,000 per year to 120 million small and marginal farmers under the Pradhan Mantri Kisan Samman Nidhi will be used for this purpose. The subsidies on fertilisers along with PM Kisan deposits will serve to give a quasi-universal basic income transfer to the farmers. The proposal will be put...
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Incentivise, don’t destroy business
The Government’s brazen attempt to increase the profits of MSMEs by letting them retain a good portion of tax collected from consumers is illogical The Goods and Services Tax (GST) Council has adopted a liberal stance towards small businesses, keeping in mind their potential to generate employment and increase workers’ income. The bearing is particularly reflected in its decision to (i) exempt businesses having a turnover below a certain threshold of Rs 4 million from registering under GST and paying tax; (ii) allowing a manufacturer having a turnover less than Rs 15 million opt for ‘composition scheme’ under which he will pay tax @1 per cent and face minimal compliance viz returns to be filed quarterly against monthly for regular assesees; (iii)...
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India’s sugar imbroglio
The Government’s irresistible desire to control sugar prices is doing much harm to the industry. Upholding market dynamics should be the way forward In the run-up to the Assembly elections in Uttar Pradesh in 2017, the BJP had promised immediate payment of all sugarcane arrears (money that sugar mills owe to the Government for cane supplies). For future purposes, too, it had assured to release all dues by the 14th day, counting from the day the sugarcane is delivered to the mill. The BJP Government has been in office in Uttar Pradesh for over two years now and has since ensured payments of a whopping Rs 50,000 crore, which includes Rs 10,500 crore for the marketing year October 1, 2016-September 30, 2017;...
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Where are the funds?
The Congress has assured regular income for the poor but how will it identify the beneficiaries? And won’t the NYAY scheme burden the economy? During its over five decades of rule, the Congress institutionalised the culture of doles in the name of its much trumpeted garibi hatao (poverty alleviation) programme even as majority of the people continued to remain poor. Even Prime Minister Modi continued with doles but changed the narrative with a pledge to empower the poor, create jobs and increase their income to ensure that these benefits reached the beneficiaries in full. Besides, under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme, his Government is giving Rs 6,000 per year to 120 million small and marginal farmers. With general elections...
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In GST, a tale of two obnoxious levies
From the start on July 1, 2017, the implementation of the Goods and Services Tax (GST) has been plagued by several anomalies. The GST Council — the all-powerful body to decide the tax architecture and rates on various items — could have adopted a proactive stance, anticipated problems and taken steps to nip them in the bud. Unfortunately, most of the time, it has been reactive. As a result, it continues to grapple with unending problems. Two such contentious issues are (i) including the TCS (tax collected at source) amount — levied under the provisions of the Income-Tax Act, 1961 — in the value of goods for the purpose of determining the GST liability; (ii) requiring e-commerce companies to deduct tax at the rate...
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A case against shareholder interests
The idea floated by high-profile entrepreneurs, seeking dual-class share structure along with differential voting rights for founder-promoters of startups, is flawed. The Government must look for better ways to help small businesses An advocacy group, IndiaTech, representing some of the most high-profile entrepreneurs, has made a submission to the Ministry of Corporate Affairs (MCA) and the markets regulator, Securities Exchange Board of India (SEBI), seeking a dual-class share structure along with differential voting rights for founder-promoters of start-ups that can encourage the country’s most valuable companies to get listed on the domestic stock exchanges instead of overseas exchanges such as Nasdaq and New York Stock Exchange (NYSE). At present, the Companies Act 2013, permits firms having consistent track record of distributable profits...
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Protectionism hurts e-commerce
Instead of the extreme steps proposed by a new policy, the government should consider a pragmatic and flexible arrangement to address the concerns on protection of sensitive data With increasing penetration of internet, surging middle-class and focus on customer convenience and affordable pricing, online retail commerce in India has grown at a phenomenal 70 per cent during the last five years reaching about US $40 billion during 2017. This is projected to increase five-fold to US $200 billion by 2026. Much of the growth has been driven by foreign majors such as Amazon,Walmart/Flipkart and so on under a policy notified in 2016-17 which allowed 100 per cent foreign direct investment (FDI) in the marketplace model of e-commerce. The marketplace is an...
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Union Budget: The way forward
Three important highlights of the Interim Budget presented by Piyush Goyal at the beginning of this month are: (i) Under PM Kisan Samman Nidhi, the Centre will give Rs 6,000 per year to small and marginal farmers (land holding up to two hectares) to be deposited directly in their account to benefit a total of 120 million. The support is with effect from December 1, 2018, and the first installment of Rs 2,000 was transferred to beneficiaries last Sunday; (ii) Under PM Shram Yogi Mandhan, persons working in the unorganised sector and earning less than Rs 15,000 per month will get a pension of Rs 3,000 per month on attaining 60 years. For this, a worker joining at the age...
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India’s burden of fiscal dilemma
Allocation for welfare schemes have not kept pace with an increase in revenues due to which the Government had to resort to a window dressing of accounts In the interim Budget presented on February 1, the Government reported a minor slippage of 0.1 per cent in fiscal deficit for 2018-19 against the target of 3.3 per cent of the GDP. For 2019-20, the fiscal deficit is pegged at 3.4 per cent. The Finance Ministry has indulged in skullduggery to restrict the deficit to 3.4 per cent, which itself is off the three per cent mark for 2018-19, as per the fiscal consolidation road-map (albeit original). With regard to proceeds from disinvestment of shares in Public Sector Undertakings (PSUs), the Government had set...
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