Index of Eight Core Industries (Base: 2011-12=100) April, 2017

Index of Eight Core Industries (Base: 2011-12=100) April, 2017

The Base Year of the Index of Eight Core Industries has been revised from the year 2004-05 to 2011-12 from April, 2017. The shift is in line with the new base year of Index of Industrial Production (IIP). The industries covered in the Index of Eight Core are namely Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity. These remain the same as in the 2004-05 series. The revised basket of Eight Core Industries is aligned to the new series of IIP (2011-12) as far as possible. The revised Eight Core Industries have a combined weight of 40.27 per cent in the IIP. The detailed data based on the revised series since April, 2012 are given in Annexure.

The combined Index of Eight Core Industries stands at 118.6 in April, 2017, which is 2.5 % higher compared to the index of April, 2016. Its cumulative growth during April to March, 2016-17 was 4.8 %.

Coal

Coal production (weight: 10.33 %) declined by 3.8% in April, 2017 over April, 2016. Its cumulative index increased by 3.2% during April to March, 2016-17 over corresponding period of the previous year.

Crude Oil

Crude Oil production (weight: 8.98 %) declined by 0.6 % in April, 2017 over April, 2016. Its cumulative index declined by 2.5 % during April to March, 2016-17 over the corresponding period of previous year.

Natural Gas

The Natural Gas production (weight: 6.88 %) increased by 2.0 % in April, 2017 over April, 2016. Its cumulative index declined by 1.0 % during April to March, 2016-17 over the corresponding period of previous year.

Refinery Products

Petroleum Refinery production (weight: 28.04%) increased by 0.2 % in April, 2017 over April, 2016. Its cumulative index increased by 4.9 % during April to March, 2016-17 over the corresponding period of previous year.

Fertilizers

Fertilizer production (weight: 2.63 %) increased by 6.2 % in April, 2017 over April, 2016. Its cumulative index increased by 0.2 % during April to March, 2016-17 over the corresponding period of previous year.

Steel

Steel production (weight: 17.92 %) increased by 9.3 % in April, 2017 over April, 2016. Its cumulative index increased by 10.7 % during April to March, 2016-17 over the corresponding period of previous year.

Cement

Cement production (weight: 5.37%) declined by 3.7 % in April, 2017 over April, 2016. Its cumulative index declined by 1.2 % during April to March, 2016-17 over the corresponding period of previous year.

Electricity

Electricity generation (weight: 19.85%) increased by 4.7 % in April, 2017 over April, 2016. Its cumulative index increased by 5.9 % during April to March, 2016-17 over the corresponding period of previous year.

Cabinet approves continuation of Members of Parliament Local Area Development Scheme beyond 12th Plan

Cabinet approves continuation of Members of Parliament Local Area Development Scheme beyond 12th Plan
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval to continuation of Members of Parliament Local Area Development Scheme (MPLADS) till the term of the 14th Finance Commission i.e. 31.03.2020.

Details:

The Scheme would entail an annual allocation of Rs. 3,950 crore and a total outlay of Rs. 11,850 crores over the next three years with an additional annual allocation of Rs. 5 crore per year for monitoring through independent agency(ies) and for capacity building/training to State/District officials to be imparted by the Ministry.

The MPLADS funds are released to the nodal District Authorities on receipt of requisite documents and as per provisions of Guidelines on MPLADS.

Impact:

The entire population across the country stands to benefit through creation of durable assets of locally felt needs, namely drinking water, education, public health, sanitation and roads etc., under MPLAD Scheme.

The MPLAD Scheme has resulted into creation of various durable community assets which have impacted the social, cultural and economic life of the local communities in one way or the other.

Background:

The MPLAD Scheme is an ongoing Central Sector Scheme which was launched in 1993-94. Since the inception of the Scheme till August, 2017, a total number of 18,82,180 works for Rs. 44,929.17 crore have been sanctioned from MPLADS fund.

The Scheme enables the Members of Parliament to recommend works for creation of durable community assets based on locally felt needs to be taken up in their constituencies in the area of national priorities namely drinking water, education, public health, sanitation, roads etc. The Scheme is governed by a set of guidelines, which have been last revised in June, 2016.

The map of rural deprivation

The map of rural deprivation
For millions hit by agricultural distress, the escape to construction jobs is grinding to a halt
With the Union Budget to be presented on February 1, it is hoped that the Finance Minister will make a significantly higher allocation for investment in infrastructure. It is vital for addressing rural distress. The Socio Economic and Caste Census (SECC) informed us that ‘landlessness and dependence on manual casual labour for a livelihood are key deprivations facing rural families’, which make them far more vulnerable to impoverishment.

Based on indicators
The rural census, or SECC, mapped deprivation using seven indicators: ‘households with a kuchha house; without an adult member in working age; headed by a woman and without an adult male in working age; with a disabled member and without able-bodied adult; of Scheduled Castes/Scheduled Tribes (SC/ST); without literate adults over 25 years; and the landless engaged in manual labour. The more the number of parameters on which a household is deprived, the worse its extent of poverty. Nearly 30% have two deprivations, 13% have three. Only 0.01% suffer from all seven handicaps’.

While 48.5% of all rural households suffer from at least one deprivation indicator, “landless households engaged in manual labour” are more vulnerable.

Nearly 54 million households are in the landless-labourer category; assuming that each such household has five members, that makes 250 million of the nearly 850-900 million rural population. This number is almost certainly an underestimate, since 84% of all those who even hold agricultural land are small and marginal farmers.

The intersection of any of the six other handicaps with “landless labour” makes it more acute. The SECC also said that ‘59% of households with kuchha houses are landless labourers; similarly, 55% of those with no literate adult above 25 years and 54% each of SC/ST households and female-headed households without adult male members are also landless households. At the same time, 47% households without an adult member of working age are landless labourers as are 45% of those with disabled members and no able-bodied adult members’.

Farmer distress
Along with landless families, small and marginal farmers are getting pauperised and more engaged in manual labour. The overall farm size, which has been dropping since the early 1970s, and down from the 2.25 hectares (ha) average to a 1.25 ha average in 2010, will continue to become even smaller. For these farmers, agricultural incomes are also likely to fall, hastening the exodus from agriculture. In fact, farmer distress has been growing, with the past year witnessing farmers protesting on the streets in several States.

National Sample Survey (NSS) data show that there are two demographic groups which did reasonably well in labour market outcomes both in terms of job growth as well as wage growth between 2004-5 and 2011-12; these were the young who were getting educated at hitherto unheard of rates, and the older, poorly educated cohort of landless labour in agriculture, who saw construction work rise sharply.

However, the question is: does the economy have the capacity to create non-agricultural jobs for both groups whose numbers will grow over the next decade until 2030? The young have been entering and remaining in education in unprecedented numbers for the last two decades. Hence, as a result, while the young joining the labour force has been just 2 million per annum between 2004-5 and 2015-16, from this point onwards, the numbers of the young will indeed grow significantly.

However, the numbers of landless and small and marginal farmers looking for non-agricultural work is an immediate and top priority. Between 2004-5 and 2011-12, the number of cultivators in rural areas fell from 160 million to 141 million and the number of landless labour from 85 million to 69 million, both because they found non-agricultural work.

Construction employment
The real net domestic product of the construction sector had only increased at the annual rate of 3.94% between 1970-71 and 1993-94. From 1993-94 to 2004-05 and 2004-05 to 2011-12, the growth rate in the construction sector output accelerated to 7.92% and 11.5%, respectively. Consequently, the share of the construction sector in rural output increased from 3.5% in 1970-71 to 10.5% in 2011-12. Employment in the construction sector increased 13 times during the past four decades, which led to its share in rural employment rising from 1.4% in 1972-73 to 10.7% in 2011-12. This sector absorbed 74% of the new jobs created in non-farm sectors in rural areas between 2004-05 and 2011-12. These trends indicate that rural areas witnessed a construction boom after 2004-05. Further, growth in employment in the construction sector was higher than output growth during both periods under consideration. One reason for the much higher growth in the number of rural workers in construction over the manufacturing or services sectors is that there are fewer skill and educational requirements in construction.

Construction employment grew at a remarkable rate from 1999-2000 onwards. While it employed only 17 million in that year, the number jumped to 26 million by 2004-5. However, what happened after that was totally unprecedented. It grew to 51 million by 2011-12, which is a doubling in seven years or a tripling in 12 years from the turn of the millennium.

This was possible because of the sustained growth in investment in infrastructure, especially over the 11th Five Year Plan period (2007-12) of $100 billion per annum, two-thirds of which was public, and the remainder private. In addition, there was a real boom in real estate, residential and commercial, throughout the country. However, private investment is now much lower than earlier.

Construction is the main activity absorbing poorly educated rural labour in the rural and urban areas. These workers are characterised, as noted above, by very low levels of education. It is estimated from NSS and Labour Bureau data that the absolute number of those in construction who were illiterate was 11 million in 2004-5, but which rose to 19 million in 2011-12.

Construction jobs were growing so fast between 2004-5 and 2011-2 that the share of construction in total jobs for 15 to 29 year olds in the workforce doubled from 7.5% to 14%. Since then construction job growth has slowed, such that the share of construction in total youth employment fell to 13.3%. Construction jobs are growing more slowly since 2011-12, as public investment has fallen. And with the rising non-performing assets of banks, private investment has fallen as well. The result: fewer workers have been leaving agriculture since 2011-12. From the 5 million leaving agriculture per annum between 2004-5 to 2011-12, the number is down to just over 1 million per annum between 2011-12 to 2015-16.

This is hurting landless labour and small and marginal farmers the most, since their households had benefited the most from the tightening of the labour market that had ensued in rural and urban areas because of rising construction jobs. Rural demand in particular has risen, raising consumer demand for simple manufactured goods, especially in the unorganised manufacturing sector, raising employment in those sectors especially in rural areas.

The Union government has sustained rural development expenditure for the last two years, especially for rural roads, under the Pradhan Mantri Gram Sadak Yojana and rural housing under the Pradhan Mantri Awas Yojana (Urban). The Surface Transport Ministry has also attempted to sustain public investment in infrastructure to generate construction jobs for growing surplus rural labour.

The Budget for 2018-19 should sustain this public investment effort. The announcement that the government plans to borrow an additional ₹50,000 crore in this financial year, is welcome. Hopefully, the intention here is to raise public investment, especially for infrastructure investment.

What is the Financial Resolution and Deposit Insurance Bill 2017

What is the Financial Resolution and Deposit Insurance Bill 2017
The FRDI Bill seeks to decrease the time and costs involved in resolving distressed financial entities

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Financial Resolution and Deposit Insurance (FRDI) Bill, 2017 to be introduced in the Parliament. This Bill is similar to the Insolvency and Bankruptcy Code, 2016, which was enacted last year in May. Both of these are about issues that can arise when companies go bankrupt or insolvent, except that this Bill deals only with the companies that are in the financial sector. The insolvency code Act deals with companies in all other sectors. The FRDI will provide a comprehensive resolution framework to deal with bankruptcy situations in financial sector entities such as banks and insurance companies. Let’s read more about the Bill.

Background
In his 2016-17 budget speech, Union finance minister Arun Jaitley said, “A systemic vacuum exists with regard to bankruptcy situations in financial firms. A comprehensive Code on Resolution of Financial Firms will be introduced as a Bill in the Parliament during 2016-17.” Following the announcement, on 15 March 2016, a committee was set up under the chairmanship of Ajay Tyagi, additional secretary, Department of Economic Affairs, Ministry of Finance, to draft and submit the Bill. The committee also had representatives of the financial sector regulatory authorities and the Deposit Insurance and Credit Guarantee Corporation.

The committee submitted its report and based it the draft FRDI Bill was drawn up. The finance ministry sought comments on the Bill till 31 October 2016 and after consideration of the suggestions, the Union Cabinet approved it to introduce it in the Parliament.

What the Bill offers
According to the finance ministry, FRDI Bill, 2017 seeks to protect customers of financial service providers in times of financial distress.

It also aims to inculcate discipline among financial service providers in the event of financial crises, by limiting the use of public money to bail out distressed entities.

The Bill would help in maintaining financial stability in the economy by ensuring adequate preventive measures, while at the same time providing the necessary instruments for dealing with crisis events.

The Bill aims to strengthen and streamline the current framework of deposit insurance for the benefit of retail depositors.

Further, it seeks to decrease the time and costs involved in resolving distressed financial entities.

Once enacted, a resolution corporation will be setup to strengthen the stability and resilience of the entities in the financial sector.
What the Bill seeks to do

The FRDI Bill is part of a larger, more comprehensive approach by the Centre towards systematic resolution of all financial firms — banks, insurance companies and other financial intermediaries. The Bill comes together with the Insolvency and Bankruptcy Code to spell out the procedure for the winding up or revival of an ailing company.

The need for a specific regulation rose following the 2008 financial crisis, which witnessed a large number of high-profile bankruptcies. With the Centre also actively encouraging people to engage more with the banking sector — both through schemes like Jan Dhan Yojana and moves like demonetisation — it becomes critical to protect savers and those joining the formal economy in case a bank or insurance firm starts failing.

The Bill’s main provisions

The Bill provides for the setting up of a Resolution Corporation — to replace the existing Deposit Insurance and Credit Guarantee Corporation — which will be tasked with monitoring financial firms, anticipating their risk of failure, taking corrective action and resolving them in case of failure. The corporation is also tasked with providing deposit insurance up to a certain limit yet to be specified, in the event of a bank failure.

The Corporation will also be tasked with classifying financial firms on their risk of failure — low, moderate, material, imminent, or critical. It will take over the management of a company once it is deemed critical.

Concerns abound

Among other tools, the FRDI Bill also empowers the Corporation to bail-in the company. While a bail-out is the use of public funds to inject capital into an ailing company, a bail-in involves the use of depositors’ funds to achieve those ends. This can be done either by cancelling the bank’s liabilities, or converting them into other forms, such as equity.

This has caused a lot of concern among depositors who are worried they may lose their hard-earned money deposited with banks. However, the fact is that the risk is no more or no less than it ever was. The Deposit Insurance and Credit Guarantee Corporation provides deposit insurance of up to ₹1 lakh. The rest is forfeited in the event of a bank failure. The FRDI Bill has not specified the insured amount yet, but it is unlikely to be lower than that amount, as the limit was set way back in 1993.

Much ado about ‘bail-in’ and FRDI Bill

Much ado about ‘bail-in’ and FRDI Bill
The strong voices against the FRDI Bill seem to be ill-informed, as protecting the interest of depositors has all along been the topmost priority of RBI
In the early 1990s when India’s banking law was amended to bring down the 100% government’s stake in its banks to 51%, there were all-round protests and the trade unions took to the streets. The so-called crony capitalism which spoils the quality of assets of government-owned banks, leading to periodic recapitalisation of such banks, also draws flak from different quarters. But none can match the mass hysteria that is being created by the Financial Resolution and Deposit Insurance Bill (FRDI), 2017.

While the Insolvency and Bankruptcy Code deals with the corporations that have taken money from the banks but are unable to pay back, the FRDI Bill outlines how the insolvency of a financial intermediary—banks, non-banks and even insurance firms—can be tackled. The need for such a regulation stemmed from the 2008 global financial crisis which killed iconic US investment bank Lehman Brothers Holdings Inc. and brought many large financial intermediaries to their knees, forcing large-scale bailouts by governments.

The bill envisages setting up of a resolution corporation which will replace the existing Deposit Insurance and Credit Guarantee Corporation or DICGC. Established in 1978, DICGC is a Reserve Bank of India (RBI) arm that offers an insurance cover of up to Rs1 lakh to the depositors. The proposed corporation will closely monitor financial companies, classify them in accordance with their risk profiles and step in to resolve in case of a failure (this could mean taking over a financial company).

Till here, the narrative flows quite smoothly. It takes a different turn when the bill empowers the corporation to “bail-in” a failing financial company. What’s that? A “bail-in” involves rescuing a financial institution on the brink of failure by making its creditors and depositors take a loss on their holdings. It is the opposite of a “bail-out”, which involves the rescue of a financial institution by external agencies, typically governments, using taxpayers’ money. In other words, instead of the government rescuing a failing bank or any other financial intermediary by infusing capital, depositors’ funds are being proposed to be used for this purpose. So, the depositors run the risk of losing their money or facing inordinate delays in realizing the money—and that too may not be the full amount as deposits may get converted into other financial instruments such as equity or a quasi-equity.

Will the existing deposit cover of Rs1 lakh be taken away? The answer is an emphatic no. All depositors will continue to enjoy that.

There has been a demand from certain quarters that the limit should be raised. Is there any justification in such a demand? Well, since this limit was fixed 24 years ago in 1993, and inflation has substantially eroded the value of money over this period, it can definitely be looked into.

In fact, during the financial crisis in 2008, the Indian government and RBI did have rounds of discussions on raising the limit but they refrained from doing so. It was felt that raising the limit would have made depositors suspicious about the vulnerability of Indian banks which were absolutely safe, with sovereign backing. Besides, the Rs1 lakh limit covers 93% of the depositors (in number) and 30% of the deposits (in value). In other words, the masses have been covered by this limit and the 7% who keep more than Rs1 lakh in bank deposits are presumably savvy on financial matters and well aware of the efficacy of other financial assets.

One pertinent point here: the Rs1 lakh limit is for depositors in a particular bank and not for their deposits. This means, if a depositor has a savings bank account, recurring deposit and a fixed deposit in a bank, and that bank fails, the individual is entitled to Rs1 lakh (and not Rs3 lakh even if there is more than Rs1 lakh in each of the accounts)—that too inclusive of interest.

The proposed regulation will retain the insurance cover. So, what’s the problem? The uncertainty is about the money kept in banks beyond Rs1 lakh. Now, in case a bank goes for liquidation, depositors are entitled to get only Rs1 lakh. Beyond this cover, they can get money, if any, only after the liquidation proceedings are complete and the bank’s secured creditors are taken care of. A depositor is an unsecured creditor.

Does the proposed regulation dilute the depositors’ rights to money beyond Rs1 lakh (or, any other amount in case the limit is raised) which doesn’t enjoy the insurance cover? I don’t think so. The regulation also proposes to ensure proper supervision of the lending activities of a financial intermediary, classification of them based on their risk profile (low, moderate, material, imminent and critical) alerting the depositors if a financial intermediary’s health is deteriorating and a time-bound resolution process. If we consider all these, the new architecture is any day superior to a mere DICGC cover.

Typically, when RBI senses a bank failing, it does not allow the bank to collect fresh deposits and the existing depositors are not allowed to withdraw their own money. The depositors of a dozen-odd cooperative banks, which have been in losses, have not been able to get their money back after years because their functions have been frozen but the licences are not cancelled. Once the new regulation is in place, the wait will be much shorter as there will be time-bound resolution. Besides, the insurance cover will be an absolute obligation of the proposed corporation and the money will be given before a case is resolved.

Most importantly, unlike many of the developed markets, India has not seen bank failures. Some of the cooperative banks which are often a political cesspool have failed, but RBI does not allow any scheduled commercial bank to fail. Protecting the interest of the depositors has all along been the topmost priority for India’s banking regulator. In rare cases of banks going belly-up, RBI plays the role of a match-maker and gets it merged with a stronger bank, deftly and without losing time.

The strong voices against the FRDI Bill seem to be ill-informed. The government-owned banks will continue to have the backing of the sovereign and the depositors don’t have much to worry over the safety of their money. The challenge before the government and the regulator is communicating this. If the canard against the bill continues, there could be a run on some of the weaker banks; also shadow banks may lure away money from the banking system.

Finally, an unsolicited piece of advice. A bank fails primarily because of wrong lending decisions; the depositors are never ever responsible for a bank failure. Even the cooperative banks have been playing an important role in collecting deposits and creating savings habits while their loan decisions often lead to their downfall. Keeping this in mind, the new law may consider giving a greater role to depositors’ representatives on bank boards. This could assuage the misplaced fears of many.

Tamal Bandyopadhyay, consulting editor at Mint, is adviser to Bandhan Bank. His latest book, From Lehman to Demonetization: A Decade of Disruptions, Reforms and Misadventures will be released in Bengaluru on 22nd December.

GST, a work in progress

GST, a work in progress
We need to immediately move towards three tax slabs, and eventually two
The introduction of the Goods and Services Tax (GST) raised much hope that it would herald the emergence of a ‘good and simple tax’ with ‘one nation, one market, one tax’. However, there has been considerable concern with the new tax, both in its structure and operational details, including the ease of paying the tax and filing returns. Trade and industry have been grappling with the problem of payment, filing the returns and claiming input tax credit, and exporters have been facing liquidity crises as the zero-rating of the tax has not worked and refunds have not been forthcoming, with difficulty in filing returns. Of course, the GST Council has been quite responsive to tweak the structure and operational details to make it simpler. Yet, considerable work needs to be done to ensure a smooth transition and to reap the revenue and productivity gains to the economy.

History of GST
Introduction of the GST is an important reform and is a standard policy recommendation for every country going in for the structural adjustment programme of the International Monetary Fund. This has been a major money spinner and a source of productivity gain. According to Michael Keen, of over 165 countries which have adopted GST in one form or another, only five have repealed it (Belize, Ghana, Grenada, Malta and Vietnam), but have reintroduced the tax later. The GST has taken centre-stage in many countries and is considered important in view of the competitive reduction in corporation tax rates due to high mobility of capital. It is also true that there is no “one-size fits all” GST and each country has to adopt the structure depending on political bargains and operational feasibility. It is a major reform, and even as every country makes a lot of preparations before it is introduced, it takes time to smoothen the rough edges and settle contentious issues.

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All you need to know about GST

International experience shows that some features of the reform are inherently desirable. It is important not to have too low thresholds. In fact, reasonably high thresholds will reduce the compliance burden to a large number of small businesses without much impact on revenue. Richard Bird and Pierre-Pascal Gendron, after a detailed examination of a number of countries adopting GST, suggest that in developing countries, a threshold closer to $100,000 would eliminate 75% of the taxpayers with a revenue loss of less than 4%. (See Bird and Gendron, The VAT in Developing and Transitional Countries, Cambridge University Press, 2007). Another desirable feature of a successful GST is to have fewer rates. Multiple rates create classification problems, are harder to administer and would require the general rate of tax to be higher. It would also invite a lot of lobbying by special interest groups. Third, it is important to prepare well before the plunge. Most countries take at least two years to prepare for the introduction of reform to ensure a smooth transition. This is particularly necessary for developing and testing the technology platform, educating the tax collectors and tax payers and to avoid any anomalies in the structure of the tax.

The Indian version
In the Indian context, given that the reform had to be evolved by taking into account the views of 29 States, two Union Territories with legislatures and the Union government, compromises are inevitable and it is impossible to expect the structure of the tax to be ideal. As stated by Bird and Gendron, some bad initial features may be an essential compromise to get the tax accepted in the first place.

It would have been preferable to evolve the structure with two rates, one lower on items of common consumption and another general rate on consumer durables and luxuries. Notably, given that the VAT in the earlier regime had predominantly two rates, it should have been possible to convince the States of the need to fix the GST rates at two rather than four. In addition, the levy of three rates of cesses has further complicated the structure. Having four tax rates and three rates of cesses should have been avoided. As mentioned above, multiple rates create problems of classification, inverted duty structure and large-scale lobbying. It enormously complicates the technology platform to ensure input tax credit mechanism. It therefore appears desirable to move immediately towards three slabs with the final goal of reducing the slabs to two. It would also have been desirable for the “fitment committee” to evolve the rates by thinking afresh instead to merely adding up the excise and VAT rates to fit the item to the nearest rate decided. This is particularly relevant in the case of commodities which are predominantly inputs as in the earlier VAT regime they were placed in the lower rate category. Hopefully, the GST Council will act soon on this.

Raising the threshold
As mentioned above, expert opinion based on international experience shows that there is much to be gained by having the threshold at reasonably high levels. As mentioned above, international experience is that a threshold closer to $100,000 would eliminate 75% of the taxpayers and the sacrifice in terms of revenue would be less than 4%. Moreover, it is the small businesses which produce and trade in commodities and services which are predominantly consumed by low income groups and therefore, keeping the threshold high would be desirable from the viewpoint of equity as well. Considering this, going further, it may be desirable to fix the threshold at ₹50 lakh. The revenue loss will be minimal but ease of doing business will be high. The inclusion of petroleum products in the GST base will depend on mainly the revenue gains from the reform. Nevertheless, it is a desirable objective and the GST Council must act on it. International experience shows that including real estate may not be easy.

Steps ahead
There is some concern that the revenues from GST in the past few months are somewhat below expectations. Things could improve as the new changes bring in stability and technology platform stabilises. Hopefully the implementation of GST may help in augmenting income tax as well.

Strong political commitment, to implementing the reform, thorough advance preparation, adequate investment in tax administration and taxpayer services, extensive public education programme, support from business community and good timing of reform are the important pre-requisites for successful implementation of the GST. It is also important to note that problems of transition to a major tax reform are unavoidable and most countries go through this. In this regard, the approach of the GST Council must be commended for being receptive to the concerns of businesses and in dealing with the glitches in technology. Some of the noise heard is also due to the fact that all traders, in one way or the other, are brought into the formal sector. That hurts some. The GST Council has recognised that it needs to carefully calibrate the reform until the desired goal of a Good and Simple Tax is realised. Hopefully the GST Council will keep the goals clear and consider the reform effort as a work in progress.

DBT of fertilizer subsidy to make farm sector planning more effective

DBT of fertilizer subsidy to make farm sector planning more effective
The agriculture ministry will implement direct benefit transfer (DBT) of fertilizer subsidy in the 14 remaining states from 1 January 2018
As the government rolls out direct benefit transfer (DBT) for fertilizer subsidies, one of the largest subsidy reforms currently underway, the massive amount of data being generated is expected to provide a clear picture of farming activity in the country and help make future planning for the sector more effective.

The government is keeping subsidy reform in the fertilizer sector low key for the complexities involved. The complexities include improper land records, and the involvement of a large number of tenant farmers.

With DBT on fertilizers implemented in all but 14 states, the government has already noticed a close to 10% reduction in subsidy requirement in certain states, fewer instances of retailers overcharging farmers, better transaction times and a reduction in diversion of subsidized fertilizers to other countries for sale at market prices, a person with knowledge of the scheme’s implementation said on condition of anonymity.

The linking of Aadhaar, a 12-digit biometric identification number issued by the Unique Identification Authority of India (UIDAI), with soil health cards and land records wherever possible, is helping policymakers get a better picture of the farming activity in the country.

The data helps in suggesting which crop can be grown where in what season for optimum productivity, based on soil health profile. The software system linked to the point of sale (PoS) machines deployed by the retailers also suggest the best combination of fertilizers needed. At present, farmers have the choice of going by the system’s suggestion or make their own choices.

Once the system functions fully, it will lead to better soil health management, balanced fertilization, and better productivity, besides increasing transparency. Earlier, officials could only be aware that fertilizer supplies had reached a particular district and not whether they had reached the farmer. With Aadhaar linkage, policy makers would know if a farmer has got the plant nutrient.

“This will also stop any leakage that might be happening in the system. A minimum 5-10% saving in consumption and as a result, saving in subsidy, is expected,” said the person mentioned above.

This is significant considering that fertilizer subsidy of Rs70,000 crore was originally allocated for the current fiscal.Fourteen states including Kerala, Bihar, Karnataka, West Bengal, J&K, Jharkhand, Telangana, Odisha, Gujarat and Himachal Pradesh will switch to DBT on fertilizers by 1 January, according to the implementation plan.

The agriculture ministry is on target to provide soil health cards for all 120 million farm holdings by the end of this year. According to the ministry, use of these cards have led to 8-10% lower consumption of fertilizers in 2016-17 compared to the year before, while due to balanced use of nutrients overall crop production went up by up to 12%. In addition to rolling out DBT in disbursal of fertilizer subsidies, the centre in early 2015 initiated 100% neem coating of urea to prevent industrial use and smuggling.

Rethinking India’s tax system

Rethinking India’s tax system
Indian states should rely more on property tax, which is economically efficient, incentive compatible, and progressive
There is a fundamental problem with India’s current tax system. India simultaneously has a tax base for direct taxes that is too small; and a tax base for indirect taxes that is too large. Consequently, too little tax revenue is raised; and too much of the tax burden is paid by the poor. This limits the state’s ability to provide the infrastructure and manpower required for good governance.

According to the December 2017 report of the income-tax department, only 1.6% of Indians pay income tax. This is unsurprising since agricultural income is not taxed in India and the wealthy have mastered the art of tax avoidance and evasion.

Despite the small base for income tax, most Indians contribute to tax revenue because India relies heavily on indirect taxes. However, the Indian version of taxing consumption is not very efficient. Even the relatively incentive-compatible goods and services tax (GST) is fraught with high compliance costs, too many rates and classifications.

Further, taxes on consumption tend to be regressive, because poor people spend a greater proportion of their income on consumption—and consumption is taxed at high rates in India. The regressive nature of a consumption tax is exacerbated by the current GST system, where biscuits are taxed at 18% but gold is taxed at only 3%. For instance, the smallest packets of Parle-G biscuits, a snack for the middle class, and often a meal substitute for the poor, are priced at Rs2 and Rs5, with an 18% tax. While the price is unlikely to increase, the quantity available to the buyer will likely reduce at that price—with tax burden partly passed on to the consumer.

So, what can be done to resolve this problem? I propose that Indian states should rely more on property tax, which is economically efficient, incentive compatible, and progressive. Property tax has four key benefits.

First, it is difficult to evade. Property cannot be moved, or hidden easily, and lasts long. There is an additional incentive to correctly declare the full extent of one’s property. Property owners will not understate the amount of property owned, because it might adversely affect their wealth, future sales, disputes, inheritance, etc. Since property often forms a large proportion of total assets/wealth, there is a built-in incentive to declare property honestly, unlike incentives to understate income or sales.

Second, property tax is efficient because it creates fewer distortions. Typically, a tax on something results in less of it. High levels of income tax may create a disincentive to work. High sales taxes may lead to lower consumption, and, in certain situations, an informal economy, with goods sold off-the-books, etc. In this regard, property taxes are quite efficient. Typically, existing buildings, land, etc. don’t reduce or disappear because of a tax. The main response available to the property owner is to sell the property, and as long as there is a buyer willing to take on the tax burden, revenue tends to be stable.

Third, property taxes tend to be more progressive than consumption taxes (but less progressive than income tax) because the wealthy, relatively, own more property. India has a very high percentage of home ownership, especially in rural areas. It will be important to design a progressive property tax system by classifying plot sizes, accurate land values and zoning data.

Finally, and most importantly, property taxes tend to be levied by local governments. This creates a very direct feedback mechanism between voters/taxpayers and their elected representatives, unlike income and sales taxes, which are levied centrally and spent far from where they are collected. In India today, the urban rich and middle class are able to exit the consequences of state dysfunction by buying into gated communities and private developments. Within these communities, individuals pay maintenance fees, which provide the same services that would be provided by a functional municipal system.

A property tax system makes such exit costlier— which might lead the rich and middle class, who have political and social capital, to participate in governance decisions and demand better public goods and services. Unlike income taxes (often withheld at source by the employer) or sales tax, where the tax is hidden in the retail price, taxpayers typically have to write a cheque to the government while paying property tax. This has the advantage of revealing the extent of the tax explicitly, which may lead taxpayers to demand low tax rates as well as exert pressure on local governments for better services.

Property taxes may also have other consequences specific to India, with its 24.7 million vacant homes. Much of the black money in India is channelled towards owning multiple homes, and poorly designed tenancy laws coupled with a slow dispute resolution system incentivise owners to leave additional homes vacant. Property taxes make it costlier for owners to have additional vacant properties that are purely speculative. In rural India, property tax may also be an avenue to tax wealthy farmers without unduly burdening poor farmers, since agricultural income is not taxed at all.

Currently, India barely relies on property taxes, with a property tax to gross domestic product (GDP) ratio of 0.2%. For other developing countries, though data varies greatly, the rough estimate is 0.7%. By comparison, the average property tax to GDP ratio for OECD countries is almost 2%. India should actively consider exploring property taxes as an important source of revenue to develop increased citizen participation for public goods infrastructure.

Blockchain for commodities markets

Blockchain for commodities markets
The technology could offer a secure means of exchange of raw materials, and provide greater transparency and liquidity to a market
Blockchain technology, which has already been adopted by gold traders, is starting to show the potential to transform other sectors of the global physical commodities markets.

While it wouldn’t necessarily boost commodity prices, the innovation could offer a secure means of exchange of raw materials, open up channels of trade among buyers and sellers that had until now been perceived as credit risks, and provide more transparency and liquidity to a market that has slowly lost favour among financial institutions.

The technology provides a way of accounting for financial transactions. It was developed as a means of addressing the vulnerability of stored data on exchange of assets. Many associate blockchain with bitcoin. The cryptocurrency has undergone a meteoric price increase this year, up more than 17-fold. Future contracts began trading onthe Chicago board options exchange (CBOE) and CME Group this month. By 18 December, the January contract had soared to over $20,000.

The mainstream adoption of bitcoin is becoming a reality despite sceptics who compare the boom to the 1636 tulip-mania. It is unclear whether the cryptocurrency serves more as a medium of exchange or a store of value. Another uncertainty is the longevity of the currency, which has many competitors. There are 4,543 cryptocoins with a $567.7 billion market capitalization, according to CryptoCoinCharts. Yet, no matter how many cryptocurrencies succeed or fail, the blockchain technology underlying digital assets is likely to remain and could make commodity trading more secure.

That has already begun to happen with gold, the most liquid commodity traded. As of 1 November, you can own physical gold as a digital asset in a digital wallet and transfer that holding to any other wallet on the network. Although gold has multiple tradable products (spot, futures and options, exchange-traded products, indices, physical), blockchain accomplishes what none of the other offerings do—the ability to bring together all market participants (miners, refiners, wholesale traders, financial institutions, investors and traders and the retail sector).

The Royal Mint, along with the Chicago Mercantile Exchange, established the Royal Mint Gold blockchain, a digital asset token to represent physical ownership of gold held in the vault at the Mint in South Wales. Earlier this month, Euroclear and Paxos announced that a group including Société Générale, Citi and Scotiabank had completed the first pilot of the blockchain-based gold trading platform developed by Euroclear. And Canada’s GoldMoney announced a blockchain product providing clients the ability to trade gold in cryptocurrencies.

Before blockchain, transactions were recorded in an accounting ledger and eventually as entries in a spreadsheet or database stored in computer systems. This could be risky because it isn’t always secure. Data can be out of date, tampered with or deleted. Digitally distributed ledgers address this concern. Rather than storing data on a server or database, blocks exist on multiple computers and networks in different locations. Should a change come about in the chain, it will immediately and simultaneously be reflected in every copy.

The advantage is that the duplication of digitally distributed ledgers provides a safety mechanism. Cryptographic proofs lock in the transaction order chain in perpetuity, eliminating any disputes over the sequence of events. The blockchain is verified and validated by the high degree of visibility of every transaction, ensuring consensus. With no sole central authority, everyone in the chain is a manager of equal stature.

The physical commodities markets have often been laggards when it comes to innovation and cutting-edge technology. That’s because they are among the least regulated. Commodities have been able to avoid much of the increasing regulatory scrutiny of financial markets because of the vast number of unregulated geographic areas where they are produced, stored and shipped.

Commodity traders know that a typical metals shipment is not just from mine to smelter or refiner to purchaser; rather, it can involve ships, trains, warehouses, and factories along the way. And even when that shipment sits on a barge or vessel for a month or in a factory for a year, its ownership can change multiple times. The same would apply to barrels of oil or bags of coffee.

Today, despite the Donald Trump administration’s efforts to curb financial regulation, global financial markets are contending with an expanding regulatory framework. The commodities markets are far from immune as regulatory bodies aim to scrutinize participants and enforce transparency and stability. The quality of the supply chain of raw materials is being held to higher standards, and requires a greater transparency of the provenance and traceability of shipments.

Blockchain could help commodity traders transcend conventional market barriers. It also ensures timely settlement, expedites capital allocation and provides proof of collateral.

Its use by gold markets paves the way for increased transparency in physical commodities. That should be just the beginning of a broader adoption of ledger technology that will transform the commodity sector, including other precious and industrial metals, energies, grains and softs.

Centre drafts model contract farming act to counter price risks

Centre drafts model contract farming act to counter price risks
The model contract farming act provides a framework for determining the pre-agreed quantity, quality and price of farm produce between farmer and sponsoring companies
To protect farmers from price risks and provide incentives to buyers to procure produce directly from farmers, the agriculture ministry has drafted a model contract farming act that states can adopt as per their needs.

The model act follows a budget proposal last year to help farmers integrate with food processing units for better price realisation and reducing post-harvest losses. A draft of the act is now available on the agriculture ministry’s website for public comments, following which rules under the act will be framed.

The model act provides a framework for determining the pre-agreed quantity, quality and price of farm produce between farmer and sponsoring companies and seeks to ‘transfer the risk of post-harvest market unpredictability from the former to the latter.’

Among other things, the act bars the transfer of ownership of the farmer’s land to companies under all circumstances. However, as an incentive, it allows these contracts to be governed outside the purview of state agriculture produce marketing committees (APMCs).

This essentially means companies can purchase produce directly from farmers and save the 5-10% usually spent in market fees. Under this act, all disputes relating to these contracts will be settled by a state-level contract farming development and promotion agency. Besides there will be local-level recording committees to register these contracts and implement them effectively.

“Past experiments with contract farming have not been successful as in times of unusual price movements, either the farmer or the buyer reneges on contracts,” said Ashok Dalwai, chief executive of the National Rainfed Area Authority, who chaired the committee which drafted the new law. “But with rules that will be framed under the model act, such situations can be avoided by sharing of windfall gains between parties,” he added.

“The basic aim of the act is to transfer the risk associated with price unpredictability from the farmers to buyers,” said Dalwai.

According to the draft act, contract farming arrangements will benefit growers with access to better inputs, scientific practices and credit facilities that may be provided by the buyer, while their produce will be insured under existing agriculture insurance schemes. Further, under the act provisions will be made to settle disputes at the local level when any party breaches the terms of contract.

“The centre had earlier drafted a model agriculture marketing act which states have been reluctant to adopt and the new model act on contract farming may see the same response,” said Ashok Gulati, agriculture chair professor at the Delhi-based Indian Council for Research on International Economic Relations.

“The model act allows for direct purchase from farmers and therefore states have to amend their APMC acts to make this happen,” Gulati said, adding, “if prices rise sharply compared to the contracted price, it will be difficult to force the farmer to sell the produce and such challenges will be difficult to resolve.”

The draft contract farming act follows months of agitations by farmer groups in several states protesting plunging crop prices and demands for loan waivers.

Cities need a sustainable transport update

Cities need a sustainable transport update
Public transport can easily be the cheaper, faster and economical alternative if policymakers plan for tomorrow’s problems today
The car has been the signifier of the aspiring Indian for decades. Starting in the 1980s, the democratization of car ownership with the explosion in sales of the humble Maruti 800 heralded an emergent middle class.

Every year, governments across the country lay down fresh tar on any available city space to welcome the latest entrants into the coveted league of car owners. Meanwhile, the millions who don’t own cars—and are sidelined to the narrow footpaths that lead to the distant bus stop—continue to aspire to own their own car one day.

The government is now beginning to see why this is a problem. Bengaluru is engulfed in a never-ending traffic jam, Delhi’s pollution is at world-beating levels and Mumbai was never famous for its fast roads. This decade has made it resoundingly clear that the present model of urban transport is unsustainable, and the only way out of the cycle—of rising incomes and more wheels on the road—is an efficient public transport alternative.

In light of this realization, Prime Minister Narendra Modi’s inauguration speech for the Magenta Line of the Delhi Metro was on point. Using a city’s public transport should be a matter of prestige, he said. Modi made a fine attempt to persuade people to choose public transport over private, but persuasion only goes so far. India is stuck in a collective action problem: It’s not rational for anyone to switch to public transport until everyone else also follows. An individual will stop using his car if the bus is faster, but that is possible only if others also get their cars off the road. Unfortunately, city-development plans have failed to create the right incentives, as is borne out by the preference for private transport.

For example, Bengaluru has seen an increase in the number of private vehicles from 2.7 million in 2008 to 6 million in 2017. The growth in roads cannot keep up with this. Meanwhile, roughly half the city’s passenger trips (5 million) are via a fleet of 6,000 Bengaluru Metropolitan Transport Corporation buses.

The problem starts with the way cities are governed in India. The lack of adequate devolution as per the Constitution (74th Amendment) Act, 1992, and consequently, effective power vested in a city-level governance mechanism, exacts a heavy toll. Chief ministers, whose remit should be the state, are inevitably involved at the city level. Municipal corporations lack adequate transparency and accountability, and urban governance is a tangled web of overlapping jurisdictions. This becomes abundantly clear every time a major city floods or faces some other upheaval, like the Elphinstone Road railway bridge tragedy in Mumbai earlier this year. Urban planning is a mechanistic process that pays little heed to evolving urban landscapes. Taken together, this means band-aid solutions to congestion, i.e. building more roads. That is what the Jawaharlal Nehru Urban Renewal Mission did, as it allocated 80% of the budget to building roads and flyovers.

The urban transport policy must rethink the hierarchy of needs; pedestrians and cyclists must be on top, followed by buses and then motor vehicles.

It is absolutely clear that there isn’t enough space for everyone to drive a car, and the government must pivot the policy to delivering reliable public transport. The metro project is a step in the right direction, but it needs complementary changes that improve the citizens’ experience.

For starters, the metro system needs a bus system to provide last-mile connectivity. If people have to take buses, they need pedestrian paths to walk on the roads. The bus system also needs to be reliable. Mysuru has managed to achieve that because of a centralized monitoring system that tracks buses using GPS. monitors driving speed and ensures that they stop at every bus stop.

Second, the government must resist using attractive-sounding propositions, like pushing electric and hybrid buses, to give the impression that there is political will to improve urban transport. Changing the fuel of the bus will reduce emissions, but there will be dramatically bigger gains if we are able to prompt even a quarter of the private vehicle-using population to use public transport.

Third, India has plenty of assets that are decaying due to poor maintenance. Policymakers will do well to make space for depreciation accounts in their budgets to pay for maintenance and replacement of public assets.

As a positive step towards reforming urban governance, the Centre has proposed incentives worth Rs10,000 crore for meeting certain defined parameters. This should, hopefully, empower municipal bodies, encourage states to delegate more powers to them, and improve the delivery of services. There are other reforms as well, like lateral entry of officers and giving local bodies greater flexibility in urban planning. However, it remains to be seen whether these reforms will be able to change the conventional ways of the bureaucracy.

India is a growing economy, and census data suggests that only 31% of the population lives in urban centres. Another 300 million people will be added by 2050 and the planning for carrying those people in our cities must begin now. Public transport can easily be the cheaper, faster and economical alternative if policymakers plan for tomorrow’s problems today.

How can India improve its public transport system?

India’s 1st pod taxi on the way, to follow US safety norms

India’s 1st pod taxi on the way, to follow US safety norms
If all goes according to plan, the first phase will be linking the 70km stretch from Dhaula Kuan in Delhi to Manesar in Haryana to decongest NCR with pod taxi
The much-awaited India’s first pod taxi project has moved a step closer to reality after a high-level panel recommended inviting fresh bids for the same conforming to the strictest safety standards on the lines of those prescribed by an American body.

The projected Rs4,000 crore pod taxi scheme—also known as personal rapid transit (PRT)—is a dream project of road transport and highways minister Nitin Gadkari, and the National Highways Authority of India (NHAI) has been mandated to execute it on Delhi-Gurgaon pilot corridor (12.30km) from Delhi-Haryana border to Rajiv Chowk in Gurgaon on a public-private partnership (PPP) basis.

“The committee recommends issuance of a fresh EOI (expression of interest) incorporating (automated people movers) APM standards and specifications, along with other general safety parameters with Niti Aayog recommendations,” the five-member committee set up for technical and safety standards of PRT, headed by transport expert S.K. Dhramadhikari, said.

The ambitious project has been plagued by delays as government think-tank Niti Aayog raised some red flags, asking the highways ministry to direct initial bidders to prepare a 1km pilot stretch as all the technologies were unproved.

Subsequent delays were caused due to formation of the high-powered committee to lay down safety and other specifications. “We will be issuing bids very soon for the pod taxi project now, with all hurdles cleared. The safety and security concerns will be taken care of as per the recommendation of the committee. This will be a major step towards easing congestion on busy Dhaula Kuan-Manesar stretch and revolutionising transportation,” Gadkari told PTI.

PRT is an advanced public transport using automated electric pod cars to provide a taxi-like demand responsive feeder and shuttle services for small groups of travellers and is a green mode of uninterrupted journey. The committee in its report, a copy of which is with PTI, also recommended framing of request for quotation (RFQ) based on discussions with interested players and stressed the need for evaluation, based on performance in the test sections.

The automated people mover (APM) standards in the US as recommended by the committee for the maiden PRT in India have been prepared by the American Society of Civil Engineers (ASCE) and these constitute the minimum requirements for an acceptable level of safety and performance for the PRT. “The APM standards include minimum requirements for the design, construction, operation and maintenance of the various sub-systems of an APM system and are in general relevant for a PRT,” the committee said.

These include vehicle arrival audio and video visual warning system, platform sloping, evacuation of misalighted vehicles, surveillance/CCTV, audio communication, emergency call points and fire protection, among other advanced systems, it added. The pilot project, to be taken up on design, build, finance, operate and transfer (DBFOT) basis, is meant for a 12.3km stretch from Delhi-Haryana border on NH 8 (near Ambience Mall) to Badshahpur via Rajiv Chowk, IFFCO and Sohna Road.

The model is in place in London’s Heathrow airport, Morgantown and Masdar city. Earlier, three global companies, including New Zealand’s Metrino Personal Rapid Transit that later called off its joint venture with Indian partner Gawar construction, were picked during initial bids for the project.

Metrino, along with PNC-SkyTran and Neel Metal Products Ltd, had bid for the pod taxi project last year. The companies were to build 1km of pilot stretch to showcase their technology. The standards approved will also play a role in guiding safety and other specifications for states interested in such projects, including Punjab.

Three bidders had made technical presentation to the government last year—Neel Metals Product Ltd, Ultra Personal Rapid Transport (technology partner), Gawar Construction MIPL—which later said that instead of Metrino, they are roping in LSD by MND Group, and PNC-SkyTran that provided details of specifications in the prototype being developed for commercial operation in Israel.

If all goes according to plan, the first phase will be linking the 70km stretch from Dhaula Kuan in Delhi to Manesar in Haryana to decongest national capital region (NCR), Gadkari said

Testing times: on the bad loans menace

Testing times: on the bad loans menace
Structural reforms alone offer a viable long-term solution to the bad loans mess
The Central government has been working hard to address India’s twin balance sheet problem, but it hasn’t had much to show in the form of results. The Financial Stability Report released by the Reserve Bank of India, for one, suggests that India is still far away from solving the troubles ailing its banks and large business corporations. According to the report released last week, gross non-performing assets (NPAs) in the banking system as a whole rose to 10.2% at the end of September, from 9.6% at the end of March. This, according to a research report released by CARE Ratings, puts India fifth among significant economies with the most NPAs. The RBI stated further that it expects NPAs to continue to rise to as high as 11.1% of total outstanding loans by September 2018, so the end to the bad loans mess seems nowhere near. The bad loans problem has also not spared private sector banks – these lenders have seen their asset quality deteriorate at a faster pace than public sector banks. Private bank NPAs increased by almost 41%, as compared to 17% in the case of public sector banks at the end of September. Non-banking financial companies that compete against banks also saw a jump in NPAs. There are, however, some signs of hope as credit growth has begun to turn the corner and shown faster growth on a year-on-year basis when compared to March.

Reforms undertaken until now though may not be good enough to tackle the problem. The resolution of bankruptcy cases, particularly against large borrowers that contribute a major share of bank NPAs, under the new Insolvency and Bankruptcy Code should help bring the NPA situation under some control. In fact, despite its many imperfections and the slow pace of resolutions by the National Company Law Tribunal, the Code can be helpful in cleaning up bank books in future credit cycles. The recapitalisation of public sector banks too can help increase the capital cushion of banks and induce them to lend more and boost economic activity. But bad debt resolution and recapitalisation are only part of the solution as they, by themselves, can do very little to rein in reckless lending that has pushed the Indian banking system to its current sorry state. Unless there are systemic reforms that address the problem of unsustainable lending, future credit cycles will continue to stress the banking system. In this regard, the government will do well to consider the recent advice of the International Monetary Fund to reduce its ownership stake in banks and give greater powers to the RBI to regulate public sector banks efficiently. Structural reforms are the only long-term solution.

UDAY States have reduced losses by ₹16,762.64 crore in FY17: Power Minister

UDAY States have reduced losses by ₹16,762.64 crore in FY17: Power Minister
Aggregate technical and commercial losses also saw 1% reduction
The financial losses of States participating in the UDAY Scheme have reduced from ₹51,589.51 crore in 2015-16 to ₹34,826.87 crore in 2016-17, R.K.Singh, Power Minister, informed the Lok Sabha on Thursday.

States participating in UDAY saw a reduction of 1% in their aggregate technical and commercial (AT&C) losses and a ₹0.17/unit reduction in the gap between the average cost of supply and the average revenue realised in financial year 2017.

“Further, the Minister stated that tariffs are determined by the respective State Electricity Regulatory Commission (SERC)/Joint Electricity Regulatory Commission (JERC), taking into consideration several parameters including cost of debt, power purchase costs, operation and maintenance costs, capital expenditure etc,” according to an official press release.

,,,,,Historic event will be hosted by Manipur University

The 2018 edition of the historic Indian Science Congress will be held at Manipur University, Imphal, in March.

The event was scheduled at the Osmania University (OU), Hyderabad, in the first week of January but had to be moved out due to “security problems.” This was the first time the 106-year-old ISC — the largest congregation of scientists in India — had to be postponed at the last minute.

“We’ve got confirmation from the Governor as well as the Chief Minister’s invitation to host the event at Manipur University,” Prof. Gangadhar, general secretary (Membership Affairs), Indian Science Congress Association (ISCA), told The Hindu. They would soon be writing to the Prime Minister’s Office about the dates. The congress sees several students, Nobel Laureates and scientists from India’s science academies in attendance. Fresh registrations would now be required, Mr. Gangadhar said.

Since the days of Jawaharlal Nehru, the ISC was traditionally the first public function the Prime Minister addressed in the calendar year.

..........The 25th edition of National Children Science Congress (NCSC-2017) was recently held Gandhinagar, Gujarat.

The theme of the five-day Congress this was ‘Science and Innovation for Sustainable Development’ with the special focus on persons with disabilities

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