NITI working on index to foster competition in power distribution: Kumar

 Niti Aayog has been working on a State Energy Index that is set to foster healthy competition in the states' power distribution space, the think tank's Vice-Chairman, Rajiv Kumar, said on Saturday.

The tool will be designed to assess and further improve the performance of states to efficiently manage their energy resources.

"Niti Aayog has been working on a #StateEnergyIndex that is set to foster healthy competition in the states' energy #DISCOM space. The index would not only allow for better formulation & implementation of strategies for continuous improvement & management of resources," Kumar said in a tweet.

"But also enable a comprehensive assessment of a specific #DISCOM aided by the use of indicators like: viability, access, affordability & reliability of #energy, and even their efforts at #cleanenergy initiatives, energy efficiency and #technology innovation," he added.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Fiscal stimulus, lower interest rate needed for 7% growth rate: Panagriya

 India will need fiscal stimulus, lower interest rates, faster bank recapitalisation and privatisation of some PSUs to return to 7 per cent growth rate, former Niti Aayog vice chairman Arvind Panagariya said on Monday.

Addressing a virtual event organised by AIMA, Panagariya further said the country lost nearly $125 billion in the April-June period due to the Covid-19 pandemic.

"Economy will return to a 7 per cent plus growth rate (in post Covid-19 period). For that to happen, I will pitch for a lower interest rate by the RBI.

"We will need some fiscal stimulus. We will have to go for faster bank recapitalisation," the eminent economist said.

The government had in May announced a nearly Rs 21 trillion stimulus package to help the nation tide over the economic crisis induced by the coronavirus pandemic.

"We need to privatise in a big way as well monetise roads and railways," Panagariya added.

Most rating agencies and economists have projected the country's economy shrinking this fiscal.

The ADB expects India's economy to contract by 9 per cent in 2020-21, while Goldman Sachs has pegged it at (-) 14.8 per cent. Fitch Ratings has forecast a 10.5 per cent contraction.

Panagariya pointed out that India's economic growth was slowing down even before COVID-19 hit the country because there was a lot of stress in the financial sector.

"So we need to recapitalise banks now, otherwise NPAs will rise again and it will be difficult for Indian economy to grow at 7-7.5 per cent again. So, we should not commit past mistakes," Panagariya, currently a professor of economics at Columbia University, emphasised.

Talking about the farm sector, he said agriculture is important for India because too many people are dependent on it.

"But agriculture cannot grow more than 4 per cent. So we need more growth in services and manufacturing sector," Panagariya said.

India's economy suffered its worst slump on record in April-June, with the gross domestic product (GDP) contracting by 23.9 per cent as the coronavirus-related lockdowns weighed on the already-declining consumer demand and investment.

However, agriculture grew by 3.4 per cent during the April -June quarter of the current fiscal.

On trade with China, he said India will have to continue trading with the neighbouring country.

"But China can't be trusted.... We should sign free trade agreements with the European Union and USA," he added.

Regarding the price rise situation, he said he is not an inflation hawk.

"Inflation of 6-7 per cent, we can tolerate, (it) is also good for the economy," he added.

Not fiscal stimulus, other measures needed to boost economy: NITI Aayog VC

The government should focus on alternate measures to stimulate economy as it is not possible to give fiscal stimulus, NITIAayog Vice-Chairman Rajiv Kumar said ahead of the Budget.
Kumar also said growth-enhancing measures are the need of the hour to achieve India's potential growth rate of 7-8 per cent per annum.

He attributed the current slowdown to low investment, muted consumption expenditure and lagging exports.
Experts are divided over whether the government should provide stimulus to boost slowing economy without bothering too much about fiscal deficit.
"Growth-enhancing measures are the need of the hour to achieve India's potential growth rate of 7-8 per cent per annum.
"However, the government's ability to finance a large stimulus is admittedly constrained. Therefore, attention will have to be on alternate measures to stimulate a recovery," Kumar said in a newsletter 'arthNITI'.
The NITI Aayog's vice-chairman noted that some green shoots of recovery are now visible with the Purchasing Managers' Index (PMI) for both manufacturing and services showing a smart rise to above 52, which signifies expansion.
He also said there have already been plenty of measures taken by the government in the recent past, including the decision to lower corporate tax rates in September 2019.
"The equity markets have responded positively and strongly to these measures and recorded all-time highs. Still, all eyes are now on Budget 2020 for further growth-enhancing measures," Kumar said.
Noting that growth, equity and sustainability can no longer be viewed as mutually exclusive, he said, "We cannot achieve one goal while neglecting the other two." Our policy design should, Kumar said, always have these three principle goals that are also enshrined in the Sustainable Development Goals (SDGs) or the Global Agenda 2030, for the achievement of which, all UN members have given their unequivocal commitment.
The Indian economy, which till recently was hailed as the fastest-growing major economy, has seen growth rate decline in each of the past five quarters, falling to over six-year low of 4.5 per cent in July-September 2019.
The National Statistical Office (NSO) has estimated the gross domestic product (GDP) in the current financial year at 5 per cent, which is 11-year low.
During the current year ending March 2020, the fiscal deficit target has been pegged at 3.3 per cent of the GDP.
However, there are apprehensions the government may miss the target in view of the slower economic growth and likely shortfall in revenue collection, mainly because of massive cut in the corporate tax rate.
Finance Minister Nirmala Sitharaman will present Budget 2020-21 on February 1.

NITI Aayog moots Rs 22,500 cr plan for 150 private trains on 100 routes

NITIAayog and Indian Railways have come out with a discussion paper for running 150 trains on 100 routes by private operators, envisaging an investment of Rs 22,500 crore.
The discussion paper titled 'Private Participation: Passenger Trains' has identified 100 routes, including Mumbai Central-New Delhi, New Delhi- Patna, Allahabad-Pune and Dadar-Vadodara.
Other prominent routes include Howrah-Chennai, Howrah Patna, Indore-Okhla, Lucknow-Jammu Tawi, Chennai-Okhla, Anand Vihar-Bhagalpur, Secunderabad-Guwahati and Howrah-Anand Vihar.
The paper, prepared for discussions with stakeholders, has split the 100 routes into 10-12 clusters.
According to the paper, the private operator will have the right to collect market-linked fares and will be provided flexibility of class composition and halts.
The privatisation of train operation, the paper said, will help in introducing modern technology and rolling stocks with reduced maintenance.
Besides, it would provide world-class service experience to passengers and also help in reducing the supply demand deficit.
The operators could be domestic or international entities, the paper said.
Each bidder would eligible for award of maximum three clusters, it added.
The Tejas Express on the Lucknow-Delhi route, which was flagged off on October 4, is the railways' first experience of letting a non-railway operator run a train. The Tejas Express is run by railways' subsidiary IRCTC.
IRCTC has a slew of benefits worked out for its passengers -- combination meals, free insurance of up to Rs 25 lakh and compensation in case of delays.
The Railway Board had in October last year formed an empowered group of secretaries, headed by NITI Aayog CEO Amitabh Kant, to chalk out the modalities of the bidding process and take other decisions to fast-track awarding of bids to private players.

No place for protectionism, we must penetrate global markets: Amitabh Kant

India should penetrate global markets, NITI Aayog CEO Amitabh Kant said, even as he stressed on promoting manufacturing in the country in a big way.

"We need to make India easy to do business and we in the government have taken several steps by simplifying rules and regulations that resulted in the country improving substantially in the World Bank's 'Ease of Doing Business'," a release from IIT, Hyderabad quoted him as saying, at the institute's convocation.

The country should penetrate global markets, Kant, who delivered the convocation address via video conference, said.

"It is important for all of you to understand that we live in a globalised world and there is no place for protectionism. We need to penetrate global markets. Japan and China are export-driven economies that have thrived on trade," he said.

Kant advised the students to think of the world as their market and not only the domestic market.

"We now import a lot of our mobile phones, television sets and telecommunication equipment. Manufacturing is important and we should increase it from its current share of 18 per cent of our GDP," he said.

The participation of women in the economy must increase and the country cannot grow without bringing the large women population into the workforce, he said.

"If India is to grow at 9 per cent, we must have gender parity. We must increase the participation of women in Indian economy and that will depend on you, many of whom will be in positions of power. You must give a place of prominence for women wherever you work. We cannot grow without bringing half of our population into the workforce," he said.

At NITI Aayog meet, CMs say centrally sponsored schemes bleeding states dry

At the fifth meeting of NITI Aayog’s Governing Council on Saturday, Karnataka Chief Minister H D Kumaraswamy demanded the Centre extend GST compensation period beyond five years as he feared his state will face “severe financial crunch” when the recompense period ends in 2022. The demand comes ahead of the Goods and Services Tax (GST) Council meeting on Friday.
Several chief ministers (CMs), of not only Opposition parties but also allies like Bihar’s Nitish Kumar, went beyond the suggested five-point agenda of the meeting to stress that centrally sponsored schemes (CSS) were bleeding states dry, and asked the Centre to either fund these fully or discontinue them. They also demanded the Centre, given the rural distress because of drought, release its backlog of MNREGA payments.

Later at a press conference, NITI Aayog Vice-Chairman Rajiv Kumar said the suggestions made by the states could form input for the formulation of the Budget, to be presented on July 5 in Parliament.
Finance Minister Nirmala Sitharaman said central devolution to states rose from Rs 20 trillion between FY12-FY15 to Rs 41 trillion in the next four years, a rise of around 97 per cent.
Kerala CM Pinarayi Vijayan and Bihar’s Kumar expressed reservations at the reforms proposed in the model agriculture produce marketing committee (APMC) Act. Both said the reforms in the APMC Act might not be the panacea the model law promises.
Chhattisgarh CM Bhupesh Baghel, who earlier met the PM, said that premium should be increased for mines allotted for government venture from Rs 100 per tonne to Rs 500 per tonne and the state should also be given a share in electricity generated. Baghel said there were several loopholes in the proposed amendment to Indian Forest Act, 1927, and it does not protect the rights of tribals living in forest areas.
On GST, Kumaraswamy said several structural issues, including flawed tax rates, have caused GST revenue shortfall in the state. He said Karnataka has limited scope to mobilise additional revenue, and this would mean that at the end of 2022-23 there would be a steep fall in revenues of the state as compared to the protected revenue of 2021-22. He said this would hurt social welfare, development and infrastructure work. He demanded that compensation be extended beyond 2022.
While West Bengal CM Mamata Banerjee skipped the meeting after writing to the PM where she termed the exercise “fruitless” as the NITI Aayog does not have any financial powers, Vijayan seemed to echo her.
In his speech, the Kerala CM said the NITI Aayog in its “present form has not played the much expected role of a facilitator in the last four years. There is a growing realisation that it is perhaps not a substitute for the erstwhile Planning Commission.” He said the Inter-State Council should be revived.
The Bihar CM said the 14th Finance Commission devolution has meant states having to dip into their finances to fund central schemes. He suggested the Centre discontinue the CSS and implement its priority area schemes under central sector schemes, while states fund their priority schemes from their respective funds.
Kumar demanded the Centre do away with the PM crop insurance scheme for Bihar’s farmers. He said the scheme should be delinked from farmers seeking bank loans as its premium is proving to be an additional burden when his government provides such insurance free of cost.
He said the Centre should extend the PM Kisan Nidhi scheme, in which it pays Rs 6,000 to farmers, to tillers as well.
Vijayan criticised the model APMC Act. He said in a society with highly unequal bargaining and monopoly powers, the influence of corporate entities would worsen the exploitative conditions. “Our state has shown we need to look beyond certain restrictive assumptions and prescriptive policies. We need to learn from popular experiences,” he said.
Kumar said the Bihar government dissolved all agricultural marketing boards and committees in 2006, converted these into free public markets. He said the main premise of the ‘model APMC Act’ of the Centre is based on regulating agricultural markets, but his government feels there is no need to regulate the market.
Vijayan cautioned against doing away with the Essential Commodities Act as hoarders can misuse this to create a situation of rising prices, which would hurt the consumers, especially poor and vulnerable sections.
Kumaraswamy said the ‘ease of living index’ ranking system adopted by the NITI Aayog should be “more participative, scientific and transparent”. He said giving 58th rank to Bengaluru in that index is “unacceptable as Bengaluru is widely rated as the most preferred city for work in the country by reputed agencies”.
The Karnataka CM also echoed others on central schemes and subsidies. “Regarding subsidies, our view is that the subsidies which arise because of specific central legislations or policies should be borne by the central government itself and the state should not be expected to share a portion of them,” he said.
Apart from the West Bengal CM, Telangana’s K Chandrashekhar Rao did not attend the meeting. Punjab CM Amarinder Singh also skipped it because of health reasons, but state finance minister Manpreet Badal represented him. The Punjab CM, in his speech circulated at the meeting, asked the Modi government to increase the annual assistance under PM-KISAN from Rs 6000 to Rs 12,000.
Madhya Pradesh’s Kamal Nath called for adopting a mechanism by which import and export of farm commodities is seamlessly taken care of to benefit the farmers. Rajasthan’s Ashok Gehlot was also at the meeting.
Andhra Pradesh CM Y S Jaganmohan Reddy demanded special category status for his state, saying the PM and the BJP manifesto for 2014 polls had committed to it. He placed before the meeting a letter by 14th Finance Commission member Abhijit Sen, which “explicitly stated that the commission did not recommend the abolition of special category status”.
Bihar’s Kumar made a case for special category status for his state, but suggested a way out. He said the Raghuram Rajan committee had identified 10 most backward states in the country and Bihar was one of them. He said the panel had recommended the Centre could provide assistance under other heads to most backward states.