Talk Policy

 When we start to talk about judicial reforms in India, we begin with constitutional values, independence of judiciary, separation of power, appointment of Judges etc etc etc. Not to say that these are not cherished values that all citizens of India must crave and fight for, but there is a case to be made that these are not the only judicial reforms that we must be concerned with. There are much more mundane, dry and boring stuff which needs to be fixed at the administration level in every court and tribunal of this country. This would also enable to clear up the long list of backlogs that we have in this country. The number of backlog can be 3-5 Cr depending on the source but things with large numbers is that the marginal shock value diminishes with every zero added beyond a point. Moreover the number of case instituted each year is higher than the number of case disposed (as per Pratik Dutta and Suyash Rai, the average disposal of cases each year between 2015-19, was 1.8 million)...

 GST was a major reform in India and was launched at the sroke of a mid-night hour, an attempt made to draw parallel with India's moment of freedom. However after the froth and hype has settled around GST and now that it is in place for sometime now, let us evaluate on how it has fared so far and what else is required: The Major gains from GST are as follows: -           Uniformised various consumption and trade taxes particularly state VAT and central excise (excluding Petroleum and tobacco) and Service tax. Although the Petroleum, electricity and real estate taxes are outside the ambit of GST, still a large basket of goods and services are included. This has helped in making trade within the country relatively free flowing with no state competition on rates. -           Cessation of inter state and intra state check posts 1 which significantly fostered the free flow of goods across coun...

  As per RBI report on state finances (State Finances- A risk analysis, June 22, Chart 9, RBI bulletin ) below is the financial performance of DISCOM in terms of losses, long term debt, State wise break down of debt and overdues to Generating companies (Gencos). Figure 1: Financial health of DISCOMs Source: Reserve Bank of India - RBI Bulletin The combined Distribution Company (DISCOM) losses amount to Rs.59,000 Cr in FY 2022 ( ETenergyworld report, Jun 2022, ETenergyworld.com ) and the total debt of DISCOMs in FY 21-22 is Rs. 6.2 lakh cr (i.e. ~3% of GDP) excluding the amount it owes to power generators as of Dec 2020 ( ET Bureau, April 2023, The Economic times ) .  Average cost of supply (ACS) to Average Revenue Realized (ARR) is Rs. 0.57 ( ETenergyworld report, Jun 2022, ETenergyworld.com per unit ) . The State governments has bailed out many DISCOMs through taking over debt or through equity infusion. The size of the bailout has been up to 5.2% 2 ( S...

    1)     Regulatory environment and capacity: Indian businesses are bound by substantially high number of laws, regulation, and compliance that disincentivizes scale and incentivize informality. There are 1536 1 laws that directly or indirectly are applied to businesses, and some are enforced by center and some by the states. These laws together account for 69,233 1 compliances that businesses need to comply. More than 26,134 1 clauses carry imprisonment provisions and 40% 1 of the compliances have prescribed jail terms. This has made India a repository of dwarf enterprises. India has 63 million 1 enterprises out of which just one million are in formal sector. The moment a company scales and reaches 150 employees there are additional 900 compliances which incurs approximately Rs.12-18 lakh rupees in addition. One must note that this additional compliance burden is way more for costly and cumbersome for smaller companies which generally lacks capacity, ...

 India's capital account has extensive list of control rivalling only China. Its not a character of any free market and free trade liberal economy to have such draconian capital controls. It has a toll on its firms as there is that much high cost of capital for denying them international access of capital. As a consequence this has a direct impact in India's economic growth as well.  I recommend a gradual opening up of India's capital market focusing on below areas as a starting point:   -           There is currently only a subset of bonds that is issued under Fully Accessible Route (FAR) which is now included in JP Morgan’s emerging market bond index. We recommend the bonds across maturity classes to be included in FAR new issuance and make it eligible for foreign investment and which continues with no quantitative capping. This would deepen the portfolio of bonds which will attract more capital in Government bonds effectivel...

Cities, like dreams, are made of desires and fears. This quote from Italo Calvino reverberates in my mind when I imagine any city in India. Cities are talent magnets, epicenter of innovation and heartbeat of any economy. Yet cities are messy, noisy, dusty and in India’s case, filthy. As India gears up to its ambition to become a $10 trillion economy, her cities need to be more resilient, both economically and administratively. However, to build a robust and sustainable city, I argue that we need a robust and sustainable local politics. First, let me make it clear that I am not an urban Pessimist. I firmly believe in the brilliant lines of Lewis Mumford that that last invention of villages are cities. The trajectory of progress of human civilization crisscrosses through many many cities throughout history of time. Cities are grand subsidizers of much romanticized rural life. For instance, almost 40% of Karnataka’s GSDP is from Bangalore and almost 60% of Haryana government’s revenue i...

  Jaitley and Shah ( Jaitley and Shah, Oct 2021, Page 30, xKDR forum ) points out State Electricity Regulatory Commission (SERCs) and Central Electricity Regulatory Commission (CERC) have excessive concentration of power in terms of being executive, legislative and judiciary at the same time. Moreover, it is also tasked with the function of Tariff setting and true up determination. The central planning-based price system should not be the primary concern of any regulator. Price should be determined by market forces and any redistributive measures must be achieved through budgetary allocated vouchers without intermediating it with price system. A major roadblock to enabling Pricing system is the institutional design of SERCs commission and CERC which are tasked with tariff fixation and regulation. The SC in one judgement during Jan’24 (Yash Mittal, January 2024, Live law article, Livelaw.in ) also made it clear that the state and central govt’s role is only advisory and regu...