The additional funds will be over and above the Rs400 crore already released under the National Horticulture Mission for the rejuvenation of orchards in the drought-affected regions of Maharashtra
The Empowered Group of Ministers (EGoM) on Drought, headed by Agriculture Minister Sharad Pawar, has approved an additional assistance of Rs256 crore for rejuvenation of orchards in drought-hit districts of Maharashtra.
After the meeting Pawar told reporters that “The proposal on providing additional assistance of Rs256 crore to protect the orchards in drought-hit districts of Maharashtra has been approved.
The additional funds will be over and above the Rs400 crore already released under the National Horticulture Mission through a special scheme launched last month for the rejuvenation of orchards in the drought-affected regions of Maharashtra.
However, the decision on extension of duty free import of oilcakes to boost fodder supply was left to the Finance Ministry, which will take a call after assessing the demand and supply situation.
When asked about this proposal, finance minister P Chidambaram said: “This has to be decided on file at the department level after assessing the domestic production and import level.”
He said that extending the duty waiver to other varieties of oil cakes like copra cake, palm kernel cake and rice bran extraction will also be decided on file and will be communicated to the EGoM Chair.
The country has imported 53,090 tonnes worth Rs84.52 crore oil cakes between September 2012 and January 2013 against 18,769 tonnes worth Rs21.27 crore in the same period last year, as per the official data.
The coal ministry has proposed to replace the 26% profit sharing between coal and lignite miners with project people with a new royalty payment system
It may be recalled the Mines and Mineral (Development and Regulator) Bill of 2011, to replace the old one was tabled in the Parliament in December 2011, when it was sent to the Standing Committee for its recommendations.
It would appear when such matters are referred to various Committees, no time frame is set within which they ought to submit their views and recommendations.
Which is why, the final recommendation has taken a good 15 months to come to public notice now.
The original provision called for 26% profit sharing by coal and lignite miners with the project affected people. Now, the Coal Ministry has proposed that this will be replaced by a system based on royalty payment by firms concerned.
In order to take care of the welfare of the affected people, a new District Mineral Foundation (DMF) has been created. The exact terms of reference of this DMF is not yet known, but the new law proposes payment of an amount equivalent to the royalty paid by companies to state government concerned. The mechanism for such payment may also have to be worked out.
Nevertheless, such moves will eventually affect the consumer who will foot the bill, as such costs will be passed on to him!
Also, at present, the rate of cess, amounting to 10% of the royalty is paid to the state government by miners. The Standing Committee has recommended that it is up to the state to increase or decrease this percentage of cess chargeable and has stated that while issuing mineral concessions, they should not put any pre-condition about location of the industries, which require the mined product. The tendency so far has been driven by the regional consideration of development and employment potential of the State.
The panel had also suggested that if shares are allotted to the affected people these should be made transferable, and issued at par value.
Provisions under this procedure of share allotment, though a novel idea, would also ensure that there is a guarantee of a regular income through dividends, and other related benefits, all of which are a welcome step in the right direction. In many organizations, offers of employment, for at least one member of the affected family, have also brought about enthusiastic response in the past.
In fact, in case of lump sum compensations, when involved, why not encourage the affected people to redeposit it with the miner in an escrow account under the Ministry of Finance or some sort government supervision, so that this fetches a regular additional income in terms of interest?
Full market reactions from Miners are likely in the next few days. But, in the meantime, coal miners would show sign of relief that the coal regulator will not determine the final rates, though he may be involved in other areas in case of disputes etc.
Time is the essence of any contract or proposal. Such matters should not be left linger on for months.
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
In India, we are plagued with a multiplicity of authorities and shadow boxing of regulators in the financial arena. There is an urgent need to place consumer protection at the heart of financial regulation with a stronger Financial Redressal Agency or mechanism
Now that our financial regulatory, legislative and administrative frameworks have failed the common Indian, it calls for immediate fundamental system overhaul. The multiple regulatory authorities have in no way curbed the menaces of money laundering, black money, insider trading, mis-selling of insurance, mutual fund products and chit funds that have turned cheat funds.
The numerous financial swindles have mostly harmed the lower income segment of society who is lured by promises of extremely unimaginable returns by agents whose commissions run as high as 40%. West Bengal-based Saradha and its associate chit funds has galloped people’s savings from other states like Assam, north-eastern states, Odisha, Bihar and Jharkhand. The ramifications of Sahara with much wider footprints are yet to turn up as so far it had simply ignored directions from the Supreme Court and Securities and Exchange Board of India (SEBI).
The sheer lack of regulatory oversight by any one or more of the high-level authorities has proven them toothless paper tigers. The regulators have failed as watchdogs, which can neither bark nor bite. This has necessitated the need for a more effective watch on the watchdogs.
That scams of such great magnitude running into thousands of crores of rupees are perpetrated under their very noses cannot go unnoticed. This occurs primarily because unscrupulous market players taking unfair advantage of the multiple orders from the Supreme Court and SEBI. Yet they cannot be touched as they know the regulators are operating in grey areas. This is exactly the situation the Saharas and Saradhas who have been very conveniently been exploiting with their schemes that were neither here nor there, regulated neither by Reserve Bank of India (RBI) nor SEBI nor Insurance Regulatory and Development Authority(IRDA) nor the State Governments. Sahara has been dragging its feet, buying time with impunity.
In India we are plagued with a multiplicity of authorities and regulators shadow boxing in the financial arena, with vast scope for regulatory arbitrage and not acting effectively in their mandate of protecting consumer interests. At the top of the pyramid in New Delhi are the Prime Minister’s Office (PMO), followed by the Ministries of Finance and Corporate Affairs. The Central Bureau of Investigation (CBI) reports to the PMO, the Central Board of Direct Taxes (CBDT) and Enforcement Directorate (ED) to the Ministry of Finance while the Special Frauds Investigation Office (SFIO) reports to the Ministry for Corporate Affairs. Next come the three Financial Regulators - RBI for the banking sector, SEBI for the capital markets both are Mumbai-based and the Hyderabad-based IRDA for the insurance sector. Each of them have their own file pushing babus duplicating investigations by stepping on each other’s toes, resulting in harming genuine consumer interests. Each of them jealously guards their turfs. Typically, it happened during investigations into the Satyam investigation where the local police station despite not knowing the ABC of the fraud wanted a piece of the action!
The Government of India, pursuant to the 2011 Budget announcement setup an Expert Group designated the Financial Sector Legislative Reforms Commission (FSLRC) with an extremely lofty mandate ostensibly, “to re-study the regulatory requirements of banking, payments, public debt management, securities, insurance, pension funds and small savings and rewrite and harmonize the century old financial sector legislation by creating an umbrella Unified Financial Regulatory (UFRA) to oversee all the regulators – SEBI, RBI and IRDA as well as Forward Markets Commission (FMC) and Pension Fund Regulatory and Development Authority (PFRDA) to move from narrow sectoral regulation to a broader framework of rules and principles. To deal with all financial transactions, help regularizing economies of scale and scope, provide a common platform for organized financial trading in all kinds of financial instruments spanning equities, bonds, currencies and commodities.”
Presently, there are no effective regulations to effectively supervise financial entities masquerading as chit funds, mutual funds, insurance under undefined grey areas in the unorganised sector that commence operations merely by producing a registration certificate issued by either the Registrar of Firms or Companies. The confusions of jurisdiction of different agencies over products and services are galore.
At present efforts are on to keep RBI out of the purview of the UFRA. The inter-regulator turf war spat in 2010 over the jurisdictional issues like unit linked insurance plan (ULIP) among RBI, SEB and IRDA makes it all the more imperative to mandate that the RBI is also brought in the loop. There are no convincing reasons to keep RBI out. Like its other counterparts, the RBI too has to share the blame for allowing matters to deteriorate.
The many transgressions and misdemeanours that are the fall out of unbridled growth of unorganized entities masquerading as non-banking financial companies (NBFCs) which are cheating citizens of their hard earned savings. This is the result of throwing up of hands by the banking, markets and insurance regulator by trying to palm off the blame to the state governments who are expected to have their own laws.
West Bengal has a special Assembly session to get a new one. None of the state governments are equipped with the wherewithal and manpower qualified to audit or inspect the massive financial frauds. None of the Regulators have been able to prevent these unorganized entities from constantly hawking all kinds of finance, money and insurance products with fancy names, fabulous returns, incentives and commissions.
This is all the more reason when all the three of them viz. SEBI, IRDA and RBI have abjectly failed in discharging their sovereign duties of protecting the aam insaan calling for setting up a super watchdog like the UFRA to oversee their functions as proposed by the FSLRC.
The interests of millions of consumer deserve special attention as problems of moral hazard and incidence of white-collar economic offences are hitting the common citizens and there are no credible institutions that can be approached to address the consumers’ legitimate grievances concerns and award appropriate compensations.
Read SEBI vs Investors by Sucheta Dalal
Under the present dispensation, the FSLRC points out that action are initiated far too late when the entities whether commercial or co-operative banks or the NBFCs get into trouble. It recommends the setting up of a ‘Resolution Corporation’ a hybrid covering Deposit Insurance and Credit Guarantee Corporation (DICGC), which is an out dated slow active passive body.
This is a cash rich wholly owned subsidiary of the RBI sitting over premiums collected from all banks, disbursing hardly any sums and showing massive profits. The maximum cover of Rs1 lakh per capita of deposit it provides to depositors is grossly inadequate when compared with the scams and non-performing assets (NPA).
In its recommendations the FSLRC seems to disregarded some of the path breaking recommendations made by the Jagdish Kapoor Working Group on Deposit Insurance (2000). The working group had advocated differential deposit premium for banks in keeping with their respective risk profiles and providing teeth granting regulatory and supervisory powers to the DICGC in line with the US Federal Deposit Insurance Corp (FDIC) to trigger faster and prompt corrective action. There are disagreements on replicating the US Resolution Trust that was set up following the sub-prime crisis. There are two opinions whether the NBFCs should also be brought into the net.
In India today the NBFCs and co-operatives operating as banks function in opaque no-mans-land of dual-but-no control of state and central government legislations, this has been put an end to. There is an urgent need to place consumer protection at the heart of financial regulation with a stronger Financial Redressal Agency or mechanism that the FSLRC also recognizes.
(Nagesh Kini is a Mumbai-based chartered accountant turned activist.)