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Fact-checking the budget: some false claims, some shortcomings, esp the ‘dole’ to farmers

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Piyush Goyal

[vc_row][vc_column][vc_column_text]Seen as an ‘election budget’ by all, including the upbeat members of government and the ruling BJP, the Budget 2019 with provisions that goes well beyond the ‘interim’ period of the three-month remaining term of this dispensation was found wanting by analysts with regard to some facts and promises.

As for the much flaunted sops for the poor and farmers, a look at the provisions made revealed them to be misleading and meaningless. The ‘smart’ move with regard to farmers is that the payment for Rs.6,000 annual income will start retrospectively from December 2018, and the first instalment of Rs.2,000 will be deposited in farmers’ account this March: just in time for 2019 Lok Sabha election.

The allocation for MGNREGA, about which the initial claim of an increase was followed by silence, is Rs. 60,000 crore.

This is 1.8% lower than the Rs 61,084 crore (revised estimate) allocated for 2018-19.

In February 2018, the Union budget had earmarked Rs 55,000 crore to the demand-driven rural employment scheme. In January 2019, the government had to allocate an additional Rs 6,084 crore to the programme to meet its financial demands, thus taking up the total amount to be spent in the financial year 2018-19 to Rs 61,084 crore.

For the last few years, though the demand for MGNREGA has been steadily increasing, the government has not been able to address it fully, leading to pending liabilities.

Prior to the presentation of the 2018 full budget, NREGA Sangharsh Morcha, a country-wide coalition of organisations and individuals, had submitted a memorandum to the Union finance ministry stating that there should be an annual allocation in the range of Rs 80,000 crore to be able to minimally function as per its legal provisions.

A shortfall would aggravate problems of implementation and pending liabilities, leaving the poor short-changed.

PM Kisan Samman Nidhi

Narendra Modi government’s income support scheme for small farmers – those cultivating up to two hectares of land – is Rs.6,000 a year, or Rs 500 per month. Considering a household size of five, this is 1/8th the rural poverty line of Rs 816 per person per month.

The allocation of Rs.20,000 crore in the interim budget (out of the total Rs.75,000 crore) falls short of meeting even this target. According to 2015-16 Agriculture Census, the  small  and  marginal  holdings  taken  together  (0.00-2.00  ha) constituted  86.21% of total 14.6 crore operational  holdings in  the  country, or a total of over 12.58 crore. If Rs. 2000/- is allocated for each small & marginal farm household as part of 1st instalment, then the total spending (cost) under PM Kisan Samman Nidhi would be 25,160 crore.

But the interim budget has allocated only Rs. 20,000 crore for 2018-19 (R.E.). So, even if landless farmers, SC-ST farmers, women farmers, sharecroppers and tenant farmers are kept aside, not all the small and marginal households can get covered under the income support scheme (assuming that 1 household operates one holding

Agriculture and food policy expert Devinder Sharma who has been advocating a fixed annual income for farmers was surprised at the figures allocated for the purpose. “How can they seriously think that a support of Rs 500 per month will help farmers out of the terrible agrarian crisis. And how will it help reduce the number of farmers suicides.”

The announcement is also discriminatory in nature. The measure is meant for small farmers with less than two hectares of land and does not take into account the 40% tenant farmers and agricultural workers who had been left out of the Budget altogether. The forest rights being demanded by the Adivasis and tribals has not even been acknowledged.

Ashok Gulati, chair professor for agriculture at ICRIER, writing in The Indian Express, said  that the direct income support to farmers of total Rs..75,000 crore is nowhere near the annual loss of about Rs 2,65,000 crore that farmers have been suffering in recent years because of the low prices they have received due to restrictive marketing and trade policies. “Until major marketing reforms are initiated, there is no hope of doubling farmers’ real incomes by 2022-23,” he wrote.

Moreover, the budget has nothing to create jobs. Gulati said: “It is more like using band-aid where surgery was required.”

Apart from the shortcomings in these two of the major announcements, several of the claims of Interim Finance Minister Piyush Goyal were contested by FactChecker.in of The Spending and Policy Research Foundation which verifies the claims made by those in public life and has been certified by the International Fact-Checking Network, a unit of the Poynter Institute.

Pradhan Mantri Awas Yojana (PMAY)

Claim: 1.53 crore (15.3 million) houses constructed.

Fact: As of December 2018, at least 3.65 million houses were constructed under PMAY, according to government data. Of these, 1.25 million were constructed in urban areas whereas 2.4 million in rural areas.

Foreign Direct Investment

Claim: India could attract massive amount of Foreign Direct Investment (FDI) during the last five years- as much as $239 billion.

Fact: True. But the rate of growth of FDI inflows have declined from 25 percent in 2014-15 and 23 percent in 2015-16 to eight percent in 2016-17 and one percent in 2017-18.

Distribution of LED Bulbs

Claim: At least 143 crore (1.43 billion) bulbs distributed that will save Rs 50,000 crore.

Fact: Till date, 32.3 crore (323 million) LED bulbs have been distributed, as per official records.

Swachh Bharat Mission

Claim: Mindset change achieved.

Fact: In 2018, 40 percent households with a toilet, according to a SQUAT Survey, had at least one member who defecated in the open

Pradhan Mantri Kaushal Vikas Yojana

Claim: Over one crore (10 million) youth being trained to help them earn a livelihood.

Fact: Between July 2016 to 30 November 2018, under PM’s Skill Development Programme (second edition) as many as 3.6 million or 36 percent of the target had enrolled and 3.39 million (34 percent) had been trained. In the first edition, between July 2015 to and June 2016, 1.9 million were trained, as per government data.

Also Read: No Vote on Account; Modi govt presents an election Budget ‘interim’ only in name

The first edition was severely criticised for several shortcomings including low level of placements, low quality of training and inflated training numbers.

Mobile Manufacturing Units

Claim: Under Make in India initiative, mobiles and part manufacturing companies have increased from two to 268, providing huge job opportunities.

Also Read: Opposition parties calls Interim Budget a jumla, can’t be implemented

Fact: As of August 2018, there were 127 mobile manufacturing units in the country, the government told Lok Sabha citing information provided by the Indian Cellular Association.

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Adani, Torrent compete to purchase Gujarat Titans from CVC Capital

The probable sale of the Gujarat Titans, with the lock-in period coming to a close, will therefore be a defining moment in the changing face of IPL investments.

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The Adani Group and Torrent Group are currently negotiating a deal with private equity firm CVC Capital Partners to offload a controlling stake in the Indian Premier League franchise Gujarat Titans. According to sources, close to the development, reports say CVC Capital Partners will be looking to sell a majority interest while retaining a minority share in the franchise.

This becomes important because it is aligned with the end of the lock-in period by the Board of Control for Cricket in India (BCCI), which restricts any new teams from selling stakes until February 2025. The three-year-old franchise Gujarat Titans is reportedly worth $1 billion to $1.5 billion. CVC Capital Partners had paid ₹5,625 crore for the franchise in 2021.

A source close to the development pointed out that IPL franchises have attracted many investors’ interest since the league has proved an asset with a good reputation for money-making capabilities and cash flows. This growing interest of investors embodies the financial value and stability that come with the IPL franchises.

Gautam Adani, who owns teams in the Women’s Premier League and UAE-based International League T20, is understood to be one of the serious buyers. In 2023, Adani’s group won the Ahmedabad franchise in the WPL with a bid of Rs1,289 crore, the highest offer. His interests in this potential deal signal his commitment to expanding his footprint in the cricketing world.

Arvinder Singh, COO of Gujarat Titans, exuded confidence in the financial future of the franchise. He said the team was confident of turning profitable in the next media rights cycle, referring to even the original ten IPL franchises that took four to five years to turn profitable. He added confidently that the Gujarat Titans would not only turn profitable but significantly enhance in brand value.
 
This surging interest of investors in it is evidence of the growing financial attractiveness of IPL franchises, driven by healthy revenue streams and an increasing global footprint. The probable sale of the Gujarat Titans, with the lock-in period coming to a close, will therefore be a defining moment in the changing face of IPL investments.

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PayTm share price slips 2 per cent over SEBI warning

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Paytm

The share price of PayTm fell by nearly 2 per cent on Tuesday following a warning from the the Securities and Exchange Board of India (SEBI).

PayTm’s parent One 97 Communication had got SEBI’s administrative warning letter on some transactions involving the PayTm Payments Bank during fiscal year 2021-2022. The bourses reacted strongly leading to PayTm shares falling by 1.88% to Rs 460.80 per share on the Bombay Stock Exchange.

SEBI said it had noted the violation with concern and said these matters are being viewed very seriously. The regulator warned the company to exercise caution going forward and improve compliance to rules to prevent similar incidents in the future.

The markets regulator added that failure to comply with rules may force it to invoke enforcement actions as per the law.

In its response to SEBI, PayTm said in a media release that it has always followed listing regulations, as well as any change to these rules over time. The company said it would keep up its commitment to maintain and follow high standards of compliance. Paytm said it intends to provide an adequate response to SEBI on this matter.

PayTm said it has always followed Regulation 23 along with Regulation 4(1)(h) of the SEBI Listing Regulations, without including any change made to these rules over time. Paytm added that the letter from  SEBI has no influence on its finances, operations or other activities in any way.

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Zomato, Swiggy hike platform fee by 6% 

After the hike, the platform fee would be Rs 6 per order from an earlier Rs 5 per order.

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The food delivery majors, Zomato and Swiggy, have recently increased their platform fee by 6 per cent for food orders initially in Delhi and Bengaluru.

The food giant is currently charging in the national capital and IT hub, Bengaluru, the platform fee is distinct from delivery fee, goods and services GST, handling charge and restaurant charges.

After the hike, the platform fee would be Rs 6 per order from an earlier Rs 5 per order. Gradually, the higher platform fee is expected to roll out to other cities as well.

Notably, this fee is applicable universally to all food orders, irrespective of customer enrollment in loyalty programmes offered by both food giants. The charges directly contribute to the companies’ revenue streams and cost management efforts. The platform fee goes to the food aggregators to apparently control costs and increase revenues.

In April, they charged Rs 5 per order, but now it’s been increased by Rs 6 per order. That’s a 20% increase in fees for food delivery. This change in their strategy to adjust the price in a market as they expand their services.

Increase in platform fees, impacting how much customers pay for their food deliveries across the board. When customers order food using the app, they will notice different charges, besides the platform fees. These include delivery fees, handling fees, GST (Goods and Services Tax), and charges from the restaurant.

The charges earned by the platform, directly go to the food delivery app, helping to manage all expenses and boost their wages. The food delivery platform aimed to make between Rs 1.25 to Rs 1.5 crore per day through the fee, the app charges.

In August last year, Zomato introduced platform fees of Rs 2 per order for the first time. In October, they raised their platform fees from Rs 2 to Rs 3 in most and in major cities. Additionally,  Zomato is a quick commerce platform.

According to reports, Zomato stock reached its highest price of Rs 232 on the Bombay Stock Exchange. This achievement has made Zomato founder and CEO, Deepinder Goyal, a billionaire. The company has experienced a strong upward trend over the past years, driven largely by the expansion and success of its quick commerce subsidiary in Blinkit.

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