10 highlights of the new draft national forest policy
On June 15, India’s environment ministry placed the draft national forest policy in public domain for comments and suggestions. It is slated to replace the National Forest Policy, 1988
Less forests in hilly areas?
Hills and mountainous regions may not be required to maintain two-thirds of the geographical area under forest cover. Although the policy continues with the national goal of maintaining a minimum of one-third of the geographical area under forest or tree cover, the Forest Survey of India report released in December 2015 shows that India’s forest and tree cover makes up only 24.16 per cent of its geographical area.
Green tax on citizens
The draft National Forest Policy (NFP) proposes the levy of a green tax for facilitating ecologically responsible behaviour and supplementing financial resources essential to address forestry woes. “The budget of the forestry sector should be appropriately enhanced so that the objectives enshrined in this policy can be achieved. Environmental cess, green tax, carbon tax may be levied on certain products and services for facilitating ecologically responsible behaviour, garnering citizen’s contribution and supplementing financial resources,” the draft policy says.
Draft policy undermines the Forest Rights Act
NFP ignores Forests Rights Act, 2006, which empowers local gram panchayats, especially in tribal areas close to India’s forests, and proposes a joint forest management-like mechanism to enhance agro-forestry. This move will bring back the forest department as the final authority over using forest resources instead of forest dwellers and communities dependent on them.
Forest management mission to facilitate supply to wood industry
The policy proposes to launch a new Community Forest Management Mission, bringing government, community and private land under the new proposed management system. It aims to bring one-third of the government-owned forests under the Community Forest Management regime by the end of the next decade. The policy recommends contracts between forest-dependent industries and farmers to fix price and quantity to ensure supply for the wood industry. The policy says, “Large-scale expansion of agro-forestry and farm forestry should be encouraged through commensurate incentives and operational support systems such as lowering the input costs and enabling access to reasonably priced quality planting material.”
Technology to minimise damage to forests
The policy states that forest land diversion projects related to mining, quarrying, construction of dams, roads and other linear infrastructure need to adopt special caution. Use of state-of-the-art technology which causes minimum pollution and damage should be promoted.
Board to monitor management of forests
The policy states that a National Board of Forestry and State Boards of Forestry are to be established to ensure monitoring of the spread of the forest areas and management of forest cover.
Provisions for responsible tourism
It calls for developing “sound ecotourism models” with the focus on conservation while supplementing the livelihood needs of local communities. “Ensure that tourism is responsible, does not negatively impact wildlife and its habitat and maximises the income of the local community,” the policy says.
Climate change to emerge as important factor in policy
Climate change concerns should be effectively factored into all the forest and wildlife areas management plans and community ecosystem management plans, the policy states.
Purchase of wildlife corridors
The draft policy indicates that CAMPA(Compensatory Afforestation Fund Management and Planning Authority (CAMPA)funds from diversion of forest land by industry are to be used for purchasing wildlife corridors from people.
Maintaining urban forests
The policy also asks for management plans for city forests, parks, garden and woodlands to nurture and sustain urban health, clean air and related benefits.
Bread makers’ body withdraws carcinogenic additive -potassium bromate
Following the release of the CSE study, the FSSAI had said on May 24 that it would soon notify the removal of potassium bromate from the list of additives. It also said that it was examining evidence in case of potassium iodate and a decision would be taken soon.
FSSAI recently banned the additive and Bread makers also withdrew it.
It’s 100% FDI in most sectors, including defence
The government has announced a “radical liberalisation” of the Foreign Direct Investment (FDI) regime by easing norms for a host of important sectors including defence, civil aviation and pharmaceuticals, opening them up for complete foreign ownership.
Key Details:
- In defence, foreign investment beyond 49% (and upto 100%) has been permitted through the government approval route, in cases resulting in access to modern technology in the country. The condition of access to ‘state-of-art’ technology in the country has been done away with, as many foreign investors had complained about the ambiguity regarding that term.
- FDI limit also has been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act, 1959.
- 100% FDI has been permitted under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India, bringing into effect the proposal made in the Budget 2016-17.
- To promote the development of pharmaceutical sector, the government has permitted up to 74% FDI under automatic route in existing pharmaceutical ventures. The government approval route will continue beyond 74% FDI and upto 100% in such brown-field pharma.
- 100% FDI has been permitted in India-based airlines. However, a foreign carrier can only own upto 49% stake in the venture, and the rest can come from a private investors including those based overseas. This is expected to bring in more funds into domestic airlines.
- To boost airport development and modernisation, 100% FDI in existing airport projects has been allowed without government permission, from 74% permitted so far.
- Entities undertaking single brand retail trading have been relaxed from local sourcing norms up to 3 years. Entities engaged in of single brand retail trading of products having ‘state-of-art’ and ‘cutting edge’ technology have been relaxed from local sourcing norms up to 5 years.
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Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.
Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.
Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.
In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.
Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.
“Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.
India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.
With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.
They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.
India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.
As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices
The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).
The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.
Here is an approximate break-up (in Rs):
a)Base Price | 39 |
b)Freight | 0.34 |
c) Price Charged to Dealers = (a+b) | 39.34 |
d) Excise Duty | 40.17 |
e) Dealer Commission | 4.68 |
f) VAT | 25.35 |
g) Retail Selling Price | 109.54 |
Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.
So the question is why government is not reducing the prices ?
India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.
However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.
That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.
Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.
Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.
But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.