Team JGJ

August 08,2024 In a country that still prioritises roti, kapda, aur makaan (food, clothes, and home) over chic iPhones, having too much of the former shouldn’t be a problem, right? Well, though it is not really a paradox of plenty, there’s too much food in a basket that is actually making things tough for common man and the policymakers. We are not talking about the amount of roti and rice on the table that is causing the problem, but India is deep into the trouble of having a high share of food in the consumption basket and the very fact that food price pressures are a big headwind in an economy that has high income inequality. India is set to remain the fastest-growing major economy in 2024, according to the IMF. But remember, it is still a country that has to provide free food grain to 800 million. The Reserve Bank of India’s Monetary Policy Committee, who left rates and stance unchanged for the ninth time, has decided to focus on inflation and support price stability to ensure growth. While economists flagged that food inflation remains a hurdle, the RBI too sounded caution on it. In June, food inflation surged significantly, raising the overall Consumer Price Index (CPI) inflation to 5.1 percent, up from 4.8 percent in May. The spike in food prices, particularly for vegetables, cereals, milk, and fruits, has been a major contributor to this increase. Despite a favorable base effect from last year, food inflation soared to 9.4 percent, driven mainly by consistently high vegetable prices, which have stayed in double digits for eight months. India’s central bank, who along with the government has to ease price pressure in the world’s most populated country, today acknowledged that food inflation pressures cannot be ignored. While inflation in other sectors is under control, food inflation in India has remained persistently high. This is due to the unpredictable nature of weather affecting food production and inefficiencies in the agricultural sector. The government has been actively working to keep food prices low by selling vegetables and pulses at reduced rates, imposing stock limits, and implementing export restrictions. It also has to carefully balance protecting farmers’ interests by avoiding excessively low prices while also ensuring prices don’t rise too high for consumers, particularly the poor. India’s Chief Economic Adviser, V Anantha Nageswaran, suggested in the Economic Survey that the central bank’s inflation target should exclude food. However, several economists disagreed, stating this approach is not suitable for India. A government panel is considering a significant reduction in the weighting of food in the consumer price index (CPI) to help control inflation spikes. According to Bloomberg, the panel under the statistics ministry is discussing a proposal to reduce the weight of food in the CPI basket by up to 8 percentage points. Currently, the food and beverage category accounts for 54.2% of the CPI basket. CPI is currently based on consumer spending patterns from 2011-2012, which economists argue are outdated and might be skewing the official inflation data that the central bank relies on to set interest rates. “First and foremost is the fact that our target is the headline inflation wherein food inflation has a weight of about 46 per cent. With this high share of food in the consumption basket, food inflation pressures cannot be ignored,” RBI Governor Shaktikanta Das said. Moreover, the general public perceives inflation mainly through the lens of food prices rather than other components of overall inflation. Therefore, India cannot and should not become complacent just because core inflation has decreased significantly, Das said. India’s inflation index is heavily influenced by food prices because most people spend a significant portion of their income on food. “India’s share of food and beverage in the CPI basket currently stands at 46% which is much higher than developed countries or even emerging countries like Brazil, China and South Africa where the weight ranges between 20-25%. Even though the share of food in the inflation basket is expected to fall in the new series to ~43% after the 2024 household consumption survey, it will still continue to remain high,” Rajani Sinha, Chief Economist at CareEdge, told ET Online. Developed countries find inflation targeting easier due to the low share of food in their inflation baskets, but it’s more challenging for economies like India, she added. Monetary policy mainly affects demand but struggles with supply-driven food inflation, especially when food demand is price inelastic. While the Economic Survey suggests excluding food from CPI inflation for monetary policy, food inflation cannot be entirely disregarded, Sinha said, adding the central bank must balance its approach, considering both core and food inflation trends and their impact on overall CPI. Seasonal food price fluctuations, like those for vegetables, can be ignored if they seem temporary. Ongoing food price shocks have slowed the process of disinflation in the first quarter of this fiscal year. There is also a significant gap between headline and core inflation. This raises the question of how much emphasis the MPC should place on food inflation, the governor said. Marking a significant departure from earlier meetings, the RBI Governor spent a fair amount of time in flagging the issue of high food inflation. This is important since food inflation remains a burning point for consumers and policy makers alike, Aditi Gupta, economist at Bank of Baroda, told ET Online. “With food inflation remaining elevated for the past few months and a high share of food items in the inflation basket, the transitory supply side shocks in food prices can have a detrimental impact on consumers’ inflation expectations. This is compounded by the fact that a few items of the food basket are exhibiting maximum volatility, with the seasonal impact on prices proving to be much more intrinsic in nature,” she said. Shaktikanta Das today also said high food inflation negatively impacts household inflation expectations, which significantly influence the future path of inflation. After a moderating trend between May 2022 and September 2023,

June 12,2024 The Insurance Regulatory and Development Authority of India (IRDAI) said that general insurance companies cannot reject claims in the absence of documents. The master circular issued in this regard, which is part of the reforms in the general insurance business, will usher in a new era for easy and customer-centric insurance solutions. The comprehensive master circular on general insurance business also repeals 13 other circulars. IRDAI said that it has now become possible to provide easy-to understand insurance products to meet the individual needs of customers, give adequate choice to customers and improve their insurance experience. The circular states that no claim will be rejected in the absence of documents. Necessary documents should be sought at the time of approval of the proposal. According to this, customers can be asked to submit only those documents which are necessary and related to claim settlement. Moreover, retail customers can cancel the policy at any time by informing the insurer, while the insurer can cancel the policy only on grounds of proven fraud. Source: Business League

July 28,2024 Renu Jain, a Bengalurubased software professional and mother of two teenagers, tries to check every box to keep her children healthy. However, last year, when she came across a viral video by Revant Himatsingka—known as “foodpharmer” on social media—warning about high sugar content in Bournvita, she was shaken. “I have been giving Bournvita to my children for years. Not just that, my mother also made me have it every day when I was little,” says Jain. “Wasn’t it supposed to be a health drink—to help children grow taller, run faster?” she asks. Jain is not the only one who makes kids gulp down “health drinks”. Some popular health drink brands are part of the monthly grocery lists of many families. Health experts say many of these brands have been available in India since the 1950s and have established themselves in the minds of consumers as “health drinks”. In India, the challenge of feeding a large, geographically dispersed population, millions of whom are poor, malnourished and unaware of labelling on packs, results in lax public health policies. Even if the policy is strong enough, sometimes the problem lies with its implementation, say civil society activists. “Health drink” labels often mislead consumers as the advertiser misrepresents the nutritional content of the food item, says Dr Arun Gupta, paediatrician and convener of Nutrition Advocacy in Public Interest (NAPi), a think tank. In April last year, it was a child rights body, the National Commission for Protection of Child Rights, that asked Mondelez International India, which makes Bournvita, to withdraw all “misleading” advertisements, packaging and labels. It took almost a year for India’s food regulator, the Food Safety and Standards Authority of India (FSSAI), to order ecommerce players to not use the term “health drink for malt-based drinks” as the food laws of the country do not define the term. From high sugar in “health drinks” to added sugar in baby food to contaminated spices, Indians have had much to worry about what they eat and drink (See box “Eating Away”). FSSAI has to knuckle down to ensure that the labelling is clear, advertisements don’t mislead and the grub does not harm the people. FSSAI did not respond to ET’s emailed queries till press time. A recent report by NAPi, which analysed 50 advertisements of packaged food items across media platforms, found that all of them were concealing information about critical “nutrients of concern” such as sugar, salt and fat. The report also found that 23 out of 50 advertisements used celebrities— film and television stars or popular sports persons—to market the products. The advertisements used attractive visuals and made manipulative claims to position themselves as the best products, says the report. It also said fruits, grains and positive nutrients were used to project a deceptive image of health food. The impact of such advertisements on public health is concerning, especially with the rising rates of obesity, diabetes and other diet-related illnesses in India. Even the recent Economic Survey has flagged unhealthy food, social media, screen time and sedentary habits as a “lethal mix that can undermine public health and productivity and diminish India’s economic potential”. Misleading ads are a huge concern, but do they face consequences? In May 2023, the Advertisement Monitoring Committee of FSSAI reported 32 cases of misleading ads, which were found to be in contravention of the Food Safety and Standards (Adver tisements & Claims) Regulations, 2018. However, an RTI query filed this year has revealed that no action has been taken against these companies even after one year of being found guilty. “There is weakness in the process in identifying what a misleading advertisement is because there is no objective definition in the FSS Act 2006 (which governs India’s food laws). Therefore, it takes years and there have been no penalties,” says Gupta. He adds that the Consumer Protection Act 2019 defines “misleading advertisement” as a product or a service that deliberately conceals important information; however, it has not been applied to food items. “While the FSS Act prohibits misleading advertisements, its regulations do not have the provision to define misleading advertisements based on nutrients of concern,” he says. The Global Food Security Index 2022, managed and published by The Economist, ranked India 67th, on the quality and safety of food, out of 113 countries. Is that a good score for the world’s most populous nation, aspiring to be Viksit Bharat by 2047? India is already known to be the diabetes capital of the world. According to a recent report in The Lancet, the country could be facing an obesity epidemic. Non-communicable diseases account for 60% of deaths in India, says a health ministry report. Stepping up its act, India’s food regulator, in the past few months, has come out with several initiatives. It has ordered all food companies to remove any claim of “100% fruit juices” from the labels and advertisements of reconstituted fruit juices. Such claims are “misleading”, particularly when the major ingredient is water and the primary ingredient, fruit juice, is reconstituted using water and fruit concentrates or pulp, the food regulator said. On July 6, FSSAI approved another important proposal to display nutritional information regarding sugar, salt and saturated fat in bold letters and in bigger font size on labels of packaged food items. The draft notification for the amendment would now be put in the public domain for suggestions and objections. “Along with empowering consumers to make healthier choices, the amendment would also contribute towards efforts to combat the rise of non-communicable diseases (NCDs) and promote public health and well-being,” FSSAI said. H owever, George Cheriyan, who was a member of FSSAI’s expert group on front-ofthe-pack labelling (FoPL), calls it a “sabotage”. “Display of nutritional information in bold letters is just a way to sabotage a more effective and stricter front of the pack labelling, which has proven to reduce consumption of unhealthy foods in several countries,” says Cheriyan. “The labelling already exists. Putting it in bold serves no purpose.” An

July 30,2024 The Supreme Court on Tuesday said the Ministry of Ayush should set up a dashboard so that details about complaints filed on misleading advertisements and progress made on them can be made available to the consumers. The apex court had earlier highlighted the aspect of misleading advertisements being published or displayed in media contrary to the provisions of the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 and the rules, the Drugs and Cosmetics Act, 1940, and the Consumer Protection Act, 1986. A bench of Justice Hima Kohli and Justice Sandeep Mehta was hearing a plea filed by the Indian Medical Association (IMA) alleging a smear campaign by Patanjali Ayurved Ltd against the Covid vaccination drive and modern systems of medicine. The bench noted that the lack of proper data regarding action taken on the complaints received leaves the consumers helpless and in the dark. “The Ministry of Ayush must set up a dashboard citing complaints received… so that the data comes in the public domain,” the bench observed. It added that the data can also help in addressing the issue of prosecution under the Drugs and Cosmetics Act. The top court was informed that in several states, a number of complaints regarding misleading advertisements were forwarded to other states as the firms manufacturing those products were based there. The bench noted that the number of complaints made by the consumers, which was over 2,500 earlier, has gone down to only around 130 and the main reason appears to be that the grievance redressal mechanism for dealing with such complaints has not been properly publicised. It asked the ministry concerned to look into this issue and file an affidavit within two weeks. The apex court bench also dealt with the aspect concerning manufacturing licences of 14 products of Patanjali Ayurved Ltd and Divya Pharmacy. The Uttarakhand State Licensing Authority (SLA) on April 15 issued an order suspending the manufacturing licences of 14 products of Patanjali Ayurved Ltd and Divya Pharmacy. However, the state licensing authority later filed an additional affidavit in the apex court stating the suspension order has been cancelled following a report by a high-level committee which examined the grievances of Patanjali Ayurved Ltd in the wake of the row. On May 17, it said the operation of the April 15 order was paused and the suspension order was cancelled on July 1. During the hearing on Tuesday, the counsel appearing for the IMA told the apex court bench about the cancellation of the suspension order. “What is the status today?” the bench asked. The counsel appearing for Uttarakhand said that after the July 1 order, a fresh notice was issued to Patanjali and the SLA received a reply from Patanjali on July 19. When the state’s counsel said they have sought legal opinion in the matter, the bench asked, “How much time do you need to wrap up the matter after hearing them?”. When the counsel said they needed three to four weeks, the bench asked, “Why?”. It told the state to pass an order pursuant to the show cause notice before the next date of hearing and communicate the same to Patanjali. It also dealt with the issue related to its May 7 directive, which said that before an advertisement was printed, aired or displayed, a self-declaration shall be submitted by the advertiser or advertising agency on the lines contemplated in Rule 7 of the Cable Television Networks Rules, 1994. Rule 7 of the 1994 rules deals with the advertisement code and stipulates that advertisements carried in the cable service shall be designed to be in conformity with the laws and should not offend the morality, decency and religious susceptibilities of the subscribers. The top court on May 7 said self-declaration shall be uploaded by the advertiser or advertising agency on the ‘Broadcast Sewa Portal’ run under the aegis of the Ministry of Information and Broadcasting. During the hearing on Tuesday, Additional Solicitor General K M Nataraj informed the bench that the ministry had convened a meeting of all stakeholders on June 30 in which 40-odd parties participated to discuss the issue. He said another meeting was held in July and some time was needed to collate all the information and give recommendations. The bench granted two weeks to the ministry to do the needful. Source: Economic Times

August 08,2024 The Reserve Bank of India has proposed raising the upper limit for tax payments through Unified Payments Interface (UPI) from Rs 1 lakh to Rs 5 lakh per transaction, governor Shaktikanta Das said during its bi-monthly monetary policy announcement. UPI boom: The increased limit is expected to offer greater convenience to taxpayers, particularly for high-value transactions, potentially encouraging more taxpayers to use UPI for their tax liabilities. Earlier, in December 2023, RBI had increased the limit to Rs 5 lakh for certain payments, such as to hospitals and educational institutions. Delegated payments: The measures announced included ‘delegated payments’ through UPI. In his post-monetary policy review address, Das said the facility would enable an individual (primary user) to allow another user to make UPI transactions up to a limit from the primary user’s bank account without the need for the secondary user to have a separate bank account linked to UPI. Repository of lending apps: The central bank also proposed to create a public repository of digital lending apps (DLAs) to address the problems arising from the mushrooming of unauthorised players in the segment. “The regulated entities (REs) will report and update information about their DLAs in this repository. This measure will help the consumers to identify the unauthorised lending apps,” Das said. A US bankruptcy court has dismissed a plea by Glas Trust Company, which represents US lenders, to block the settlement deal of Byju’s Rs 158-crore overdue payment to the Board of Control for Cricket in India (BCCI) over a sponsorship deal. Tell me more: Judge Brendan Shannon of the Delaware Bankruptcy Court declined to intervene in legal proceedings taking place in another country’s judicial system. Byju’s legal counsel said any interference from the US court “would be an unimaginable insult to the system in India.” Byju’s had raised $1.2 billion in term loan in 2021. Source: Economic Times

July 31,2024 DEHRADUN: The state consumer commission ruled against Oriental Insurance Co Ltd (OICL) for rejecting a mediclaim on the grounds of concealing pre-existing conditions of diabetes mellitus (DM) and coronary artery disease. The commission found credence in the complainant’s assertion that in an analogous case, the national consumer commission has adjudicated that “diabetes is a lifestyle-related ailment and is so pervasive in India that the entire insurance claim cannot be denied on this basis.” The order was issued on Monday and made public on Wednesday. Anshul Garg, a resident of US Nagar, had purchased a mediclaim policy of Rs 2 lakh for himself and his parents in 2013. In July 2014, his father underwent cardiac surgery, which cost around Rs 5 lakh. Garg submitted the necessary documents to OICL for reimbursement but his claim was denied, forcing him to approach the consumer court. In March 2018, the district consumer commission ruled in favour of Garg, directing OICL to pay a compensation of Rs 2 lakh, along with 7% interest from the date of filing the case and Rs 15,000 for mental anguish and litigation expenses. OICL then challenged the order in the state commission. After reviewing the documents, the state commission concluded that OICL did not provide any credible evidence to support their claim that there was concealment of pre-existing illness while filling up the proposal form. The commission stated that OICL failed to establish that the father of the respondent had been suffering from DM for the last 15 years and as per the doctor’s report, the pre-existing disease was the primary cause of coronary artery blockage. “Thus, we are of the considered opinion that the district commission has perfectly and legally passed the judgment,” the division bench comprising president Kumkum Rani and member BS Manral said and directed OICL to pay Rs 2 lakh with 7% interest from April 2014 and Rs 5,000 as litigation costs to the complainant. Source: TOI

July 24,2024 Budget 2024 has proposed a significant change in tax regulations, allowing individuals to benefit from a reduced Tax Deducted at Source (TDS) on their salaries. This adjustment is particularly relevant for those who have paid Tax Collected at Source (TCS) on foreign remittances, foreign travel among other expenses. Under the new provisions, employees can now inform their employers about any TCS payments they have made. This information will enable employers to factor in these payments when calculating the TDS on employees’ salaries. The move is designed to lower the TDS deduction, thereby easing the financial burden on individuals and simplifying the process of reclaiming any overpaid taxes. The TCS on international remittances under the Liberalised Remittance Scheme (LRS) was raised to 20% from 5% in budget 2023, with several exceptions. Under the Liberalised Remittance Scheme, individuals can remit up to $250,000 annually without seeking prior approval from the Reserve Bank of India. This scheme facilitates a range of overseas expenses, including education, travel, and medical treatments. However, the introduction of TCS on these remittances requires taxpayers to account for additional cash outflows, which can impact one’s finances significantly. The TCS requirement adds a financial burden at the time of remittance. Like the tax deducted at source (TDS), TCS can be adjusted against an individual’s income tax liability. According to the Budget 2024 proposals, credit for TCS will now be available against TDS deducted by the employer on salary income, which can help ease cash flow for employees. Should the TCS paid exceed the actual tax liability, the excess amount is refundable. However, claiming this refund can be a time-consuming process and involves additional paperwork, including providing PAN details. The revised TCS rates vary based on the purpose of the remittance. For education, if it is financed by a loan from a financial institution, the TCS rate is nil up to ₹7 lakh and 0.5% above ₹7 lakh. For self-financed education, the rate is nil up to ₹7 lakh and 5% above ₹7 lakh. Expenses for self-financed education include airfare for overseas students, tuition, food, accommodation, local transport, health services, and other fees paid to educational institutions, as well as day-to-day expenses. For overseas tour packages, the TCS rate is 5% up to ₹7 lakh and 20% thereafter. The cost of the tour package must include at least two of the following: international travel tickets, hotel stay with or without food, boarding, lodging, or other similar expenditures. Other expenses, such as gifts or donations, employment abroad, emigration, maintenance of relatives, and business travel, have a TCS rate of nil up to ₹7 lakh and 20% above ₹7 lakh. Medical treatment expenses have a TCS rate of nil up to ₹7 lakh and 5% above ₹7 lakh. Expenses for medical treatment include airfare for the patient and an attendant, medical expenses, day-to-day expenses required for treatment, and related food, accommodation, and local transport. To minimize TCS liabilities, consider booking travel and hotel accommodations separately, as this can sometimes reduce the overall tax rate. Furthermore, using an international credit card overseas does not currently incur TCS, offering another potential avenue for cost savings. Source: Economic Times

July 21,2024 Akshit Rajpal finds the online shopping experience increasingly frustrating. “Every app I visit has some form of dark pattern ,” says the 26-year-old media and entertainment lawyer from Mumbai. “I can’t find a single safe app that lets me pay only for what I want,” he adds. What is a dark pattern? It refers to manipulative or deceptive tricks—such as hidden fees, subscription traps and sneaking items into online baskets—that get users to perform an action they would not have otherwise done had they understood it well or had a choice. Harry Brignull, a UK-based UX (user experience) designer coined the term in 2010, referring specifically to digital platforms. Rajpal often falls for dark patterns like false urgency , where ecommerce sites display fake scarcity to trigger quick purchases from users who tend to wait for better deals. “Only two items left in stock,” they say, and he immediately clicks “Buy Now.” “That’s what they do,” says an exasperated Rajpal. “They make you think you are being smart, but you are just dancing to their tune. I have felt stupid falling for these dark patterns despite knowing about them,” he admits. Stupid,” “annoyed,” “cheated,” “stressed.” Over a dozen urban Indian consumers ET spoke to have used these words to describe their experience of navigating apps like ecommerce, food and grocery delivery, cab and online travel aggregators, all due to dark patterns. The apps are getting so creative that even savvy users like Rajpal fall into their trap. “I find myself being extra vigilant while doing even the smallest of transactions on an online platform now, constantly checking to make sure I haven’t been duped,” says Rajpal. Consumer internet apps gained popularity with their promise of convenience, but now many deliver nuisance as part of the package. A recent report by the international consumer protection and enforcement network (ICPEN) says at least 76% of sites and apps worldwide use at least one dark pattern, and 67% use more than one. In October 2023, the Central Consumer Protection Authority (CCPA), which operates under the Ministry of Consumer Affairs, identified 13 dark patterns, including false urgency. Product designers ET spoke to highlight some of the more notorious patterns from the list. Like basket sneaking, where items are added to the cart without user consent. ‘Confirm shaming’ uses guilt-inducing language to push users into buying, such as “I’ll risk my safety and family’s” to get people to buy insurance while booking flight tickets. B Narayanaswamy, 67, learnt about both terms from his son Chandra Ramanujan recently while getting a refresher course on the different kinds of dark patterns. Narayanaswamy had fallen for a case of basket sneaking on Urban Company ’s app when it added a 6-month membership plan to his cart, unbeknownst to him. And while the action was rectified by the company in less than a week, it left a sour taste in Narayanaswamy’s mouth. “I feel less confident using any app now because the experience taught me you have to keep your eyes open at all times and be very wary. If you miss even one pattern, you come away feeling very unsuccessful,” says Narayanaswamy, a consumer behaviour specialist based in Bengaluru. Urban Company declined to participate in the story but it has made the membership plan an opt-in instead of an opt-out since Ramanujan called it out on X in March. Among the more sinister patterns is “forced action”, which makes users take unrelated steps such as entering credit card details to access a free trial. As per the ICPEN report, six out of 10 consumer internet businesses force users to fill in payment details to access free trials. Then there are “subscription traps” that complicate cancellation. 81% of sites use automatic subscription renewal, while 70% lack clear subscription cancellation information. Before the CCPA guidelines, the Advertising Standards Council of India (ASCI) had issued guidelines for deceptive design patterns in online advertising. “However, despite attention from regulators, consumer-driven actions against dark patterns are limited and public awareness regarding dark patterns remains sub-par,” says Tanu Banerjee, partner at corporate law firm, Khaitan & Co. Take the case of Balram Vishwakarma. The Mumbai-based content creator and marketing consultant was unfamiliar with the term “dark patterns”. Upon explaining, he realised that he had indeed been a victim of it. While booking an Ola ride recently, he was subject to a case of “interface interference”, where a platform obscures relevant information in fine print. “During the trip, I received a message saying I don’t have to pay the driver,” he recalls. His usual payment method is cash or UPI, but he realised it had been moved to Ola Postpaid, which he did not choose and which he thought could entail a late fee if it was not paid back within a prescribed time. Unable to change the payment option mid-ride, he had to request an opt-out via email. Ola did not respond to ET’s emailed queries till press time. For his part, Vishwakarma has become extremely cautious while using consumer internet apps. He says it is overwhelming to remain watchful during basic online transactions. “I just wanted a straightforward ride,” he laments. Gauri Bansal, a strategy manager at a consumer tech company, highlights another potential case of interface interference. On the quick commerce platform Zepto, you can buy a Zepto Pass membership to avail of free delivery. However, a delivery fee is automatically charged unless deselected from the bill—a company practice that regularly gets criticised by users on X. “Why put it there in the first place?” asks Bansal. An email to Zepto did not elicit a response till press time. Bansal observes that smaller players, aiming to lower entry barriers, often resort to dark patterns like “drip pricing”, revealing extra costs only after purchase confirmation. She recalls ordering a cake from a Delhi bakery online, where the site initially mentioned a standard delivery fee, but additional fees were revealed at checkout depending on the area. Bansal points out that such