National Pharmaceutical Pricing Authority keeps a check on prices of medicines in India

National Pharmaceutical Pricing Authority keeps a check on prices of medicines in India TAGS: NPPA Union government Price ceiling antibiotics cancer 52 drugs under price control RELATEDS Mann ki Baat: Top 10 facts 7 things you should definitely know about the Clean India Mission Ten things to know about Anna Atkins on her 216th birthday Renowned Gandhian, Narayan Desai dies at 90 Mahatma Gandhi's statue unveiled at London's Parliament Square The National Pharmaceutical Pricing Authority (NPPA) of India has brought 52 new drugs under price ceiling on December 11, 2014, adding to the 348 drugs already involved. The move is expected to impact huge drug manufacturers like Merck, Lupin and Cadila Healthcare. The majority of the new drugs involve basic painkillers, antibiotics and medicines used for ailing skin disorders and cancer. The list of bulk drug formulations under price capping include Glucose, Paracetamol, Diazepam, Losartan, Amoxycilline, Ciprofloxacin, Diclofenac and Codeine Phosphate. Earlier in September 2014, 43 formulation packs including drugs like antibiotic Ciprofloxacin, Bacillus Calmette-Guerin (BCG) vaccine and anti-diabetic Metformin went through the price capping by NPPA. This brings 450 drug formulation packs under price control mechanism. The price capping of the medicines was based on the average of the costs of all drugs with over one per cent market share. In July 2014, NPPA fixed the price for 108 non-essential drugs including 50 anti-diabetes and cardiac medicines while invoking the public interest but Indian Pharmaceutical Association and the Organisation of Pharmaceutical Producers of India went to court against the move. With the move, the government ensures the improvement of medicinal affordability. What is National Pharmaceutical Pricing Authority (NPPA)? National Pharmaceutical Pricing Authority is a regulatory body handled by the government to bring the costs of pharmaceutical drugs under control It is also endowed with the task of recovering overcharged amounts by manufacturers from the consumer for the controlled drugs It also monitors drug shortages and the prices of decontrolled drugs in order to keep them at reasonable levels It collects or maintains data of exports and imports, production, profitability, market share of individual companies, etc for bulk drugs and formulations.

No safety net for bulk of banks deposits

 

Do bank deposits come with adequate cover? Perhaps not, as less than a third of bank deposits in value terms is currently covered by insurance.

Deposit Insurance and Credit Guarantee Corporation of India (DICGC), a wholly-owned subsidiary of the Reserve Bank of India, provides cover to deposits of all commercial banks, local area banks, regional rural banks and co-operative banks. Each deposit account is insured up to ₹1 lakh, including principal and interest. This limit applies separately to deposits in each bank. If a bank goes belly up, the DICGC pays the customer the deposit amount up to a maximum of ₹1 lakh.

About a decade back, 95 per cent of the accounts and 66 per cent of the value of deposits had the DICGC cover. But this had dropped to 92 per cent of the accounts by 2013-14, and only 31 per cent of value of deposits.

This could be due to a sharp jump in the amount held in each deposit account. In 2004-05, the average amount in each account was ₹37,000. Over the last decade this has almost doubled to ₹67,000.

 Deposit insurance cover has clearly failed to keep up with increasing sums in bank accounts. The DICGC cover was last raised in 1993 from ₹30,000 to ₹1 lakh. This was done after a long gap of 13 years.

Revision needed

 For over two decades the cover has remained at ₹1 lakh. Experts feel that a revision is long overdue. Even assuming an inflation of 6.5-7 over the past two decades, the insurance cover should go up to ₹5 lakh.  “The purpose of the deposit insurance was to give an additional cover to small deposit holders and provide them a safety net and confidence in the banking system. Given India’s growth in the last two decades as well as inflation, an increased cover may be considered,” says Monish Shah, Senior Director, Deloitte India.

Better insured?

Is the situation the same across the banking industry? No. Deposits with public sector banks are better covered than those of private or foreign banks. While public sector banks have about a third of their deposit value under the DICGC cover, it is 23 per cent in private banks and just 6 per cent in foreign banks.

But this is only because a larger portion of deposits of both private and foreign banks exceed ₹1 lakh. For instance, while state-owned banks, including the State Bank of India, hold an average of ₹66,000 in each deposit account, private banks have over ₹1 lakh. Foreign banks, on the other hand, average ₹7 lakh in each deposit account.

The total deposits held by private sector banks rose from ₹1.17 lakh crore in 2000-01 to ₹15.9 lakh crore in 2013-14, implying almost a 14-fold rise. Their public sector counterparts saw a nine-fold rise in deposits from ₹7.4 lakh crore to ₹65.9 lakh crore over the same period. Foreign banks held fixed deposits worth ₹3.5 lakh crore in 2013-14, seven times more than in 2000-01.

Higher premium

 An increase in insurance cover means an additional outflow for banks. Currently, the premium is paid by banks and not passed on to the customer. The DICGC charges a maximum premium of 15 paise per ₹100 per annum.

So far in India, this cover has come in handy to protect only the customers of urban co-operative banks, many of which fail every year. During 2013-14, DICGC settled claims for ₹103 crore to depositors of 51 co-operative banks.

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Budget 2015: Jaitley introduces gold monetisation scheme

The Finance Minister proposed to develop an alternate financial asset, a sovereign gold bond, as an alternative to purchasing metal gold. The bonds will carry a fixed rate of interest, and also be redeemable in cash in terms of the face value of the gold, at the time of redemption by the holder of the bond.

India imports as much as 800-1000 tonnes of gold each year. Though stocks of gold in India are estimated to be over 20,000 tonnes, mostly this gold is neither traded, nor monetized, the Finance Minister said.

Proposed Gold Monetisation Scheme will replace both the present Gold Deposit and Gold metal Loan Schemes. The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewelers to obtain loans in their metal account. Banks and other dealers would also be able to monetize this gold.

Indian cold coin

The Government also proposed to commence work on developing an Indian gold coin, which will carry the Ashok Chakra on its face. Such an Indian gold coin would help reduce the demand for coins minted outside India and also help to recycle the gold available in the country.

Industry reacts

Suvankar Sen, Executive Director, Senco Gold said the proposed Gold Monetization Scheme will increase a avaiablity of the yellow metal in the domestic market and help jewellers. "Moreover, there is a possibility that the gold prices may come down whenever imports comes down which would enable the end user to save on cost while buying gold jewellery", he added.

The policy announcements on gold today are a step towards making gold a part of the larger financial system, said the Managing Director of World Gold Council, P R Somasundaram before adding “this budget has been exceptional for gold.”

While stating that the demand for gold cannot be wished away by supply curbs, he said the Council has been stressing the need for introduction of a structured and customer friendly gold monetisation scheme.

The introduction of India branded gold coin is expected to have a healthy impact on the country’s gold sector, provided the trade is liberalised without artificial curbs and higher duties.

Recent policy decisions were a pointer on these lines, suggesting the need to go beyond duty cuts and artificial regulatory curbs. There is therefore an imperative need to nurture the savings mindset through gold accumulation, use the same to enhance savings and put it to work for the economy.

The country would now be able to set in place a measured monetisation framework for gold from the existing stocks in private hands worth over $1 trillion.

“The monetisation scheme will drive orderly recycling and enhance transparency, as it has the potential to translate gold savings into economic investments. Standard India gold coins will ensure gold availability aligned to customer preferences and will help curb the unofficial market,” the WGC MD said

Budget 2015: List of products turning costlier/cheaper

NEW DELHI, FEB 28:  

Smoking and consumption of other tobacco items will be more expensive, while an increase in service tax rate would make costlier a whole lot of other activities including air travel, eating out and paying bills. Continuing the trend set by his many predecessors, Finance Minister Arun Jaitley today came down heavily on smokers and tobacco consumers with a steep increase in excise rate in tax proposals in Budget 2015-16.

While increase in service tax rate to 14 per cent would make a whole lot of things more expensive, he spared the common man from price hikes on many commonly used day-to-day items by keeping the duties unchanged.

Following is a list of what will be cheaper and costlier:

You will pay more for

Cigarettes and other tobacco products

Completely built imported commercial vehicles

Cement

Aerated, flavoured drinks and packaged water

Plastic bags and sacks

Business and executive class air travel

Visit to amusement and theme park

Music concerts

Liquor, chit fund and lottery

You will pay less for

Leather footwear priced above Rs. 1,000 per pair

Locally made mobile phones, LED/LCD panels, LED lights and LED Lamps

Solar Water heater Pacemakers, ambulance and ambulance services

Computer tablets

Agarbattis

Microwave ovens

Refrigerator compressors

Peanut butter, packaged fruits and vegetables

Visit to museum, zoo and national park

RBI cuts repo rate by 25 bps to 7.5%; Sensex, Nifty hit historic highs | Business Line

Tree days after the Union Budget announcement, the Reserve Bank of India on Wednesday cut the repo rate from 7.75 per cent to 7.50 per cent.

Repo rate is the interest rate at which RBI provides short-term liquidity to banks.

The benchmark BSE Sensex breached the 30,000-mark and the NSE Nifty zoomed to hit a lifetime high of 9,119.20 in opening trade today on buying in rate-sensitive stocks after RBI's surprise move.

Given low capacity utilisation and still-weak indicators of production and credit offtake, it is appropriate for the Reserve Bank to be pre-emptive in its policy action to utilise available space for monetary accommodation, the RBI said.