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The war against illegal goods as India’s fight

  • Published
    13th Oct, 2022

India’s wholesale inflation has made consumer to look for alternatives. The War against illegal goods the market being flooded with inferior or spurious fake brands, giving a dream run to the parallel economy players.

What is Parallel Economy?

  • A parallel economy means the functioning of an unsanctioned sector in the economy whose objectives run parallel and in contradiction with the objectives of official or sanctioned.
    • The unaccounted money that is being hidden from the tax administrators is known as the black money.
  • This is where the China angle comes in. The parallel economy dealers need access to seemingly similar functioning cheaper goods during the festive seasons.

Reason behind Parallel Economy

  • Higher Rates of taxes
  • Ineffective enforcement of tax laws
  • Bribing, smuggling, smuggling of illegal products

FICCI-Counterfeiting Activities Destroying the Economy (CASCADE) Report:

  • FICCI’s Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (CASCADE) Report is one of the best-known data sources for information on smuggling. The illicit market is thriving in five key Indian industries, including:
    • Mobile phones
    • Fast-moving consumer goods (FMCG) – household and personal goods
    • FMCG-packaged foods
    • Tobacco products
    • Alcoholic beverages
  • The size of the illicit market in these industries was valued at RS2,60,094 crore in 2019-20.
  • The CASCADE report estimates that unlawful trade in the industries mentioned above results in a total estimated legitimate employment loss of 15.96 lakh.

Required steps to stop the menace of smuggled, low-quality goods:

  • Smart Taxation
  • Restrictions on profit repatriation
  • Stricter law enforcement
  • Using cutting-edge technology (artificial intelligence, blockchain, and location technology)
  • Consumer awareness
  • People boycott counterfeit goods
  • The Government should place added focus on producing goods in bulk at the lowest possible cost under the Atmanirbharta agenda. For example, Indian Toy Industry.

Recent government initiatives

  • Quality Standards of Products: The government of India has taken a number of steps to improve the quality standards of products manufactured under the Atmanirbhar Bharat Abhiyan.
  • Quality Control Orders (QCOs): For ensuring the availability of quality products to consumers, QCOs are issued by various Ministries/Departments of the Government of India.
  • Standard mark (ISI mark): BIS grants a license to manufacturers to use the Standard mark (ISI mark) on the product conforming to the relevant Indian Standards.
  • Production-Linked Incentive (PLI) Scheme: To provide a major boost to manufacturing, the government has launched the Production-Linked Incentive (PLI) Scheme for 13 sectors with an outlay of Rs 1.97 lakh crore over the next five years.
  • UdyogManthan: First-of-its-kind brainstorming exercise to enhance productivity & quality in Indian industry.
  • Strengthening of IPR Regime: Digitisation of workflow in IP offices, Bolstering IP protection for MSMEs and Startups through dedicated schemes.
  • Barcoding of Medicine: Barcoding for domestic sales of drugs will ascertain the authenticity of medicines.
  • Anti-Smuggling Day: FICCI’s CASCADE established Anti-Smuggling Day on February 11th, 2022.

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