IT is difficult to understand why the outgoing government wants to launch an elaborate exercise of soliciting opinion for a discussion paper on whether or not it should re-impose a ceiling on royalty payments that multinational companies extract from their Indian subsidiaries. After all, the issue is a no-brainer. Royalty payments urgently need to be capped. …

It is hard to escape the view that rising royalty payments reflect deteriorating corporate governance standards, since companies do not feel obliged to explain why payouts have been raised. Decisions on royalty payments are often questionable as these are taken by the top management at the behest of the foreign parents, who have a majority stake in these companies. … Compared to the huge problems that the incoming government will face in kick-starting the economy, re-imposing the old ceilings should be no problem. … — (May 1)