Economic Times ⁽²¹⁸⁾

While the overall costs of agricultural protection and subsidies in the rich countries fully justify their dismantling, the policy discourse on the subject has suffered from deliberate obfuscation, with political correctness rather than economic logic driving it. (Economic Times, March 23, 2005) While the overall costs of agricultural protection and subsidies in the rich countries fully justify their dismantling, the policy discourse on the subject has suffered from deliberate obfuscation, with political correctness rather than economic logic driving it. The argument that dominates the media waves is that the rich-country subsidies and tariffs, especially those applied by the European Union (EU), hurt the poorest countries most. The subsidies depress the world prices of the goods exported by these countries and tariffs deprive them of the access to the rich country markets. This plausible-sounding but economically incorrect argument probably originated in the pronouncements of the World Bank leadership at the turn of the millennium. But it is now widely accepted. The result is that one can scarcely distinguish the view of such mainstream institutions as the World Bank, IMF and Organisation…

India is about to lose on the home front what it had won in Geneva--its Patent Ordinance gives pharmaceutical multinationals what the United States had failed to win for them at the negotiating table. Read full article This article is reproduced here with the author’s consent. It is also featured in the February 23rd edition of The Economic Times. Representing the interests of its ultra-powerful pharmaceutical multinationals, the United States had pushed for a very high level of patent protection for medicines during the Uruguay Round negotiations. India, which had witnessed its poor benefit greatly from the low-cost generic-drugs industry that grew around its relatively weak patent regime for medicines, had led the fight against this U.S. push. In the end, though the United State was largely successful in achieving its objectives, India managed to push a set of flexibilities into the Uruguay Round Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) that could be used to protect the interests of the consumers against those of the multinationals. It now appears, however, that India too has capitulated to…

In India, under the Parliamentary system, the Cabinet must be selected from among the Members of Parliament who, for the most part, are career politicians. As such the chances that experts will hold the Cabinet positions are negligible. This fact places the top-level bureaucracy in India in an enormously privileged position: most Cabinet members look to their secretaries for guidance when it comes to policymaking. Under such circumstances, if the secretaries and those immediately below them also happen to lack the necessary expertise, we run the risk of blind leading the blind. Economic Times, January 26, 2005 The forthcoming budget will test the resolve of the UPA government to put economic reforms back on the fast track. Politically feasible reforms include the adoption of a 15 percent uniform tariff on all imports, a unified value added tax on goods and services as outlined in the Kelkar report on the implementation of the Fiscal Responsibility and Budget Management (FRBM) Act, taming of the deficit as required by the FRBM Act, and slashing the list of small-scale-industries (SSI) reservation to 100 items…

The best economists of India, both inside and outside the government, are locked in a fierce debate on the proposal for swapping infrastructure for foreign exchange reserves, put forth by the Planning Commission. A key concern raised in the debate is that dollars can be spent only on imports while infrastructure largely requires the acquisition of domestic resources. Careful analysis reveals, however, that at least this concern is without foundation: the import intensity of infrastructure is virtually irrelevant to the final outcome!The best economists of India, both inside and outside the government, are locked in a fierce debate on the proposal for swapping infrastructure for foreign exchange reserves, put forth by the Planning Commission. Read full article Abstract: The best economists of India, both inside and outside the government, are locked in a fierce debate on the proposal for swapping infrastructure for foreign exchange reserves, put forth by the Planning Commission (PC). A key concern raised in the debate is that dollars can be spent only on imports while infrastructure largely requires the acquisition of domestic resources. Careful analysis reveals, however,…

India stands on the threshold of a historic opportunity to accelerate the growth of manufacturing. Textiles and clothing account for nearly 40% of India's manufacturing output. And the time for giving this highly labour-intensive sector a major push has never been better. Will Dr. Singh's government seize the opportunity? Reform labour laws to end fragmentation in the textile industry and grab the historic but short-lived opportunity, which will come up this weekend as the quotas go. Behind the fog of the populist expenditure packages floated daily, the ray of hope for the proponents of reforms remains the prime minister himself. True, progress on reforms has been slow but the blame for that goes to the anti-reform wing of the Congress that is reasserting after being underground for 15 years. Thus, it is Dr Singh, who called for an end to the small-scale industry (SSI) reservation in a speech to the Small Industries Development Organisation some months ago. He is also the one to have called for an end to the export subsidies that risk being countervailed abroad. And he also…