In The Media ⁽⁴⁰⁰⁾

Read full article Abstract: On the reform front, the government needs to create enabling environment for the unskilled-labour-intensive industry. Paradoxically, despite its large endowment of unskilled labour, the fastest growing sectors in India are either capital intensive (automobile, auto parts, steel and petroleum refining) or skilled-labour intensive (pharmaceuticals, software and the financial services). Additionally, the government must bring electricity and reliable roads to the rural economy, repeal the Essential Commodities Act, 1955 and persuade the states governments to adopt reforms that better connect the farmers to the marketplace via direct sales to retailers, contract farming and food processing. The author is a professor at Columbia University. This article draws on his forthcoming book, India: The Emerging Giant, to be published by OUP, New York 

Read full article Abstract: Two propositions have occupied the policy space in India recently: first, 10% growth in the GDP is possible but only if agriculture grows at the rate of 4% and, second, the acceleration in agriculture is essential to make growth more inclusive. Most Indians view growth in agriculture instinctively important and therefore accept these propositions at face value. But since their acceptance has important implications for which policies get adopted and which ones get short shrift, hard-nosed economists like to examine them more critically. Such examination leads to a more nuanced view of what place we must assign agriculture in the overall development strategy and what else must be done to accelerate poverty reduction. While many may find this unsettling, the hard reality is that agriculture has become virtually irrelevant to the overall GDP growth in India. Faster growth in industry and services than in agriculture over the last several decades has reduced the share of core agriculture in the GDP to only 16%. Therefore, even 4% growth in this sector can contribute only 0.64 percentage points…

Read full article Abstract: The WTO talks between the G-4 nations -- Brazil, India, the United States and the European Union -- have collapsed yet again. This time, the only surprising twist was that U.S. Trade Representative Susan Schwab put the blame primarily on India and secondarily on Brazil. In truth, the breakdown of the Doha Round in Potsdam, Germany, had less to do with India and Brazil's protectionism than with the U.S.'s paralyzing inability to respond to long-standing, world-wide demands for the reduction of its (and the EU's) agricultural subsidies. Until we confront this central fact, success will remain beyond our grasp. The good news is that the Doha Round has already made substantial progress on other contentious issues -- such as poor nations gaining easier access to generic drugs and the least-developed countries enjoying virtually free-market access without duties and restrictions. With many of these issues settled or taken off the table, and many players placated, the endgame came down to the four "big players": the U.S., the EU, Brazil and India. Each had to make substantive trade-barrier…

Read full article Abstract: Dear chief minister, Kindly accept my belated congratulations on your spectacular victory in UP, by far the largest state in India and larger than all but six countries in the world. Allow me to also applaud you for publicly announcing your preference for poverty-based rather than caste-based reservations. Just as it took Richard Nixon — a Republican President — to open the door to China, it will probably take a Dalit prime minister to replace caste-based by poverty-based reservation in India. But in the meantime, you confront the task of leading UP out of poverty. Your speeches, including some delivered in my part of the world, leave little doubt that you fully understand what must be done. Yet, given the historic opportunity you have, I can scarcely resist offering my two bits’ worth.

Read full article Abstract: The Doha Round negotiations remain stalled. Neither the United States nor European Union (EU) appears eager to jump-start them. This is a pity. Considerable progress has been made since the launch of the round in 2001. At the Cancun ministerial meeting in 2003, contentious Singapore issues, investment, government procurement and competition policy — were removed from the negotiating table. At the Hong Kong ministerial in 2005, the EU agreed to eliminate export subsidies by 2013 as a part of an eventual overall Doha agreement. The member countries also agreed to address the major concerns of the Least Developed Countries.