In The Media ⁽⁴⁰⁰⁾

The United States has proposed that all tariffs on non-agricultural goods be reduced to 8 percent or less by 2010 and to zero rate by 2015. This offers India a gloden opportunity to either make a huge economic gain or win a major tactical victory. But will Arun Jaitley, India's new Commerce Minister act? February 26, 2003 For more than four decades, developing countries have sought to eliminate developed-country barriers against such labour-intensive products as textiles, clothing and footwear. Until recently, they have had little success. Instead, during 1970s and 1980s, they saw the barriers rise. Bigger developed countries including the United States, European Union and Canada created a system of country-by-country quotas on the imports of textiles and apparel under the so-called Multi-fiber Arrangement. They also maintained unduly high customs duties, referred to as "tariff peaks," on labour-intensive products. As a part of the Uruguay Round Agreement, developed countries finally agreed to dismantle the MFA quotas by the end of 2004. This process has been under way albeit at a snail’s pace since 1995. But no agreement exists as…

Policy changes in India are no longer by stealth. Indeed, Kelkar has now brought the process out of the diwan-e-khaas to diwan-e-aam. Critics of his reports have been unsparing but are they right? January 29, 2003 Following the conclusion of the consultation period, the Kelkar taskforces have submitted their final reports. Criticisms in the press notwithstanding, Kelkar must be applauded for his innovation of the process of reform as well as the reform itself. For the first time in India’s reform history, Kelkar began by placing his preliminary recommendations before the public in the form of consultation papers and actively sought its feedback. Though some reacted cynically arguing that the papers were merely trial balloons, having observed the process function efficiently in other countries during his various stints abroad, Kelkar genuinely wanted to move the policy making in India out of the diwan-e-khas into the diwan-e-aam. And judging by the numerous e-mails and memorandums to the taskforces and opinion pieces and commentaries in print and electronic media, the experiment has been a resounding success. For their part, in the final…

Abandoning the exclusive focus on the rich country protectionism and complacency towards the poor country protectionism, the World Bank Chief Economist has now forcefully condemned the latter. This is good news. But the World Bank also needs to pay attention to the nuances while propagating the view that agricultural subsidies and protection in the rich countries inflict huge injuries on the poor countries. The removal of these intervention will no doubt benefit the developing countries as a whole but it will also hurt the majority of the poorest countries. December 18, 2002 World Bank Chief Economist Nicholas Stern is reported to have told a gathering of economists in New Delhi this past month that poor countries should unilaterally dismantle their barriers to trade in agriculture in spite of European and American “hypocrisy” in raising farm subsidies. “There is no point in saying to the developed world: ‘You are shooting yourself in the foot so we are going to shoot ourselves in the foot as well,’” said Stern. “The best response is not to shoot yourself in the foot at all.”…

In less than two months, the Kelkar taskforces on direct and indirect taxes have spoken. They propose to overhaul the Indian tax system. The question is whether Jaswant Singh will show the necessary courage. WEDNESDAY, NOVEMBER 20, 2002 I have argued in this column and elsewhere that with the Indian economy now producing goods and services worth approximately Rs 20,00,000 crore annually, policymaking has become too complex to be left exclusively to career bureaucrats. The bureaucrat's instinct is to give priority to putting out daily fires while lighting a few of his own; the specialist is eager to address issues of architecture and engineering of policy. Therefore, when Jaswant Singh appointed Vijay Kelkar as his advisor within days of taking charge as finance minister, he was signalling his intention to repeat the success he had achieved as the external affairs minister. Kelkar is not only a first-rate economist with a Ph D in economics from the University of California, Berkeley but also a long-time insider with a keen sense of how to design good policy in the context of the…

Besides, railways and nuclear power, the only state monopoly remaining in India is the one on issuing university degrees. Universities in India can be established only by an Act of Parliament, Act of a State Legislative Assembly or by the University Grants Commission (UGC) "deeming" an institution university. UGC centrally controls all major functions of universities and colleges. Not surprisingly, the Indian higher education system is in a quiet crisis on both quantity and quality dimension. Economic Times, October 23, 2002 A striking feature of the U.S. higher education system is its ability to sustain excellent public universities. Not only do these universities impart decent education in most states, many of them figure prominently in the national rankings. The University of California-Berkeley, University of California-Los Angeles, University of Michigan, University of Wisconsin-Madison and University of Minnesota are all public institutions. There are three complementary reasons why public universities have flourished in the United States while their counterparts in the rest of the world including Great Britain and continental Europe have declined. First, the United States has an excellent collection of…