สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 21 กุมภาพันธ์ 2557

Need to restructure promotion schemes for exporters: Rajeev Kher

India needs to re-structure its promotion schemes for exporters and make them less dependent on government support for being complaint with the international laws, a top government official said here today. Commerce Secretary Rajeev Kher said several developed countries are raising issues against many of India's export promotion schemes. He said the WTO Agreement on Subsidies and Countervailing Measures (ASCM) allows India (which is an Annex VII country) to provide export subsidies as its per capita GDP on nominal terms (on 1990 prices) is still within USD 1,000. Further, he said that under WTO's ASCM, Indian exporters would also have to face challenge of subsidies. India cannot provide export subsidies to a sector if outbound shipments from that particular segment crosses 3.5 per cent share in the relevant global market. Citing example of textiles, he said the sector is "reported" to have crossed the 3.5 per cent share in the global market on a certain point of time and now India would not be able to provide export subsidies to the sector. The government provide export benefits to sectors under programmes such as Focus Market Scheme, Focus product Scheme and Duty Entitlement Pass Book ( DEPB).

(Source: Financial Express)

‘Need to align our export schemes with WTO norms’

India will need to restructure its export promotion schemes by making them less dependent on government support to be WTO compliant, commerce secretary Rajeev Kher said on Thursday, adding that several developed countries were raising concerns over India's export promotion schemes. He said the WTO Agreement on Subsidies and Countervailing Measures (ASCM) allows India (which is an Annex VII country) to provide export subsidies as its per capita GDP on nominal terms (on 1990 prices) is still within $1,000. But Kher added "very soon we will cross this bridge and then we will not have the protection of Annex VII countries, which would mean that all export subsidies will be prohibited". "This means we will have to re-structure or re-engineer our various schemes in a manner that they sustain for a long term," he added. India cannot provide export subsidies to a sector if the outbound shipments from that particular segment cross 3.5% share in the relevant global market. Citing the example of textiles, he said the sector is "reported" to have crossed the 3.5% share in the global market at a certain point of time and now India would not be able to provide export subsidies to the sector. The government provides export benefits to sectors under Focus Market Scheme, Focus Product Scheme and Duty Entitlement Pass Book (DEPB).Kher also said that the free trade agreements (FTAs) signed by India with other countries, widely considered the reason for India's rising imports, needed to be utilised well to gain advantage from these pacts. The important thing is that we have to see how we are utilising these FTAs," Kher said. He, however, added that "we are aware that some FTAs have caused a certain amount of problem like duty inversion. This needs to be addressed and hopefully it will be addressed". India has entered into FTAs with Japan, Singapore, South Korea, Malaysia and Association of Southeast Asian Nations (Asean).

(Source: Economic Times)

IMF lauds India’s monetary policy to control inflation

The International Monetary Fund (IMF) lauded India's ability to keep a tight rein on spending and monetary policy as it battles an economic slump and inflation, praise that comes amid signals of a difference of opinion over this between the government and the Reserve Bank of India. Finance minister P Chidambaram slashed spending and put in place several measures to ensure that the fiscal deficit was reined in. Meanwhile, the central bank has said that bringing down inflation is key to shoring up growth, which slumped to a decade low last year. IMF pinned most of the blame for India's slowdown on domestic factors. Chidambaram reiterated after presenting the interim budget on Monday that central bank policy should be subservient to the overall economic vision of the government, which seemed to echo the reasons for the testy relationship he had with former governor D Subbarao. It was believed at the time that the central bank was keeping too tight an inflation focus without paying enough attention to boosting economic growth.The finance minister also said that the next government, which will be formed after elections that are imminent, should continue to maintain control of economic direction.The IMF said however that the Indian authorities should be ready for further monetary tightening to bring inflation down to sustainable levels. It welcomed the RBI's initiative to strengthen the monetary policy framework. The central bank, which has raised interest rates by three quarters of a percentage point since September, recently made public a report by an internal panel that said managing inflation should be its prime policy objective. It said the goal should be to bring consumer price inflation down to 4%, with a 2% band on either side. Inflation based on the consumer price index was 8.79% in January. The IMF report follows bilateral discussions that it usually holds with members every year under the Articles of Agreement. India and IMF, however, continue to differ over the latter's assessment of the country's growth. This had come to the fore in the October IMF-World Bank meetings in Washington when the government rejected IMF's 3.8% growth forecast (4.25% at factor cost) for the current fiscal. India's own initial estimate says the economy will expand 4.9% at factor cost in 2013-14. IMF expects the Indian economy to expand 5.4% in 2014-15, an estimate also regarded by the government as being on the lower side.

(Source: Economic Times)

India to push for IMF quota reforms at G20

India will push for International Monetary Fund (IMF) quota reforms during the G20 Finance Ministers meeting beginning here on Saturday, seeking to provide more voice to developing countries. The IMF quota reforms, which seek to increase the voting share of emerging economies, including India, had hit a roadblock, with the US Congress refusing to increase the American contribution to the multilateral body. Besides the IMF quota reforms, the G20 ministerial, which will be attended by Indian Finance Minister P Chidambaram and RBI Governor Raghuram Rajan, will focus on implications of the US Federal Reserve tapering of bond purchases on emerging economies and the steps being taken by different nations to fight corruption and combat tax evasion. India is likely to vigorously push for early completion of the IMF quota reforms at the ministerial meeting of the G20, a club of rich and developing nations. The IMF reviews members' quotas once in five years and the last such review took place in December 2010. India has already consented to its quota increase under the review and it would cost the exchequer Rs 14,000 crore.  Once implemented, India's share will increase to 2.75 per cent from 2.44 per cent currently, following which the country will become the eighth-largest quota holder at the IMF, up from 11th position.

(Source: Economic Times)

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