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Political Play
CA Dr Sunil Gupta
India's stand at Geneva: Good or bad? 06 August, 2014
Is this something that would hurt the new government's repute with respect to calling in global funds and facilitating trade, or is this a tough stand from the new group of administrators who very well understand that food security in India is more than just 'vote bank politics'?
What happened in Geneva a couple of days ago could have lessened the trust of economic experts who anticipated that India, with Mr. Narendra Modi as PM, would easily agree upon WTO norms on subsidy support and stockpiling. However, evaluating this merely on the grounds that global trade may suffer will serve no purpose as we Indians have our own set of concerns.

Much clearly, India has sent across the message that with millions of poor families and farmers, the country cannot just compromise on subsidy and stockpiling so as to pave route for the Trade Facilitation Agreement that as per economists can add about USD 1 trillion to the global economy, along with creating over 20 million jobs. 

As a relaxing measure, the Indians may now hope that the new government’s way of administration is not exactly overriding the actions of the previous UPA government, at least to some extent. Instead, the new rulers seem to be much worried about the internal fortune prior to welcoming funds and jobs from overseas.

However, what can hurt post this stand can be the declined curiosity of foreign investors who have quite often underwent pain while doing business in India. Retrospective taxation, delayed clearances, and now India’s verdict of standing by the longstanding view of not curtailing subsidy and stockpiling can disseminate a message that a promising developing country, India, is not ready to form consensus with the developed nations.

Many economists and think tanks, post India’s conclusion in Geneva, are in suspense that we are turning out as a business partner who does not respect contractual onuses and is not thus trustworthy enough to do trade with.

On the contrary, another key concern is the wide dependency of our underprivileged families on food security. Accept it or not, the WTO norms of limiting the value of subsidy on food at 10 percent of total food grain production of the country, is not just what India can afford with such a bulky portion of population below the poverty line.

Stockpiling of food is thus a pre-emptive measure that the government has to make sure citing the need for food security. While on one hand, the UPA-2 has passed over the burden of implementing the food security module on the shoulders of the new government, the WTO’s TFA is toughening the job even further.

The Indian administrators and their advisors are ready to postpone the TFA protocol until the WTO finds out a workable solution for the concerns of public stockholding. For sure, the minds at work must have comprehended country’s and countrymen’s essentials which cannot be put at stake owing to pressure from overseas partners or the WTO. 

Still, Mr. Modi’s persona of a ruler who believes in easing the path for businesses is bound to writhe, if not largely, to some extent, due to delayed execution of TFA. Weighing precisely the internal needs of the economy with respect to seeking support from outside is a tough job to handle; however is much-needed.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
About The Author
A Chartered Accountant by profession and Director on the board of Punjab National Bank (PNB), General Insurance Corporation of India (GIC) and Rural Electrification Corporation Limited (REC). Dr. Sunil Gupta is working flawlessly for the economic and social prosperity of India.
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