Tuesday, July 18, 2000, Chandigarh, India
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Thackeray must be tamed FOR quite a long time whenever there was a plane crash in India, it usually involved an IAF fighter jet. On Monday morning the news came that at least 51 persons lost their lives when an Alliance Air plane met with an accident at Patna. Great timber robbery
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PERFORMANCE OF WTO Measures for Punjab agriculture by Joginder Singh THE GATT agreement signed by 125 countries on April 15, 1994, had the basic objective of minimising the use of natural resources in the world through the comparative advantage system and to have better cooperation among different countries through world trade rather than having bilateral agreements. This was mainly an agreement on agriculture having far-reaching implications for different countries as well as for different states of India.
Magic thou art by Ramesh Luthra OPPRESSIVE heat. And sweat! What to say of it! Blazing sun makes life unbearable. The sky sans a patch of cloud presents a gloomy picture. Dry branches of the trees hardly provide any respite to the thirsty birds. Animals too traverse long distances in search of water holes which are dry. Parched and shrivelled mother earth looks up to heaven for life giving showers. Invariably human hands go up in prayer, “Baba Megh De”.
PM-RSS rift: beyond PR & pep talk by P. Raman THERE HAVE been several misconceptions about the nature of the raging confrontation between the RSS and the effective leadership of the BJP and their possible outcome. Some have already jumped into the conclusion that the relationship is fast reaching a point of no-return. Others dismiss the present discord as a mere gimmick aimed at simultaneously retaining the traditional Hindutva constituency by the RSS even while the BJP keeps the multi-party coalition intact.
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PERFORMANCE OF WTO THE GATT agreement signed by 125 countries on April 15, 1994, had the basic objective of minimising the use of natural resources in the world through the comparative advantage system and to have better cooperation among different countries through world trade rather than having bilateral agreements. This was mainly an agreement on agriculture having far-reaching implications for different countries as well as for different states of India. More important is to understand the proposal: where do we stand and how do we adjust ourselves to the new world scenario. An analysis has been attempted here with respect to some important aspects. The agreement aims at a substantial progressive reduction in protection to the agricultural sector so as to prevent restrictions and distortions in world trade. The overall tariff (by converting non-tariff barriers into tariff barriers) is to be lowered by 36 per cent in six years in developed countries, by 24 per cent in 10 years in developing countries while the least developed nations are not required to reduce such tariffs. The minimum access tariff quota was to be established at reduced tariff rates for the products when minimum access was less than 3 per cent of domestic consumption in the base period of 1986-88 which were to be gradually increased to 5 per cent. In India, different types of Customs duties such as basic Customs duty, additional Customs duty, special additional duty, including the surcharge on agricultural commodities are significantly less than that of correspondingly agreed final bound rate showing thereby that India has immediately reduced the tariff rates substantially. As per the treaty, India has also agreed to phase out quantitative restrictions upto 2003 on all commodities except for 632 for reasons related to security, religion, etc. Out of 673 major agricultural commodities, our tariff rates are far lower than the specified ones except in eight commodities. Rice, milk and milk products and various other agricultural commodities are highly protected in advanced countries like Japan, the USA, the European Union, Canada, etc, while in India tariff walls are very low. For example, in Japan 700 per cent protection is on rice and 557 per cent on milk products. Canada has 213 per cent and 313 per cent tariffs on milk products. Therefore, either the tariff rates of other countries should also be lowered so that we can have access to the potential markets there or we should raise our tariff walls as well and protect our economy from dumping. India is bound for agriculture tariff at 100 per cent for raw commodities, 150 per cent for processed agro-products and 300 per cent for edible oils. It was also provided in the agreement that sanitary and phyto-sanitary measures necessary to protect human, animal and plant life and health are to be followed as per international specifications. Most of the advanced countries have taken this clause to shield themselves against the import from developing countries. Agricultural production is exposed to natural factors of rainfall, humidity, storms, temperature, etc. The protection from damage by physical injury and by pests and diseases cannot be ensured to the tune of 100 per cent. Hence the rejection of anyone’s produce even on the gate of importing countries is not difficult as per this clause. Therefore, there is strong need to urge the WTO to specify the reasonably normal tolerance limits for different agricultural commodities. The aggregate measure of domestic support (AMS) to agriculture is to be limited to a maximum of 5 per cent in developed and 10 per cent of the value of production of individual product in developing countries. The AMS includes both non-product-specific subsidies (on water, electricity, credit, fertilisers, seeds, pesticides, farm machinery, etc) and product-specific subsidies worked out on the basis of the domestic price minus the international price of the product. If the AMS exceeds the prescribed limit, the country is committed to reducing domestic support by 13.3 per cent in the case of developing countries over 10 years and by 20 per cent in the case of developed countries in six years. The green box policies have a minimal impact on trade as research, plant protection measures, infrastructure, food security, training and extension services, marketing and promotion services and environmental programmes are excluded from the domestic support. However, the flaws in this clause are: 1. The exemption of green box measures which cover a large variety of costs as discussed provides escapism to the most protected economies. 2. Blue box policies — the exemption of direct payment to producers like decoupled income support payment not related to production, structural adjustment assistance and support provided to resource-poor farmers. There is no specific definition of a “resource-poor” farmer. Different economies based on relativity can have different sets of criteria of resource poor and thus claim a large-scale exemption. 3. The base period subsidies shown by most far-sighted countries were on the higher side, and thus they are not bound to lower them. 4. The working out of product-specific support on the basis of the international processes, which themselves are highly volatile, does not provide a sound base for AMS. If the rules of the game are to be fair for all, AMS should be fixed at some minimum and some maximum rather than first showing a very high figure and then lowering it by some percentage. The export subsidies were subjected to reduction commitment. The direct export subsidies are to be reduced by 36 per cent in developed countries and the quantity of subsidised export is to be lowered by 21 per cent. The developing countries are to reduce export subsidies by 24 per cent and the quality of subsidised export by 14 per cent within 10 years. It includes the internal transport cost of marketing, export promotion, etc. The export subsidies not included here are export credit, export credit guarantee and insurance. The export subsidies in the case of wheat from the USA, the EU, Canada, Turkey and Hungry were 95 per cent. The rice subsidy was 100 per cent in the case of Indonesia, Uruguay, the EU, the USA and Cambodia. The EU was the major user of export subsidies. Even if the export subsidies are reduced by 36 per cent it would be enormous to make others compete with these countries. The trade-related intellectual property rights (TRIPS) provide norms for copyrights, trademarks, geographical indications, designs patents, etc. A number of international agreements on most of these rights already exist. On patents, the basic obligation is that of product and process patent in all areas, including agriculture. On plant varieties, there is a provision of protection by patents or by the sui generis system. India has opted for the sui generis system which is being developed taking into account the national requirements. Though it is still in the process of development, the common feeling of charging a high price for seeds of new plant varieties and new breeds of animals by multinational corporations (MNCs) is being taken care of. There would be none to thrust new technology upon farmers. They are free to multiply, exchange and sell their produce but not commercially as seed. The buyers of technology need to examine thoroughly the added cost and added return by way of new technology before taking such decisions. An after-thought by the developed countries was to introduce a “social clause” in the GATT treaty. This clause aimed at nullifying the price advantage enjoyed by the developing countries like India due to the low labour cost. Such goods thus would be subject to import duties by the developed economies. As a result of this, the developing countries forfeit their competitive edge over the advanced countries. The multinational firms interested in making investment in the developing countries may find it unattractive as a result of this clause. The migration of labour to the advanced countries may be checked, resulting in a still higher rate of unemployment and misery for the developing economies. Child labour, which forms an important part of working population in some specialised enterprises like the carpet industry, is supposed to be taken out causing a severe impact on such industries. The clause has as yet been kept out of the agreement, and India has opposed it along with most of other developing nations. Therefore, it is clear that the fulfilment of the basic objectives of the World Trade Organisation (WTO) is not in sight. The loopholes like green box and blue box policies and other manipulations made by the developed countries and the lack of our preparedness to meet the challenges appear to damage our interests. Within the country, different states will have different implications. For example, the economies of agriculturally surplus states like Punjab and Haryana may receive a severe jolt. Punjab is one of the smallest states but contributes about 10 per cent of the total agricultural value output of the country. The state has helped the country to generate surpluses for export. However, the flow of exportable potential over the deficit parts of the Indian economy requires long-term policy measures. Some of these measures can be as given here: 1. The surpluses generated by agriculture in Punjab are mainly absorbed within the country. Therefore, the maximum limit on export is fixed from time to time for various agricultural commodities such as wheat, rice and cotton. In case this restriction is relaxed, export can be enhanced. Easy export licensing and the allocation of an export quota to farmers and farmers’ organisations can be helpful in this regard. 2. Though the agriculture is competitive when compared with the main producing countries in terms of the cost of production, the marketing and handling charges are so high that by the time the produce reaches the consuming centre, the entire comparative advantage is lost. For example, in 1994-95, the price of Punjab wheat at Bombay railway station was Rs 510.16 per qtl as compared to the US wheat at Gulf ports which was 15.34 per cent lower than this. The cost of freight, market charges, local transport and handling need to be subsidised, especially for export purposes. 3. The state has a vast production potential in the case of fruits, vegetables, floriculture, meat, milk, fish, mushrooms, etc. There is need for having a dry port and a refrigerated transport system in the state for the export of such perishable products. 4. For better understanding of different consuming and producing countries, a marketing cell needs to be created which should make information available to exporters quickly. 5. Technical knowhow regarding production, processing and marketing of exportable goods should be provided by the government. 6. Export-oriented units for processing various agricultural commodities need to set up. 7. In spite of the growing opportunity for the export of agricultural products, there is an increasing stress on sanitary and phytosanitary measures to protect human, animal and plant health. Quality consciousness requires strict legislation and improved processing and packaging facilities. There is also need to have more diversification in agricultural exports as it conforms more to traditional items. Therefore, processing in ready-to-use products such as food products, textiles and electronics of standard quality need to be stressed. 8. There is need for strict agro-climatic regional planning. The areas having potential for the production of different agricultural commodities need to be earmarked and their production and marketing should be encouraged there. For example, Punjab’s areas bordering Pakistan are most suited to basmati production. Khanna and its surrounding areas can be specified for durum wheat production. South-western districts have the potential for cotton production. The central districts are suitable for meat and milk production. Similarly, there are specified areas for fruit, vegetables, condiments, mushroom cultivation, honey, production, etc. The writer is Professor and Head, Department of Economics and Sociology, Punjab Agricultural University, Ludhiana. |
Magic thou art OPPRESSIVE heat. And sweat! What to say of it! Blazing sun makes life unbearable. The sky sans a patch of cloud presents a gloomy picture. Dry branches of the trees hardly provide any respite to the thirsty birds. Animals too traverse long distances in search of water holes which are dry. Parched and shrivelled mother earth looks up to heaven for life giving showers. Invariably human hands go up in prayer, “Baba Megh De”. Lo! the Baba does grant “megh”. Suddenly white clouds start floating in the sky. As if by sheer magic soon they transform into a thick dark sheet. Thunderstorm and forked lightning compel the sun hide its fiery face behind the clouds. The most magical and mesmerising moment of nature. The first showers of monsoon! one goes ecstatic. Imagination runs wild. It is sheer joy to experience the soothing drops fall on your upward face, dripping you all over, in fact, your whole being. As if the soul merges with the supreme and shares the ecstasy. Heavens too join in. In a jiffy it gets torrential. One and all come out to partake of this bliss. Artificial rain dance! Its poor and distorted replica indeed. Farmers are the happiest lot. Their very existence depends upon monsoons. As if overnight, the dry and parched fields undergo total rejuvenation. Rain-washed fields and trees present a unique phenomenon, so soothing to the eyes. Heady fragrance the earth exudes to welcome the first showers. It goes deep down your soul. Makes you feel at the top of the world. Tiny and not-so-tiny puddles. How do they burst out and form part of the streamlet that flows on the road remains a puzzle for me till now. Nostalgia sweeps me. Images after images surfaces before my eyes. I would go crazy catching the puddles. Good heavens! the rapture the plying of paper boats gave me en route home from school. Nothing on earth can beat it. Wish my kids too could enjoy that bliss. Alas! they come home in school buses. Another fun would await me at home. Aroma of cooking wafted across invitingly. Mother would threat me with sumptuous “pakoras” and “sweet puras”. The delicious feast would lull me to sleep. I would dream of the rain-soaked fields and gardens where peacocks danced during day and glowworms brought the star-studded sky down on the planet at night. Life in the pigeon hole flat deprives me of these pleasures now. The thrilling “teej fair” brings to mind, rainbow coloured bangles, fragrant henna & lilting songs like “savan ayo re jhum jhum ke nacho...”. And the long swings which make you touch the very clouds! They carry you to the world of romance and fancy. Magic thou art, indeed the monsoon. |
PM-RSS rift: beyond PR & pep talk THERE HAVE been several misconceptions about the nature of the raging confrontation between the RSS and the effective leadership of the BJP and their possible outcome. Some have already jumped into the conclusion that the relationship is fast reaching a point of no-return. Others dismiss the present discord as a mere gimmick aimed at simultaneously retaining the traditional Hindutva constituency by the RSS even while the BJP keeps the multi-party coalition intact. Though there is an element of truth in both claims, the actual position remains somewhere in between. No doubt, for over a couple of years, the two sides have been trying to vainly rationalise their parallel programmes by claiming it as an experiment to win over conflicting constituencies. Accordingly, the BJP under its liberal Prime Minister projects the government as the good boys of the globalisers and giving it a reasonably fair secular image. While doing so, the government has also initiated the process of Hindutvaising history, archaeology, culture and education and filling all available institutions with its own supporters. The RSS side was repeatedly told of such rich “premium”. Under this “dual” policy, the RSS outfits have been allowed considerable freedom to protest against what they call the NDA government’s “appeasement” of minorities. However, the VHP-Bajrang Dal would not violate the law. The support thus generated would help the BJP retain its traditional vote base. But as quid pro quo Vajpayee had prevailed upon the old RSS leadership to put restraint on the Swadeshi Jagran Manch (SJM). All this was during the rein of Rajendra Singh, a soft person with little initiative or vision. A little pep talk and a broad smile, he could easily be won over. The SJM was made dormant to prevent the “jokers” — a term popular among the pinky editors and the pro-reform economists — from hurting the government. Thus K.S. Sudarshan’s accession as Sarsanghchalak earlier this year had also marked a perceptible change in the approach and determination of the RSS. It has not been a routine reinstallation. The change was brought about by intense internal pressures, especially from those middle-level apparatchik who felt aggrieved at the subordination of the RSS to the exigencies of the BJP’s ministerial ambitions. At every stage, the Vajpayee camp had tried its best to delay the change of RSS guard. Finally it came as a coup d’etat of sort. By the time the choice was known, it was too late. For, Sudarshan has been one of the pioneers of the Swadeshi economics and inspiration for the SJM. RSS circles attribute to him the revival of the theory of dovetailing economic nationalism with cultural and religious nationalism. Sadly for the globalisers in the BJP, with this almost the entire top RSS hierarchy remains dominated by the swadeshi lobby. Like Sheshadri, Moropant Pingle, Datopant Thengdi and Madan Das. During the ministry formation, Sudarshan was the one who had forced Vajpayee not to make Jaswant Singh, known in the Swadeshi circles as globaliser — a rather dirty word — as Finance Minister. Sudarshan himself marked his advent with the proclamation of his hard line. Now the Vajpayee camp is desperately trying to avert the election of Sunder Singh Bhandari, another hardliner, as the BJP chief. There has been intense lobbying to smoothen Sudarshan, the hardboiled ideologue through different channels, business included. The response, however, has been rather lukewarm. As a result, differences between the Vajpayee camp and the RSS have sharpened in the past few months. There has certainly been a hardening of the position on both sides due to the inherent internal pressures beyond the control of both. Vajpayee’s tearing hurry to enforce the second generation of reform which is described by the RSS outfits as a “total surrender” to the foreign investors and MNCs, further heightened the tension. Sudarshan’s TV interview, which sparked the present crisis, has specially assailed the government for giving 100 per cent equity to foreigners. While the Vajpayee camp invariably seeks to play down the confrontationist mood of the Parivar head, it is going to be beyond the routine public relations and pep talk. Such methods may be effective in the case of non-ideological, power hungry politicians. Sudarshan is not known to make off-cuff remarks. In fact, it has been the culmination of a series of decisions taken by various RSS outfits in the past few weeks. Insiders assert that all major documents adopted at the SJM’s Agra session had the prior approval of RSS chief. And so the the RSS session at Gandhinagar where the same line was duly endorsed. Talk to any senior RSS leader in private. Out comes their anger over the way Vajpayee has been taking them for granted on every issue on which they are known to have strong reservations. An RSS old guard, now sick, says that the government’s strategy has been to take unilateral decisions mortgaging the rights of the future generation and then come back to us with a fait accompli. This has been going on far too long, and there is no way of curbing the government. The RSS, he believes, is left with no other way but to highlight “our own objections in public”. Another important factor that has prompted the RSS to go public is the severe pressures from the thousands of tiny, small and medium firms that are being wiped out by the ‘second generation’ reforms. Ignored by the pinkies — and also the government — they regularly tell the RSS leaders of their slow death. Even the grassroots BJP leaders fear a severe backlash from these traditional supporters and their work force. Now sections of big Indian industrialists, who share such disillusionment with the government’s pro-MNC policies, have joined them. Things are bound to turn worse after April next. The problem for Vajpayee is that he finds himself in dharma sankat. The whole Jaswant Singh diplomacy with the USA is based on India conceding to all its globalisation demands. He had to throw open about 1300 US items — including beef — for imports to facilitate Bill Clinton’s visit. Vajpayee will now have to meet more “second generation” conditionalities before his two-week return visit to USA in September next. Any slippages in the progress report would make India a bad boy. In fact, a highly persuasive Union Minister had recently pleaded with the RSS to realise this aspect and give some more time for the government to reverse its image. This is going to be Yashwant Sinha’s main argument when he meets the SJM leaders next week to discuss the differences. The conclave was arranged on the Prime Minister’s instructions. That the latter is perturbed over Sudarshan’s warnings to take to the streets is evident from his decision to put off this week’s crucial meeting of the Cabinet Committee on disinvestment. This itself marks a climbdown on the part of Vajpayee, who had all along asserted his prime ministerial right to decide the government’s policies without interference from outside. At the Chennai meeting of the BJP’s National Executive, he had curtly rejected Kushabhau Thakre’s suggestion for a coordination panel of the party and government to finetune the policies. If he needs the cooperation of the RSS, he will now have to listen to their views and adjust the policies accordingly. If Sinha’s meeting with the SJM is confined to “explaining” the government’s policies, it will end up in deadlock. SJM leaders like S. Gurumurthi and Murlidhar Rao are well versed in their subjects and it is unlikely that a lecture and a few sheets of figures could convert them into MNC admirers. This is Vajpayee’s real globalisation dilemma. If he has to buy peace with the RSS Parivar, he will have to give some concessions in the form of a well defined cap on foreign equity, imports and privatisation. The Parivar has its own specific views on all such issues. On the other, any climbdown on any of this will evoke angry responses from abroad. Already, Vajpayee’s natural instinct for compromise seems to have averted much of washing the dirty linen in public. For two days it looked as if a full war of attrition had begun with those claiming to represent the Prime Minister heaping sarcasm on the RSS. A third-ranker who claims support from the official BJP, Jagdish Shettigar, derided the RSS and asked what they knew of economics. If they oppose disinvestment, we will reject it. The RSS is “taking orders from Bhondsi” (Chandra Shekhar). The PMO too discreetly encouraged the media to highlight the “unreasonablenees” of the RSS and its “economic extremism”. Some even said that the real RSS strength vis-a-vis the BJP is highly exaggerated, and even if the RSS went ahead with its programmes, it will only further enhance Vajpayee’s image. This was promptly countered by those like Acharya Giriraj Kishore: “For them power is the goal; for us it is only the means. We can’t dictate terms with Vajpayee as they can’t do so to us.” Now that Vajpayee himself has put a cap on this brief cold war in the family, what happens if the two sides fail to patch up on the economic issues? If the SJM and the VHP-Bajrang Dal outfits go ahead with their proposed campaigns, its consequences are going to be really severe. For instance, even a few SJM indoor seminars against the MNCs, ‘sellout’ of PSUs etc will greatly influence the political parties and public opinion. Already, Mulayam Singh has taken the cue to embarrass the BJP. Even George Fernandes expresses his party’s doubts about some economic decisions. The proposed RSS campaign will, directly or indirectly, give more credence to the anti-poor, pro-rich image of the Vajpayee government. Now even Mamata Banerjee has come out with anti-reform outbursts stating that “Vajpayee is not better than the Congress.” |
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