ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Burgeoning Edible Oil Imports and Price Shock(s)

The ever-increasing import bill of edible oil has become a chronic problem for India with edible oil being the third largest among imported goods in India, next only to crude oil and gold. There are structural issues in production, productivity, and trade of edible oils. These energy-rich crops are grown in energy-starved conditions where more than 70% of the area under cultivation is rain-fed and often cultivated with low-quality seeds in a fragmented landholding and outdated agri-management practices. It further studies the trade liberalisation measures of a liberal trade policy regime, lower import duties, duty-exemptions under free trade agreements, and changes that India has witnessed in consumption as well as retail of edible oil.

Trade War and Global Economic Architecture

The recent decision of the United States to impose punitive tariffs on imports from China and the European Union, and the retaliation of these trade partners in tandem, is of concern to the global community. In analysing these contemporary events, it is argued that the genesis of the trade war can potentially be traced to the piling up of global imbalances, and the failure of the global financial institutions or fora—like the World Trade Organization and the International Monetary Fund—to address such imbalances. In such a context, whether the emerging economies have the ability to influence the course and outcomes of the current trade war, and whether this trade war can generate the possibility of reform of the international institutions are explored here.

Majoritarian Rationale and Common Goals

Looking at existing policy instruments and goals, and the economic and social outcomes they promise to deliver, it is argued that majoritarian politics and social and cultural outcomes are not part of fringe thinking. The politics of hate actually works to build a consensus for ruling class economics. It is not surprising, therefore, that the only "nationalist outlook" of our times is to stand firmly behind the policy programme for the global investor.

Exim Policy 2002-07

The new Exim policy will cover five years, making it coterminus with the Tenth Plan. Since the policy is mainly concerned with export trade procedures, it can be argued that a definitive programme of improved procedures for the entire Plan period might be of assistance in achieving the Plan targets of exports. It would, however, be a pity if further improvements were held back, even when they were demonstrably needed, because of the five-year term of the policy.

Fertilisers : Policy Muddle

It is time once again for fresh policy convulsions in the fertiliser sector and for claims and counter-claims by the government and industry. After a break in 2000-01, the government has once again imported 2.2 lakh tonnes of urea in order, it says, to prevent a shortage in the current rabi season. Considering that the total installed capacity of urea in the country is 20.9 mn tonnes, the import of such a small quantity is probably a symbolic gesture to drive home the government’s determination to press ahead with ‘rationalisation’ of prices. In November, the government, in an ‘interim’ decision, notified lower retention prices of urea for 13 manufacturers with retrospective effect from April 2000. This is expected to result in savings of Rs 800 crore in subsidies given to fertiliser units. The government has also drawn up stiff new norms of capacity utilisation and feedstock consumption by fertiliser units based on which retention price will be determined. But a comprehensive long-term policy for the Rs 35,000 crore industry – a key element in the agriculture sector – has yet to materialise.

Continued Ambiguity on GMOs

Despite the easing of trade embargoes and the increasing cultivation of transgenic crops, India still needs to clarify its stand on genetically modified foods and their import. Besides setting in place a regulatory system, it is necessary to inculcate awareness among the numerous agencies involved in the task.

VAT: A Closer Look

In an irreverant look at VAT, the darling of tax pundits, the author questions the supposed virtues of the tax-neutrality, avoidance of cascading and zero-rating of exports - and wonders whether more genuine tax reforms should not be considered in preference to VAT.
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