The 2020 budget faced wide diversions from its projected course due to high uncertainty caused by the COVID-19 pandemic. Initially designed to cater to varying economic needs of multiple sections of society, in the backdrop of sluggish growth and low tax collections clubbed with slow domestic demand, the 2020 budget did maintain fiscal prudence. It was focused on structural reforms in the financial sector and on credit access. It had proposed changes in the banking laws to enable public sector banks to raise funds from capital markets and flexible debt restructuring for the NBFCs. However, with economy hit by pandemic, the newer challenges had emerged. Government had to take a cautious approach in response to the social and economic impacts of the coronavirus crisis. In this regard, a stimulus package of Rs 20 trillion was announced for businesses and workers. Whether the stimulus was sufficient for the economy is another debate, the unprecedented challenges posed by the pandemic has led to steep rise of the fiscal deficit and for year ending in March 2021, it is likely to be over 7% of gross domestic product, against the initial prediction of 3.5 %.
The budget exercise 2021 has thus put a natural strain on the government. The preparation of the 2021 budget will need to take stock of the impact of the COVID 19 crisis on the economy and the government’s fiscal position and evaluate the fiscal space for continued priority crisis spending and recovery measures. The budgetary exercise is a strategy setting stage that will be closely evaluated by investors. Given that pandemic is still not over, it is better to have a medium term orientation to planning. Most importantly, the government should assess its financing needs and adopt a transparent approach towards its fiscal responses as it will help gain both market as well as investor confidence. One thing that markets don’t like is unpredictability. For this, adoption of medium term oriented plan and an accountable and transparent system of implementation of such plans will infuse confidence of both market and its investors. This is because unpredictability factor is high in long term planning given the current crisis.
India needs to continue its momentum towards structural reforms. The current government’s work has so far been laudable in this regard. But the government should not let the aftermath of pandemic defocus itself from its objective. Market reforms that pushes for easy lending, more expenditure, high public deposit should be encouraged.
The budget planning thus needs to be a concerted effort to ensure that the budget is focused on revival and resurrects the growth without hurting the vulnerable class. The planning activity may adopt the following approaches:
1. Focused budget with medium term objective
2. Increased transparency of the institutions
3. Protection of vulnerable class of people through state initiated plans as well as private participation
4. Determination of priority areas such as infrastructure, health, financial markets etc
5. Special support for MSMEs in terms of easy access to finance and regulatory ease
6. Employment generation through focus on informal sectors.
ALLOWING INDUSTRIAL HOUSES TO OPEN BANKS TO TAP DOMESTIC CAPITAL TO EFFECTIVELY
In past, government has considered allowing private industrial houses into banking business. Probably, this year, government could start with allowing a few. It will be in the interest of the market that invisible hands are strengthened and newer equal opportunities are provided for new entrants. In past, government has infused large amounts of taxpayer money into the ailing public sector banks which has weakened the backbone of Indian economy. Allowing industrial houses to open banks will allow tapping into domestic capital for effective capitalisation. Government then can use its own fiscal resources in other sectors like health and education.
FOCUS ON REVIVAL AND DEVELOPMENT OF BOND MARKET
In 2020, India saw high volatility in bond market with $13.7 billion worth of outflows even as most of its Asian peers saw record inflows. While the equity market continues to see record dollar inflows but foreign investors are still exiting bond market. Given the stress in financial institutions, it is imperative that debt market, especially bond market, develops. In India, the bond market has remained underdeveloped due to extensive compliance and disclosure. For instance, due to regulatory restrain, private placement is preferred which could be made to a maximum of 50 qualified institutional buyers. Thus, despite the potential, the bond market has faced a stunted growth.
INCREASING TAX BUOYANCY
Another area where attention needs to be given increasing tax buoyancy which is an important indicator of efficiency and responsiveness of tax revenue mobilisation to GDP growth. Tax is said to be buoyant if the gross tax revenues increase more than proportionately in response to a rise in GDP figures. Experts have argued that ideally India should target at achieving target of 1.2 to 1.3. Formalisation of economy and GST has increased direct tax buoyancy. Agricultural reforms, if implemented, could have added to this. Indirect tax buoyancy increases with additional cess collected. However, the burden does hurt both rich and the poor. Thus, if the government is thinking of adding coronavirus cess, it should not become burden on the poor who have already been hit by pandemic.
REORIENTED FOCUS ON HEALTHCARE & INCREASE HEALTH EXPENDITURE
Post pandemic, most of the countries will reorient their focus on healthcare. India’s past expenditure in healthcare sector has been low. In 2018-19, India’s spending on health sector was 1.5% of GDP. European countries spend 7 to 8 % of their GDP on healthcare. India should target to increase its healthcare expenditure to at least 4 % in next 5 years. Focus should be on increased infrastructure for medical facilities. Healthcare is country’s largest sector, both in terms of revenue and employment. The healthcare market holds potential to increase to Rs. 8.6 trillion by 2022. In Union Budget 2020 -21, Rs. 35,600 crore was allocated for nutrition-related programmes and Rs. 69,000 crore outlay for the health sector that was inclusive of Rs. 6,400 crore for PMJAY in Union Budget 2020–21. Government is mulling over to increase the healthcare budget to 2.5 % by 2025 but there is no gainsay that healthcare is one of the most important sector which needs greater attention.
INCREASING INFRASTRUCTURE EXPENDITURE
Spending on infrastructure will help government come back to path of economic stability quickly. As mentioned earlier, healthcare infrastructure must develop in all parts of the country. It must be realised that in this regard, much of it is done by state governments and not the central governments. Thus, getting the money out to the states is crucial. GST compensation due to states should be disbursed timely.
Further, the upcoming Budget for 2021-2022 is a good opportunity to take forward the efforts in clean energy. Given the impetus for Atmanirbhar Bharat, greater emphasis on power can lay the foundation for long-term growth opportunities, create jobs and attract foreign investments. For this, regulatory bottlenecks need to be addressed.
FOCUS ON EMPLOYMENT GENERATION
The litmus test for all the reforms will be whether government can reduce the unemployment rate. The year 2020 was particularly bad for employment. As per CMIE data, as a result of first lockdown, over 11.3 crore people lost jobs as the entire economy went into shutdown mode. The decline in employment will lead most of the labour reforms fruitless. As an expert as pointed, India cannot have jobless growth. Hence, government needs to find means and ways to boost employment. Focus on developing infrastructure, boosting growth of MSMEs have to be part of this major plan. For job creation, government should have focused approach. It should boost labour intensive sectors and also make policy intervention to reduce layoffs. For instance, in order to ensure more labour is deployed into the work force, a temporary policy intervention could be made introducing reduced working hours for labours. This will enable more number of labours into workforce albeit at a reduced economic output per labour.
BUDGET CANNOT BE PANACEA FOR THE PANDEMIC
Troubled times call for timely troubleshoots. While stimulus packages through a combination of both fiscal and monetary action partially arrested the impact of pandemic and imparted much-needed confidence of market , there is a lot need to be done. The Budget 2021 should be used as an opportunity to provide an additional dose of economic stimulus in seeking inclusive growth. But one needs to realise that Budget 2021 cannot be panacea for the pandemic. The recovery from the aftermaths of pandemic may take more than a year but what is important is that we take the right direction and work towards it. Government should focus on continuing the momentum of structural reforms. While it may not be the best time to bringing in sweeping change till the pandemic is over, some tweaking in regulations to suit the interest market should be adopted. Further, attempt should be made to make financial market more attractive for investors. This must be adopting medium term objective and mid-term review. After all, budget 2021 will pave a way for an “Aatmanirbhar Bharat”.
Dr Neeti Shikha is Head, Centre for Insolvency and Bankruptcy, Indian Institute of Corporate Affairs. Views are personal.
The litmus test for all the reforms will be whether government can reduce the unemployment rate. The year 2020 was particularly bad for employment. As per CMIE data, as a result of first lockdown, over 11.3 crore people lost jobs as the entire economy went into shutdown mode. The decline in employment will lead most of the labour reforms fruitless. As an expert as pointed, India cannot have jobless growth. Hence, government needs to find means and ways to boost employment.
The Daily Guardian is now on Telegram. Click here to join our channel (@thedailyguardian) and stay updated with the latest headlines.
For the latest news Download The Daily Guardian App.
3,600 STARTUPS TO BENEFIT FROM STARTUP INDIA SEED FUND SCHEME LAUNCHED BY PIYUSH GOYAL
Minister says the scheme will secure seed funding, inspire innovation, support transformative ideas, facilitate implementation, and start startup revolution.
Minister of Railways, Commerce & Industry, Consumer Affairs and Food & Public Distribution Piyush Goyal has launched the Startup India Seed Fund Scheme (SISFS). The Fund aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialization. The Scheme was announced by the Hon’ble Prime Minister, Shri Narendra Modi on 16th January 2021 in his Grand Plenary address of ‘Prarambh: Startup India International Summit’, marking the five-year anniversary of the Startup India initiative. Rs. 945 Crore corpus will be divided over the next 4 years for providing seed funding to eligible startups through eligible incubators across India. The scheme is expected to support an estimated 3,600 startups through 300 incubators.
Speaking on the occasion, Shri Goyal said that this scheme is being launched within 3 months of its announcement, one of the fastest in the recent times. He said that times are tough, but our resolve is strong, and never before has it become more important for us to empower our startups.
The Minister said that the SISFS will Secure seed funding, Inspire innovation, Support transformative ideas, Facilitate implementation, and Start startup revolution. He said that this Scheme will create a robust startup ecosystem, particularly in Tier 2 and Tier 3 towns of India, which are often deprived of adequate funding. The Minister said that he would like to especially encourage innovators from rural areas to come forward and benefit from this scheme.
Shri Goyal said that under the guidance of Hon’ble PM Modi, DPIIT has worked tirelessly to bring a tectonic shift in the startup ecosystem in India. he assured that the department has been acting as the Facilitator, with Open door, Open Arms & Open Mind, encouraging largescale youth participation in the innovative activities.
The minister said that there has been change in approach, change in mindset from job seekers to job providers, which is helping Startups to become the backbone of New India. He said that Startup India Seed Fund Scheme will act as a bridge between ideas and their implementation. Independent & ambitious thinking in the Startup ecosystem will encourage entrepreneurship and create a culture that will recognise innovation
Shri Goyal said that 2020 is testament to the transformative potential of Indian Startup – Startups with their energy & enthusiasm came up with efficient and cost effective solutions which ensured last mile supply of essential commodities across India. He lauded our young entrepreneurs for the ability, agility & dedication. He said that Indian Startups have been inculcating, incubating and innovating not only for the nation but for the humanity.
The minister said that with the motto of Connect, Collaborate & Catalyse, the Government has introduced initiatives like Startup Innovation Challenges, National Startup Awards, Ranking of States, SCO Startup Forum, Prarambh etc.
The online portal created by DPIIT, for the scheme, will allow incubators to apply for funds under it. An Experts Advisory Committee (EAC) has been created by DPIIT to execute and monitor the Startup India Seed Fund Scheme. Grants of upto Rs 5 Crores shall be provided to the eligible incubators selected by the EAC. The selected incubators shall provide grants of up to Rs 20 lakhs for validation of Proof of Concept, or prototype development, or product trials to startups. Furthermore, investments of up to Rs 50 lakhs shall be provided to the startups for market entry, commercialization, or scaling up through convertible debentures or debt-linked instruments. The detailed guidelines of the Startup India Seed Fund Scheme are provided on the Startup India portal (www.startupindia.gov.in).
The promising startups that are supported at their early stages shall create huge employment opportunities for everyone. The Seed Fund Scheme also envisions to promote virtual incubation for startups by enabling 300 incubators to support startups from all corners of the country. The impact of this will be visible by the spur of innovations in tier 2 and tier 3 regions of India.
CONTAINER SHORTAGE EASES IN INDIA
Pro-active and coordinated approach has helped; number of steps taken to ease the problems faced by exporters; in order to improve availability of containers, India is also targeting to manufacture containers domestically; waiting time for availability of containers at ICDs and ports comes down.
Shortage of containers has been eased now in the country. Special Secretary in the Logistics Division, Ministry of Commerce and Industry, Shri Pawan Agarwal informed this during media interaction today. He said that 58% additional exports have been handled in March (YoY). He added that Container Shipping Lines Association (India) (CSLA) informed that this was about 17-18% more than the level of March 2019( pre-Covid).
During a review along with Federation of Indian Export Organizations (FIEO) and CSLA on 15th April 2021, FIEO informed that due to coordinated efforts, the issue of shortage of containers has been almost sorted out, except some shortage of food-grade containers for export of tea/coffee/spices and is localized to Southern Ports (Kochi/Tuticorin/Chennai/Mangalore) which CSLA apprised is a long term issue due to import deficit at these ports. Further, CSLA said that the impact of Suez canal blockade is not much anymore. The bunching was handled well by Indian Ports mainly due to timely advance intimation, after the meeting of 26th March.
Close coordination is being maintained between shipping lines and exporters which has resulted in an excellent shared understanding of the situation and requirements and better planning by both sides. The fact that during March Indian exports were at a record level, even higher than the figures of 2019, indicates that the efforts have been fruitful.
The World Container Index (WCI) in March 2021 was 233% higher than a year ago. Non-availability of space in vessels calling on Indian Ports and delayed availability of certain destinations, particularly in East Africa, were other issues affecting trade.Congestion at major ports of the world due to COVID and an acute imbalance between exports and imports in India were largely the factors responsible. In recent months, a spurt in exports has been yet another reason. Following steps have been taken to ease the problems faced by exporters over the past few months:
(1) In coordination with Shipping lines, drive was taken to reposition empty containers in India on urgent basis. Consequently, 100,000 empty containers were repositioned on Indian ports from across the world by the Shipping lines.
(2) In early 2020, the quarantine period applicable on ships arriving from China was 14 days. After a detailed discussion with Ministry of Shipping, Ports and Waterways and Ministry of Health and Family Welfare, the quarantine period was reduced to the extent of 5-7 days (which is the time spent by seafarers on board in in isolation after departure from China). This reduced the lead time in repositioning of empty containers.
(3) In coordination with Customs, a special drive was launched for expedited clearance of unclaimed/uncleared cargo. Consequently, more than 2000 empty containers were released.
(4) Logistics Division facilitated the demand projections of empty containers and circulated it to the Shipping lines. This gave clarity to shipping lines on the actual demand for empty containers in India and plan accordingly. Logistics Division in partnership with FIEO, EPCs and Shipping Lines has also coordinated the development of a Portal for matching demand and supply of Containers. The first version of this portal has been made available on FIEO website and has received excellent response from exporters. The portal has been a significant contributor in planning supply of containers during March 2021.
(5) Facilitated close coordination between shipping lines (CSLA, MSC, Hapag-Lloyd), Container Train Operators ( CONCOR, GRFL, etc) on the one hand, and Exporters on the other hand (including FIEO, All India Sugar Trade Association (AISTA), Indian Sugar EXIM Corporation Ltd). Specifically, for the export of sugar, in a meeting held along with Ministry of Consumer Affairs and Public Distribution on 25th Feb 2021, the ports were advised to provide priority berthing to break-bulk carriers, so that while the container shortage is persisting, some off-loading through break-bulk transportation can be arranged. Railways in this regard offered to ensure unhindered supply of wagons.
(6) Indian Railways provided free movement of empty flats and empty containers for 71 days during March to May 2020. Currently a 25 % concession in haulage of empty containers and empty flats has been provided upto 30-4-2021. A 5% concession for haulage of loaded containers has also been provided from Sep 2020 till 30 April 2021. Stabling charges levied on container rakes has been waived off fully till 31 March 2021. With effect from April 1, 2021, the haulage charges of empty containers from port to hinterland have been reduced by 50% by CONCOR through a discount scheme. This is expected to result in reduction of overall shipping cost.
By early March 2021, the waiting time for availability of containers at ICDs and ports was down to a maximum of 2-3 days (booking date to container pick up date).At several terminals like Tughlaqabad, Dadri, Jaipur etc and terminals on Delhi-Panipat route, the figure is less than a day.
Blockage of Suez Canal for a few days in March 2021 had seriously impacted global trade. (Route used for Indian exports/imports worth US$ 200 Bn per year to/from North America, South America and Europe.) To meet with the situation proactively, mitigate/minimize the impact and to sustain exporter confidence, a Four-point plan was chalked out by the Government of India on 26 March, 2021. This included 1) Prioritization of cargo 2) Stability in Freight Rates 3) Advisory to Ports to prepare for expected bunching once the canal reopens 4) Re-routing decisions.
In order to improve availability of containers India is also targeting to manufacture containers domestically. CONCOR has already issued an order of 2000 containers to M/s BHEL, and Braithwaite and Co. Ltd. Discussions have been initiated with steel manufacturers for producing COR-TEN steel in India at competitive prices and with Railway wagon manufacturers/ BHEL/Private manufacturers DCM-Hyundai, Balmer & Lawrie etc. to set up production lines for indigenous manufacturing of containers.
Why we need to shift from linear to circular economy
The circular economy is one of the boosters for enhancing the economic growth as it led to minimum wastage.
As we all know the fact that the population is enhancing to a great pace and due to increase in the population, the demand and the requirements of the countries are also increasing each day.
Plastic will relentlessly seize our landfills, drifting in the oceans and defiling our bodies as long as we would attach ourselves to the 20th century’s linear kind of model of take make and waste. Nonetheless 21st century needs an alternative for plastic crises. As linear economy emphasizes on recycling which refers to the recirculating the toxic hazardous material, providing them another opportunity for infecting our ecosystem with poisonous repercussions. If the musings would remain intact with the saying that plastic is the only solution then it would definitely lead to generation of waste and proliferation of plastic.
The thing is that we have to go beyond the methodology of recycling and there is a need to construct framework for a credible circular economy. It would be primarily assisting to construct waste to biomaterial technology in order to curb with the predicament of climate with plastic and other waste. Apart from taking a packaging fee, these types of industries really require to get away from the carbon intensive chemicals to a protective materials production. It is a dire need to reduce the subsidies of particularly these kinds of industries, impose taxes on emissions.
Circular economy is a kind of technique through which the lifecycle of the product could be extended. It is a kind of model which entails leasing, sharing, repairing, reusing and refurbishing. Whenever the product attains the end of its life its material is retained wherever economy is possible so that maximum utility is possible. It could be optimally be utilized time and again. Additionally, it would enhance the value of the product. As contrast to the linear model this model relies on huge quantities quickly accessible material as well as energy.
What is the need to shift from linear to circular economy?
As we all know the fact that the population is enhancing to a great pace and due to increase in the population, the demand and the requirements of the countries is also increasing day day. But as it is quite evidenced that the resources are not proportionately equal to the population. This is the reason through which the environment gets influenced through the extraction of more and more raw material. Therefore, it also enhances the consumption of energy and CO2 emissions. Nonetheless, it is a need of smarter utilization of raw materials which would lower emissions of harmful gases.
The measures for instance prevention of the waste, eco-design and re -utilization could probably would protect the corporate’s money. Additionally, it would decline the total annual greenhouse gas emissions. Right now, the production of the materials we utilize everyday is nearly 45% of the total carbon dioxide emissions. The more we progress towards a circular economy it would provide several benefits which are as following:
ENHANCING THE ECONOMIC GROWTH
The circular economy is one of the boosters for enhancing the economic growth as it led to minimum wastage. Through the assistance of the same the countries could grow economically. As it has been evidenced that it led to additional 0.5% to the growth to the economy.
IMPROVEMENT IN THE SECURITY OF RAW MATERIAL
With the help of the circular economy the raw material could be secured in an improved manner as it includes the smarter use of raw material.
Reduction in the pressure to the environment:
The circular economy also helps us to reduce the pressure to the vicinity as it led to the optimum utilisation of the resources.
It has been concluded that there is a need for developing a roadmap for each country that should be followed very diligently. That should clearly take into consideration different measures for instance waste generation, land filling, and greenhouse gas emissions. By removing the plastic-based kind of pollution we can all create a community which is more safer, healthier and sustainable.
Cumulative value of India’s overall exports in April-March 2020-21 estimated at $493.19 billion
India’s export sector set to take off on the back of significant improvement in EoDB, creation of a plug and play investment/manufacturing environment, and launch of the PLI schemes across 13 sectors.
The Indian Economy has shown significant resilience amidst the global pandemic and trade shock that began to impact the global economy towards the end of 2019-20 and acquired catastrophic proportions in 2020-21. Secretary, Department of Commerce, Government of India Dr Anup Wadhawan today said during the virtual media interaction that the cumulative value of overall exports (merchandise & services) during April-March 2020-21 has been estimated at USD 493.19 Billion compared to USD 528.37 Billion during April-March 2019-20, registering a negative growth of (-) 6.66 percent. He added that it reflects a remarkable recovery over the course of the financial year after the huge downturn in April 2020 reflected in decline in merchandise exports by (-) 60.28% and services exports by (-) 8.92 %
Trade data for March 2021, the final month of 2020-21 reflects the build-up of a strong recovery in exports despite several challenges. The overall export (merchandise and services) for March 2021 is estimated at USD 52.20 Billion, registering a positive growth of 31.64 percent vis-à-vis March 2020. Merchandise exports in March 2021 grew by 60.29% as compared to March 2020, which was substantial even after factoring in the base effect. This was driven by healthy export growth in key sectors such as engineering goods (71.30%), gems & jewellery (78.93%), petroleum products (35.52%), drugs & pharmaceuticals (48.49%) and Organic & inorganic chemicals (46.50%).Merchandise Exports-other than POL and Gems & Jewellery had an even more impressive performance in March 2021 attaining a value of USD 27.42 Billion, as against USD 16.95 Billion in March 2020, an increase of 61.75%.
The cumulative value of merchandise exports during April-March 2020-21 has been estimated at USD 290.63 Billion compared to USD 313.36 Billion during April-March 2019-20, which is a negative growth of (-) 7.26 percent, which is fairly moderate given the prevailing global situation. If Gems & Jewelry and PoL exports, both involving very moderate value addition, are excluded, the growth in merchandise exports in 2020-21 was actually (+) 1% i.e. an increase over 2019-20, notwithstanding the Covid disruption. This reflects immense adaptability in our exporters in capturing new opportunities in sectors like other cereals, oil meals, rice, cereal preparations & miscellaneous processed items, drugs &pharmaceuticals, spices, fruits & vegetables, carpets, jute manufactures, ceramic products & glassware and organic &inorganic chemicals, while containing the downturn in other sectors in the face of huge challenges. The decline in export values in petroleum products and G&J also, predominantly reflected decline in global prices rather than volumes.
Petroleum products exports declined by $15.4 Billion y-o-y during FY 2020-21. This is a significant fraction of the decline in India’s total merchandise exports in FY 2020-21 of 22.7 USD billion. Export of Petroleum Products showcased a decline of (-) 37.3% YoY (-$15.4 Billion) during FY 2020-21. Share of Petroleum Products in overall exports also declined to 8.9%during FY 2020-21 as compared to 13.2% in FY 2019-20. Petroleum demand had been badly hit due to Covid-19 relatedlockdowns across the globe. Hence, the drop in exports was unavoidable during this period. Additionally, there has been a major decline in oil prices in the pastyear which has subdued the value of exports during this period. In this context it is mentioned that in Apr-Feb 2020-21, Pol export has recorded negative growth of (-) 42.8% and (-) 10.9% in value and quantity respectively over Apr-Feb 2019-20
Decrease in exports of diamond and other jewellery further dragged down overall exports and showed a decline of USD 9.9 Billion y-o-y during FY 2020-21, again a significant component in the overall fall of USD 22.7 Billion. Diamond and other jewellery registered a drop of 27.5% YoY (-$9.9bn) during FY 2020-21. Share of Gems & Jewellery in overall exports also declined to 9.0%during FY 2020-21 as compared to 11.5% in FY 2019-20. Further, Indian industry imports rough or unpolished diamonds fromother countries for finishing/polishing/cutting etc. Therefore, the import content is very high in exports of Diamonds and other jewellery resulting in low value addition
The commodities/commodity groups which have recorded positive growth during 2020-21 as compared to 2019-20 are Other cereals (219.13%), Oil Meals (87.91%), Iron Ore (86.78%), Rice (37.06%), Cereal preparations & miscellaneous processed items (21.16%), Drugs & Pharmaceuticals (18.07%), Spices (10.37%), Fruits & Vegetables (8.63%), Carpet (8.39%), Jute Mfg. including Floor Covering (8.29%), Ceramic products & glassware (6.02%) and Organic & Inorganic Chemicals (0.51%).
The overall trade deficit, taking merchandise and services together, for April-March 2020-21 is estimated at 12.74 USD billion as compared to the deficit of 77.76 US Billion in April-March 2019-20. The merchandise trade deficit between 2019-20 and 2020-21 declined from USD 161.35 Billion to 98.56 Billion
Dr Wadhawan said that prospects for a quick recovery in world trade have improved as merchandise trade expanded more rapidly than expected in the second half of last year. World merchandise trade volume is expected to increase by 8.0% in 2021 (Jan-Dec) after falling 5.3% in 2020 (Jan-Dec), as per the WTO. World Trade continues its rebound from the pandemic-induced collapse that bottomed out in the second quarter of last year.
The Covid period has revealed new opportunities for Indian food sector. There is a rise in demand in US, Europe, Australia, New Zealand, Israel, Palestine and Egypt. Enquires for fresh/ dehydrated garlic, spices (chilli, turmeric, ginger), seed spices (cumin, fennel), sesame seeds/oil, sugar (new demand from Sri Lanka) and groundnut have been received by the exporters. The demand for non-basmati rice from new buyers such as Malaysia and the Philippines is likely to boost exports in the coming months.
India’s dominance in the pharma sector has been reinforced with supply of critical covid related supplies to over 150 countries and rapid growth in exports during the Covid period.
This sets an excellent foundation for our export sector to take off on the back of significant improvement in EoDB, creation of a plug and play investment / manufacturing environment across various industrial corridors, and launch of the very substantive PLI schemes across 13 sectors.
Need to consider global pact on regulation of food tech: NITI Aayog official
‘Technology increasingly being controlled by private agencies and MNCs; global authority needed to ensure flow of such tech to developing nations for food safety and security.’
Expressing serious concern over the lack of proper global regulation on technologies affecting the food system, India is considering suggesting to the Food and Agriculture Organization of the UN to facilitate discussions on an international protocol or an agreement or a global authority on such technologies. “There are a lot of technological changes happening. In many cases, we do not have the right kind of regulation to ensure proper use of such technologies. Should we be asking the Food and Agriculture Organization of the UN to help prepare some global protocol on whatever technologies are coming? So, could we or should we have some kind of global agreement on these or should a global authority be advising on these,” Professor Ramesh Chand, Member, NITI Aayog, said. He was speaking at a webinar organised by Research and Information System for Developing Countries (RIS) and NITI Aayog on ‘National Consultation on Issues Before the UN Food Systems Summit’.
The event was held in the backdrop of the UN announcing that a Food Systems Summit (FSS) will be held in September 2021 in conjunction with the UN General Assembly. This Summit has assumed wider significance in the context of ongoing COVID-19 pandemic which exposed the fragilities in global food systems and their vulnerabilities to external shocks. Prime Minister Narendra Modi is expected to deliver his address during the summit. The 2021 FSS event has outlined five cross-cutting Action Tracks such as: Ensuring Access to Safe and Nutritious Food; Shift towards Healthy and Sustainable Consumption Patterns; Boosting Nature Positive Production at Sufficient Scale; Advancing Equitable Livelihoods; and Building Resilience to Vulnerabilities, Shocks and Stresses.
In his valedictory address, Jayant Sinha, Member of Parliament and Chairperson, Parliamentary Standing Committee on Finance drew upon contemporary challenges of agriculture livelihoods, and the emerging transformative changes and new institutional mechanisms in India for value creation through modern food processing system, with equal emphasis on sustainable food ecosystem. He duly stressed on the importance of access to markets and investments in this sector.
Speaking on the occasion, Professor Sachin Chaturvedi, Director-General, RIS, said given the food security concerns of the developing world, India has volunteered for Action Track 4 (that is related to advancing equitable livelihoods). He said the Indian government, through its food security welfare scheme, Pradhan Mantri Garib Kalyan Anna Yojana, reached out to the masses including the migrant labour and ensured their food security during the COVID-19 pandemic.
Experts at the meeting spoke about the inequities being perpetrated in the global agriculture system with developed countries trying to formalise their first mover advantage in the World Trade Organization negotiations by not agreeing to reducing their trade distorting subsidies, and instead have not only brought in non-tariff barriers in the form of sanitary and phytosanitary or SPS measures but are also putting pressure on the developing countries to cut tariffs. Mr. Pawan Kumar Agarwal, Special Secretary (Logistics), Ministry of Commerce and Industry, though trade issues were only a small subset of the UN food systems discussions, they should be now highlighted from the perspective of hunger, safety and livelihood. There is also a need to advance the work on revisiting global and regional arrangements of food safety so that they are looked at from the objectives of the UN FSS, he said. The webinar addressed various issues related to ‘livelihood security and impli cations for trade in agriculture’ and ‘equitable access to technology for sustainable food systems.’
India opposes rich world’s efforts to hoard Covid vaccines; seeks support for its proposal at WTO on its efforts to get TRIPS waiver to vaccines
New Delhi also called for greater support to its proposal along with South Africa at the World Trade Organisation to waive the implementation, application and enforcement of certain sections of the TRIPS Agreement (Agreement on Trade-Related Aspects of IPRs) ‘in relation to prevention, containment or treatment of Covid-19 until widespread vaccination is in place globally, and the majority of the world’s population has developed immunity’.
India on Friday vehemently opposed ‘vaccine nationalism’ – or the attempts by some developed countries to hoard vaccines and not sharing them or the related Intellectual Property Rights (IPR) with a view to maximise profits from not just COVID-related vaccines, but also from therapeutics and diagnostics.
New Delhi also called for greater support to its proposal along with South Africa at the World Trade Organization (WTO) to waive the implementation, application and enforcement of certain Sections of the TRIPS Agreement (Agreement on Trade-Related Aspects of IPRs) ‘in relation to prevention, containment or treatment of COVID-19 until widespread vaccination is in place globally, and the majority of the world’s population has developed immunity’.
Sanjay Bhattacharyya, India’s BRICS Sherpa and Secretary (Consular, Passport and Visa and Overseas Indian Affairs), Ministry of External Affairs, expressed serious concern over ‘vaccine nationalism’ and said India and South Africa have repeatedly asked WTO members, especially from the developed world, to agree to provide IPR waivers to ensure that the developing world was able to access the vaccines. Shri Bhattacharyya said India has helped the global community by delivering 64 million doses of vaccines to more than 80 countries, and has shown the willingness and capability to shoulder greater responsibility to not only be the ‘pharmacy of world’, but also be a reliable provider of medicines and healthcare worldwide. He was delivering the inaugural address at the two-day BRICS Civil Forum 2021 held in a virtual format and organised by the think-tank RIS. The official also called for reforms of multilateral bodies including the UN, IMF, World Bank and the WTO so that they can respond better to global challenges including pandemics, digital divide, climate change and terrorism.
In his keynote address, Shri P. Harish, India’s BRICS Sous Sherpa and Additional Secretary (ER), Ministry of External Affairs, said the multilateral bodies have not lived up to the expectations, adding that the edifice of the international system has been weakened and undermined. He said BRICS countries should work to strengthen the international governance architecture and enhance the capacity of WHO, IMF, World Bank and the WTO to make it more inclusive, representative and democratic by enhancing the participation of developing countries to effectively address various challenges confronting the world today.
Professor Sachin Chaturvedi, Director-General, RIS, said the priorities for BRICS during the year include ‘reformed multilateralism’, ‘technological and digital solutions for Sustainable Development Goals’, ‘enhancing people-to-people cooperation’ and ‘counter terrorism cooperation’. Dr. Mohan Kumar, Chairman, RIS, said there was a need to study how the BRICS countries have reacted to the COVID-19 pandemic including sharing best practices, adding that it would be useful to look at the strengths and weaknesses of BRICS countries in this regard to be better prepared for future global health crisis-like events. He said the BRICS bloc must also cooperate on finding common solutions to address the widening inequalities within the BRICS countries, especially following the pandemic outbreak.
Dr. Victoria Panova, Managing Director, Russian National Committee on BRICS Research and Vice President for International Relations, Far Eastern Federal University, Russia, presented the report of BRICS Civil Forum 2020, and mentioned about initiatives including BRICS vaccine research centre and a program to stimulate green investments.
Amb. Pavel Knyazev, Russia’s BRICS Sous-Sherpa, said the COVID-19 pandemic has provided opportunities for BRICS countries to not only consolidate their efforts so far but also to collaborate for a better future. Amb. Ben Joubert, South Africa’s BRICS Sous-Sherpa, said BRICS countries need to address the common challenges of poverty, inequality and unemployment, and push the development agenda in various international fora. Amb. Amar Sinha, Distinguished Fellow, RIS also spoke on the occasion.
BRICS has shown resolve through the creation of new financial mechanisms under the BRICS, viz. the New Development Bank and the Contingent Reserve Arrangement. Arguably, organisational and decision-making parameters in these institutions are more democratic than that of the Brettonwood institutions. Similarly, BRICS needs to lend stronger voice towards reviving the WTO and retaining its development centrality.
The event had sessions including on ‘reformed multilateralism’, ‘development finance and global public goods’ and ‘pandemic response, partnership and role of civil society’. India assumed the BRICS Chairship in 2021, at a time when BRICS is celebrating its 15th anniversary. Under the theme “BRICS@15: Intra-BRICS Cooperation”, India’s approach is focused on strengthening collaboration through “Continuity, Consolidation and Consensus”.
The ten themes for BRICS Civil Forum 2021 include reformed multilateralism; development finance and global public goods; pandemic response, partnership and role of Civil Society; quality of economic growth and inclusion; wellness, health and traditional systems of medicines; BRICS economies and women participation; future of education and skills – new paradigms of learning in BRICS; ‘entitlements to entrepreneurship – role of technology’; people’s participation in sustainability – BRICS Experience; and dialogue on society and peace building. RIS is planning to organise a series of events on thematic dialogues, starting with the Curtain Raiser on 16-17 April 2021 and ending with the final event in July 2021. (ENDS).
Opinion6 months ago
South Block’s mistakes will now be corrected by Army
Sports9 months ago
When a bodybuilder breaks Shoaib’s record
News12 months ago
PM Modi must take governance back from babus
News10 months ago
Chinese general ordered attack on Indian troops: US intel report
Sports9 months ago
West Indies avoid follow-on, England increase lead to 219
Spiritually Speaking8 months ago
Spiritual beings having a human experience
Legally Speaking11 months ago
Law relating to grant, rejection and cancellation of bail
Defence10 months ago
GALWAN: CHINA’S INFORMATION WAR