India to work for a successful conclusion of Doha round

LONDON: India has said it is committed to working for a successful conclusion of Doha round of WTO talks despite the setbacks witnessed in the recent months.

"We remain focused on the larger goal of having a multi-lateral trade agreement under the WTO," Finance Minister P Chidambaram said delivering a talk on 'India: The Land of Growth Opportunities' at London School of Economics here on Monday evening.

Ministers from key WTO member-countries had agreed in Davos last week to resume the Doha round of trade negotiations and would be meeting again within the next few days in Geneva.

The talks were suspended in July last year after developing countries led by India and Brazil rejected US' offer for cutting its agriculture subsidy.

"Despite the setbacks witnessed in recent months, we are committed to working for a successful conclusion of the Doha round," Chidambaram said.

Giving a graphic picture of the rapid economic strides made by the country during the last three to four years, he said: "India is poised to witness an investment boom that will take the Indian economy to an even higher growth path."

The current year, 2006-07, has been good so far. The first half has registered a growth rate of 9.1 per cent, with the second quarter registering 9.2 per cent.

"I am reassured by the indicators available to us that growth in the second half of the current fiscal will also be close to 9 per cent.

"If these indicators turn out to be correct, the GDP growth rate for the current year will be the highest since reforms were initiated in 1991.  The International Monetary Fund (IMF) seems to share this assessment," he said.

Chidambaram said the government had taken a number of steps to maintain the growth momentum.

Foremost among them was the need to observe fiscal prudence and discipline.

Conceding that the most formidable challenge was in the agriculture sector, which witnessed an average growth of 2.17 per cent in the six years since 1999-2000, the minister said, "this is a deceleration from the average rate of 4.68 per cent witnessed in the 80s and 3.16 per cent witnessed in the last three years."

To salvage the situation, a multi-pronged strategy has been devised that includes rapid expansion of irrigation facilities, extension of credit, introduction of new technologies, offering remunerative prices for farm produce and supplementing farm income with incomes from allied activities such as dairy, inland fisheries, poultry and animal
husbandry.

Another important challenge, he said, was in human resources.

"No doubt, the size of our working age population will continue to grow until the year 2040 and we will enjoy a demographic advantage until that year. Nevertheless, it has been estimated that we will face a severe shortage of skilled workers unless we expand capacity and improve quality in our schools, colleges and vocational training  institutions," he said.

Therefore, the government was in the process of expanding capacity in all institutions of higher education by 50 per cent over the next three years.

Chidambaram noted that the fiscal side too had witnessed many reforms. "Tax rates are stable and moderate. Customs duties have been brought down to nearly ASEAN levels. In 2005-06, state governments were persuaded to switch over to the value added tax (VAT). Buoyed by its success, we have announced our intention to introduce a nation-wide goods and services tax (GST) with effect from April 1, 2010," the Finance Minister said.

Conceding that the Achilles heel of India's growth story was physical infrastructure Chidambaram said, "we recognize the need to provide world class infrastructure in order to meet the requirements of a fast growing economy. We are therefore employing more than one model to build infrastructure on an ambitious scale."

Chidambaram urged young NRIs to invest and come back and work in India and become part of the development of the country.

Later, speaking at the Golden Jubilee celebration of the UK Operations of Bank of Baroda at the Grosvenor House, the Minister said "In the current year the growth rate is nearing 9 per cent. We must maintain and improve upon it and I have no doubt about it in my mind."

The Governor of Bank of England Mervyn King and Deputy High commissioner, Ashok Mukherjee were the Guests of Honour at the function. The function was also attended by British Ambassador for Overseas Business Lord Swraj Paul, Labour MP
Pyara Singh Khabra and a large number of leading NRI and British businessmen and industrialists.