1. On Need to boost exports: With global demand booming, the Centre must act faster to rev up export growth engine
Context: The Centre has notified RoDTEP Scheme Guidelines and Rates (Remission of Duties and Taxes on Exported Products). The scheme for zero rating of exports will boost our exports & competitiveness in the global markets .
- The rules and rates based on which exporters can claim rebates on taxes paid on their outbound cargo.
- It took nearly eight months to come up with these critical details after the scheme. The Prime Minister Narendra Modi’s call to scale up exports to $400 billion this year helped expedite the disentangling of inter-ministerial red tape over the RoDTEP scheme.
Importance of the Scheme
- Addressing International Challenges: A new scheme was necessitated to replace the erstwhile merchandise exports incentive scheme(MIES) after the WTO dispute settlement body held it was not compliant with the multilateral trade watchdog’s norms. The Government is confident that the new scheme, Remission of Duties and Taxes on Exported Products (RoDTEP), and effective from January 1, is WTO-compliant.
- The earlier MIES: It granted rewards upon exports. the countries have been categorized into 3 Groups and the rates of rewards under MEIS range from 2% to 5%. High level of reward for items with high domestic content and value addition.
- Now it has been given the form of tax rebate instead of additional reward, under the new scheme;
- Covers Wide variety of exports: Covering 8,555 tariff lines, or roughly 65% of India’s exports, the remission rates now notified, range from 0.5% to 4.3% of the Freight On Board value of outbound consignments.
- Addressing Domestic inflation due to excessive exports: For some goods, there is a cap on the value of the exported items. Steel, pharmaceuticals and chemicals have been excluded from the RoDTEP.
Concerns:
- Inadequate rebate on some items: Some sectors are concerned about the rates being lower than expected, while engineering firms are worried that taxes on key raw materials are not adequately offset. Fine-tuning may be needed, but a vacuum has been plugged at last.
Way Forward:
- A new foreign trade policy, a couple of smaller export-related schemes and a mechanism to fork out the last two years’ pending dues under the earlier export incentive programme are expected by September. This urgency of boosting exports to $400bn must not be lost.
- Having opted out of RCEP, India is looking to re-ignite free trade pact negotiations with Australia, the U.K., the EU and the U.S.
- Improving Global inflation & Boosting export: The global economy is on the cusp of one of its strongest rebounds as COVID-19 vaccination drives cross a tipping point in many advanced economies.
- India-an alternative to China: As countries look to go beyond China to service domestic consumption demand, India needs to aggressively step up to the opportunity.
Conclusion – Recovery Path: the second wave’s damage on the economy is less severe than the wreckage from last year’s national lockdown, domestic recovery is still feeble and uneven. Consumption may see some pullback on pent-up demand as well as the impending festive season, but its sustainability is fragile. Till that firms up, private investments are unlikely to take off. That leaves public capital spending and exports as the two growth engines with feasible firepower to aid the recovery momentum. There is no time to dither on either of these fronts.
2.The Government’s consistent ‘no data’ declarations on important issues are a critical part of a larger political project
Context: There is mounting evidence to show that either the Government has ‘no data’ about issues that show it in a bad light, or with its ‘alternate facts’, the answer is zero. Government prevents data from getting released that shows it in a bad light.
Examples of such a trend:
- Migrant Data: A World Bank report concluded that 40 million migrant jobs were impacted/lost in India in April 2020. But when the Government was first asked how many migrants had lost their jobs, the answer was that it had no data. When asked in September 2020 on how many frontline health workers had lost their lives during the pandemic, the then Health Minister announced that there was no data.
- Consumer survey: Ministry of Statistics and Programme Implementation(MoSPI) decided not to release the results of the all-India Household Consumer Expenditure Survey conducted by the National Statistical Office(NSO) during 2017-2018 over ‘data quality issues’. The leaks from the data had suggested a noteworthy slump in consumption expenditure, an ominous proposition that showed this for the first time since data collection had started in 1972-73.
- COVID Deaths & Manual scavanging: The Government told Parliament in this monsoon session that the number of deaths caused by manual scavenging were not available.
- On the lack of oxygen claiming lives in the second wave of COVID-19, the Government said it had no information.
- On the economic loss caused due to Internet shutdowns, in which India has the world record for the most by any democracy, the Government said it had no information.
- On a parliamentary question on vaccine shortage, clear as day with a number of inoculation centres shutting down due to no doses, the Union Minister of State for Health declared in Parliament (written reply to the Rajya Sabha) on July 20, that there was no shortage of vaccines.
Importance of Data:
- Brings certainty about the economy: It can be safely assumed that the popular American dictum, “In God we trust; all others must bring data”.
- For Private Players: International organizations as well as private entities rely on them to arrive at their own estimates for a country’s growth trajectory and economic potential. These estimates help them make decisions related to investments and trade.
- Data-driven policy & schemes: India can analyse data before implementation of scheme to better define focus areas and objectives.
- High Marginal returns: For every cost of expenditure done on analysis, greater benefit is achieved in terms of policy outcome. For example – price discovery mechanism under e-NAM benefits millions of farmers.
- Responsive policy: Data driven policy have an opportunity to change with the changing data.
- Resource allocation efficient: Resources are deployed where they are needed.
- Citizen-centric Governance: Government can plan targeted policies on health and education.
- Curbing Leakage: Such as in taxation, subsidies etc
Reasons for such an attitude:
1. Issues of Image: If the Government were to acknowledge any data, even if these were highly discounted numbers, it would be tantamount to entering the ring and opening itself up to scrutiny as being accountable for the mess and deterioration in the state of affairs. Failure by the Government would imply failure of this centralised machine that continually claims credit.
2. Accountability Bounced to States: To deflect accountability to the only other unit of power that continues to stand and challenge the Centre — and that is State governments. For example “health is a State subject.” There was no data on deaths due to ‘no oxygen’ because States did not give the data.
3. Evasion of responsibility and accountability, why ‘no data’ is consistently maintained is that it allows regimes to rewrite the story of the times. Recently, crucial health data from the National Health Mission’s Health Management Information System went missing. It was only after data-watchers made a fuss that the data on the website was restored.
Challenges in this Regard:
1. Widening information gap: Information is power and a lack of information is the absence of power. There is a gigantic and growing information gap between the state and citizens. The state is building the largest ever technology-driven structure ever built by India for identification under Aadhaar, which wants biometrics before poor people even get their food grain rations. While it is trying to maintain an effective ‘no data’ position on the biggest snooping revelations that an international consortium has exposed globally, after the National Security Agency (NSA) revelations in the United States by Edward Snowden. The asymmetry of power can only be sustained by keeping citizens in the dark while increasing the rulers’ reach to know everything about everyone else.
2. Challenge before citizens: Even if data doesn’t show, eventually, lived experiences of people, those whose kith and kin died due to lack of oxygen, or of those who died of COVID-19 begging for medical aid, will have to challenge the Government narrative
Conclusion: Right to Information It is a long road, but good and truthful information is the very basis of the quality of democracy. It matters to fight this fight.
