The upcoming Nairobi Ministerial Conference (MC) of the WTO may not produce any substantial achievements given the trends of pre-MC meetings. Usually preparatory discussions are conducted by members. There are groups within WTO just like-minded formations on each issue. Current trends on trade discussions before the Nairobi MC show that agricultural trade liberalization continues to be the prime area of conflict. There are several pressure groups in agricultural trade. The G33, Cairns Group, EU and the USA are the leading ones. Reports indicate that the G33, including India has come with a hard stand on the use of Special Safeguard Duties. G33, which is also called &
India has demanded governance reform of the World Bank (WB) by raising the shareholding by the developing countries at the Plenary Meeting of the WB-IMF Development Committee. The World Bank is facing fund shortages to implement its ambitious development programmes including climate financing and realizing the Sustainable Development Goals. Development Committee is the ministerial-level forum or decision making body of the World Bank Group and the IMF together, for intergovernmental consensus-building on development issues. India has a multi country representation as the Finance Minister represented a constituency consisting of -- Sri Lanka, Bangladesh and Bhutan besides India
The much anticipated biggest rules in international taxation- the OECD designed and G20 promoted BEPS (Base Erosion and Profit Shifting) Project is coming into the final stages. World’s leading finance ministers at the leadership of the G20 agreed on Friday to create international and domestic laws for taxing profits; giving warning to MNCs that they should end tax avoidance practices. BEPS project is a set of international tax rules proposed to counter the widespread tax avoidance practices by big MNCs. The companies use tax loop holes, concessions and Double Taxation Avoidance Treaties (DTATs) to escape from taxation. This has frustrated governments and more than that, cit
The mega trade bloc that the world was continuously talking on during the last few years – the Trans Pacific Partnership (TPP) is going to be materialized. The New York Times has reported that the Obama administration and the partnering countries have reached consensus on TPP. If implemented, the TPP will be the largest trade bloc in recent history, comprising 40 per cent of the world GDP in twelve countries, but remarkably excluding China. The TPP is a WTO plus trade alliance that aims to liberalise trade to advanced level between the US and eleven other members of the group. Besides economics, the TPP bears considerable value as it is considered as an alliance betwee
When the world’s biggest exporter -China has devalued its currency to stimulate export and growth, there is little option for other EMEs. They also have to produce devalued currencies to remain competitive in the international market. At the same time, the EMEs have to evade any potential currency crisis. Declining exports and evading foreign investors may make currencies double weaker. Already, fall in commodity prices are causing currencies of many EMEs, especially that of Brazil and Turkey weaker. Thus, policy makers in EMEs have to carefully balance measures to make currencies competitive at the same time by avoiding currency crisis. For India, it is difficult for
Chinese equity market continued to fall today despite the rate cut stimulus package extended by the People’s Bank of China yesterday. Leading index, the Shanghai Composite Index (SCI) fell by 1.3 %, which is a smaller dip compared to near double digit fall registered on the previous day. For the first time in this year, the SCI fell below 3000 mark and closed at 2927. Yesterday, the PBOC (People’s Bank of China) has cut its policy rate by 25 bps and the reserve ratio by 50 basis points. The continuing decline in stock prices indicates that the market is in an auto correction mode in the context of falling GDP growth. Stock prices that doubled in the last one year are
The People’s Bank of China has made a decisive cut in interest rate to arrest the free fall in the equity market. Central bank’s move came after the Shanghai Composite Index recorded third day steep fall with stock prices coming down by 7.5% today. For the last three days, the SCI has lost 20.5%. Always there is inverse relationship between stock prices and market rate of interest. Cutting the interest rate will make equities more attractive. This is what the PCB aims in its indirect way to support the market. It is expected that interest rate cut will make bank loans cheaper and will provided adequate liquidity in the stock market. The rate cut may encourage inv
The biggest crisis after 2008 has reached. From Japan to US, financial markets and commodity prices have crashed down by the latest turn of faults in Chinese economy. Leading the scoop in stock markets, the Chinese Shanghai Composite Index has fallen by 8.5%; its biggest fall since 2007. Stock markets in Europe, US and Asia- all have recorded value collapse in response to the negative news from China. Over the last one month, the Chinese economy was showing symptoms of crack. Stock market value has come down by nearly five percent on many trading days. Worst is that every official attempt to arrest the market fall had failed. Financial markets are reading that China ca
In a reward maximizing move, China has made its official exchange rate equal to that of the market exchange rate. The result of aligning the two exchange rates was that the Yuan has undergone devaluation of around three and a half percent over three days. Of course there are two interpretations for the Yuan devaluation- one by China and the other by the rest of the world. The financial world has assessed Beijing’s move as a devaluation effort to make export gains. Many analysts have described the step as currency war. Devaluating domestic currency increases exports at the same time decreasing imports. Obviously, the Chinese economy is undergoing a tough and unprecedent
China has to wait for one more year to include the Renminbi under the IMF’s SDR basket. A decision on this has been taken by the IMF on Tuesday, indicating that the Fund will introduce any change only by September 2016. The SDR (Special Drawing Rights) is the reserve asset of the IMF and its value depends upon a basket comprised of the four important global currencies- the US Dollar, the Euro, British Pound Sterling and the Japanese Yen. China has been insisting on every global front that the IMF should reform the currency basket by including its currency – the Renminbi. Inclusion of Renminbi is an indicator of the rising status of the Chinese economy and a big
Dictionary on Indian Economy
- Logic of withdrawing Rs 1000 and Rs 500 notes
- Raghuram Rajan: The Gladiator returns to Chicago
- Why the GST reform is transformational?
- Good intention but poor thinking - what troubles demonetization?
- India Black Money Report: CBI underestimates black money at Rs 25 lakh crore
- High interest rate rather than inflation is the macroeconomic problem for India right now
- Japan’s first trade deficit in 30 years is part of the Global Shift
- Why we need an emergency monetization plan as well?
- Arvind Subramanian rocks with 'Chakravyuha' in Economic Survey
- NREGS: give respect to the tax payer’s money