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Soumya Kanti Ghosh says RCEP ‘no pact for India’, Ajit Ranade calls the move ‘defensive’

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No pact for India 

Soumya Kanti Ghosh | Group Chief Economic Advisor, State Bank of India

The Indian Express 

Ghosh applauds India’s decision to not join RCEP (Regional Comprehensive Economic Partnership) and writes that it is a “good thing” that “India still has some unresolved issues and this has resulted in it holding back its decision to join the RCEP”. India has decided to “keep its self-interest at the forefront” with this move, he adds.

He notes that “emerging economies” are now in “focus for growth opportunities” and a “significant increase in South-South trade is turning established trade patterns and practises on their head”, and thus it was “crucial” that India becomes a part of the RCEP on its own terms.

There were fears that the “imports of cheaper electronic and engineering good from China could increase further post the signing of RCEP” and that may have had a “negative impact on the manufacturing sector”. Further, an area of “hard bargaining for India is our unfulfilling want for exemptions from the Ratchet obligations”, which implied that a country could not raise tariffs once the pact came into effect.

In conclusion, Ghosh argues that India’s “main requirement is that of a balanced outlook which is a win-win for all” and its “current tough posturing is perfectly justified”.

A rights-based framework to theorise poverty

Neera Chandhoke | Former Professor of Political Science, Delhi University

The Hindu 

Chandhoke questions the moral status of the global poor in poverty reduction schemes. She notes that the “global justice debate” has been “extremely exclusionary” because it divides the “world into the ‘distant needy’ in the global south and affluent people living in the West who owed the global poor” over guilt “wreaked” by global institutions.”

She argues that “poverty cannot be abstracted from society” and that it is a “product of and a signifier of a deeply unjust and unequal society”. The poor are not just “deprived of access to material benefits, they are [also] socially marginalised”.

The way to “theorise the moral status of the poor” is to imagine human beings “as bearers of the right to a fair share in the collective resources of society”. A fair share in the resources of society “can be conceptualised as ownership of enough resources to allow human beings a reasonable chance of living decent lives”.  Finally, Chandhoke calls for the need to introspect “whether our task as democrats ends with the proposition that people should not be poor”.

Domestic partisan politics must not affect the Kashmir challenge 

Kanwal Sibal | Former Foreign Secretary

Hindustan Times 

Sibal writes that the “manner in which the Opposition” has “run down the visit” of European MEPs to Kashmir shows “how we can be our worst enemies”. He suggests that “if the Opposition cannot mute its criticism”, a “responsible position should integrate the external dimension of an enduring national problem”.

Most “arguments against the MEPs’ visit have little merit”, argues Sibal. He questions whether the critics are suggesting that “we cease all international engagement on our internal decision on Article 370” because not doing it will internationalise the issue. The “shabby way” with which the MEPs have been treated was “diplomatically most regrettable as it was done to destroy their credibility”.

Sibal maintains that the MEPs’ visit was “not to go into the constitutional and political issues involved, but was limited to assessing the human rights situation and the terrorism issue”. He calls for the need to “meet a national challenge collectively, without subjecting it to partisan domestic politics”.

RCEP could still act as a trigger for domestic reforms 

Ajit Ranade | Economist and a Senior Fellow at The Takshashila Institution

Mint

Ranade comments on India’s decision to stay out of RCEP for the time being. The decision is in tandem with India’s classic “defensive stance” when it comes to trade negotiations so as to not get hurt by competition, he writes. Rao adds that India “cannot forever use subsidy schemes to compensate for a lack of cost competitiveness and innovation-led value addition”.

Ranade also assesses how India fares in comparison to neighbouring countries in the Association of Southeast Asian Nations (ASEAN). An “impartial third party review of India’s free-trade agreement” is pending, but its trade deficit with almost each of its members, barring Singapore, is hard to ignore, he explains. Overvaluation of the Indian rupee is another problem, he adds. A domestic reform agenda for exports would be a good step forward, recommends Ranade.

Not PSUedo, Get real 

Sandeep Parekh | Managing partner, Finsec Law Advisors, Mumbai

Economic Times

Parekh lays out a “multi-step process for divestment” that the second Modi administration should consider in the strategic sale of public sector undertakings (PSUs). Despite “privatisation [being] a bad word”, the Modi administration is keen on “pushing the exit of government from almost all businesses” and has the “political spine” to do it, he writes.

Parekh recommends PSUs first “comply with the law on minimum public shareholding” and “improve corporate governance by adding credible people on the boards”. Divestment should also be “time-bound” to give domestic and international funds enough time to “keep their powder dry and apply at the appropriate time”, he writes. Setting the terms of the sale today will help improve its current value which could significantly “drive both demand side and supply side of the economy”, he adds. Risks would entail litigation traps and buyers’ problematic “take-it-or-leave-it approach”, he writes.

Should corporate taxes finance anti-poverty programmes? 

Govinda Rao | Member, Fourteenth Finance Commission & former Director, NIPFP

Financial Express

Rao points out that the “costs of tax concessions in terms of revenue foregone and distortions are high [and] their efficacy in achieving the professed objective” of reviving the economy “is doubtful.” He also quotes Nobel Laureate Abhijit Banerjee who reportedly said that reducing taxes to boost investment is a “myth created by businesses”.

The “international mobility of capital” presents a challenge for taxing it at high rates as “flight of this capital in response” could lead to loss of jobs, he explains. Rao also argues that highly progressive tax systems come at a “cost of economic efficiency”. That is why it’s not surprising that after celebrating the corporate rate tax cut, the stock market “shed over two-thirds of the gains” later on. While such cuts may not solve the slowdown, they “would check outflow of Indian investments, besides attracting inflow of some additional investments”, he writes.

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