Institutional setting for trade policy formulation, Macroeconomics

Institutional Setting for Trade Policy Formulation:

While the Ministry of Commerce has the main responsibility of formulating India's trade policy, it also seeks policy inputs farm its various autonomous bodies such as Export Promotion Councils, Commodity Boards, IIFT, FIE0 to boost exports.  Along with its ritual of Export-Import (Em) Policy, the Central Government Budget also announces certain policy measures impacting upon India's trade in particular and external sector in general. EXIM Policy over the years was an annual feature of the Ministry of Commerce, but in 1985, a three yearly EXlM Policy was introduced to provide a definite focus to the trade sector.  In post-reform period, this policy was replaced by a five yearly policy in March 1992 (EXIM Policy 1992-97) to impart greater stability and carry forward the process of trade liberalisation.

Another milestone in institutional innovation in early 2002 was the government's unfolding of its Medium Term Export Strategy (2002-07). This document provided a vision for creating a stable policy environment with indicative sector wise target, with a mission to achieve 1 percent of global trade by 2007. In the same year, the new EXIM Policy (2002-07) was also announced, which seeks to achieve an environment free of restrictions and controls. Synergy between these policies/strategies is expected to realise India's strong export potential and enhance the overall competitiveness of its exports. Further, in August 2004, the government announced a comprehensive  Foreign Trade  Policy 2004-09 (FTP 2004) with the basic objective to double  India's share of global merchandise trade by 2009 and to make exports an instrument of growth and employment generation.

Considering exports as a national priority, the Finance Ministry also constituted Expert Committees on tax reforms, tax administration, customs tariffs in post-reform period. After the Tax Reforms Committee headed by Raja. J. Chelliah  and  its  recommendations  concerning  tariff rates  and  their dispersion announced in 1992, another committee known as Finance Ministry Task Force  (Kelkar Committee)  on indirect taxation in 2002 suggested  reforms in areas  related to customs  tariffs,  rationalisation of  export  promotion schemes, trade facilitation and other changes in tax administration.

 

 

Posted Date: 11/9/2012 4:37:23 AM | Location : United States







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