Make globalisation more inclusive: FM

Age of prosperity passing millions by, Chidambaram tells West.

India has asked the developed nations to implement their part of obligations under the WTO, reduce agriculture subsidy and provide developing countries access to their markets.

Speaking on 'India and Globalisation' at the Foreign Policy Centre, an European think tank with a global outlook, in London on Friday, Finance Minister P Chidambaram said: "We abide by every obligation under the WTO. Yet we are denied of market access (by developed countries). A lot must change. There is a lot of talk but very little action."

He said: "India accepts and willingly embraces the imperatives of globalisation. We do so in our self-interest. The real question is the terms of engagement in globalisation.

"As of today, the terms are heavily weighted in favour of the developed countries. Millions of people in the developing countries, and in the least developed countries, watch in silence, and with a growing sense of bitterness, that the age of prosperity is passing them by. This does not augur well for either globalisation or stability."

Asking the developed countries to review the process of globalisation, Chidambaram said: "I urge you to renew the process by making it more inclusive, more just and more equitable."

Chidambaram, who will represent India as an invitee at the two-day meeting of the G-7 nations beginning on Friday, said the Foreign Policy Centre was well placed to take a leadership role in this regard and India would be very happy to work with it in areas of mutual interest.

Along with India, the G-7 has invited China, Brazil, Russia and South Africa for the meeting.

The finance minister indicated that his efforts would be to broad-base the tax collection in the country. Last time, he had succeeded in increasing the number of tax payers, from 1.2 million to 25-30 million. "We have to raise it to 50 million," he said.

To a query, Chidambaram said the previous National Democratic Alliance government believed in privatisation being an end in itself.

"Our coalition does not believe in the privatisation for the sake of privatisation. Our policy is that the public sector will occupy an important place in the Indian economy and the profit-making public sector units will not be privatised. They can go to the market and raise funds. Only loss-making units will be sold off."

Asking the developed nations to open up their markets to products from the developing countries, Chidambaram said: "My farmer must be able to export his products to the world market. That is not happening. We want market access. We want the developed countries to comply with WTO obligations."

Observing that globalisation meant different things to different countries, and within a country, too, different things to different people, he said: "The international architecture, comprising the UN, the World Bank and the IMF, has served the globe reasonably well in the last 50 years. As we face new kinds of complex challenges in the future, we need to find new ways of organising the international architecture in response to the emerging poles of economic strength on the plane."

Reeling off statistics, the finance minister said India's GDP, at market prices, is nearly $800 billion per year. "Exports of goods and services amount to $133 billion a year. Net capital inflows average about $19 billion annually," he said.

He also said a new aspect of India's globalisation is "outward foreign direct investment (FDI)" by Indian companies, which were now enormously confident, and were in the process of becoming multinational corporations.

Chidambaram said: "In 2003-04, outward FDI from India amounted to a sum of $1.4 billion -- a small step by world standards, but a giant leap for India.

"In my view, this is only the beginning. Indian companies are hungry to go abroad, acquire manufacturing firms as well as brands, and position themselves at the doors of new markets. For the first time, Indian companies are seen as potentially major players in the world market."

The finance minister said the traditional face of Indian business had changed dramatically in the past few years.

"Indian firms are no longer only seekers of foreign technology or producers of staple goods or providers of low-end services. Their engagement with the world has acquired new dimensions."

Even in the traditional engagement in goods and services, India has become the leading nation in software services -- TCS, Infosys and Wipro are acknowledged world brands.

"India is also a major hub for manufacturing and export of manufactured products, especially in sectors such as automobiles, auto parts and accessories, leather goods, textiles, pharmaceuticals, petroleum products and machine tools. And if you will add handicrafts and hand made products, flowers and herbs, the traditional engagement with the world is quite impressive."