The Left parties have stepped up their opposition to the lifting of import restrictions and have asked the government not to bow to World Trade Organisation (WTO) pressure. The countdown has begun for the World Trade Organisation (WTO) meeting to phase out Indias quantitative restrictions on imports.
The Left parties want the government to argue the case for phasing out of restrictions in 10 to 15 years. They have asked the government to immediately clarify its position on the countrys balance of payments situation, as confusing signals are being given by the finance and other economic ministries on the issue.
A delegation of Left leaders met Prime Minister IK Gujral last week and prevailed upon him the need for continuing with quantitative restrictions on imports of at least agricultural goods, saying the countrys BoP situation was still precarious considering the composition of foreign exchange reserves.
One Left leader who was part of the delegation said that while Gujrals response was positive, he did not commit himself on the issue and asked the officials present at the meeting to prepare a case for India for the WTO meeting in Geneva on June 5.
Gujral also spoke of inevitability of lifting restrictions on imports, in a phased manner though, and said that the time span of phasing out could be negotiated at the meeting.
The cabinet secretary, the commerce secretary, the countrys ambassador to the WTO and the Prime Ministers principal secretary also attended the meeting.
Left leaders argued that just on the basis of $ 23 billion foreign exchange reserves, the countrys BoP position could not be called satisfactory, as has been made out by the finance and commerce ministry officials.
The present level of foreign exchange reserve could ensure payments of imports for six months only and the $23 billion reserve was not indicative of the countrys balance of trade. The countrys exports have come down to 4.01 per cent in 1996-97, whereas our imports are very high and consequently the trade deficit is still very high, CPI general secretary AB Bardhan said.
He explained that of the $23 billion reserve, NRI remittances are $8 billion and $2 billion belong to foreign institutional investors. At the same time, the countrys foreign debt stands at around $100 billion which has to be serviced every year and if all these factors are taken into account, the BOP situation is still fragile, he added.
The Left parties therefore suggested to the Prime Minister that the country should plead for continuing with Article 18 (B) of the Gatt agreement, which gives developing countries an option to continue with the use of quantitative restrictions on imports on the grounds of balance of payments difficulties.
