India PM calls 8% growth ‘ambitious’

Updated 28 December 2012
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India PM calls 8% growth ‘ambitious’

NEW DELHI: India's Premier Manmohan Singh played down hopes yesterday for the nation's once booming economy, terming a plan for achieving eight percent annual growth an "ambitious" goal.
Singh's muted expectations came after the government this month cut its growth forecast to just under six percent for this financial year — putting Asia's third-largest economy on track for its worst performance in a decade.
"Achieving a target of eight percent growth, following less than six percent in the first year, is still an ambitious target," said Singh, 80, in an unusually downbeat message ahead of the new year.
He was speaking to state chief ministers reviewing India's 2012-2017 economic plan which aims for eight percent annual average growth. Despite liberalization steps, India runs on five-year plans based on the old Soviet Union's model.
The Congress government's "first priority must be to reverse this slowdown," said Singh, who is keen to get the economy moving again before the 2014 polls.
"We cannot change the global economy but we can do something about the domestic constraints which have contributed to the downturn," he said, warning India can no longer "follow a business-as-usual policy".
Singh's scandal-scarred government in the past few months has shed its policy inertia and unleashed a blitz of new reforms to draw more investment to jump-start growth.
Much of the world would envy even six percent growth but India says it needs at least nine-to-10 percent expansion to significantly cut poverty.
The government's forecast for the fiscal year to March of 5.7-to-5.9 percent growth is far below the near double-digit pace India set before the onset of the global financial crisis.
A top adviser to Singh, Montek Singh Ahluwalia, cautioned at the same meeting against "policy logjams," saying India's growth "could be stuck at five-to-5.5 percent" if it fails to cut suffocating red tape, streamline its patchwork tax system and speed approval for long-delayed infrastructure projects.
Congress has long wanted to make history as the first government to achieve 10 percent growth. But it has rowed back in the face of the global downturn and stubborn inflation that have kept interest rates high and curbed investment.
India's troubles comes as fellow emerging market giant China's growth hit an over three-year low of 7.4 percent in the three months to September, but new figures have fueled optimism the worst is over.
A top industry body warned separately that because of slower growth India could fall 70 million jobs short of its flagship plan to create 100 million new manufacturing posts by 2022 to absorb the nation's ballooning young workforce.
"Given the moderate growth forecast by top management of manufacturing companies, the National Manufacturing Policy targets for 2022 might be missed by a wide margin," the Confederation of Indian Industry said.


US unveils new veto threat against WTO rulings

Updated 23 June 2018
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US unveils new veto threat against WTO rulings

  • US tells WTO appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days
  • Trump, who has railed against the WTO judges in the past, threatens to levy a 20 percent import tax on European Union cars

GENEVA: The United States ramped up its challenge to the global trading system on Friday, telling the World Trade Organization that appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days.
The statement by US Ambassador Dennis Shea threatened to erode a key element of trade enforcement at the 23-year-old WTO: binding dispute settlement, which is widely seen as a major bulwark against protectionism.
It came as US President Donald Trump, who has railed against the WTO judges in the past, threatened to levy a 20 percent import tax on European Union cars, the latest in an unprecedented campaign of threats and tariffs to punish US trading partners.
Shea told the WTO’s dispute settlement body that rulings by the WTO’s Appellate Body, effectively the supreme court of world trade, were invalid if they took too long. Rulings would no longer be governed by “reverse consensus,” whereby they are blocked only if all WTO members oppose them.
“The consequence of the Appellate Body choosing to breach (WTO dispute) rules and issue a report after the 90-day deadline would be that this report no longer qualifies as an Appellate Body report for purposes of the exceptional negative consensus adoption procedure,” Shea said, according to a copy of his remarks provided to Reuters.
An official who attended the meeting said other WTO members agreed that the Appellate Body should stick to the rules, but none supported Shea’s view that late rulings could be vetoed, and many expressed concern about his remarks.
Rulings are routinely late because, the WTO says, disputes are abundant and complex. Things have slowed further because Trump is blocking new judicial appointments, increasing the remaining judges’ already bulging workload.
At Friday’s meeting the United States maintained its opposition to the appointment of judges, effectively signalling a veto of one judge hoping for reappointment to the seven-seat bench in September.
Without him, the Appellate Body will only have three judges, the minimum required for every dispute, putting the system at severe risk of breakdown if any of the three judges cannot work on a case for legal or other reasons.
“Left unaddressed, these challenges can cripple, paralyze, or even extinguish the system,” chief judge Ujal Singh Bhatia said.
Sixty-six WTO member states are backing a petition that asks the United States to allow appointments to go ahead. On Friday, US ally Japan endorsed the petition for the first time, meaning that all the major users of the dispute system were united in opposition to Trump.