Cut duties,hike FDI in education,insurance

The finance ministry has advised lowering of peak duties for goods and liberalising of foreign direct investment in services like insurance...

The finance ministry has advised lowering of peak duties for goods and liberalising of foreign direct investment FDI in services like insurance,banking and higher education to facilitate further growth. While nearly all economic indicators resulted in a world-wide grimace by trade experts in 2008-2009,Indias trade and growth is far closer to a full recovery than other economies according reports by the World Bank and The International Monetary Fund IMF in the 2009-2010 Economic Survey.

In order to go beyond short-term,stimulus-based recovery,the survey has advised the government to lower peak duties from 10 per cent to 7.5 per cent; weed out unnecessary customs duty exemptions and streamline export promotion schemes including reduction of tariffs on all capital goods to 3 per cent,while withdrawing the export promotion capital goods scheme; reduce excise duties to make exports more competitive; issue special improvement on export infrastructure and place an emphasis on trade strategy to target exports of dynamic products to developed markets.

For services,the survey describes open FDI policies for health insurance,rural banking and higher education as more conduciveas FDI inflows and trade in services have a close relationship. Real GDP growth rates are projected at 2.7 per cent globally while the World Banks projection for India logs in at 7.5 per cent and 7.7 per cent by the IMF in the new fiscal. The outlook for Indias trade sector in 2010 has brightened with prospects and recovery in world output and trade volumes, reads the survey tabled in Parliament on Thursday.

The survey insists that struggles in the worlds developed economies should not serve as an impediment for growth in India. Instead,the finance ministry insists that present world-wide economic conditions should promote bold reforms as it did in 1991 on the back of the balance-of-payments crisis.

According to the survey,Indias trade deficit with its top 15 partners has been on the rise since 2004-2005 when India carried a surplus with eight of those 15 nations. By 2007-2008 that number had shrunk to just four. In 2008-2009,India added Singapore to its surplus list,but even that ratio has become northing more than marginal while its surpluses with the remaining four countries has since shrunk.