Farm, SSI sectors will be protected, says Maran

By Our Special Correspondent

NEW DELHI, APRIL 3. The Commerce and Industry Minister, Mr. Murasoli Maran, has said that the Government will not allow the interests of agriculture and small-scale industries (SSI) sectors to be affected in any manner by the phase-out of quantitative restrictions (QRs) on imports. ``We are vigilant on this score.''

Presiding over the Parliamentary Consultative Committee meeting attached to the Commerce Ministry here today, he announced that tariff bindings in respect of a number of agricultural items - which were bound at zero or low tariff levels during previous rounds of negotiations - had recently been increased substantially following negotiations under Article XXVIII of GATT 1994. Thus, tariff bindings for milk powder have been increased from zero to 60 per cent, for spoilt wheat, rice in husk (paddy), broken rice, grain sorghum etc from zero to 80 per cent and for maize (corn) from zero to 70 per cent. These bound rates renegotiated recently have been incorporated in the Finance Bill. The Minister said that as a measure of safeguarding domestic agriculture, tariffs for primary products were already bound at 100 per cent, for processed products at 150 per cent and for edible oils at 300 per cent.

Responding to members who expressed concern over the likely adverse impact of the phase-out of QRs particularly on agriculture, Mr. Maran stressed that the Government would use all the safeguard mechanisms available to protect domestic interests. If imports rise beyond the desired level in any sector, tariffs would be raised.

Explaining that the phase-out had been on for quite sometime now, Mr. Maran informed members that as many as 6,161 tariff lines were phased out on April 1, 1996 followed by a phase-out of 488 tariff lines from April 1, 1996 to March 31, 1997; 132 on January 1, 1998; 391 on April 13, 1998 and another 894 on April 1, 1999. QRs on 714 tariff lines were dismantled on April 1, 2000 and on the balance 715 tariff lines would have to be dismantled by April 1, 2001.

``Removal of QRs is not because we volunteered to do it...we inherited a system as a signatory to WTO in Marrakesh in 1994 and even as far back as GATT 1947, which stipulated the condition of not keeping QRs '' the Minister said. Outlining the various safeguard mechanisms available to protect domestic industry, he emphasised that tariff protection would continue even after phase-out of QRs.

Mr. Swadesh Chakraborty expressed concern that phase- out of QRs would open the floodgates for imports and would hit the workers, especially in the SSI sector. Mr. P. C. Thomas said free imports of items like coconut and rubber would adversely affect the economy of Kerala.

Mr. Prakash V. Patil stressed the need for wider consultations in view of the impact of such policies on the domestic sector. Mr. Kapil Sibal suggested that the Government draw up a programme for ``liberating the economy from within'', especially through financial sector reforms.

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