Business

Changing style of policy announcements

All the more reason why banks and other lenders should also be advisers and not confine themselves to pushing their loans.

THE NEW foreign trade policy presented by the Commerce Minister, Kamal Nath, on August 30 was supposed to differ both in style and substance from the exim policy it sought to replace. However, many wondered whether it was possible at all to overhaul something so procedural as trade related matters. Also, the scope for new initiatives from the Commerce Ministry is restricted, with anything having a financial implication obviously coming under the purview of the Finance Ministry. Besides, there is the WTO angle, which every policy-maker in India has to contend with.

A recent meeting in Geneva has set an agenda for proceeding further with the Doha round. And, as if to underline further the growing importance of trade treaties, the Indo-Thailand free Trade Area became operational on August 31, a day after the trade policy was presented.

Even with all these fetters, the trade policy announcement has generated a fair amount of excitement. Certainly this had to do with the style. The Minister's speech was covered by TV channels, some of which also had detailed analyses both before and after the speech. All these are reminiscent of the Union budget.

However, in the very nature of things, a trade policy — now essentially a facilitating device — captures the imagination of fewer people than the Union budget. One would go a little further to say that even the annual monetary and credit policy of the Reserve Bank of India generates more excitement than the procedural changes that a trade policy brings about. The whole point is that there is now a conscious effort in India and elsewhere to reduce the hype surrounding official announcements.

The trade policy is thus clearly out of step with current trends. The monetary policy announcement has deliberately been made into a "non-event". Even the budget exercise is being demystified.

For instance, by throwing open for debate the Kelkar proposals on fiscal responsibility, the Government is in effect giving advance notice of the possible direction the tax policies will take.

One area however has remained immune to change. All industry bodies and trade organisations acclaimed the trade policy even before its fine print was read. Their initial response to the latest budget was similar. Certain things in India do not change.

C. R. L. Narasimhan

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