Showing posts from 2017

Stampede dynamics - Preventing unnecessary deaths

It is sad to hear news of deaths due to stampedes. These could have been avoided. We had the major Hajj stampede in 2015  and now we have another stampede at Mumbai in a suburban railway station . Hindu temples seem to be designed for stampedes, with a complete wiki list associated to it now . The news of stampede results in common reaction of blaming the authorities for poorly designed entries/exits, narrow lanes/bridges, bad crowd behaviour, law and order problem, and sometimes the victims are blamed for panicking and creating stampede. While it is obvious that we need to evolve standard evacuation procedures in all crowded areas, and ensure that public spaces are redesigned to handle the peak load properly, it is easier said than done, especially when the areas involved are matter of faith, like temples. Stampede deaths are avoidable It is in this light that I feel that we should use mathematical methods to arrive at an indicator, which can be used to mandate a redesign of

Musings about Niryat Bandhu - Export promotion through training

Govt of India started a program under Niryat Bandhu (Exporter's friend) scheme during 2013. It was an ambitious scheme and continues today. Hundreds of thousands have been trained across India under the scheme. 38 filed offices of DGFT, headed mostly by various Indian Trade Service officers are spearheading the efforts to help exporters through this scheme. However, the efficacy of the same, and the outcome has not been scientifically evaluated.  I was posted at Bangalore at the time of launch of the scheme. My jurisdiction at that time covered the entire state of Karnataka. My then boss, an expert in trade himself, gave me a lot of freedom to implement the program in our jurisdiction. We launched out the program systematically. The program covered three training components.  1. Training new entrants to international trade 2. Outreach programs with various industry clusters 3. Outreach programs with universities and colleges Apart from the above three, at Bangalor

Is GST killing Make in India?

Is GST killing Make-in-India?  Post GST, FIAT offers deep cuts on its imported Jeep models . Is GST making imports cheaper? Is it harming make-in-India initiative?  While it is easy to dismiss such questions in the face of yay-we-rolled-out-GST euphoria, it still makes sense to analyse some challenges that GST has thrown up in terms of cheaper imports and greater competition to domestic industries.  Cheaper imports for finished goods Before GST, the major components of import duties were Basic Customs Duty (BCD) and Additional Duty of Customs (ADC) along with Special Additional Duty (SAD). The ADC and SAD together were bigger components that usually totalled around 20% of the value of goods for most of the items and not refundable to most extent.  The ADC part was equal to central excise duty (usually 12 to 16% for most items) and SAD was equal to 4% of value of goods. For a merchant who imported finished goods and sold them locally, SAD was refundable upon produ

ITC HS harmonisation method for trade data analysis - a proposal

(I have used LaTeX in this post for math symbols. If you are using a mobile browser, you may consider requesting a desktop version of the page in order to view the table and formulae properly) The International Trade Classification - Harmonised system (ITC HS) codes are used for classification purposes in international trade. All products traded internationally are represented though these codes. The codes extend upto 8 digits in India, first 6 of which are harmonised with the international system. Most of the countries are harmonised at 6 digits which implies that the product classification upto 6 digits is common. However, the next two digits are country specific and this sub classification or further bifurcation is a function of statistical and industry needs. Some countries have further two digits, taking the number of digits to 10 to help further statistical purposes. In India, it stops at 8 digits. First two digits in the classification are known as chapter number (0

GST effect on Foreign Trade Policy: Effect on various exemption and incentive schemes - Part 2

I had elaborated my thoughts on the topic in the Part 1 of the series . This is a continuation and part 2 of the series. As was outlined in part 1, it appears that the duty exemption schemes, specifically the popular advance authorisation scheme may get a short shrift under GST and may be made ineffective. As proposed, GST would allow only refunds on the duties suffered, unless a course correction is done before the launch and now. I have discussed some details in the video post here: I have also summarised my thoughts on other schemes, namely the Export promotion capital goods scheme and the export incentive schemes in the same video. I guess I got too lazy to type at some point and decided to video log it over a coffee. To sum it up, it appears that GST has not kept the best interests of exporting community in mind at the time of rollout. However, one must also agree that GST is being rolled out with a sense of urgency and there will be kinks and knots and pockets of dissa

Undervalued currency of China and learnings for India

China maintains an undervalued currency which is one of the key reasons for trade surplus of China with most trading partners. It has also led to huge forex build up over the years. While China's undervalued currency has faced criticism from trading partners, the public policy choice of this tool for development of China is not well appreciated. The use of currency undervaluation as a tool to gain export advantage has decreased over time for China due to multiple factors and I doubt it the current level of Chinese currency is as undervalued as it used to be. Yet, as a policy lesson it is illuminating to analyse the effects. China has used the currency as a policy tool to empower itself; it is just incidental that this policy has done damage to trading partners. The undervalued currency of China acts as a direct subsidy for exports. A 20% undervaluation of currency is equivalent to 20% direct subsidy support in terms of export price. Given that China has usually maintained an und