The Indian Panorama

Tag: OECD

  • Digital tax row: US suspends additional tariffs on India

    NEW DELHI( TIP): The US has backtracked from imposing penalties on six countries, including India, for introducing the digital services tax (DST) which it felt targeted its social media giants.

    The US has decided to opt for negotiations for the next six months with these countries to work out a satisfactory solution. Making the announcement, US Trade Representative (USTR) Katherine Tai said the plan for retaliatory tariffs on some goods from six countries would be suspended till November 29 to provide additional time to complete the ongoing multilateral negotiations on international taxation at the OECD and in the G20 process.

    “The US is focused on finding a multilateral solution to a range of key issues related to international taxation. It remains committed to reaching a consensus through the OECD and G20 processes. Today’s actions provide time for those negotiations to continue while maintaining the option of imposing tariffs if warranted in the future,’’ said Tai in a statement. The USTR holds that the DST is discriminatory and burdens US commerce. In March, Tai was unmoved by the arguments from Commerce Minister Piyush Goel. A day after their meeting, the USTR had said it would impose higher import duties on 45 categories of Indian imports equal to the $55 million that New Delhi presumably earned from imposing 2 per cent DST.                  Source: TNS

  • Plight of farmers in India: How rural incomes have struggled to keep up

    Plight of farmers in India: How rural incomes have struggled to keep up

    Indian farmers have been on the road since November last year, seeking repeal of three new farm laws and demanding minimum support prices for their produce. Leaders from the ruling Bharatiya Janata Party (BJP) say the new farms laws will double farmers’ income – a promise made by Prime Minister Narendra Modi in 2016.

    So is there any evidence that rural livelihoods have been improving?

    What’s happened to rural incomes?

    More than 40% of India’s workforce is engaged in agriculture, according to the World Bank.

    There are no official figures for rural household income in recent years, but there is data on agricultural wages (an important part of rural income) which shows the rate of growth slowing down between 2014 and 2019.

    And India has seen rising inflation in the last few years, with World Bank data showing that consumer price inflation grew from just under 2.5% in 2017 to nearly 7.7% in 2019.

    This has eaten into wage gains.

    India conducted surveys in 2013 and 2016 which showed an increase in farmers’ incomes in absolute terms of nearly 40% over that period.

    However, a report by the Organisation for Economic Co-operation and Development (OECD) in 2018 estimated that in real terms, farmers’ incomes increased by just 2% a year over those three years.

    The report also makes clear that these farmers’ incomes were just one-third of those for non-agricultural households.

    Agricultural policy expert Devinder Sharma believes farmers’ incomes in real terms have remained stagnant or even declined for several decades.

    “An increase of a couple of thousand [rupees] a month doesn’t make much difference if we account for inflation,” he says.

    He also points to the rising costs that farmers face, as well as the wildly fluctuating prices they receive for their produce.

    It’s also worth adding that in recent years, there have been periods of extreme weather such as droughts, which have seriously affected livelihoods.