ICRIER Annual Report 2005-06.Pdf

Home , Isher Judge Ahluwalia, Jagdish Bhagwati, Kirit Parikh, Shankar Acharya

ANNUAL REPORT 2005-2006

ICRIER Linking India to the World Economy

Indian Council for Research on International Economic Relations Indian Council for Research on International Economic Relations

ANNUAL REPORT 2005-2006 Contents

Foreword by the Chairperson ...... 5

Board of Governors ...... 7

Founder Members and Life Members ...... 9

Director’s Report ...... 11

ICRIER’s Research Activities ...... 15-57

! Research Projects ...... 17

! Seminars ...... 33

! Lectures ...... 41

! Conferences / Workshops ...... 49

! South Asia Network of Economic Research Institutes (SANEI) ...... 55

ICRIER Team ...... 59-65

Faculty News ...... 67-81

Management Committees ...... 83-85

Publications ...... 87-90

! Working Papers ...... 89

! Book Release ...... 90

Audited Annual Accounts ...... 91-100

Linking India to the World Economy 3 Foreword by the Chairperson

The year 2005-06 has seen several transitions at ICRIER. I was elected Board Chair at the AGM on August 8, 2005 following the demise of my distinguished predecessor, Dr. I G Patel. Dr. Rajiv Kumar joined as Director & CE, ICRIER on February 1, 2006 after the departure of Dr. Arvind Virmani who resumed his association with the Planning Commission in January 2006. Dr. Kumar is no stranger to ICRIER having worked with the institution in the early stage of his professional career in the 1980s. The new Director now has his task cut out to plan and execute the silver jubilee celebrations at ICRIER in the current year and work towards further expansion and strengthening of the research capacity at ICRIER with a view to further improving the quality of debate on policy issues arising from India's on going integration with the world economy.

In keeping with the practice of the recent past, WTO research and policy advice remained a thrust area for ICRIER in the year under review. As the Director's report indicates, ICRIER continued to provide research based inputs to policy makers during the negotiations for the Doha round. An international conference was organized at ICRIER in April 2006, jointly with the Ministry of Commerce and the Sir Ratan Tata Trust, which presented the research output of ICRIER on the WTO issues.

In the area of regional economic cooperation, ICRIER has moved to fill an emerging need by studying issues in negotiating Bilateral Free Trade Agreements and Comprehensive Economic Cooperation Agreements with the ASEAN, China, Thailand and Gulf Cooperation Council and highlighting the potential areas of concerns for India.

Research on trade, openness, restructuring and competitiveness in the current year has focused on some of the most important areas such as textiles and agriculture. Studies analysing post-MFA opportunities and challenges for Indian textiles by Meenu Tewari are very timely. The study on the “Effects of global agricultural trade liberalization on agricultural production, rural income and poverty in India” by Surabhi Mittal explores issues which are uppermost in policy-makers' minds. This study is being conducted as part of a major global research project titled “Impact of Rich Country Policies on Poverty: A Global View”, sponsored by the Global Development Network. Recognizing the importance of skills and higher education to sustain India's global advantage in the services sector, a study titled “Higher Education in India: The Need for Change” by Pawan Agarwal has informed the current policy debate and attracted significant attention.

ICRIER has also continued its active outreach program through public policy workshops, seminars, lectures by eminent experts and international conferences. ICRIER continues to enjoy sound financial position on account of its income from the Endowment Fund and increasing revenue from commissioned research.

As ICRIER celebrates its 25th anniversary in 2006-07, efforts are under way to significantly strengthen the resource base to enable the institution to set even higher goals in the years to come and strive for globally competitive standards. I have no doubt that ICRIER will rise to the new challenges under the leadership of its new Director, Dr. Rajiv Kumar.

Isher Judge Ahluwalia Chairperson

Linking India to the World Economy 5 Board of Governors

As on March 31, 2006

Chairperson Dr. Isher Judge Ahluwalia Vice Chairperson Punjab Planning Board 32 Aurangazeb Road New Delhi-110 011

Elected Members Dr. Shankar Acharya Mr. Aman Mehta Honorary Professor ICRIER and 4/7, Shanti Niketan Chairman, Kotak Mahindra Bank New Delhi-110 021 Core 6-A, 4th Floor, India Habitat Centre Lodi Road, New Delhi-110 003 Dr. Rakesh Mohan Deputy Governor Ms. Lalita D Gupte Reserve Bank of India, Central Office Joint Managing Director Mumbai -400 001 Co-opted Members ICICI Bank Ltd, ICICI Bank Tower Mr. N K Singh Bandra-Kurla Complex Deputy Chairman Dr. Kirit S Parikh Mumbai - 400 051 Bihar Planning Board, Suite 2/10 Member Hailey Road Planning Commission Dakshineshwar Building (1st Floor) Ms. Janaki Kathpalia Yojana Bhawan, Sansad Marg New Delhi-110 001 D-935, New Friends Colony New Delhi - 110 001 New Delhi-110 065 Mr. Nitin Desai Dr. Swati A Piramal Honorary Professor, ICRIER Mr. Vijay Kelkar Director- Strategic Alliances & B- 63, Defence Colony Chairman Communications New Delhi-110 024 IDFC Asset Management Company 617, Nicholas Piramal India Ltd. Vaswani Mansion, 3rd Floor Nicholas Piramal Tower Dinshaw Vachha Road, Churchgate Ganpatrao Kadam Marg Overseas Members Mumbai 400 020 Lower Parel, Mumbai - 400 013 Dr. Arvind Panagariya Professor of Economics & Bhagawati Mr. Uday S Kotak Mr. N Ravi Professor of Indian Political Economy Vice Chairman & Managing Director Editor Columbia University Kotak Mahindra Bank Ltd The Hindu School of International & Public Affairs, Bakhtawar, 2nd Floor, 229 Kasturi Buildings 420 West 118th Street, 1129 IAB Nariman Point, Mumbai-400 021 859-860, Anna Salai New York NY 10027 Chennai - 600 002

Dr. R A Mashelkar Member- Secretary Director General, CSIR Dr. Rajiv Kumar Department of Scientific & Director & Chief Executive Industrial Research ICRIER Anusandhan Bhawan, 2, Rafi Marg Core 6-A, 4th Floor, India Habitat Centre New Delhi-110 001 Lodi Road, New Delhi-110 003

Linking India to the World Economy 7 Founder & Life Members

As on March 31, 2006

Founder Members Mr. Montek Singh Ahluwalia Mr. Govind Narain Dr. Jagdish Bhagwati Mr. N C B Nath Mr. K K Bhargava Mr. P C Nayak Mr. I S Chadha Dr. Deepak Nayyar Dr. R J Chelliah Dr. M S Swaminathan Mr. K L Dalal Mr. T K N Unnithan Mr. B S Das Dr. Charan D Wadhva Mr. P K Dave Late I G Patel Mr. Ashok V Desai Late Anand Prakash Mr. Nitin Desai Late Sukhamoy Chakravorty Professor P N Dhar Late Khub Chand Mr. M Dubey Late B K Chatterjee Mr. R S Gae Late J Rameshwar Rao Dr. V R Panchamukhi Late P Chenstal Rao Mr. Vijay G Pande Late H N Ray Mr. R D Pradhan Late Y T Shah Mr. Bharat Ram Late S R Sen Mr. Vinay Bharat Ram Late L K Jha Mr. S S Ramphal Late A M Khusro Dr. C Rangarajan Late Raj Krishna Mr. S S Rao Late Lovraj Kumar Mr. N K Sengupta Late Suresh Kumar Professor Manu R Shroff Late K B Lall Mr. Harbans Singh Late Sanjaya Lall Life Members Dr. Manmohan Singh Late R N Malhotra Dr . Isher Judge Ahluwalia Mr. R V Subrahmanian Late Fredie A Mehta Mr . J S Baijal Dr. S P Gupta Late B K Nehru Dr . Bimal Jalan Mr. R M Honovar Late Prakash Tandon Dr . Vijay Kelkar Mr. B D Jayal Late Mohd Yunus Mr . Shiv S Kapoor Mr. S V S Juneja Late Malcolm S Adiseshiah Dr . Depak Lal Mr. P K Kaul Late M C Bhatt Mr . Raghunandan D Maluste Dr. Rajni Kothari Late Brij Bhushan Dr. Arvind Panagariya Mrs. Anna R Malhotra Dr. Y V Reddy Mr. S S Marathe Professor TN Srinivasan Mr. Suman K Modwel Mr. N K Singh Mr. P K Nanda Mr. Prakash Shah

Linking India to the World Economy 9 Director’s Report

The year under review has seen several changes at ICRIER. Dr. I. G. Patel, our chairman since August 1997 passed away on 17 July, 2005. Dr. Isher Judge Ahluwalia was elected Chairperson at the Annual General Meeting held on 8 August, 2005. Dr. Arvind Virmani left ICRIER on 31 December, 2005 and I took over as Director & Chief Executive on 1 February, 2006. I consider it a privilege to renew my association with ICRIER in a year when we will be celebrating our Silver Jubilee. Over the past 25 years ICRIER has emerged as a leading independent policy think tank in the country. My endeavor will be to further build upon this commendable achievement and try to ensure that we continue to make contributions through high quality research on issues of importance to policy makers and other stakeholders.

The WTO and the ongoing Doha Development Round expectedly remained the center-piece of our work program. This work has been supported by a generous grant from the Sir Ratan Tata Trust and guided by a Project Advisory Committee comprising senior negotiators and industry representatives. This theme has seen significant research effort that is reflected in the seven working papers brought out on these issues during the year. Within the WTO-related issues, trade in services continues to be a focus area of research at ICRIER. The study on FDI in retail services, led by Dr. Arpita Mukherjee received wide recognition and contributed significantly to policy discussions on this topical issue. We are now planning to initiate research on costs and benefits from the liberalization of sectors such as education, legal and accounting services.

The research output from the WTO project was presented at an international conference on 6-7 April 2006, jointly organized with the Ministry of Commerce and the Sir Ratan Tata Trust. The conference was inaugurated by the Minister of Commerce, Mr. Kamal Nath and included an address by Mr. Pascal Lamy, Director General, WTO. Among the participants were senior WTO officials, researchers and officials from developing countries. An international Round Table on Migration was organized in March in collaboration with the Global Development Network (GDN). We also organized regular discussion sessions on the developments in the Doha Round. These included sessions with the Minister of Commerce, Mr. Kamal Nath in November 2005 and in August 2006 and with Mr. Gopal Pillai, Special Secretary, Ministry of Commerce, also in August 2006.

ICRIER's work program on the WTO is being led by Dr. Arpita Mukherjee and Dr. Suparna Karmakar with support by Adithya Krishna Chintapanti. We hope to continue to provide the backstopping technical support and needed policy inputs for the Doha Round when negotiations resume. An edited volume that will bring together ICRIER's substantial output on the impact of the multilateral negotiations on India's liberalization experience will be published by Sage later this year.

A second important thrust area for research at ICRIER has been that of regional economic cooperation and South Asian economic integration. In response to the emerging policy needs, our focus under this theme now includes research on issues in negotiating Bilateral Free Trade Agreements and Comprehensive Economic Cooperation Agreements with the ASEAN, China, Thailand and GCC, highlighting the potential areas of concerns for India. We are also undertaking a study on the likely entry barriers faced by Indian banks in the Chinese market. The impact of non tariff barriers on bilateral trade between India and Pakistan was examined in a project supported by the World Bank and this is being further extended under a grant from the Linking India to the World Economy 11 Director’s Report

A second important thrust area for research at ICRIER has been that of regional economic cooperation and South Asian economic integration. In response to the emerging policy needs, our focus under this theme now includes research on issues in negotiating Bilateral Free Trade Agreements and Comprehensive Economic Cooperation Agreements with the ASEAN, China, Thailand and GCC, highlighting the potential areas of concerns for India. We are also undertaking a study on the likely entry barriers faced by Indian banks in the Chinese market. The impact of non tariff barriers on bilateral trade between India and Pakistan was examined in a project supported by the World Bank and this is being further extended under a grant from the Ministry of Commerce. Research on bilateral economic relations has been led by our four senior fellows, Ms. Nisha Taneja, Dr. Amita Batra, Dr. Arpita Mukherjee and Dr. Suparna Karmakar. Work in progress includes a study on the potential for

12 appointments are Dr. Purnamita Dasgupta as Senior Fellow; Dr. Badri Narayanan G., Dr. Mandira Sarma and Dr. Abhijeet Sengupta as Fellows, and Mr. Adithya Krishna Chintapanti and Ms. Manisha Gupta as Research Associates. Our complement of research assistants has also correspondingly increased. In addition, we have on board nine consultants for specific assignments. Attracting more senior staff and specially Professors will be our top priority to achieve the critical mass for making further inputs into policy formation and provide a vibrant collegial environment within ICRIER for high quality research.

We have also upgraded our IT infrastructure with the purchase of a new server, thereby more than doubling our server capacity and procuring twenty Pentium IV computers and one HP laser printer with more expected to be replaced soon. In addition, it is proposed to replace all existing CRD monitors with flat screen LCD monitors.

I would like to take this opportunity to thank all my colleagues both in research and administration for coming together as a team and sincerely contributing to building ICRIER as one of the finest research organizations. And last, but certainly not the least I do wish to convey my gratitude to the Board of Governors and specially the Executive and Finance Committee Members for their continuous and valuable guidance and cooperation in making my task much easier and enjoyable.

Rajiv Kumar Director & Chief Executive, ICRIER

Linking India to the World Economy 13 Research Activities

Research Projects

Seminars

Lectures

Conferences / Workshops

South Asia Network of Economic Research Institutes (SANEI) Research Projects

The six major thrust areas of research in ICRIER are Trade, Openness, Restructuring and Competitiveness

WTO-Related Issues

Regional and Bilateral Issues

Financial Liberalization

Macroeconomic Management in an Open Economy

Strategic Aspects of India's External Relations Research Projects

A Trade, Openness, Restructuring and Competitiveness

Ongoing Projects

A1 Effects of Global Agricultural Trade Liberalisation on Agricultural Production, Rural Income and Poverty in India - Surabhi Mittal

The objective of the study is to analyze the impact of change in OECD agricultural policy on domestic agricultural prices in India. The analysis is being done for rice, wheat, cotton and sugar. The project estimates the impact of trade liberalization on production and poverty through the changes of in-world prices, production, wages and employment, and a net impact on welfare and poverty of the poor farmers. The effects are based on price transmission elasticity and supply elasticity, so if there is any changes in international price through these elasticities it will reflect the change in production levels and thus welfare of small farmers. The time period of analysis is 1980-2000. The study is awarded by Global Development Network (GDN) as a country study under the Global Research Project “Impact of rich country policies on poverty: a global view”. The draft report of the project was presented in a workshop at St. Petersburg in January 2006, and has been submitted to the GDN for review.

A 2 Emerging Trends in the Indian Textile and Clothing Sector: Post-MFA - Meenu Tewari

The global textile and apparel industry has been in a state of major flux since the abolition of textile quotas on January 1, 2005. This study assesses India's emerging position on the global division of labour in the textile sector in this changed scenario. Two working papers have been published as part of this project, namely: (i) “Post-MFA Adjustment in India's Textile and Apparel Industry: Emerging Issues and Trends,” ICRIER Working Paper No. 167, July 2005; and (ii) “The Role of Price and Cost-Competitiveness in Apparel Exports Post-MFA: A Review,” ICRIER Working Paper No. 173, November 2005.

This study is being supported by the Ministry of Textiles, Government of India. It is expected to be completed by December 2006.

A 3 Labour Intensity and Employment Potential of Indian Manufacturing - Rajiv Kumar, Deb Kusum Das and Deepika Wadhwa

This study analyses the potential of employment generation in the Indian manufacturing sector. It focuses specifically on labour-intensive manufacturing sectors and examines the constraints affecting sectoral growth and export performance by applying quantitative techniques. The study will carry out firm-level surveys in key industries for drawing inputs which will form the basis of relevant policy recommendations for promoting growth and employment in labour- intensive industries.

The study is funded by the National Manufacturing Competitiveness Council, Government of India, and is expected to be completed by December 2006.

Linking India to the World Economy 19 Research Projects

A 4 Puzzles in Manufacturing Productivity, Employment and Labour Share - Arvind Virmani and Danish A Hashim

The study applies the constant elasticity of substitution to the Indian manufacturing sector for analyzing the employment elasticity with respect to output. The present study estimates the productivity performance of Indian manufacturing by allowing for non-unit elasticity of substitution and non-constant returns to scale for majority of the industries. Several studies report a significant increase in manufacturing employment in the post reform period compared to the same in the 80's. This was not expected in view of increased competition along with improved access to foreign technology, which was anticipated to have adversely affected the employment growth through higher capital intensity. The study intends to address the following related issues: First, whether the increase in growth of employment is sustainable. Second, how the increased employment can be related with the declining share of labour in manufacturing value added and what implications this has for long term employment policy. Third, how the shifts in real wage rates and factor biased technical change have affected employment over the years and what could be the lessons for employment policy from this.

The study is expected to be completed by December 2006.

A 5 Urban Sector Policy - Ashwajit Singh

The study reviews urbanization trends in India, including the economic role of urbanization and its implications on urban infrastructure provision. The study looks at key issues of urban governance, including decentralization and evaluates the state of decentralized urban governance, and the status of urban infrastructure and services. It also examines the modalities for financing of urban infrastructure and services and aims to identify policy guidelines for improved urban sector development.

A 6 Governance in the Provision of Public Goods in India - Arvind Virmani and Sanghamitra Sahu

This study proposes to develop a time series index of quality governance based on the availability of public and quasi- public goods and services across Indian states. Though a number of studies have tried to measure the quality of governance, it has been found that these indices are based on perceptions and thus are subject to a high degree of subjectivity and bias. This study, therefore, makes an attempt to construct a more objective index based on the available data. The study is supported by the South Asia Network of Economic Research Institutes (SANEI) and is expected to be completed by October 2006.

Projects Completed

A 7 Domestic Market Integration - Arvind Virmani and Surabhi Mittal

This study examines the level of integration of the commodity markets in India across the centre and states, using actual price data. It measures the extent to which domestic markets for goods in India are integrated, and recommends policy options to facilitate integration. Some of the questions it addresses include: (i) Are domestic markets for goods integrated across the states?; (ii) Has market integration increased over time? and (iii) What are the policy options to facilitate integration?

20 Funded by the World Bank, the study is a contribution to the World Bank Development Policy Review (India): “Inclusive Growth in Service Delivery: Building up India's Success July 2006.” It is published as ICRIER Working Paper No. 183, July 2006.

A 8 Linkages between Development Researchers and Policymakers in India - Arvind Virmani, Tarun Das and Tejinder Singh Laschar

This case study of economic reforms in India makes a critical appraisal of linkages between development researchers and policymakers since the 1990s. It analyzes their contribution to external sector reforms and, with a lower degree of success, to reforms in the labor market.

The study was completed with support from the Global Development Network (GDN) under the Bridging Research and Policy Project.

Linking India to the World Economy 21 Research Projects

B WTO - Related Issues

The research studies and papers on WTO- related issues have been undertaken by ICRIER, with a generous support from the Sir Ratan Tata Trust since 2000. This grant has enabled ICRIER to utilize the expertise of eminent professionals dealing with WTO issues to prepare research papers and disseminate them through international and national conferences as well as through ICRIER working papers.

Ongoing Projects

B 1 WTO Implementation Issues - Anwarul Hoda

The issue of implementation as a whole became a rallying point for members against the proposal for launching a new comprehensive round of multilateral trade negotiations. It envisaged, inter alia, the expansion of the scope of WTO disciplines. Against this background, the study aims at presenting an overview of the deliberations in the WTO on implementation issues, providing an account of the debate that has taken place; and describing the current status of negotiations. It also aims at providing an evaluation of the results obtained so far, an assessment of outstanding issues, and recommending the future course of action for India.

The study is supported by the Sir Ratan Tata Trust and is expected to be completed by October 31, 2006.

B 2 Enhanced Protection for Geographical Indications: The Case of Indian Tea - Anwarul Hoda

The Trade Related Aspects of Intellectual Property Rights (TRIPS) Council under the Doha mandate has been discussing two important aspects of geographical indicators: first, the extension of higher levels of protection under Article 23 of the TRIPS Agreement to products other than wines and spirits; and second, the establishment of a multilateral system of notification and registration of geographical indications for products eligible for protection. This paper will analyze these issues and explore their implications for Darjeeling tea.

The study is supported by the Sir Ratan Tata Trust and is expected to be completed by October 31, 2006.

B 3 India's Liberalization Experience: Impact of WTO - Rajiv Kumar, Bibek Debroy and Suparna Karmakar

ICRIER's ongoing research on WTO has resulted in a collection of several policy contributions on the subject of trade reforms and liberalisation. The proposed volume comprises contributions from experts on India's liberalization experience in the last decade wherein some liberalization measures could have resulted from the implementation of WTO obligations. The volume also aims to review how India has coped with obligations under WTO Agreements and benefited from the rights granted under different protocols. Different chapters discuss how each sector or theme under the WTO-mandated liberalization has impacted Indian policy-making and liberalization initiatives.

The volume is supported by a grant from the Sir Ratan Tata Trust. Sage has agreed to publish the book by December 2006.

22 B 4 Market Access Negotiations in Services: Options for India - B K Zutshi

The paper makes a critical assessment of the liberalization process under the GATS during the Uruguay Round. It concludes that so far there has been limited liberalization under the GATS except for telecommunication services, and to a lesser degree, in financial services. The paper looks at India's existing commitments and contrasts this with autonomous policy reforms and liberalization already accomplished and under way in the services sector.

The study, supported by the Sir Ratan Tata Trust, will be published as an ICRIER Working Paper. It is expected to be completed by October 31, 2006.

B 5 Trade in Energy Services under GATS - Arpita Mukherjee and Ramneet Goswami

The study analyzes recent developments in energy services sector in the context of ongoing GATS negotiations. It examines India's trade and investment prospects in energy services in the light of unilateral domestic policy changes, and various domestic and external constraints inhibiting trade. It evaluates the scope for multilateral negotiations in energy services and the implications of liberalization for India's energy sector. Finally, the study recommends domestic policy reforms that are necessary for supporting India's negotiating strategies at the WTO and the overall growth of this services sector.

The study on the oil and gas sector was completed in August 2005. The study on the power sector has also been completed. ICRIER has conducted research in other energy services such as mining and nuclear energy as well.

The combined report will be completed by October 2006. Supported by the Sir Ratan Tata Trust, the study will be published as an ICRIER Working Paper.

B 6 Globalization of Transport Services: India's Trade and Investment Prospects - Arpita Mukherjee and Deepa Bhaskaran

The objective of this study is to discuss India's trade and investment prospects in the global transport sector in the light of recent global and domestic trends. It will discuss the nature and extent of liberalization in the transport services sector undertaken by India unilaterally or in the context of various bilateral, regional and multilateral agreements, and the measures required for India to maximize the gains from future negotiations.

The study, supported by the Sir Ratan Tata Trust, is expected to be completed by October 2006.

B 7 Special and Differential Treatment - Anwarul Hoda

A number of developing countries, including India, have been making the point that special and differential provisions contained in the WTO agreement are not effective and operational and, therefore, need to be improved and made mandatory. In the post-Cancun negotiations, this subject continues to be of critical importance for developing countries.

This study examines the usefulness of the special and differential (S&D) provisions contained in the WTO Agreement and the scope for making them mandatory or improving them in other ways. Linking India to the World Economy 23 Research Projects

The study, supported by the Sir Ratan Tata Trust, is expected to be completed by October 31, 2006

B 8 Global Competitiveness of Indian Higher Education - Pawan Kumar Agarwal

With the inclusion of higher education as traded services in the GATS framework, there is renewed interest in the global competitiveness of higher education. This paper examines the policies, programs and practices in India's higher education and discusses the critical issues related to the prospects of education like skill migration, mobility of professionals, cross-border trade and investment, and overall implication of internationalization on quality assurance and accreditation. The study analyses funding patterns and expenditures by households on education, reviews the regulatory environment and suggests specific domestic policy reforms in the context of internationalization of higher education.

The study, supported by Sir Ratan Tata Trust, is expected to be completed by September 30, 2006.

B 9 Doha Development Round Negotiations on Market Access in Agriculture: Implications for India: Issues in Special Products - Parthapratim Pal and Deepika Wadhwa

Special Products (SPs) are part of WTO's special and differential (S&D) provisions. In the current round of negotiations on agriculture, it has been decided that all developing country members will have the flexibility to designate an appropriate number of products as SPs, based on the criteria of food security, livelihood security and rural development needs. These products will be eligible for more flexible treatment, that is, they will attract lower levels of tariff reduction commitment as compared with other agricultural products. In this context, the paper proposes to look into the reasons that prompted developing countries to demand this provision in agricultural negotiations, identify universal applicability for developing countries to designate SPs, and, most importantly, develop a specific methodology for India to identify and designate an appropriate number of special products.

The study, supported by the Sir Ratan Tata Trust, is expected to be completed by September 30, 2006.

B 10 Domestic Regulation and GATS: Assessment of How the Regulatory Barriers Frustrate Market Access Initiative - Suparna Karmakar

Impediments to market access in developed countries for two modes of supply of services lie in a range of regulatory barriers. These include burdensome visa formalities, stringent quotas, and qualification requirements, and discriminatory taxes, levies and standards imposed on developing country service providers. It is seen that developed countries have more intensively regulated services on supposed grounds of protecting consumer interest and ensuring quality, which has, at times, bordered on de-facto protectionism.

This paper outlines the key elements of prevalent regulatory measures and barriers in developed economies to market access by service providers from developing countries. It then assesses how the proposed disciplines under GATS will help developing country service providers in improving market access.

The study, supported by the Sir Ratan Tata Trust, is expected to be completed by September 30, 2006.

24 Projects Completed

B 11 Impact on India of Tariff and Quantitative Restrictions under WTO - B N Goldar

This study assesses the impact of India's unilateral tariff reductions and lowering of quantitative restrictions since 1991. It evaluates WTO commitments on non-agricultural market access (NAMA) in the light of these reductions. Based on hard quantitative analysis, the study is a valuable addition to the literature on the impact of tariff reductions and NAMA issues in WTO.

The study was supported by the Sir Ratan Tata Trust and has been published as ICRIER Working Paper No. 172, November 2005.

B 12 Subsidy Disciplines under GATS - Rajeev Ahuja

Unlike agricultural and manufactured goods for which subsidy rules or disciplines are already well developed in the WTO, such rules and disciplines are yet to be developed for services. Developing subsidy rules in this sector poses a major challenge because of various channels through which trade in services takes place and also because of the basic framework of trade in services as laid out in the GATS.

The study brings out the complexity of issues that come up while developing subsidy disciplines for services. The non- availability of information about various subsidy practices of member countries adds to the complexity. The study indicates some broad guidelines that can help in developing the subsidies framework.

The study was supported by the Department of Commerce, Ministry of Commerce and Industry, Government of India. It has been published as ICRIER Working Paper No. 174, December 2005.

B 13 Barriers to Movement of Natural Persons - Rupa Chanda and Debjani Ganguli

This study investigates the entry barriers for Indian service providers. It focuses on the United States, and determines the volume and nature of barriers to movement of professionals in the United States. It also emphasises on the barriers in key service sectors and professions that are of export interest to India. The findings reveal that in the United States, domestic regulations and recognition issues such as licensing requirements, nationality and residency conditions are often the most significant barriers in regulated professions, such as medicine and law.

The study also looks into intermodal linkages, and analyzes how recent trends in the United States of increasing restrictions in modes such as commercial presence (mode 3) and outsourcing (mode 1) can affect services trade under mode 4. It shows that rising legislation related to the use of foreign labour, their qualifications, and labour standards in multiple sectors does impact mode 4 trade and raises the costs of entry and operation for temporary service providers.

The study was supported by the Sir Ratan Tata Trust and has been published as ICRIER Working Paper No. 169, September 2005.

Linking India to the World Economy 25 Research Projects

B 14 Market Access in Agriculture : Special Safeguard Mechanisms and Implications for India - Parthapratim Pal and Deepika Wadhwa

This study explores the reasons that prompted developing countries to demand special safeguards in agriculture. It also reviews and analyzes the proposals and submissions made by WTO member countries, and undertakes an empirical comparison of volatility of agricultural prices during the pre- and post- Uruguay Round period. A price trigger-based SSM model is developed consistent with the goals spelt out at the Doha Development Agenda.

The study was supported by the Sir Ratan Tata Trust. It will be published as an ICRIER Working Paper by December 2006.

B 15 Disciplining Voluntary Environmental Standards at the WTO: An Indian Legal Viewpoint - Samir R Gandhi

This study evaluates whether the WTO dispute settlement mechanism offers India an effective remedy against the misuse of environmental standards formulated and administrated by non-governmental organizations (NGOs) or whether India needs to adopt an alternative strategy to address such concerns. The paper argues that an amendment to the text of the Agreement on Technical Barriers to Trade (TBT) is perhaps the most effective way of regulating the growth of NGO standards and for removing any ambiguities or misinterpretation by the dispute settlement mechanism. In addition, it suggests that India could push for a more ambitious work agenda at the WTO Committee on Trade and Environment (CTE) within the ongoing Doha Round negotiations.

This study was supported by the Sir Ratan Tata Trust and has been published as ICRIER Working Paper No. 181, June 2006.

B 16 Higher Education in India: Seizing the Opportunity - Sanat Kaul

This study reviews the prevailing policy environment in higher education and evaluates its efficacy in ensuring that India is successfully able to address the emerging challenges in this sector. Given the constraints on public funding in education, the role of the private sector has been highlighted, especially in provision of higher education and technical training. The paper suggests that India needs to have a proactive demand- based policy towards private education including foreign institutions and universities desirous of setting up campuses in India. This has to be combined with the establishment of a regulatory mechanism that ensures that students' welfare is not compromised and quality standards are maintained.

The study was supported by the Sir Ratan Tata Trust and has been published as ICRIER Working Paper No. 180, June 2006.

26 C Regional and Bilateral Issues

Ongoing Projects

C 1 Non-Tariff Barriers: India's Trade with Pakistan - Nisha Taneja

The key question being posed in the ongoing study is - do exporters and importers engaged in Indo-Pakistan trade face any non-tariff barriers? If so, what is the nature of non-tariff barriers that are being faced by traders? The study would measure the incidence of non-tariff measures and identify barriers in the application of such measures. The study would be based on an extensive survey to be conducted in cities in India and Pakistan. On the basis of the findings of the study measures to address these barriers would be suggested so that the ongoing trade dialogue between the two countries can be taken forward.

The project is being funded by the Ministry of Commerce and is being supported by Sir Ratan Tata Trust.

C 2 Indo-US Trade in Services: Prospect of the ICT sector under a possible Free Trade Agreement - Arpita Mukherjee, Paramita Deb Gupta, Prerna Ahuja

This project is exploring the possibilities of enhancing trade in the Information and Communication Technology (ICT) sector under a possible Indo-US FTA. Four sector studies have been conducted under this project. These are in telecommunication services, audio-visual services, IT-enabled services (ITES) and Business Process Outsourcing (BPO) services and software services. Each sector study focuses on the current trade flows between India and the US in the particular sector, the areas of trade potential, recent regulatory and other developments and their implication and barriers to trade. The study will put forward India's possible negotiating strategies if the two countries enter into a FTA. It will also list domestic reforms that will improve productivity, efficiency and global competitiveness of the sector and enable India to benefit from bilateral liberalization.

The studies have been supported by the National Association of Software and Services Companies (NASSCOM). It is expected to be completed by September 2006.

C 3 Preferential Trading Agreements in Asia: Towards an Asian Economic Community - Amita Batra

The study undertakes an analysis of the economic rationale, costs and benefits and design of regional economic integration as in Asia. The focus of the study is on the existing and potential preferential trading arrangements among ASEAN, India, China, Korea and Japan. IDRC (International Development Research Centre of Canada), Ottawa has provided financial grant for the study for a period of two years. The report, on the completion of the first phase, was submitted to IDRC in March 2006.

The first workshop on “Preferential Trading Agreements in Asia: Towards an Asian Economic Community” was held on March 30, 2006. Preliminary findings of ICRIER's research were presented by Dr. Amita Batra. For providing a perspective to ICRIER's study, scholars from other institutes in the region were invited to present their related research.

Linking India to the World Economy 27 Research Projects

Professor Peter Drysdale of the Australian National University presented the concept paper on the “Asian Economic Community”.

The study supported by a grant from IDRC, Canada, is expected to be completed by March 2007.

C 4 Entry Barriers in China's Financial Sector - Ajay Shah, Amita Batra, Khan Masood Khan and Shahid Ashraf

The study looks into regulatory structures in the five components of the financial sector (banking, capital markets, insurance, specialized financial institutions and money markets) in India and China to ascertain the constraints related to market access (MA) and the implications for Indian firms of national treatment (NT) in this sector in China. It highlights the changes in the policy and regulatory mechanisms that the Government of India can specifically request and for commitment from the government of the Peoples' Republic of China (PRC) in these areas in the forthcoming dialogue.

Financial support has been received from the Department of Economic Affairs, Ministry of Finance, Government of India. The study is expected to be completed by December 2006.

Projects Completed

C 5 SAFTA: Potential for Expansion in Intra- Regional Trade - Amita Batra

The study examines the issues associated with participation in South Asia Free Trade Agreement (SAFTA) and suggests measures to enhance trade, investment, economic growth and poverty reduction in the South Asia Association for Regional Cooperation (SAARC) region. The preliminary outline of the country paper was presented at the orientation workshop and interactive brainstorming session held in Dhaka, Bangladesh from April 6-8, 2005.

The final country paper was submitted in August 2005. The paper was presented at the regional conference on “SAFTA: Opportunities and Challenges” held in New Delhi in October, 2005.

The study is now available in “SAFTA-Opportunities and Challenges”, a USAID publication (2005).

C 6 India-Korea: Trade in Goods - Amita Batra

An India-Korea Joint Study Group was constituted by the Ministry of Commerce, Government of India to make a comprehensive study on bilateral economic linkages between the two countries. ICRIER was asked by the Group to undertake a study on “India-Korea: Trade in Goods”. The study aimed at identification and analysis of the opportunities and challenges of a bilateral trade agreement between India and Korea, using sector and commodity trade data. The study was supported by the Ministry of Commerce, Government of India and conducted by Dr. Amita Batra, Senior Fellow, ICRIER. The final report of the study was submitted in August 2005. The report served as the basis for Chapter 2 “Trade in Goods” in the Ministry of Commerce, Government of India Report on “India-Korea Bilateral Economic Cooperation”.

28 C 7 Trade in Services under a Free Trade Agreement: Feasibility Analysis and Potential for Trade Creation - Suparna Karmakar

Three studies were undertaken simultaneously on this subject. The research output comprised three separate reports of feasibility analyzes for trade creation in services under the aegis of the Indo-ASEAN and Indo-Thai Comprehensive Economic Cooperation Agreements (CECAs), and for the Joint Study Group on the Indo-Malaysia Framework Agreement. The objective of these studies was to identify the areas of mutual trade interest in the services sector between India and its partner countries in the context of a possible Free Trade Agreement (FTA).

The studies were commissioned by the Department of Commerce, Ministry of Commerce and Industry, Government of India. Of the three reports, the Indo-Malaysia and Indo-Thai Reports have been finalized; the Indo-ASEAN Report has been sent to the Department of Commerce, Ministry of Commerce and Industry, Government of India for comments.

C 8 Feasibility for Inclusion of Services in the Proposed Indo-GCC FTA - Arpita Mukherjee and Sukanya Ghosh

The study deals with the services sectors (and modes within those sectors) of bilateral trade interest between India and the Sixth Gulf Cooperation Council (GCC) countries. It also identifies areas of future trade, trade barriers in different GCC markets and suggests measures for reducing and removing such barriers through the proposed FTA. The findings of the study have been used by the Ministry of Commerce and Industry for stakeholders' consultation and in drawing up negotiating strategies.

According to the study, Indo-GCC bilateral trade flows are expected to increase in the future as GCC countries diversify into knowledge-based services. India is a major exporter of such services. Although GCC countries are liberalizing their services sectors, there are various barriers to trade that can be addressed under the FTA. Till now, India has not been very successful in attracting investment from GCC countries. The study suggests various ways in which the FTA can help enhance the investment flow.

The study commissioned, by the Department of Commerce, Ministry of Commerce and Industry, Government of India, was completed in October 2005.

Linking India to the World Economy 29 Research Projects

D Financial Liberalization

Ongoing Projects

D 1 International Transmission of Stock Market Movements: The Indian Case - Amita Batra

In an era of increasing globalization, the transmission of movements in international financial markets is an important issue for economic policy, especially in periods of market volatility. Links between different markets have been investigated in many different ways by a growing body of research attempting to describe and quantify the transmission mechanism. This study examines the stock market linkages of the Indian equity market with the global markets. In this context, some tests may be undertaken to shed light on the nature of the propagation mechanism and its relation, if any, with economic fundamentals.

The work is part of the research work under the RBI Chair and is expected to be completed by December 2006.

D 2 Concept Paper on Financial Policy Reforms - G N Bajpai

The pace of reforms in various segments of the financial system has witnessed an increase. Whereas India's equity markets are world class, the same cannot be said of the debt markets; even in the banking sector several fragile spots, which are being dealt with on a case by case basis, can imperil the financial system. Therefore, it is timely and topical to undertake a comprehensive review of the current state of the financial sector and suggest an agenda of financial sector reforms that can be implemented without adversely impacting either the system, markets or economic growth.

The study is a part of the work program under the RBI chair and is likely to be completed by December 2006.

30 E Macroeconomic Management in an Open Economy

Ongoing projects

E 1 Role of Monetary Aggregates in the Conduct of Monetary Policy in India - Sanghamitra Sahu

In recent times, a broad consensus has emerged among economists that in the long run, inflation is a monetary phenomenon. However, notwithstanding this view, monetary policy is often analyzed using models that have no causal role for monetary aggregates in the analysis of inflationary process. Against this background, the paper investigates the role of monetary aggregates as indicators of future inflation for maintaining price stability. This paper analyzes the monetary indicators within the framework of a small monetary model known as the P-star model. The study is expected to be completed by August 2006.

Projects Completed

E 2 Critical Issues in India's Service-Led Growth - Rashmi Banga

Given the growing significance of the services sector, the study draws attention to some critical issues related to India's services-led growth and provides relevant policy insights. The main issues examined are the factors behind the growth of the services sector in India, the reasons for the lack of corresponding growth in employment in services, sustainability of growth in services sector and the existing external and domestic constraints to trade among different services.

The study has been funded by the Asian Development Bank under the Policy Networking Project. It has been published as ICRIER Working Paper No. 171, October 2005.

E 3 Globalization, Poverty and Inequality - Rajat Acharyya

The paper summarizes country studies on linkages between trade, growth and poverty. It provides additional evidence on the nexus between globalization, inequality and poverty based on traditional wisdom as well as on new theories and methodologies.

The study reveals that in the long run there is a favourable impact of trade on poverty through growth. The commensurate increase in inequality, however, is a reflection of unequal opportunities for the lower-income group to formal and technical education and skill-formation. But with acceleration of the growth of output through increased trade, and an increase in opportunities for upward income mobility for lower-income groups, income inequality should decline in the longer term.

The study has been funded by Asian Development Bank under their Policy Networking Project.

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E 4 Non-Tariff Barriers affecting India's Exports - Rajesh Mehta

According to the WTO, there are over 2,000 NTBs notified in the world. The objective of this study is to: (i) highlight that Indian exports do face NTBs in major export markets especially the United States, European Union, Japan and other developed economies; (ii) illustrate the range of barriers, which confront Indian exporters; and (iii) suggest policy responses to reduce the impact of these NTBs on Indian exports.

The study has been funded by the Asian Development Bank under their Policy Networking Project.

E 5 Policy Regimes, Growth and Poverty - Arvind Virmani

The paper is a case study of the Indian development experience since 1950-51, based on earlier studies by the author along with new analysis of poverty. It uses a mix of theory, empirical analysis, policy experience and intuition to present a picture of the evolution of the Indian economy through two major policy experiences and underlying growth trends. From these it derives lessons for institutional and policy reforms needed for speeding up growth and eliminating poverty. In particular, it selects five major reforms that have the greatest possibility for structurally transforming the Indian economy.

The study has been completed and has been published as ICRIER Working Paper No. 170, October 2005.

E 6 The Debate on the Poverty Estimates of 1999-2000 - K L Datta

This paper looks into the issue of comparability of the latest estimates of poverty prepared by the Planning Commission for the year 1999-2000, with earlier estimates of the 1980s and 1990s focusing on the methodology and data base of the estimation. It also reviews the alterative approaches and studies in this regard. The paper traces the comparable poverty estimates for the 1980s and 1990s in their levels and change, and uses the extent of poverty reduction implicit in these estimates to assess the magnitude of poverty reduction during the two decades.

The study has been completed and will be published as an ICRIER Working Paper.

32 Seminars Seminars

Fifth India-Korea Dialogue - October 5, 2005

The Fifth India-Korea Dialogue, jointly organized by ICRIER and the Seoul Forum on International Affairs, titled “The India-Korean Partnership for Economic Cooperation in Globalization” was held in Seoul on October 6, 2005.

The Dialogue - a non-governmental initiative - reaffirmed the existing friendly relations between India and Korea and noted the large potential for further cooperation in fields such as information technology, biotechnology, energy, etc.

The Indian delegation was led by former Foreign Secretary, Mr. Shashank and comprised Mr. Rajive Kaul, Chairman, NICCO Corporation and former President, Confederation of Indian Industry, Dr. Manoj Joshi, Editor (Views), The Hindustan Times and Dr. Amita Batra, Senior Fellow, ICRIER.

Professor Kim Dal Choong, Programme Chair, SFIA and Professor Emeritus, Yonsei Univeristy, led the Korean delegation, which included Mr. Lee Hong-Koo, former Prime Minister of Korea and Chairman, SFIA, Mr. Han Seung- Soo, former Foreign Minister and former Deputy Prime Minister, and Mr. Jung Chang-Young President Yonsei University.

Energy Security: The Future of Oil and Gas in India - October 25, 2005

The panelists included Mr. Talmiz Ahmad, Additional Secretary, Ministry of Petroleum and Natural Gas, Government of India, Ms. Sudha Mahalingam, Senior Fellow, Nehru Memorial Museum and Library and Dr. T. L. Sankar, Consultant, Administrative Staff College of India, Hyderabad. Mr. Nitin Desai, Honorary Professor, ICRIER and former Under Secretary-General of the UN chaired the seminar. The discussion reviewed energy prospects in the light of: (i) mounting oil prices; (ii) the rising demand and uncertain supplies;

and (iii) uncertainties surrounding global energy prospects. It also From L to R : Mr. Talmiz Ahmad, Mr. T.L. Sankar, Mr. Nitin Desai, Honorary Professor, ICRIER, Ms. Sudha Mahalingam and Dr. Arvind discussed policy options needed for India's energy security. Virman, Director & CE, ICRIER, at the Panel Discussion on 'Energy Security : The Future of Oil & Gas in India' The principal conclusion was that energy security involves more than merely tying up sources of oil supply. It must also address demand management and alternatives to oil, which requires coordination. Stress should be laid on demand assessment and management, and setting priorities for long- term technology options. The sectoral bodies should be left free to undertake supply planning on the basis of this assessment and priority setting.

Important Issues for India's Negotiations in WTO - November 14, 2005

This seminar was organized jointly with the Ministry of Commerce and Industry, Government of India and the Sir Ratan Tata Trust. Mr. Kamal Nath, Minister for Commerce and Industry, Government of India was the Chief Guest and the session was chaired by Dr. Isher Judge Ahluwalia, Chairperson, ICRIER. The objective was to discuss important negotiating issues before the Hong Kong Ministerial Meet of the WTO.

Linking India to the World Economy 35 Seminars

The Commerce Minister said that agriculture remains the most distorted sector. Domestic support and subsidies are key obstacles, since they are illegitimate instruments in a rule-based, multilateral system and the sooner they are dismantled, the better. India needs to be aggressive in agricultural negotiations and make tariff reduction conditional on subsidy reduction in developed countries. Mr. Anwarul Hoda, Member Planning Commission mentioned that capping of high tariff lines is extremely important.

From L to R: Dr. Arvind Virman, Director & CE, ICRIER, Mr. B.K. Zutshi, Dr. Isher J. Ahluwalia, Chaiperson, ICRIER, Hon'ble Minister of Commerce For NAMA, the Minister pointed out, India seeks significant market & Industry, Mr. Kamal Nath, and Mr. Anwarul Hoda, Member, Planning Commission, at the Seminar on ‘Important Issues for India's Negotiations in access for exports through reduction in tariff and non-tariff barriers WTO' in the developed countries. Regarding services, the Minister said India should open some sectors to gain market access in developed countries. Mr. B. K. Zutshi, former Indian Ambassador to GATT, pointed out that with the submission of the revised offer, India is moving ahead.

ICRIER's research work on key WTO-related issuesincluding Impact of Tariff Reforms, Cross Modal and Cross Sectoral Issues in Services, Trade Facilitation, Anti-Dumping and Subsidies in Serviceswas disseminated in the session chaired by Mr. S. N. Menon, Commerce Secretary, Government of India.

VIP2: A Simple Measure of a Nation's (Natural) Global Power - November 29, 2005.

A seminar on ‘VIP2: A Simple Measure of a Nation's (Natural) Global Power' by Dr.. Arvind Virmani was organized by ICRIER on November 29, 2005. Dr. Sanjaya Baru, Media Adviser to the PM chaired the seminar.

It is well known that the US economy is the largest in the world. But does the size of an economy measure a nation's power in a global context? During the Cold War, the world was treated as being bi-polar, that is the US and USSR were recognized as the two most powerful nations. The most visible part of their competition was in space, nuclear, defence and other technology. Since then complex models have been built to define and measure a nation's global power. Economic and technological factors play a major role in these models, along with natural resources, education and skills.

International relations experts are divided on the relative importance of economic and military strength. This can be resolved by decomposing national power into two elements: (i) The “power potential” of a country, which depends on economic strength and general technological capability; and (ii) military capability, including defence and strategic equipment and specific technologies needed for attaining military superiority. Together these define the actual power of a country. The index of “power potential”, christened VIP2, is the basis for defining an index of actual power (VIP), which requires a separate measure of military capability.

The paper defines VIP2 (the index of power potential), calculated for about 110 countries. The paper also analyzes the implications for permanent, veto bearing membership of the UN Security Council.

36 Emerging Global Scenario: Economic Perspective - December 10, 2005

ICRIER organized a seminar on “Emerging Global Scenario: Economic Perspective” by Dr. Arvind Virmani on December 10, 2005. Mr. K. Subramanyam, chaired the seminar.

Dr. Virmani said that India was among the ten fastest growing economies of the world since 1980 and projected that in the next decade its growth rate would exceed that of the Tigers to reach the top three. Also, though China's growth had been overestimated by about 2 per cent, it would remain the world's fastest growing From L to R : Mr. Uday Bhaskar, Dr. Arvind Virmani, Director & CE economy till 2010. ICRIER and Mr. K. Subrahmanyam, at the Seminar on ‘Emerging Global Scenario : Economic Perspective'. The reality of Krauthammer's “unipolar world” was reinforced since 9/11 when the USA began assertsing its primacy. However, views differ on how long the unipolar world will last and the possibility of its conversion to a bipolar or tripolar one. Dr. Virmani argued that the global economy will result in a tripolar world by the middle of the twentieth-first century with two of the poles in Asia and one across the Pacific. The evolution of global power into a bipolar and then tripolar world, based on Dr. Virmani's projections, the rationale for the growth assumptions about China and India, and the reasons for the European Union not becoming a fourth pole were also discussed.

China's Socialist Market Economy: Lessons of Success by Dr. Arvind Virmani - December 15, 2005

Exports and Foreign Direct Investment have played such an important role in China's economy that its growth has been characterized as “export-led growth,” and could since 1990 be characterized as “FDI-export led growth.” The extent to which import trade is now free is not entirely clear, though on balance this could be put into the market category. There is also a competitive fringe of individual capitalists and private capital that operates in export production.

Dr. Arvind Virman, Director & CE, ICRIER, and Mr. Abid Hussain at the Seminar on 'China's Socialist Market Economy Lessons of Success’ In moving from the “Socialist” to the “Socialist Market” economy, China has borrowed aspects from the “Nationalist Market Economies” of developing Japan, South Korea and Singapore. China has achieved considerable success in decentralizing and ensuring accountability at every level including the private corporate sector. However, greater attention had to be paid to democratization of the gains from growth, and the welfare of all citizens.

Drawing on the Chinese experience, Dr. Virmani recommended specific lessons for other countries, which include focus on growth orientation, modification of existing institutions in accordance with development objectives, promotion of complementary trade and FDI; adoption of flexible labour laws for attracting export oriented FDI, creation of market structures for promoting competition and emphasis on good governance.

Dr. Abid Hussain, Former Ambassador to USA chaired the seminar.

Linking India to the World Economy 37 Seminars

Higher Education in India: The Need for Change by Mr. Pawan Agarwal - March 2, 2006

The study looks at the growth of higher education in India (in an international comparative perspective), with reference to private initiatives. It notes that countries such as United Kingdom, United States and China have been using competition to foster change in building a high-quality differentiated system of higher education.

The India focus begins with an empirical mapping of growth since 1947. The funding patternpublic financing (both centre and states), households' expenditure and trends in students' loanshas been Mr. Pawan Agarwal is presenting the presentation at the Seminar on ' Higher Education in India : The Need for Change'. analyzed. The research examines the role of higher education in workforce development to meet domestic as well as global demand for qualified manpower in present times when both skilled work and skilled workers are moving across national borders. Evaluating the role of academic research in fostering innovation in the Indian economy, its weaknesses have been outlined and the way forward suggested.

The research also looks into the present regulatory environment. Instead of a detailed planning and a controlled approach, a regulatory framework that takes care of market failure and facilitates market coordination has been advocated.

Changes have been suggested in the accreditation system in India. Other important issues such as governance, academia, technology, trade-related issues, statistical system and policy research have also been covered.

Rural Income Volatility and Inequality in China by John Whalley - May 9, 2006

Much of current debate on poverty in China focuses on the growing urban-rural income gap (the ratio of mean urban to rural incomes). The available data indicates a significant increase from approximately 1.8 in the late 1980s to over 3 at present, but the higher volatility of rural incomes in China is not accounted for. Analysis of rural income volatility decomposed into chronic and transient components point to the conclusion that poverty may be a less serious social problem than it appears. Heightened rural volatility increases the effective urban-rural income gap, intensifying, and not weakening, poverty concerns.

Open for Business by Henrik Isakson - May, 10, 2006

This comparative analysis studies the trade policies of four major industrialized trading nations or blocs: the European Union, the United States, Canada and Japan, also known as "the Quad". Using more than 70 indicators, it compares the openness for imports in industrial and agricultural goods as well as in services. Also included are the horizontal issues of free trade agreements and trade preferences towards developing countries. No clear overall pattern can be found in the trade policies of the four countries. They all have their strengths Mr. Henrik Isakson & Dr. Rajiv Kumar, Director & CE, ICRIER, at the and weaknesses, with some open doors and some closed. Seminar on 'Open for Business'.

38 ICRIER-World Bank seminar on “Assessing World Bank Support for Trade” - May 15, 2006

The Independent Evaluation Group (World Bank) report “Assessing World Bank Support for Trade 19872004” analyzes the Bank's contribution to free trade in developing countries with significantly liberalized trade regimes over the past two decades. The Bank played a significant role in the reform of developing countries' trade policies through research, adjustment lending and support of trade-related institutions and infrastructure. Following a lull during the mid-1990s, in 2001 the Bank re-appraised its trade activities and intensified its From L to R : Dr. Manoj Pant, Professor, JNU, Mr. Pradeep Mehta, focus. This phase has focused on the global trading system and on the Secretary General, CUTS, Mr. R.V. Kanoria, Chairman, WTO Committee, Dr. Pronab Sen, Pr. Adviser, Planning Commission, and Dr. use of trade-related research, advocacy, capacity building and H.A.C. Prasad, Sr. Economic Adviser, Ministry of Finance, at the Seminar on ‘Assessing World Bank Support for Trade’ mainstreaming trade in the Bank's operations. On the lending side, attention has shifted to trade facilitation (both physical infrastructure and institutions). This study outlines the evolution of the Bank's assistance between 1987 and 2004, evaluates the development effectiveness of its support to developing countries in trade and recommends action to enhance the development effectiveness of that support.

International Seminar on “Developing Countries and Services Negotiations” - June 6-7, 2006

While some developing countries such as India, Mexico and China have a strong interest in pushing forward services negotiations, other WTO members have taken defensive positions. Consequently, services negotiations under the Doha Round are progressing at a slow pace. Many developing countries such as India have unilaterally liberalized most of their services sectors and now face market access and domestic regulation related barriers in developed country markets. Till now, developed countries have not been willing to liberalize sectors or modes From R to L : Dr. Mina Mashayekhi, Head, Trade Negotiation and Commercial Diplomacy Branch, UNCTAD, Dr. Harsha Vardhana Singh, Deputy Director of trade of interest to developing countries. On the other hand, some General, WTO, Dr. Abdel Hamid Mamdouh, Director Trade in Services Division, WTO, and Ms. Arpita Mukherjee, Senior Fellow, ICRIER, at the Seminar on developing countries have also adopted defensive positions due to lack 'Developing Countries and Services Negotiations'. of negotiating resources; inability to identify areas of export potential; fears about the domestic industry's inability to face competition; and fear of losing sovereignty to regulate key service sectors;. Some developing countries have limited export interest in the services sectors and are inclined to liberalize sectors such as agriculture where they have a strong offensive interest. Others do not expect trade liberalization to generate sufficient economic gains to make it worthwhile for political effort to overcome domestic resistance to services sector liberalization. As a result, there is no unanimity among developing countries on the approach to be adopted for services negotiations.

The lack of interest in some developing countries to actively participate in services negotiations undermines the development objective of this Round. Active participation of developing countries is a prerequisite for successful conclusion of services negotiations and for them to gain from the negotiations.

The seminar was supported by the Ministry of Commerce and Industry, Government of India and the WTO Secretariat.

Linking India to the World Economy 39 Lectures Lectures

High Debt Emerging Market Macroeconomics: Turkey, Brazil and other experiences by Dr. Kemal Derviş, Administrator, UNDP and UN Under Secretary General November 11, 2005

Dr. Derviş discussed the problems faced by high-debt economies and how it led to the crises of the emerging market economies such as Brazil, Turkey, Argentina and Mexico. He pointed out that the average debt to GDP ratio in these economies has been very highat around 70 per cent, which is unsustainable leading to financial crises.

Turkey overcame the crisis by creating a primary surplus through a tight fiscal policy which led to reduction in social expenditure on From L to R : Dr. Suman K. Bery, Director General, NCAER, Dr. Kirit S. Parikh, Member Planning Commission, Prof. Kemal Dervis, and Dr. Arvind Virmani, education, health etc. Accordingly, a stability and growth facility Director & CE, ICRIER, at the lecture on 'High Debt Emerging Market Macroeconomics : Lessions from Turkey, Brazil and Other Experience'. programme was proposed to address volatility and high-debt problems in emerging market economies that would help in achieving social stability and eventually reducing public debt.

Although India has a high debt to GDP ratio at 81 per cent in 2002, its situation is different from high-debt economies. The growth rate of high-debt economies was lower than their real interest rates whereas in India the real GDP growth rate exceeds the real interest rates. This makes the growth dynamics more favourable for India. Also, the major part of the public debt consists of internal debt of the public sector, thus reducing the vulnerability factor.

However, while India does not seem likely to face a debt event, if the debt ratio creeps up, it could lead to a significant negative impact on growth and investment that could impede economic activity. Reduction in fiscal deficit was suggested for better management of debt.

Dr. Kirit Parikh, Member, Planning Commission chaired the lecture, which was organized jointly with NCAER and UNDP at ASSOCHAM.

Will Europe still be a World Economic Player in the 21st Century? by Professor Jean Pisani-Ferry, Head Bruegel Center, Brussels November 25, 2005

The lecture dwelt on the international economic role of the EU (with political pressure starting to rise in favour of a reduction of Europe's weight in international organizations), its representation in international economic institutions; the way it uses its power; the choices it faces; and the potential role it can play in the rebalancing of power in a multilateral system to reflect rising economic powers like India and China.

Countering the growing perception that the EU is on the decline and does not respond well to global economic challenges, it was argued that the EU is the clear winner and a dominant player evident through its dominant share in several international institutions the G7, the OECD, and the International Energy Agency and also its significant share of membership in global institutions such as the WTO or Bretton Woods Institutions.

However, it was questioned whether the EU makes effective use of its institutional power to shape the agenda of the multilateral system. To assess this, three key areas point out the limits. In international trade, the EU has not been able to develop a consistent strategy. In currency management, despite Europe's economic and institutional investment in

Linking India to the World Economy 43 Lectures

Creating a common currency, since the launch of the euro, neither the EU as a whole nor the euro area have expressed strong intentions to build on it to enhance its international role. Even in area of international finance, the EU's effective role does not seem to be commensurate with the role that its representation in the Bretton Woods organizations can allow it to play.

The policy issues are evident. Over-representation in the international institutions and weaker use of power is unsustainable. The EU has an opportunity to trade off formal, but ineffective, power for a formally diminished, but more effective influence in world economic affairs. For this it needs to seize the opportunity for a rebalancing of representations in the IMF and other institutions and reform its own external representation. This, however, does not imply a complete federalization of external representation. The supervised delegation model in use in the trade field offers a middle path. It allows member states to retain control rights through the definition of a mandate and the supervision of its implementation.

Dr. Isher Judge Ahluwalia, Chairperson, ICRIER chaired the lecture, which was organized jointly with the Embassy of France and Euro India Centre.

International Trade in Education Services: What Should India Do? by Professor Stephen Heyneman, Professor of International Education Policy at the Vanderbilt University December 28, 2005

Education has been included for discussions under the GATS framework. Professor Heyneman analyzed the concerns about classifying education as a traded service. He reviewed the current status of the quality of education around the world, and explained why education is increasingly becoming a factor of international trade. He examined the arguments for and against the trend to reduce barriers to trade in education.

Competition in education services (underpinning of trade in education services) is justified not merely for practical reasons like efficiency, but for furthering a basic human right. Public interest is served best when each member of the public has access to the higher education it wants. Every monopoly abrogates this right of the public.

Finally, arguments were weighed for and against India's participation in education trade, with the suggestion that it would be morally, economically, and educationally opportune for India to do so.

Dr. Arvind Virmani, Director, ICRIER chaired the lecture, which was organized jointly with the United States Educational Foundation in India (USEFI). Dr. Jane E. Schukoske, Executive Director, USEFI made the welcome address.

Preserving Financial Stability during periods of High Growth and Low Inflation: The Role of the IMF by Mr. Willy Kiekens, Executive Director, IMF December 29, 2005

Changes in the monetary and financial regimes during the last 20 years explain the emergence of global financial imbalances, thereby increasing the threat to financial stability despite prudent monetary policies. In the aftermath of the Asian Crisis, the IMF has adjusted its surveillance to better diagnose the build up of excessive risks and imbalances. It has also advised fiscal, monetary and prudential supervisory authorities in preserving financial stability while liberalizing the financial sector and international capital flows.

44 The lecture focused upon three key issues pertaining to the IMF's operations. These were lessons for safeguarding financial stability, the process of adjusting policies for successfully safeguarding financial stability and assessing the challenges facing India in preserving financial stability.

Financial stability depends on sound risk management by managers of financial institutions and corporations. Governance structures that enable such decisions are integral to safeguarding financial stability. The IMF has changed dramatically during the last ten years in response to the recurrent banking and capital account crises. These changes have aimed to improve transparency and timely information of markets, better analysis of the dynamics and vulnerabilities in the economy and advising policies that anchor expectations, promote flexibility in adjusting to shocks and Mr. Willy Kiekens is delivering the lecture on 'Preserving Financial Stability liberalize international capital movements prudently. During Period of High Growth and Low Inflation-The Role of the IMF'.

The role of the IMF in India is to support the country's cautious approach to liberalizing the capital account. Improving the business climate and further lifting restrictions on foreign participation in Indian companies and banks will be instrumental for attracting higher FDI flows. The stress tests, conducted by the IMF, show that the Indian banking sector is resilient to a tightening of provisions requirements and to a deterioration in credit quality typical in periods of rapid growth.

Mr. T. N. Ninan, Editor, Business Standard chaired the lecture

India's Development Strategy: Which Way Now? by Dr. Jagdish Bhagwati January 17, 2006

Professor Bhagwati discussed the history of India's economic policies since independence and the ideas that shaped such policies. He reviewed the ongoing reforms process and complemented successive governments for persevering with the agenda despite difficulties. He underlined the importance of removing poverty as one of the key objectives of economic reforms. He, however, specifically pointed out that although high growth is the trigger for gainful employment, in the absence of supplementary reform measures like land reforms, higher social Prof. Jagdish Bhagwati, University Professor, Economic and Law, Columbia University is delivering the lecture on 'India's Development Strategy : Which Way expenditure, employment guarantee schemes and greater Now?'. deployment of resources in agriculture, it is unlikely to result in a meaningful reduction of poverty.

The lecture was chaired by Dr. Vijay Kelkar, Chairperson, ICRIER.

Linking India to the World Economy 45 Lectures

The Role of Central Banks in Fostering Economic Growth by Dr. Ronald I. McKinnon, William D. Eberle, Professor of International Economics, Stanford University February 15, 2006

Beginning from the early decades of the previous century, Professor Mckinnon traced the evolution of monetary policy and central banking, till the recent times. He pointed out that the last few decades have seen major changes in the role perception of central banks. He drew particular attention to the emphasis of the central banks in allocating credit during the 1950s and 1960s for maintaining reserve From L to R : Dr. Rajiv Kumar, Director & CE, ICRIER, Dr. Shankar Acharya, Honorary Professor, ICRIER, and Prof. Ronald I. McKinnon, William D. Eberle, requirements and capital controls. He pointed out that in the 1970s, Professor of International economic, Stanford University. there was high growth of the unregulated euro currency markets, in a regime of deposit insurance. As international players had no capital requirement, this led to reduction in the capital requirements of the local banks, making them vulnerable to the banking crises. The resultant banking crisis faced by the US in the 1980s and by Western Europe around the same time led to the first Basel Accord in 1989.

The 1990s saw a number of banking crises followed by currency crises. Private capital flows to developing countries largely displaced the official development assistance while there was a spread of official deposit insurance to more than 70 countries. Except China and South Asia, most other countries loosened capital control and interest ceilings were lifted. The central banks were no longer activist intermediaries. The central banks' role as direct agents in capital markets was now seen as running the risk of financial repression and loss of monetary control with inflation.

While there are now no private or official direct borrowings from central banks, their regulatory supervision and crisis management role remains intact. This has created the problem of non-availability of long-term finances for the developing countries. Apart from a few countries like India, the bond market is not very effective. According to Professor Mckinnon, one answer to the problem could be to set up local development banks on the lines of China. He also mentioned that the exchange rate mechanism should be given more weight for which central banks must provide a stabilizing influence.

Reforms of the International Monetary System by Dr. Mervyn King, Governor of the Bank of England February 20, 2006

The lecture was chaired by Mr. P. Chidambaram, Hon'ble Finance Minister, Government of India.

A review of the international monetary system provides an opportunity to address fundamental issues such as the need for the IMF. The responsibility for radical change lies firmly with stakeholders around the world.

Dr. King was of the firm opinion that the IMF should focus its work

Dr. Mervyn King, Governor of the Bank of England is delivering the lecture on on the international monetary system around three tasks wherein it 'Reforms the International Monetary System'. should provide and share information about the balance sheets of all major countries, their composition and size, and the links between

46 Commitments for greater transparency about national policies; and provide a forum for national authorities to discuss the risks to the world economy.

Dr. King affirmed that the IMF should also step back from much of its expensive micro-management, for example, by ceasing its involvement in day-to-day reviews of Article IV reports, and concentrate instead on holding the management accountable for the delivery of its mandate.

The Role of Development Assistance for Middle Income Countries by Professor Ravi Kanbur June 13, 2006

Professor Kanbur outlined the various objectives of development assistance. These include direct development objectives for helping recipients to help themselves (such as in Millennium Development Goals), enhancing supply of global public goods for helping recipients as well as donors; and objectives those benefit only donors. He discussed the two main instruments for provision of development assistance, which are through financial transfers and through creation of knowledge. He also dwelled extensively on the ways of defining 'middle income' and the income-eligibility criteria From L to R : Prof. Ravi Kanbur, T.H. Lee Professor of World Affairs, Cornell of countries for borrowing from IDA. University and Mr. Ashok Chawla, Additional Secretary (EA), Ministry of Finance.

Referring specifically to Africa, Professor Kanbur pointed out that the outcomes of development assistance to low- income African countries have been poor, due largely to the structural features of Africa such as geography, colonial history and nature of the nation state. It has been debated whether development assistance helps in Africa. However, regarding continuation of development assistance to middle-income countries, he said such perseverance has been justified for eliminating poverty and building up stock of global public goods.

Mr. Ashok Chawla, Additional Secretary, Ministry of Finance, Government of India chaired the lecture.

Dancing with Giants China, India and the Global Economy by Prof. L. Alan Winters June 22, 2006

Research on India and China and the global economy shows that China's contribution to world GDP growth has been higher than India's during the period 1995-2004 and will remain so till 2005- 2020. It is seen that China has been unsuccessful in producing sophisticated capital goods and continues to meet its requirement through imports. However, it has been highly successful in labour- intensive manufactures. It is expected that for both countries, manufacturing will hold the key to future growth prospects.

Prof. L. Alan Winters, Director, Development Research Group, The World Bank is However, he pointed out that growing inequality was a major delivering the lecture on 'Dancing with Giants China, India and the Global Economy'. challenge for both India and China.

Dr. Isher Judge Ahluwalia, Chairperson, ICRIER chaired the lecture, which was held in collaboration with the World Bank.

Linking India to the World Economy 47 Conferences/Workshops Conferences/ Workshops

Policy Research Networking: Consultations on Trade and Industry coordinated by ICRIER and Indian Institute of Management, Bangalore (IIMB) and supported by the Ministry of Finance, Government of India August 17, 2005

The workshop marked the final phase of the Asian Development Bank's Technical Assistance Project “Policy Research Networking to Strengthen Policy Reforms” under the thematic area of “Trade and Industry”. It comprised two sessions with the key objective of networking with policymakers, opinion makers and other stakeholders to discuss policy recommendations that have emerged in the researched policy papers.

For the first session on “Trade Policy”, ICRIER was the hub institute From L to R : Dr. Narhari Rao, Chief Economist, ADB, Dr. Arvind Virmani, Director & CE, ICRIER, and Prof. Chiranjib Sen, Prof. Economics & Social and coordinated the papers on “Globalization, Poverty and Sciences, IIM Inequality”, “Critical Issues in Services-led Growth” and “Non- tariff and other Barriers to Trade”. The second session on “Industrial Performance” was coordinated by Indian Institute of Management (IIM) - Bangalore with policy papers on “Recent Developments in the Regulatory Framework for the Private Sector,” “Issues Regarding Privatization and Disinvestment,” and “Role of Small-Scale Industries in the Age of Liberalization.”

Dr. Arvind Virmani, Director & Chief Executive, ICRIER chaired the first session. Professor K. L. Krishna, former Senior Consultant, ICRIER chaired the second session.

A Roundtable Discussion: People Moving, Jobs Moving: The Impact of Migration between UK and India in collaboration with Global Development Network (GDN) and Institute for Public Policy Research (IPPR) March 7, 2006

The roundtable focused on the key aspects of migration flows between India and the UK for a better understanding of how economic and demographic changes affect the flows of people and jobs.

Mr. N.K. Singh, Board Member, ICRIER and former member of the Global Commission on International Migration chaired the roundtable.

From L to R : Mr. Nick Pearce, Mr. N.K. Singh, Board Member, ICRIER.

First International Workshop for the IDRC Research Project on “Preferential Trading Agreements in Asia: towards an Asian Economic Community” March 30, 2006

The preliminary research findings were presented by the Principal Researcher for the Project, Dr. Amita Batra, Senior Fellow, ICRIER.

The scholars present at the workshop were: Dr. Lu Jianren, Professor, Chinese Academy of Social Sciences, Beijing; Dr. Wisarn Pupphavesa, Advisor, Thailand Development Research Institute, Bangkok; and Dr. Rahul Sen, Fellow, ISEAS,

Linking India to the World Economy 51 Conferences/Workshops

Singapore and Professor Peter Drysdale, Australian National University, who presented the concept paper on the “Asian Economic Community.”

Mr. Shashank, former Foreign Secretary, Government of India gave the keynote address.

From L to R : Dr. Wisarn Pupphavesa, Advisor, Thailand Development Research Institute, Bangkok, Dr. Rahul Sen, Fellow, ISEAS, Singapore, Dr. Ramgopal Aggarwala, Consultant, World Bank, Dr. Sanjib Pohit, Chief Economist, NCAER, and Dr. Shankar Acharya, Honorary Professor, ICRIER.

WTO and the Doha Round: The Way Forward April 6-7, 2006

The Doha Round of Negotiations is now at a critical juncture. While members are convinced that successful conclusion of the Doha Development Agenda will be in their collective interest and are hence keen that the 2006 deadline is not missed, the talks seems to have reached a plateau. India's active role in Hong Kong has been recognized by all; it now has the opportunity to play an effective role in resolving the current impasse in agriculture, and further the negotiations in non-agricultural market access and services.

Mr. Kamal Nath, Minister for Commerce and Industry, From L to R : Mr. Pascal Lamy, Director General, WTO, Hon'ble Commerce and Government of India, inaugurated the Conference, and also Industry Minister Mr. Kamal Nath and Dr. Isher Judge Ahluwalia, Chairperson, ICRIER, at the International Conference on 'WTO and the Doha Round : The Way delivered the Valedictory Address. Mr. Pascal Lamy, Director Forward’ General of the WTO delivered a special address at the inaugural session.

The Sir Ratan Tata Trust (SRTT) sponsored the conference, with the support of the Ministry of Commerce, Government of India.

ICRIER-World Bank Workshop on “International Financial Integration of China and India” - May 26, 2006

The World Bank-IMF annual meetings for 2006 in Singapore will feature a series of seminars organized around the theme of China and India as major emerging players in the world economy. One of the key issues to be examined is the “Increased Integration of China and India in the Global Financial System: Issues and Implications.” In preparation for this, the World Bank commissioned a set of From L to R : Ms. Min Zhao, Dr. Omkar Goswami, CERG Advisory Pvt. Ltd., background papers by experts from India and China. Preliminary Dr. Parthasarthi Shome, Advisor to Finance Minister, Ministry of Finance and Ms. Dominique Dwar-Fercaut, at the ICRIER-World Bank Workshop on drafts of these papers were discussed at a workshop in Beijing in 'International Financial Integration of China and India'.

52 March 2006. A similar workshop was held in New Delhi in May 2006 for comments and feedback from senior policymakers, practitioners and academics.

The New Delhi workshop, organized jointly by ICRIER and the World Bank, discussed two broad sets of questions in the light of the background papers: First, the manner in which policy changes in India and China have affected the patterns of international capital flows and balance sheets. Second, the issues and challenges posed by the increased integration of China and India in the international financial system for global finance.

Linking India to the World Economy 53 South Asia Network of Economic Research Institutes (SANEI) SANEI

South Asia Network of Economic Research Institutes (SANEI)

The Secretariat of the South Asia Network of Economic Research Institutes (SANEI) was transferred from ICRIER to the Pakistan Institute of Development Economics (PIDE) in April 2004. Dr. Rajiv Kumar, Director & Chief Executive, ICRIER retains his position as member of the SANEI Steering Committee.

The Steering Committee of SANEI (Pakistan) met on December 22, 2005 at PIDE, Pakistan. Dr. Arvind Virmani, former Director & CE, ICRIER attended the meeting and also participated in the Seventh Annual SANEI Conference in Pakistan from December 22-23, 2005.

The Steering Committee of SANEI (India) met on December 22, 2005 in Islamabad, Professor T N Srinivasan chaired the meeting. Dr. A R Kemal, Dr. Dwarika Nath Dhungel, Dr. Basil Ilangakoorn and Dr. Arvind Virmani participated in the meeting.

Dr. Virmani presented the statement of accounts of outstanding payments of SANEI (India) for the project under the Education Research Initiative (ERI) and SANEI Sixth round funding. The meeting approved the statement of accounts of SANEI (India).

All projects under ERI and SANEI Sixth round were completed except one titled, “A Cost of Analysis of Medical Education”. The final project reports were forwarded to the SANEI (Pakistan).

Linking India to the World Economy 57 ICRIER Team ICRIER Team

Administrative and Support Staff with the Director

Research Assistants at work at ICRIER

Linking India to the World Economy 61 ICRIER Team

Sitting From L to R : Dr. Amita Batra, Dr. Shankar Acharya, Dr. Rajiv Kumar, Dr. Arpita Mukherjee, Ms. Nisha Taneja. Standing From L to R : Dr. Suparna Karmakar, Dr. Amitendu Palit, Dr. Garima Malik, Dr. Sanghamitra Sahu, Dr. Surabhi Mittal, Dr. Badri Naryanan G.

62 Research Faculty

Director & Chief Executive Dr. Rajiv Kumar

Professors Dr. Shankar Acharya1 Administration Mr. Nitin Desai1 Secretary Senior Fellows Mr. Rajesh Rampal Dr. Amita Batra Manager (Administration & Events) Dr. Suparna Karmakar Ms. Neena Bhatia Dr. Arpita Mukherjee Ms. Nisha Taneja Principal Private Secretary Grade I Mr. Manmeet Ahuja Fellows Dr. Surabhi Mittal Library Assistant Dr. Garima Malik Ms. Mridul Saxena Mr. Badri Naryanan G. Accounts Executive Dr. Sanghamitra Sahu Mr. S. P. Chathli Dr. Abhijit Sen Gupta Mr. Prem Chand Mathur Dr. Mandira Sarma Office Assistant Grade I Visiting Fellows Ms. Deepa Gopalan Mr. Pawan Agarwal Mr. Anil Kumar Dr. Amitendu Palit Mr. Sharad Natha Jha Research Associates Jr. Office Assistant Grade II Ms. Manisha Gupta Mr. Ram Autar Mr. Adithya Krishna Chintapanti Receptionist Grade I Research Assistants Ms. Aric Mary Mr. B. Karan Singh Ms. Deepa Bhaskaran Reprographic Attendant Grade II Ms. Paramita Deb Gupta Mr. Pherum Singh Ms. Ramneet Goswami Library Attendant Grade I Ms. Suchitra Tanwar Mr. Ajay Pal Ms. Deepika Wadhwa Ms. Shravani Prakash Driver Grade I Ms. Shounkie Nawani Mr. Ashok Kumar Singh Ms. Manjeeta Singh Office Attendant Grade I Ms. Vasundhara Ramachandran Mr. R. M. Yadav Mr. R. Srinivasulu Mr. Jovinder Ms. Ruchi Jain Mr. Pankaj Vashisht Office Attendant Mr. Gaurav Tripathi Mr. Deepak

1 Honorary Linking India to the World Economy 63 ICRIER Team

Summer Interns Mr. Prakash Chandra Bhatt Ms. Chinmayee Gopal Mr. Ashish Gambhir Ms. Anusha Nath

External Consutlants Dr. Rajat Acharyya, Professor, Jadavpur University Mr. Anwarul Hoda Dr. Aradhna Aggarwal Member, Planning Commission Reader, Delhi University Dr. Sanat Kaul Dr. Khan Massod Ahmed Chairman and Managing Director, Delhi Tourism and Professor, Department of Economics, Jamia Millia Transport Development Corporation University Mr. T. S. Laschar Dr. Shahid Ashraf Joint Secretary, Ministry of Fertilizers, Government of Lecturer, Department of Economics, Jamia Millia India University Dr. Rajesh Mehta Mr. G. N. Bajpai Senior Fellow, Research Information System Former Chairman, SEBI Ms. Shreemoyee Patra Ms. Sheela Bajaj Editorial Consultant Editorial Consultant Dr. TCA Srinivasa Raghavan Dr. Rupa Chanda Economist Associate Professor, IIMB Dr. Aparna Sawhney Dr. Deb Kusum Das Economist Reader, Ramjas College, University of Delhi Dr. Ajay Shah Dr. Tarun Das Economist Former Economic Advisor, Ministry of Finance, Mr. Ashwajit Singh Government of India Managing Director, Infrastructure, Professional Dr. Bibek Debroy Enterprises (P) Ltd. Secretary General, PHD Chamber of Commerce Dr. Rashmi Shankar Mr. Samir R. Gandhi Asstt. Professor, Deptt. of Economic Affairs, Brandeis Advocate, Economic Laws Practice University

Dr. B. N. Goldar Dr. Meenu Tewari Professor, Institute of Economic Growth Assistant Professor, University of North Carolina

Ms. Rama Goyal Mr. B.K. Zutshi Editorial Consultant Former Indian Ambassador to GATT

64 Other contributors who left during the year

Research

Director & Chief Executive Dr. Arvind Virmani Administration Senior Fellow Dr. Rajeev Ahuja Secretary Mr. P. N. Bhattacharyya Fellow Dr. Parthapritam Pal Administrative Officer Mr. V. Ramamurthy Consultants Dr. Danish Hashim Consultants (ER) Dr. Rashmi Banga Ms. Babit Batra Ms. Baiju Sanyal Research Assistants Ms. Prerna Ahuja Library & Documentation Officer Mr. Sayantan Das Mr . R. K. Ghosh Ms. Sukanya Ghosh Office Assistants Mr. Raju Huidrom Ms. Sareena Pun Ms. Zeba Khan Mr. Ankush Kakkar Mr. Prabhu Prasad Mishra Ms. Barnali Bhattcharjee Ms. Sarah Mujeeb Mr. Subhajit Shome Of fice Attendant Ms. Richa Suri Mr. Baljeet Singh

Linking India to the World Economy 65 Faculty News Faculty News

Rajiv Kumar (from February 1, 2006)

Appointed

! Member, Informal Advisory Group of PHD Chamber of Commerce & Industry (PHDCCI), New Delhi, February 2006.

! Member, Research Advisory Council of International Management Institute, New Delhi, February 2006.

! Member, Working Group on “Challenges and Opportunities of Globalization on External Sector” constituted by Planning Commission, New Delhi, April 2006.

! Member of the Group on “Provision of Smart Card to beneficiaries under TDPS” constituted by Ministry of Finance, New Delhi, April 2006.

! Member of the Steering Committee on Industry for the Eleventh Five Year Plan (2007-2012) constituted by Planning Commission, New Delhi, May 2006.

! Member Working Group on Competition Policy for 11th Five Year Plan (2007-2012) constituted by Planning Commission, New Delhi, June 2006.

! Member of the Special Committee on “Non-Aligned Movement” set up by Ministry of External Affairs, New Delhi, July 2006.

! Member, Confederation of Indian Industry (CII) Energy Council, New Delhi, August 2006.

! Member, National Security Advisory Board (NSAB) constituted by the Government of India, New Delhi, August 2006.

International Seminars/Conferences

! Panelist at the Session on “Closing the Infrastructure Gap” at the Conference on “Asia 2015: Promoting Growth, Ending Poverty” jointly organized by DFID, Asian Development Bank and World Bank, London, March 6-7, 2006.

! Participant at the meeting on “Civilization Dialogue: Japan and India”, organized by the Sasakawa Peace Foundation, Japan, March 28-29, 2006.

! Participated in the International Policy Dialogue on “New Perspectives for Economic Co-operation in Central Asia” organized by InWent, Berlin, May 18-19, 2006.

! Participated in the Conference on “Are European Preferences Shared by Others? The Fate of European Norms in a Globalized World” jointly organized by the CERI and the Centre for European Studies or Centre de Sciences Politique, Paris, June 23-24, 2006.

! Lecture on “The Indian Economy: Has it Taken Off?” organized by Bruegel, Brussels, June 26, 2006.

! Participated in the meeting on “The World in Asia and Asia in the World” organized by the World Bank, Singapore, July 19-20, 2006.

Linking India to the World Economy 69 Faculty News

Presentations/Lectures at Seminars/Conferences in India

! Panelist at the European Business Group Meeting organized by the British Business Group, New Delhi, February 10, 2006.

! Discussant at the Seminar on “Accelerating Economic Growth” jointly organized by ICRIER, MS University and Gujarat Economic Association Silver Jubilee Trust, Vadodara, February 11, 2006.

! Discussant at the Technical Session on “Pension Reforms Need of the Hour: International Experience and Lessons for India” at the Conference on “Pension Reforms in India”, jointly organized by PFRDA and FICCI New Delhi, February 16, 2006.

! Presentation on “State of the Indian Economy” at the Pre-budget Meeting organized by PHD Chamber of Commerce & Industry, New Delhi, February 21, 2006.

! Moderator at the session “Competition and Regulatory Issues in Key Sectors/Markets in India-1” at the Workshop on “Competition Assessment and Regulatory Impact Analysis: Instruments for Competition Advocacy” organized by Competition Commission of India, New Delhi, March 17-18, 2006.

! Presentation on “State of the Indian Economy” to Senior Managers of Electricity de France, New Delhi, March 22, 2006.

! Guest speaker at “Drishtikon 2006” organized by Shaheed Sukhdev College of Business School, New Delhi, April 13, 2006.

! Keynote Address on “State of the Indian Economy” at the seminar organized by ABN-AMRO Bank for their key corporate clients, Kerala, April 29, 2006.

! Presentation on “Status of Pakistani Economy” at the seminar on “Recent Developments in Pakistan” organized by IDSA, New Delhi, May 2, 2006

! Presentation on “Progress of Globalization” at session on Globalization: How do We Define It? What are the Salient Changes Associated with it in the Last 25 years? at the Conference on “Where is Globalization Heading?” jointly organized by 21st Century Trust and Commonwealth Parliamentary Association Bangalore, May 14, 2006.

! Addressed the delegates at the Conference on “Capital Account Convertibility: Opportunities and Challenges” organized by ASSOCHAM, New Delhi, May 31, 2006.

! Chaired the Panel Discussion on “Food Security in South Asia: The Way Forward” at the International Workshop on “Trade Liberalization and Food Security in South Asia” organized by IFPRI, New Delhi, June 9, 2006.

! Presentation on “Macro-Economic Perspectives - The Year Ahead” at the meeting of the Murgappa Group, Chennai, June 14, 2006.

! Panelist at the Session on “Reforming Policies and Institutions to Improve Labour Markets” at the Conference on “India: Meeting the Employment Challenge” jointly organized by the Institute for Human Development (IHD) and the World Bank, New Delhi, July 27-29, 2006.

70 Arvind Virmani (till December 31, 2005)

Appointed

! Life Member of the Institute for Social and Economic Change, Bangalore, June 2005.

! Member, Task Force on “Global Strategy: Implications and Suggested Response,” set up by the National Security Council Secretariat, New Delhi, October 2005.

International Seminars/Conferences

! Presentation at the session on “Rising Giants: China, India, and the World Economy,” at the Poverty Reduction and Economic Management (PREM) Week Conference, World Bank, Washington, D.C., April 19-20, 2005.

! Talk on “A Tripolar Century: USA, China and India,” at the World Affairs Council of Greater Dallas, Dallas, April 26, 2005.

! Participant, BRICSAM Advisory Meeting organized by The Centre for International Governance Innovation (CIGI), Canada, May 27-28, 2005.

! Panelist, session on “Assessment of Progress on Economic Performance and Reform,” at the Sixth Annual Conference on Indian Economic Policy Reform by the Stanford Center for International Development, Stanford, June 3-4, 2005.

! Participant, regional consultation on “Globalization, Growth and Poverty (GCP),” organized by the International Development Research Center (IDRC), Colombo, June 18, 2005.

! Keynote speech on “Market Reforms and Growth in India,” at the International Conference on “Is there an Economic Orthodoxy for Developing Nations?” jointly organized by the National Chengchi University, South African Institute of International Affairs and Pent Foundation, Taipei, September 28-29, 2005.

! Panelist, symposium on “Shifting Global Economic Power: From OECD to BRISCAM,” organized by The Centre for International Governance Innovation (CIGI), Canada, October 22, 2005.

! Panelist, discussion on “Sino-India Cooperation,” jointly organized by the International Monetary Fund, the Chinese Academy of Social Sciences and the Stanford Center for International Development, Beijing, October 27-28, 2005.

! Panelist, session on “Liberalization of Trade and Capital Markets: Tendencies and Challenges,” at the International Conference on “Economic Order and Economic Development,” organized by the China Development Institute and Konrad Adenauer Stiftung, Shenzhen, October 31 - November 1, 2005.

! Paper on “Economic Growth and Geo-political Power: The Likely Emergence of a Tripolar World.” and participated in the Round Table on Economic Development and National Security at the Conference on “Economic Development and National Security: The Case of India,” jointly organized by The US India Institute and United Nations Industrial Development Organization (UNIDO), Washington, D.C., November 16, 2005.

Linking India to the World Economy 71 Faculty News

! Participant, South Asia Network of Economic Research Institutes (SANEI) Seventh Annual Conference. Chaired session II “SANEI VII Presentations of Reports” at the Conference; and attended the Steering Committee Meeting, Islamabad, December 22-23, 2005.

Presentations/Lectures at Seminars/Conferences in India

! Lecture on “A Tripolar Century: USA, China and India,” jointly organized by ICRIER and the India Habitat Center, New Delhi, May 18, 2005; at the Confederation of India Industry on June 21; at the ASSOCHAM on July 29; Bengal Chamber of Commerce and Industry on August 30; ISIC, Bangalore on September 30, New Delhi on November 22-23, 2005.

! Panelist, discussion on “The Great Indian Poverty Debate,” organized by the Planning Commission, India Development Foundation, The World Bank and Macmillan India Ltd., New Delhi, June 21, 2005.

! Panelist, conclave on the Indian Economy, 2005 organized by the Bengal Chamber of Commerce and Industry , Kolkata, August 6, 2005.

! Chaired session on “Trade Policy” at the Consultation Seminar for the Ministry of Finance and the Asian Development Bank instituted Technical Assistance Project, “Policy Research Networking to Strengthen Policy Reforms,” New Delhi, August 17, 2005.

! Chaired session on “India-Bangladesh Informal Trade.” at a workshop on India-Bangladesh Trade and Free Trade Agreement organized by the National Council of Applied Economic Research, New Delhi, August 18, 2005.

! Discussant, session on “Infrastructure and Investment,” at a national seminar on “Accelerated Economic Growth and Regional Balance,” jointly organized by the Indian Economic Association, Institute for Studies in Industrial Development and the Institute for Human Development , New Delhi, September 17, 2005.

! Lecture on “India in the World Economy,” organized by the Ludhiana Management Association, Ludhiana, October 3, 2005.

! Chaired session on “Services Negotiations: India's Proactive Agenda,” at the “Pre-WTO Hong Kong Ministerial Meeting Consultation Workshop: Identifying India's Core Concerns,” jointly organized by the Ministry of Commerce and Industry and UNCTAD, New Delhi, November 28, 2005.

! Presentation at a seminar / Workshop on “VIP2: A Simple Measure of a Nation's (Natural) Global Power,” organized by ICRIER, New Delhi, November 29, 2005.

! Presentation at a seminar on “Emerging Global Scenario: Economic Perspective” organized by ICRIER, New Delhi, December 10, 2005.

! Presentation at a seminar on “China's Socialist Market Economy: Lessons of Success,” organized by ICRIER, New Delhi, December 15, 2005.

72 Other Meetings

! Member, Telecom Regulatory Authority of India , New Delhi.

! Chairman, Board of Trustees, SBI Mutual Fund, Mumbai.

! Member, meeting of the India-China Joint Study Group, New Delhi.

! Member, meeting of the India-Korea Joint Study Group, New Delhi.

! Member (expert), Research Council of the National Institute of Science, Technology and Development Studies, New Delhi.

! Member, Market Development Advisory Committee, Securities and Exchange Board of India, Mumbai.

! Member, Board of the Centre for Policy Research, New Delhi.

! Member, Technical Advisory Committee of the Money, Foreign Exchange and Government Securities Market, Reserve Bank of India, Mumbai.

! Chairman, Sub-Group on Floating Rate Bonds, Reserve Bank of India, Mumbai.

! Member, Board of the Life Insurance Corporation of India, Mumbai and Delhi.

! Member, Task Force on “US Global Strategy: Implications and Suggested Response,” New Delhi.

Publications

! “Institutions, Governance and Policy Reform: A Framework for Analysis,” Economic and Political Weekly, Vol. XL Nos. 22 and 23, May 28-June 3/June 4-10, 2005, pp. 2341-2350.

! “India-China Economic Relations, Security and Society,” Vol.1, No. 2, summer 2005, pp. 106-116 (with Amita Batra).

Shankar Acharya

International Seminars / Conferences

! Participated as a speaker on “Federalism and Governance”, in an international seminar on “Federalism and Conflict Resolution in Sri Lanka”, Colombo, Sri Lanka, May 10-11, 2005.

! Participated in a meeting of the “Toyota International Advisory Board (IAB)”, at Toyota City, Japan, May 25, 2005.

! Visit to Dhaka for World Bank Study of Growth and Employment Strategy, August 2-10, 2005.

Linking India to the World Economy 73 Faculty News

! Delivered lecture on “India's Economy: Current Status and Future Prospects”, at Schumpeter Award event (for Mr. Nandan Nilekani, CEO of Infosys) in Vienna, September 20, 2005.

! Delivered lecture on “India's Economic Growth: Retrospect and Prospects” at Vienna Institute for World Affairs (WIIW), September 21, 2005.

! Presentation at the Workshop on “Growth & Employment” Dhaka, Bangladesh, December 12,13, 2005.

! Panelist at the session “Emerging Economic Trajectories” at the Lakshman Kadirgamar Memorial Conference on “India-China Relations” at Bandaranaike Centre for International Studies (BCIS), Colombo, Sri Lanka, December 16-18, 2005.

! Discussant in the session on “India's Growth Prospects” in Seventh Annual NBER-NCAER Neemrana Conference, Neemrana Fort Palace Resort, Rajasthan, January 15-17, 2006.

! Keynote Speaker at the session on “The State, the World and the Economy” at the Eisenhower Fellowships South Asia Conference, Colombo, Sri Lanka, February 23-26, 2006.

! Panelist at the “Policy Recommendations Panel” at the 51st Economic Conference by Federal Reserve Bank of Boston, Chatham, MA, USA, on Global Imbalances as Giants Evolve, June 14-16, 2006.

Presentations / Lecture at Seminars / Conferences in India

! Chaired session on “Financing Public-Private Partnerships in Agriculture”, Plenary Session IV, at Agricultural Summit 2005 organized by Ministry of Agriculture and FICCI at Vigyan Bhawan, New Delhi, April 10, 2005.

! Panel discussant at Book Launch of “The Future of India” by Dr. Bimal Jalan organized by CII and Penguin, Maurya Sheraton Hotel, New Delhi, May 25, 2005.

! Discussant at session on “Tax Policy” in India Policy Forum 2, jointly organized by Brookings Institution and NCAER, at India Habitat Center, New Delhi, July 26, 2005.

! Delivered lecture on “Economic Policies and Performance since Independence”, India International Centre, New Delhi, September 13, 2005.

! Delivered lecture on “Indian Economy: A 25 Year Perspective”, Rotary Clubs of Chennai, Taj Connemara, Chennai, September 27, 2005.

! Delivered lecture on “India: The Economic Story”, Keynote address at HCL Global Meet, New Delhi, February 8, 2006.

! Lecture on “Can India sustain Rapid Growth?” delivered at Workshop on “Accelerating Economic Growth” jointly organized by ICRIER, MS University and Gujarat Economic Association Silver Jubilee Trust, Vadodara, Feb. 11, 2006.

! Chairperson at ICRIER Special Lecture by Prof. Ronald McKinnon (Stanford University) on “The Role of Central Banks in Fostering Economic Growth”, Assocham House, New Delhi, February 15, 2006.

! Delivered C C Desai Memorial Lecture on “Can India Sustain Rapid Growth?”, at Administrative Staff College of India, Hyderabad, March 3, 2006.

74 ! Participated as discussant in a workshop on “Inclusive Growth and Service Delivery: Building on India's Success”, organized by the World Bank, July 26, 2006.

Publications

! “Thirty Years of Tax Reform in India”, Economic and Political Weekly, May 14, 2006.

! Essays on Macroeconomic Policy and Growth in India, Oxford University Press, New Delhi, February, 2006.

! “Comments” on “Trends and Issues in Tax Policy and Reform in India” by M. Govinda Rao and Kavita Rao in S. Bery, B. Bosworth and A. Panagariya (editors) India Policy Forum Volume 2, 2005/06, NCAER and Brookings Institution, Sage Publications, New Delhi.

Amita Batra

International Seminars/Conferences

! Presentation at the “India: Country Study” at the regional conference on “SAFTA: Opportunities and Challenges,” organized by USAID and Nathan Associates, USA, New Delhi, October 24-26, 2005.

! Discussant, paper on “Trade Facilitation in South Asia,” by Jim Robertson at the regional conference on “SAFTA: Opportunities and Challenges,” organized by USAID and Nathan Associates, USA, New Delhi, October 24-26, 2005.

! Member, Indian Delegation for the Fifth India-Korea Dialogue, October 6, 2005 and jointly organized by ICRIER and the Seoul Forum for International Affairs, Seoul. Made two presentations on:

(i) India's Growth Momentum and Reform Process.

(ii) South Asia:- Rise of India and its Regional Role.

! Paper on “Preferential Trading Agreements in Asia: Towards and Asian Economic Community” at the first international workshop for the IDRC project on “Preferential Trading Agreements in Asia: Towards an Asian Economic Community,” March 30, 2006.

Publications

! “India's Global Trade Potential: the Gravity Model Approach,” Global Economic Review, forthcoming (September, Vol. 35, No.3).

! “India: Country Study” in SAFTA: Opportunities and Challenges, USAID, October, 2005.

Linking India to the World Economy 75 Faculty News

! “India-China―Economic Relations, Security and Society,” Professional Journal of the Centre for Strategic and Regional Studies, University of Jammu, summer, 2005, (co-authored with Arvind Virmani).

! “Revealed Comparative Advantage: An Analysis for India and China,” ICRIER Working Paper No. 168, August 2005 (with Zeba Khan).

! “Indian Response to East Asian Regionalism and its Impact,” in Emerging East Asian Regionalism - edited by Zhang Yunling, World Affairs Press, 2005 (with Dr. Arvind Virmani).

Newspaper Articles

! “Micro pains macro gains,” in Off the Cuff, Financial Express, May 20, 2006.

! “G8 Debt Waiver-An Opportunity to Start with a Clean Slate,” in Face-Off, Economic Times, June 17, 2005.

Academic

! Referee for the journal Indian Economic Review published by Delhi School of Economics, University of Delhi.

Arpita Mukherjee

International Seminars/Conferences

! Presentation on “Distribution Services: A Close Look at the Indian Retail Sector” at the Expert Group Meeting on Distribution Services, organized by United Nations Conference on Trade and Development, Geneva, November 16-18, 2005.

Presentations/Lectures at Seminars/Conferences in India

! Presentation on “GATS and Higher Education: Emerging Indian Scenario” at a one-day workshop on WTO, General Agreement on Trade in Services, with reference to Higher Education: Emerging Indian Scenario, organized by the Amity Institute of Global Legal Education and Research, New Delhi, April 23, 2005.

! Presentation on “FDI in Retail Sector: India” at ICRIER Conference Room, New Delhi, July 14, 2005.

! Presentation on “Intermodal Linkages: Special Focus on Mode 1 and 4” at the Pre- Hong Kong Ministerial Consultation: GATS Negotiations, organized jointly by United Nations Conference on Trade and Development, Ministry of Commerce and Industry (Government of India) and DFID, New Delhi, August 8-9, 2005.

76 ! Paper on “Introduction to GATS: Technicalities and Politics” at a Training and Workshop on Food and Trade, Action Aid India, Surajkund, Faridabad, September 21-24, 2005.

! Presentation on “GATS Negotiations: Issues Affecting Consulting Professionals” at the interactive session on GATS organized by the Consultancy Development Centre, New Delhi, September 30, 2005.

! Presentation on “FDI in Retailing” at the India Retail Summit 2005, Mumbai, November 24-25, 2005.

! Presentation on “Distribution Services and WTO Negotiations: A close look at the Retail Sector” at a seminar jointly organized by ICRIER, Sir Ratan Tata Trust and the Ministry of Commerce and Industry, New Delhi, Nov. 14, 2005.

! Presentation on “Inter modal and cross sectoral issues in services” at a seminar jointly organized by ICRIER, Sir Ratan Tata Trust and the Ministry of Commerce and Industry, New Delhi, November 14, 2005.

! Presentation on “India and Singapore: Comprehensive Economic Cooperation Agreement” to senior executives from the Government of Singapore at the Tata Management Training Centre, Pune, November 10, 2005.

! Speaker at a 5-country Video Conference on the Hong Kong WTO Ministerial Conference, organized by the World Bank, New Delhi, November 30, 2005.

! Paper on “GATS: Movement of Natural Persons” at the Institute of Chartered Accountants of India, Monday, New Delhi, December 12, 2005.

! Paper on “FDI in Retailing” at the Sixth Corporate Academia Meet, jointly hosted by NIILM Centre for Management Studies and the Standing Conference for Public Enterprises, New Delhi, January 27, 2006.

! Paper on “GATS and Indian Construction Industry,” organized by the Consultancy Development Centre at Larsen and Toubro, Engineering Construction and Contracts Division, Chennai, February 2, 2006.

Publications

! “FDI in Retail Sector: India” with Nitisha Patel, Academic Foundation, New Delhi, July 2005.

! “Retailing in India: Recent Trends and Development Survey Findings” with Nitisha Patel in Journal of Marketing and Communication, Vol. 1 Issue 2, New Delhi, Sept.-Dec., 2005.

! “India and GATS: Negotiating Strategies in Distribution Services” with Nitisha Patel in WTO News and Views, Quarterly WTO Newsletter, June-August 2005.

! “Doha Round of Services Negotiations: Indian Perspective” in Deepika MG (ed) India and the WTO: The Development Agenda, ICFAI Press (forthcoming).

! “Developing Country: the Case of India” in D. Barrowclough and Z.Kozul-Wright (eds) Creative Industries and Developing Countries: Voice, Choice and Economic Growth, Routledge, (forthcoming 2006).

Linking India to the World Economy 77 Faculty News

Nisha Taneja

International Seminars

! Paper on “Pakistan-India Trade” at a seminar organized by the World Bank, Islamabad, Pakistan, April 1-2, 2005 and on July 11-12, 2005.

National Seminars

! Paper on “Trade Facilitation in South Asia” at a seminar on “WTO Doha Round and South Asia: Linking Civil Society with Trade Negotiations” organized by CUTS International, New Delhi, September 17, 2005. .

! Paper on “Trade Facilitation” at the Regional Consultations on “Mainstreaming Development in Trade Negotiations: Run-up to Hong Kong,” organized by the Centre for Trade and Development (CENTAD), New Delhi, October 27-28, 2005.

! Paper on “Trade Facilitation: Issues and Concerns” at a seminar on “Important Issues for India's Negotiations in WTO,” jointly held by ICRIER and the Sir Ratan Tata Trust, New Delhi, November 14, 2006.

Publications

! “Informal Trade in South Asia: How to channelize to a formal route?” Briefing Paper, No. 5, CUTS International, Jaipur, 2005.

Suparna Karmakar

Seminars/Lectures

! Lecture on “India's Gains in Services at the Hong Kong Ministerial Meeting,” at a seminar organized by The Institute of Company Secretaries of India, New Delhi, December 24, 2005.

! Paper at the ICRIER workshop on “IndoThai Free Trade Agreement: Opportunities for Increased Trade in Services,” New Delhi, July 5, 2005.

Publications

! Chapter on “Infrastructure Concerns under GATS: Trade in the Telecom and Transport Services,” in Beyond the Transition Phase of the WTO: An Indian Perspective (ed), Academic Foundation, New Delhi, October 2005.

78 ! “India ASEAN Cooperation in Services: An Overview,” ICRIER, Working Paper No.176, November 2005.

! Articles on NAMA and Services Negotiations in Business World's Special Primer Series on Pre-Hong Kong Ministerial Meeting, October-November 2005.

! Article on “GATS Negotiations: Developments since the Hong Kong Ministerial” in WTO News and Views, Quarterly WTO Newsletter, January-March 2006.

! Chapter on “The Economics of Globalization: Newer Challenges and Opportunities,” in Asia-Pacific Security in the Age of Globalization: Challenges for the Future (ed), Indira Gandhi National Open University and Orient Longman, forthcoming 2006.

! Article on “Disciplining Domestic Regulations under GATS and its Implications for Developing Countries: An Indian Case Study,” in the Journal of World Trade, Vol 41:1, forthcoming February 2007.

Parthapratim Pal

Research Work

! Paper titled, “Current WTO Negotiations on Domestic Subsidies in Agriculture: Implications for India,” ICRIER Working Paper No. 177, December 2005.

! Paper titled, “Market Access Negotiations in Agriculture and Special Safeguard Mechanisms: Proposed Framework for a Safeguard Mechanism,” (with Deepika Wadhwa)

! Paper titled, “Selection and Prioritization Framework of Special Products in WTO Negotiations on Agriculture: A Study of India,” (with Deepika Wadhwa).

Published Works

! Paper titled, “Regional Trade Agreements in a Multilateral Trade Regime: A Survey of Recent Issues,” in the Foreign Trade Review, April-June 2005, Vol XL, No. 1, Indian Institute of Foreign Trade, New Delhi.

! Article on “WTO Ministerial Meet: Doomed to failure?” in the Economic and Political Weekly, September 24-30, 2005 (with Shravani Prakash).

! Paper titled, “Agricultural Subsidies and Negotiations: Strategies and Options” Paper No. 2, Hong Kong Series of Papers by the Centre for Trade and Development CENTAD, Oxfam, November 2005.

! Paper titled “Financial Liberalization in India: An Assessment of its Nature and Outcomes,” (with C P Chandrasekhar) in the Economic and Political Weekly, Vol. XLI, No. 11, March 18-24, 2006.

Linking India to the World Economy 79 Faculty News

! Paper titled, “Hong Kong Ministerial Declaration and Export Competition in Agriculture: Implication for Global Agricultural Trade,” (with Deepika Wadhwa) in Focus WTO (January-February 2006), Indian Institute of Foreign Trade, New Delhi.

Forthcoming Publications

! Paper titled, “Inequality in India: A Survey of Recent Trends,” (co-authored with Jayati Ghosh) will be published in Flat World, Big Caps: Economic Liberalization Globalization, Poverty and Inequality, edited by Jomo K S and Jacques Baudot, United Nations Publications, New York (with Zed Books, London), 2006.

! Paper titled, “Inequality in India: A Survey of Recent Trends,” (co-authored with Jayati Ghosh) will be published as a working paper by the United Nations Economic and Social Council, Division for Social Policy and Development, New York, USA.

Garima Malik

Presentations at Seminars

! Presentation on “An Investigation into Parent-Adolescent Relations and Child Delinquency,” at ICRIER internal seminar, November 7, 2005.

! Presentation on “Macro-economic Performance of the Indian Economy,” at ICRIER internal seminar, February 20, 2006.

! Paper titled “An Investigation into Parent-Adolescent Relations and Child Delinquency”, ICRIER Occasional Paper, November, 2005.

Surabhi Mittal

International Seminars/Conferences

! Presentation on the project, “Effects of Global Agricultural Trade Liberalization on Agricultural Production and Poverty in India,” under the IMPACT session of the Seventh Annual SANEI conference, at Islamabad, Pakistan, December 22- 23, 2005.

! Presentation, draft paper on “Effects of Global Agricultural Trade Liberalization on Agricultural Production and ” under

80 ! Poverty in India,” under the IMPACT workshop during the Seventh Annual GDN conference held at St. Petersburg, Russia, January 19-23, 2006.

Presentation in Conference

! Paper on “Negotiations on Agriculture: State of Play,” at an International Conference on WTO and the Doha Round: The Way Forward, organized by ICRIER, supported by Ministry of Commerce and Industry, New Delhi, April 6-7, 2006.

Publications

! Chapter on “Total Factor Productivity and Sources of Growth of Wheat in India” in book Impact of Agricultural Research: Post-Green Revolution Evidence from India edited by P.K. Joshi, Suresh Pal, P.S. Birthal and M.C.S. Bantilan: pp 57-68, National Centre for Agricultural Economics and Policy Research (NCAP, ICAR), New Delhi; International Crop Research Institute for the Semi Arid Tropics (ICRISAT), Andhra Pradesh, India. (with Praduman Kumar, 2005).

Sanghamitra Sahu

Presentation in Conference

! Presented the work in progress of the project “Governance in the Provision of Public Goods in South Asia” at the Seventh Annual SANEI conference, at Islamabad, Pakistan, December 22-23, 2005.

! Discussant, session on “Governance and economics of Urban Water Transfer: A Case Study of Melamchi Intersectoral Water transfer Project in Nepal,” at the Seventh Annual SANEI conference, Islamabad, Pakistan, December 22-23, 2005.

Linking India to the World Economy 81 Management Committees Management Committees

As of March 31, 2006

Executive-cum-Finance Committee

Dr. Isher Judge Ahluwalia : Chairperson

Mr. N. K. Singh : Member

Dr. Shankar Acharya : Member

Ms. Janaki Kathpalia : Member

Dr. Rajiv Kumar, Director & CE, ICRIER : Member-Secretary

Investment Committee

Mr. Uday S. Kotak : Chairman

Mr. Aman Mehta : Member

Ms. Janaki Kathpalia : Member

Dr. Rajiv Kumar, Director & CE, ICRIER : Member-Secretary

Linking India to the World Economy 85 Publications Publications

List of Working papers

NO. TITLE AUTHOR MONTH/YEAR

183 Domestic Market Integration Arvind Virmani July 2006 Surabhi Mittal

182 India - Pakistan Trade Nisha Taneja June 2006

181 Disciplining Voluntary Environmental Samir R. Gandhi June 2006 Standards at The WTO: An Indian Legal Viewpoint

180 Higher Education in India : The Need Pawan Agarwal June 2006 for Change

179 Higher Education in India: Seizing Sanat Kaul May 2006 the Opportunity

178 China’s Socialist Market Economy: Lessons Arvind Virmani January 2006 of Success

177 Current WTO Negotiations on Domestic Parthapratim Pal December 2005 Subsidies in Agriculture: Implications for India

176 India-ASEAN Cooperation in Services: Suparna Karmakar November 2005 an Overview

175 Global Power from the 18th to 21st Century: Arvind Virmani November 2005 Power Potential (VIP2), Strategic Assets & Actual Power (VIP)

174 Towards Developing Subsidy Disciplines Rajeev Ahuja December 2005 under GATS

173 The Role of Price and Cost Competitiveness Meenu Tewari November 2005 in Apparel Export, Post-MFA: a Review

172 Impact on India of Tariff & Quantitative Bishwanath Goldar November 2005 Restrictions under WTO

Linking India to the World Economy 89 Publications

Book-release

Essays on Macroeconomic Policy and Growth in India by Shankar Acharya - March 20, 2006

This collection provides a rare “insider” account by one of the key members of the top economic policy team that was instrumental in India's reform journey during the 1990s. The book brings a unique ringside perspective to the macroeconomic management and structural reforms of that crucial decade in India's economic development.

The issues addressed include:

! Assessing the results of the early 1990s reforms

! India's policy response to the East Asian financial crisis

! The slowdown of economic growth after 1996-97

! The serious fiscal and economic costs of the Fifth Pay Commission

! The debates over trade liberalization and exchange rate policy

! The twists and turns of tax reform since 1975

! The continuing battles to restore fiscal responsibility

Despite the current upswing in growth, these essays draw attention to a number of factors that may constrain the future performance of the economy. These include poor infrastructure, high fiscal deficits, sluggish agriculture, dysfunctional labour policies, growing regional disparities, slow reforms, and deteriorating governance. According to Acharya, without swifter progress on all these fronts, India's high growth potential may remain unfulfilled.

This book, articulating comprehensive macroeconomic policy reforms for India, will interest students of macroeconomics, journalists, civil servants, and India watchers. Shankar Acharya was Chief Economic Advisor to the Government of India, member of the Prime Minister's Economic Advisory Council, and Member, Twelfth Finance Commission. Currently he is Honorary Professor and Board Member, Indian Council for Research on International Economic Relation (ICRIER).

Tax Systems and Tax Reforms in South and East Asia by Luigi Bernardi, Angela Fraschini and Parthasarathi Shome - April 19, 2006

This book examines the present status, recent tax reforms and planned tax policies in some South and East Asia countries since the 1990s. The evidence is presented in a user friendly manner, but at the same time uses technically sophisticated methods. The countries studied are China, India, Japan, Malaysia, South Korea and Thailand.

It is the first systematic treatment of the subject of taxation: hitherto, the information available was widely dispersed and difficult to access.

90 Audited Annual Accounts Audited Annual Accounts

V SAHAI & CO CHARTERED A CCOUNTANTS

G-68, Connaught Circus, New Delhi - 110 001 Tel. : 23324045, 23352449 (Direct) 51516091 Fax : (011) 23713823 E-mail : [email protected]

AUDITORS' REPORT

The Members, Indian Council for Research on International Economic Relations, Core 6A, 4th Floor, India Habitat Centre, Lodi Road, New Delhi

We have audited the accounts of your Council and certify that the annexed Income and Expenditure Account for the year ended March 31, 2006, Balance Sheet as at March 31, 2006 and the Receipt and Payment account for the year read with the Statement of Accounting Policies and Notes thereon have been correctly drawn from the books of accounts and vouchers examined and the information and explanations given to us.

It is further certified that: -

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) Proper books of accounts have been kept by the Council so far as it appears from our examination of those books;

(c) The Council's Balance Sheet, Income and Expenditure account and Receipt and Payment account dealt with by this report are in agreement with the books of accounts and in our opinion and to the best of our information and according to the explanations given to us, the said accounts give a true and fair view:

(i) in the case of the Balance Sheet of the state of affairs of the Council as at March 31, 2006; and

(ii) in the case of the Income and Expenditure account of the excess of Income over Expenditure for the financial year ending on March 31, 2006.

For V. Sahai & Co. Chartered Accountants

Place: New Delhi (Mahesh Sahai) Dated: August 8, 2006 Partner

Linking India to the World Economy 93 Audited Annual Accounts

Balance Sheet as at March 31, 2006 Current Year Previous Year (in Rs.) (in Rs.) L I A B I L I T I E S Endowment Fund 132,985,743 130,528,070 Balance as at April 1,2005 130,528,070 130,013,263 Donations received during the year 2,155,000 250,000 Transferred from Income & Expenditure Account 302,673 264,807 Earmarked Funds (SANEI) 348,784 5,438,193 Gifted Assets Fund (As per Schedule) 11,272 14,090 Gross Block 14,090 43,000 Depreciation Reserve (2,818) (28,910) Unspent Grants 3,995,855 3,790,000 General Fund 33,186,987 27,778,138 Balance as at April 1,2005 27,778,138 26,344,208 Transferred from Income & Expenditure A/c 5,408,849 1,433,930 Current Liabilities 83,471 100,095 TOTAL 170,612,112 167,648,586 A S S E T S Fixed Assets (As per schedule 1) 18,469,176 18,827,905 Gross Block 41,083,267 39,917,159 Depreciation Reserve (22,614,091) (21,089,254) Investments (As per Schedule 2) 132,862,000 130,963,000 Long-term Investments 133,862,000 131,463,000 Less Investment Equilisation Fund (1,000,000) (500,000) Current Assets Loans & Advances 18,073,577 11,393,743 Cash in Hand: 9,995 11,693 Balance with Mutual Funds 12,223,263 7,271,140 Balance with Bank in Savings Account 3,168,156 2,500,394 Balance with Bank in US Dollar Account 2,672,163 1,610,516 SANEI Funds balance with bank 348,784 5,438,193 Advances recoverable in cash or in kind or for value to be received 858,575 1,025,745 TOTAL 170,612,112 167,648,586 Significant Accounting Policies and Notes (Schedule 3) In terms of our separate report of even date

FOR V.SAHAI & CO CHARTERED ACCOUNTANTS

Mahesh Sahai Rajesh Rampal Rajiv Kumar Isher Judge Ahluwalia (Partner) (Secretary) (Director & CE) (Chairperson)

94 Income & Expenditure account for the year ended March 31, 2006

Particulars Current Year Previous Year (in Rs.) (in Rs.) A. Income Grants 15,473,187 15,022,535 Received during the year 15,679,042 15,228,821 Grants brought forward from previous year 3,790,000 3,583,714 Grants transferred to Unspent Grants (3,995,855) (3,790,000) Income on Investment 10,024,404 8,115,904 Received during the year 10,327,077 8,380,711 Transferred to Endowment Fund (302,673) (264,807) Interest on Savings Bank Account 56,119 66,576 Other Income 649,068 251,619 TOTAL(A) 26,202,778 23,456,634 B. Expenditure Research Expenses 12,669,215 14,164,369 Salaries & Allowances 6,149,951 6,837,677 Consultancy Charges 1,506,840 2,665,828 Travel Expenses 715,509 1,708,338 Workshops Seminars & Meetings 1,344,676 348,186 Publication Expenses 734,331 641,367 Communication Expenses 874,298 757,838 Library Expenses 1,343,610 1,205,135 Administrative Expenses 3,158,735 3,582,185 Salaries & Allowances 1,981,896 1,979,452 Professional Services 305,396 348,150 Fees and Subscriptions 39,933 36,500 Office Expenses 831,510 1,152,102 Assets/Recoverables Written Off - 65,981 Overheads 2,320,160 1,952,393 Utility & Electricity Charges 1,007,712 985,947 Repair and Maintenance 1,095,474 749,009 Property Tax 216,974 217,437 Loss on Sale of Assets 149,668 - Exchange Rate Fluctuation 98,404 69,037 TOTAL (B) 18,396,182 19,767,984 Surplus/(Deficit) before Depreciation (A) - (B) 7,806,596 3,688,650 Less Depreciation 1,897,747 1,754,720 Less Investment Equilisation Fund 500,000 500,000 Surplus/(deficit) after depreciation 5,408,849 1,433,930 Total 26,202,778 23,456,634 Significant Accounting Policies and Notes (Schedule 3) In terms of our seperate report of even date FOR V.SAHAI & CO CHARTERED ACCOUNTANTS

Mahesh Sahai Rajesh Rampal Rajiv Kumar Isher Judge Ahluwalia (Partner) (Secretary) (Director & CE) (Chairperson) Linking India to the World Economy 95 Audited Annual Accounts

Receipts & Payment account for the year ended March 31, 2006

Receipt Amount Payment Amount (in Rs) (in Rs) Opening balance Receipts 11,393,743 Payments Research Expenses 12,669,215 Grants 15,679,042 Salaries & Allowances 6,149,951 Income on Investment 10,327,077 Consultancy Charges 1,506,840 Other Income 649,068 Travel Expenses 715,509 Interest on Savings Bank A/c 56,119 Workshops Seminars & Meetings 1,344,676 Donations 2,155,000 Publication Expenses 734,331 Increase in current liabilities 983,393 Communication Expenses 874,298 Decrease in advances recoverable 1,786,642 Library Expenses 1,343,610 Investments matured during the year 95,602,000 Administrative Expenses 3,158,735 Sale of fixed Assets 111,000 Salaries & Allowances 1,981,896 Professional Services 305,396 Fees and Subscriptions 39,933 Office Expenses 831,510 Overheads 2,320,160 Utility & Electricity Charges 1,007,712 Repairs and Maintenance 1,095,474 Property Tax 216,974 Purchase of Fixed Assets 1,802,504 Investment made during the year 98,001,000 Decrease in current liabilities 1,000,017 Increase in Advances recoverable 1,619,472 Exchange Rate Fluctuation 98,404 Closing Cash & Bank Balances 18,073,577 TOTAL 138,743,084 TOTAL 138,743,084 In terms of our separate report of even date

FOR V.SAHAI & CO CHARTERED ACCOUNTANTS

Mahesh Sahai Rajesh Rampal Rajiv Kumar Isher Judge Ahluwalia (Partner) (Secretary) (Director & CE) (Chairperson)

96 Linking India to the World Economy 97 Audited Annual Accounts

Schedule 2 Statement of Financial Assets In Rupees Particulars Rate of Interest Date of Maturity 31.3.06 31.3.05 Endowment Fund 132,985,743 130,528,070 Financial Assets (A+B+C) 151,935,577 142,856,743 A Long Term 133,862,000 131,463,000 1 ICICI Bank 7.00 04.03.07 3,000,000 - 2 ICICI Bank 7.30 18.01.07 21,000,000 - 3 ICICI Bank 6.00 21.07.05 - 5,800,000 4 ICICI Bank 5.25 28.07.05 - 5,800,000 5 ICICI Bank 6.46 07.09.05 - 10,000,000 6 IDBI Bonds 9.25 15.10.07 2,500,000 2,500,000 7 IDBI Fixed Deposit 5.50 27.07.05 - 10,001,000 8 IFCI Bonds 6.00 23.09.08 2,500,000 2,500,000 9 Kotak Mahindra 6.66 25.04.06 10,000,000 10,000,000 10 Kotak Mahindra 6.15 12.01.06 - 6,200,000 11 Punjab National Bank 5.55 03.08.05 - 10,000,000 12 UTI Bank 6.10 03.08.06 1,500,000 - 13 UTI Bank 6.52 29.12.06 10,000,000 - 14 UTI Bank 6.52 29.12.05 - 10,000,000 15 UTI Bank 6.52 03.03.06 - 3,000,000 16 UTI Bank 6.50 11.01.06 - 14,800,000 17 Govt Securities 11.5 24.11.11 13,362,000 13,362,000 18 GOI Bond 8.00 08.11.11 10,000,000 - 19 GOI Bond 8.00 10.08.11 10,000,000 - 20 GOI Bond 8.00 03.08.11 22,500,000 - 21 GOI Bond 8.00 31.03.11 25,000,000 25,000,000 22 GOI Bond 8.00 13.10.10 2,500,000 2,500,000 B Short Term 12,223,263 7,271,140 Money Market Funds 12,223,263 7,271,140 C Cash\Bank Balances 5,850,314 4,122,603

98 Schedule 3 For The Year Ended March 31,2006

Significant Accounting Policies and Notes to the accounts Accounting Policies 1. (a) Accounts are maintained on cash basis. (b) Capital advances for purchase of fixed assets are adjusted only after the assets are installed and their final bills received.

2. Investments, which are readily encashable, are shown under Current Assets. Increase in net asset value at the end of the year over its cost/opening net asset value, as the case may be, is shown as income for the year and a reduction, if any, as an expense. Investment for fixed periods are shown at cost as long term investments and provision for diminution in the value is made only if in the opinion of the management, the fall is of a permanent nature.

3. Security deposits for installation of various facilities are charged as expenses and will be treated as income in the year of refund.

4. Capital items of limited life and small value up to Rs. 5,000 are written off as an expense.

5. (a) Expenditure on books and publications is charged to the Income and Expenditure account but a separate record of items purchased is maintained. (b) Expense on computer software is fully charged to the Income and Expenditure account when the expense is incurred.

6. Depreciation is provided on the written down value method in the year in which assets are received. Depreciation for the entire accounting period is provided irrespective of the date of purchase of assets. The rates adopted and disclosed in the fixed assets schedule are consistent with the rates adopted in earlier years.

7. Donations received are carried forward in the Balance Sheet under Endowment Fund.

8. An LIC Policy has been taken to cover against future liability on account of gratuity payable to the staff. The premium paid is charged to the Income and Expenditure Account.

9. Gifted assets are valued by the management and shown as an addition to the fixed assets with a corresponding credit to a “Gifted Assets Fund” account. Annual depreciation on gifted assets is deducted from the cost as well as the “Gifted Assets Fund” account.

10. Leave salary is accounted for on the basis of actual payment to the employees at the time of retirement/leaving. Linking India to the World Economy 99 Audited Annual Accounts

Notes to the Accounts 11. ICRIER has a US Dollar account with American Express Bank, New York in which earmarked funds of SANEI are included. To the extent of the balance in the SANEI fund account the US Dollar account is an earmarked asset.

12. A grant of Rs.14, 461,000 was received from The Ford Foundation in June, 2002 on the condition that unless the Foundation consents otherwise in writing, withdrawals from the Fund shall not exceed 75% of the interest and dividends earned each year. Consequently 25% of the income on account of interest and dividends amounting to Rs.3,02,673 has been transferred from the current years income to Endowment Fund,

13. Investment in 11.5 % Government securities amounting to Rs. 13,362,000 will mature in 2011 and the difference between the book value and maturity value will amount to Rs. 33.62 lacs. Though the market value of the Investments at year end was higher than the book value, an Investment Equalization Fund of Rs. 10.00 lacs to absorb the eventual difference has been created this year and will be progressively augmented in future years to cover the full difference between book value and realizable value.

14. Schedules 1 to 3 form an integral part of the Balance Sheet and Income and Expenditure account.

15. Previous year's figures have been recast and regrouped wherever necessary to make them comparable with the figures for the current year.

100 About ICRIER

ICRIER, established in August, 1981, has successfully completed its 25 years, as an autonomous, policy oriented, not-for-profit research institute. We have nurtured our cherished autonomy by establishing an endowment fund, income from which meets all our administration expenses. ICRIER's offices are located in the prime institutional complex of Indian Habitat Centre, New Delhi. The prime focus of all our work is to support India's interface with the global economy.

ICRIER's research and related activities are intended to foster improved understanding of policy choices for India in an era of growing international economic integration and interdependence. As one of India's premier think-tank, ICRIER promotes multi disciplinary research at the cutting edge of knowledge domain. ICRIER's mandate also covers regional and bilateral dimensions of India's. ICRIER enables, provides and nurtures a forum where policy makers with responsibilities in economic and political governance; academia representing a diversity of inter-disciplinary talents and corporate leaders from industry and finance; regulatory bodies and civil society regularly interact to discuss and shape the core policy agenda.

ICRIER's highly qualified core team of researchers includes several Ph.Ds from reputed Indian and foreign universities. The team is headed by Dr. Rajiv Kumar, D.Phil, Oxford, who is the current Director and Chief Executive. ICRIER's governing body, chaired by Dr. Isher Judge Ahluwalia, reflects a rich diversity of professional background and experience. Indian Council for Research on International Economic Relations Core-6A, 4th Floor, India Habitat Centre, Lodi Road, New Delhi - 110 003 India Tel: 24645218-19-20, 24692070, 24616329 Fax: 24620180 Website: www.icrier.org