India is usually a democratic and political country using a well streamlined administrative structure, plus an already existing mixed economy, that has a rich connection with private sector operations. Also available in India is usually a vast stock of skilled manpower and entrepreneurial class, a fairly good basic infrastructure as well as a good reputation fulfilling past international obligations.
The present bout of economic reforms in India going in the eighties, mark both a continuity and also a break with India’s post-independence development strategy. India’s strategy for development was largely depending :
o The cynicism of policy makers regarding any possible the help of the rest of the world via investments, transfer of technology and trade and
o Reservation regarding ability of market forces to create of their very own, an optimum allocation of resources, thus balancing the country’s two main objectives – ‘growth’ & ‘equity’.
o The External world isn’t necessarily an unfriendly one, especially following your present day technological changes and adjustments to the political – economic relations between nations.
o The domestic economy has now reached a threshold where for better by using resources the key benefits of the market forces might be harnessed, by proper market friendly macro and micro economic policies helping in higher growth plus much more equity.
Since 1997, specifically after 1985-86 the Government has embarked upon several economic reforms leading towards liberalization and deregulation. The world trade in commercial services is US$ 1440 billion around 2001 that is 23% of merchandise trade. In India it accounted to 49% of GDP in 2000-01 with Agriculture 27% and Manufacturing 23% of GDP.
Since Feb 2000, negotiations are stored on the go in WTO to inflate & ‘fine tune’ the GATS. The negotiations have aroused concerns worldwide. A growing number of local governments, trade unions, NGO’s are criticizing GATS and call for a halt for the negotiations.
GATS:
The General Agreement on Trade in Services has been around since as a result of the Uruguay Round of negotiations and inked force on 1st January 1995 while using establishment of WTO. The aim of GATS would be to gradually remove all barriers of trade in services. The agreement covers services as diverse as banking, education, healthcare, tourism or transport. The main idea is always to open up these facilities to international competition, taking into account profits. The multi lateral legal instruments as a result of the Uruguay Round were treated as single undertaking . India also signed all of the agreements in the single undertaking rule and GATS is often a part of this whole package.
Prior towards the Uruguay Round, services were shown to offer less risk of trade expansion than goods, because of existence of technical, institutional and regulatory barriers. However, enhancing new transmission technologies facilitating the availability of services (e.g. satellite communication, electronic banking, tele – education), the opening of monopolies in lots of countries and gradual liberalization of hitherto regulated sectors like transport, banking and insurance combined with alterations in consumer preferences, enhanced the “tradeability” of services.These developments increased international services flows and developed a similar dependence on multilateral disciplines- such as the area of products.
The GATS covers all internationally traded services with two exceptions : services provide towards the public from the exercise of governmental authority and within the Air transport sector, traffic rights and all sorts of services directly related to your exercise of traffic rights. It recognizes the correct of Members to regulate the availability of services in pursuit of their very own national policy objectives.