India should be allowed to export foodgrains from its public stockholding to nations which are facing a hunger crisis, something which is in contravention of current World Trade Organization rules, Finance Minister Nirmala Sitharaman said on Friday.
Sitharaman was speaking on the sidelines of the G-20 Finance Ministers and Central Bank Governors (FMCBG) meeting in Bali, Indonesia.
“WTO norms have restrictions that grains so procured cannot be brought to the market to export. It is a condition which exists from the Uruguay Round days. We have repeatedly said that the surplus that we have, we are quite willing to trade,” Sitharaman said.
Under WTO norms, countries aren’t allowed to export foodgrains from their public stock holdings as they are procured at subsidised rates.
The Finance Minister said that India can help in reducing hunger or food insecurity but there is a hesitation on the part of WTO. “Food insecurity, especially in times of war, is one of the biggest challenges that many countries face,” Sitharaman said.
Many nations are currently facing food shortage as the war in Europe has disrupted supply chains. Before the war, Russia and Ukraine were two of the biggest foodgrain exporters.
A group of about 70-80 countries, led by Singapore, are pushing member countries of the WTO to accept binding commitments of not extending export restrictions on the foodgrains procured under the United Nations World Food Programme (WFP).
Some members, however, have voiced concerns regarding a blanket exemption for WFP food purchases due to domestic food security considerations.
Speaking at the event, Sitharaman highlighted that food, fuel, and fertilisers are global public goods, and ensuring access to these for developing and emerging economies is critical. She said there is an urgency to strengthen food production and global food system.
Sitharaman also shared India’s experience, including robust gains in agriculture production, the widening of the food security programme during the Covid-19 pandemic, and innovative delivery mechanisms such as ‘One Nation One Ration Card’ scheme.
Sitharaman also spoke at the main G-20 FMCBG event and said India’s long term growth prospects are embedded in public capital expenditure programmes. She also said evidence-based policy making is vital for resilient economic systems.
In an interview with Business Standard earlier this month, the Finance Minister had expressed similar views. She had said the centre is counting on its capex programme to revive demand in the economy, and may not go for sector specific fiscal measures.
“The route we have chosen and the one we are sticking with is capex. Even during the pandemic, we adopted this method of spend on capital assets, and make sure the economy revival happens. And states really showed that they had the absorptive capacity,” she had said.
The government has laid emphasis on capital expenditure to push economic growth hit by the pandemic. It is expected that the increase in public spending would crowd in private investment.
As per the latest Monthly Economic Report of the Finance Ministry, private sector investment has started to pick up, with the share of the Indian private sector in total investment proposals reaching a record high of 85 per cent in April-June quarter, rising from an average of 63 per cent in the preceding four quarters.
The centre’s FY23 capex target is Rs 7.5 trillion, out of which Rs one trillion will be long-term, interest-free loans to states for their capex needs.