Subsidies under WTO
Q. Under the WTO norms, subsidies refer to which of the following?
1) Loan guarantee
2) Equity infusion
3) Purchase of goods- Published on 07 Mar 16a. 1, 3
b. 1, 2
c. 2, 3
d. All of the above
ANSWER: All of the above
- Under the WTO norms, subsidies refer to financial contribution (loan, loan guarantee, grant, import duty exemption, equity infusion, fiscal incentives and purchase of goods) by the government or state agencies resulting in advantages to those players availing it. Action against subsidies is meant to level the playing field.
- The government has set up a special cell to compile information on subsidies given by other countries to their industry.
- The constitution of the special cell — as well as proposed measures including changes in laws such as Customs Act —is also aimed at indirectly helping India Inc file applications before the government seeking imposition of anti-subsidy duties on subsidised imports of items, such as steel, harming local industries.
- The development comes in the backdrop of slowdown in global trade and measures taken (including against merchandise exports from India) by several countries such as the U.S. to protect their domestic industries from unfairly low-priced imports.
- Government also wishes to boost local manufacturing through initiatives such as Make In India, Start-up India and Digital India.
