Tariff Commission, a relic of the licence-quota raj, is set to get its burial soon. The proposal to wind up the commission, which had outlived its utility, had been in the works for quite some time but was approved by the Centre only recently.
Government departments have been undertaking an analysis of several entities under their administrative control and reassessing their relevance. According to media reports, a member of the Economic Advisory Council to the PM has undertaken an exercise covering certain ministries, some of which is being implemented now. Prime Minister Narendra Modi had also suggested some administrative changes, say the reports.
Towards the end of 2020 also, a report had surfaced that said, the Government was planning to shut down almost a dozen autonomous bodies to rationalise costs as part of the larger plan to tackle the economic fallout of the COVID-19 pandemic. Among the entities that might be shut down are the National Productivity Council (NPC) and the Tariff Commission, said the report.
“Tariff Commission isn’t a body for tariff for imports. This is a Socialist era council that used to set the rates for steel, coal, etc. That institution still exists. It employs about 100 people,” a senior government official was quoted as saying in the report.
An independent Tariff Commission, in its present form, was established on September 2, 1997. It was constituted for recommending appropriate levels of tariffs for different products and different industries, keeping in view the larger economic interests of the country. The commission functions as an independent expert body and has the flexibility to sub-contract research work to specialised agencies.
“The plan is to shut down dozens of such autonomous bodies. These are archaic institutions and have become useless. There’s potential to rationalise cost if we do away with such bodies,” the official said.
In August 2020, the Union Textile Ministry abolished the All India Handicrafts Board and the All India Handloom Board, the advisory bodies that were created to help the Government in the “formulation of the overall development programmes” in the handicrafts and handloom sectors. This was followed up by abolishing another advisory body, the Cotton Advisory Board.
In the pre-independence era, a Tariff Board existed in the Ministry of Commerce “to advise the Government on measures required for the protection of domestic industry”. In 1951, this was converted into a Tariff Commission but was wound up in 1976 by the Tariff Commission (Repeal) Act of 1976 based on the observation that the functions of the commission were largely similar to those of the Bureau of Industrial Costs and Prices (BICP), which was set up in 1970. The BICP was bifurcated in August 1997 and the National Pharmaceutical Pricing Authority (NPPA) was carved out.
In 1991-92, the then Finance Minister in his Budget Speech said, “…I believe that the time has come to evolve a more transparent institutional mechanism for fixing tariffs and domestic prices in sectors where there might still be the need for protecting Indian industry against foreign competition and for the determination of administered prices, particularly in the area of public utilities. For this purpose, we propose to restructure the Bureau of Industrial Costs & Prices and to transform it into a Tariff Commission.”
Further in the Budget speech of 1996-97, the then Finance Minister said, “… In keeping with the promises made in the Common Minimum Programme (CMP) … Government have initiated action to set up an independent Tariff Commission.” In 1999, the BICP along with its core functions was merged with the Tariff Commission.
