Deepening the French connection:-
Background :-President François Hollande’s visit is the fifth such by a French leader to have been honoured as the chief guest at the Republic Day, more so than any other country. Equally significant, this was his second state visit (the first was in 2013), a trend that was started by his predecessor, Nicolas Sarkozy, who was chief guest at the 2008 Republic Day and returned for another state visit in 2010. With corresponding visits by Indian Prime Ministers, this annual summitry highlights the expanding areas of cooperation and convergence between the two countries.
Details :-
In recent years, India has entered into more than three dozen “strategic partnerships”, but France remains the original one. President Jacques Chirac had a long-standing interest in India and undertook three visits to India, in 1976, 1998 and 2006, the only leader to have been chief guest at the Republic Day twice, first as Prime Minister in 1976 and then as President in 1998
The second visit saw the establishment of the “strategic partnership” which was tested months later in May when India conducted a series of nuclear weapon tests. France was the first major power to open a dialogue with India. Within weeks, Brajesh Mishra (accompanied by the writer) was in Paris as Special Envoy of Prime Minister Atal Bihar Vajpayee. We were received by Mr. Chirac, who not only gave us a patient hearing, but also responded with a keen appreciation of India’s security predicament arising from the unbridled nuclear proliferation that had taken place in our neighbourhood.
Robust strategic partnership:-
This is the strategic dialogue that became institutionalised at the level of the National Security Advisers. The agenda has also expanded to include counter-terrorism, intelligence sharing and cyber-security issues, in addition to the original nuclear, space and defence related matters. The 57-paragraph-long Joint Statement covers these and also a wide range of other areas of cooperation — climate change and sustainable development, economic cooperation, urban development, human resource development, heritage preservation and cultural cooperation.
The terrorist attacks last year, on the Charlie Hebdo office in January and at multiple locations in Paris in November, have changed the way France looks at global terrorism. There is a realisation of vulnerability on account of the alienation in the French Muslim community. Radicalisation and the growing appeal of the ideology of global jihad is a real threat. This resulted in a standalone Joint Statement on counter-terrorism which seeks to do away with the caste system in terror strikes.
If New York, London and Paris were horrific, so must Mumbai, Beirut and Nairobi be, and the statement makes that point effectively. It underlines the need for a comprehensive approach, removes any distinction between al-Qaeda and the terrorist groups targeting India like Lashkar-e-Toiba, Jaish-e-Mohammed and Hizbul Mujahideen, calls on Pakistan to bring to justice the perpetrators of the Mumbai attacks and calls for a dismantling of sanctuaries and safe havens in Pakistan’s border areas that can destabilise Afghanistan.
A push has been given to the Jaitapur nuclear plant negotiations by seeking to conclude these by the end of 2016, coupled with the affirmation that there will be six European pressurised reactors which should help in bringing the cost to below $5 billion for each reactor. To mark 50 years of India-France space cooperation, new projects for cooperation between the Indian Space Research Organisation and the French government space agency, Centre national d’études spatiales (CNES) have been announced, dealing with environment and weather monitoring, mapping of water resources and a joint Thermal Infrared Earth observation mission.
The implementation of the announcement made during Prime Minister of India’s visit to Paris last April about the decision to purchase 36 Rafale combat aircraft in a flyaway condition, has been taken forward by signing a memorandum of understanding (MoU) which freezes the technical parameters, weapon payloads and lifetime servicing and spares needed. It is expected that the negotiations of the financial terms will be concluded in coming months. More significant are the joint ventures (JV) proposed to be set up between private sector entities in both countries that can provide a much needed boost to “Make in India” in defence. This should give greater content to the Agreement on Defence Cooperation, originally signed in 2006 and now extended till 2026, providing a framework for cooperation in defence production, research and development and procurement of defence materials.
Among the emerging areas of cooperation are homeland security, cyber security, special forces like the National Security Guard and its French counterpart GIGN, and intelligence sharing to tackle the common threats of terrorism and global criminal networks. Closely linked are concerns about Internet governance, surveillance by external powers and the dominance of U.S. companies in this field.
Maritime security in the Indian Ocean region is another sector ripe for greater cooperation, given French presence by virtue of its territories (the Reunion Islands) for maintaining safety of sea lanes, tackling piracy and enhancing maritime domain awareness.
Business and educational ties
Cooperation in “strategic” areas is growing and the government-to-government relationship is the principal driver for this. Two areas that have been lagging are economic and trade relations as well as the people-to-people exchanges. The Hollande visit has sought to fix these by announcing a range of new measures. Bilateral trade between the two countries has been languishing at $8 billion, well below potential.
French foreign direct investment has picked up and there are more than 800 French enterprises operating in India. These include industry leaders like Alstom, Airbus, Schneider, Alcatel, Total, BNP Paribas, L’Oréal, Renault, Sanofi Aventis, Veolia, Engie (GDF Suez), Thales, Vinci, etc. Capgemini, an IT major has a large workforce in India.
With a large number of MoUs signed in sectors like urban development, solar energy, sewage and sanitation, urban transport including railways, water supply and entertainment, there appears to be a determined effort to make the business-to-business link more robust. Dovetailing the Smart Cities initiative is a good move in this regard. Nagpur, Chandigarh and Puducherry have been identified as three cities where French technical assistance and funding has also been promised. However, the challenge will be to develop viable public-private partnerships that can generate long-term funding and also make the projects self-sustaining in the long run.
An attempt has also been made to energise the people-to-people relationship by focusing on educational exchanges and skill development which creates a resource pool as Indo-French JVs generate greater employment opportunities. The number of Indian students going to France annually is 2,500 while the number of Chinese students is 10 times larger. Allowing larger number of French youth to intern in enterprises in India and easing visa norms for Indian students to work for two years after completing their education in France are steps in the right direction. Linkages between educational institutions need to be built up as more and more French institutions begin to offer bilingual courses.
Traditionally, the people-to-people relationship has been driven at the elite level of artists, musicians, dancers, writers and film-makers as eminent Indians in these fields have engaged with their French counterparts, but at a popular level, it lacks a buzz. Out of seven million foreign tourists visiting India annually, the number of French tourists is less than 3,00,000! Direct air links between India and France are a fourth of those between India and Germany. An Indo-French Centre for the Promotion of Advanced Research has been in existence for nearly three decades but limited budgetary resources hamper its activities. It needs to be restructured to permit it to raise resources from Indian and French industry; for this, the scope of projects needs to be broadened. Cultural festivals have been a regular feature but events need to be planned outside the metropolises, taking local calendars into account.
The strategic relationship between the two countries has developed over the years generating a sense of comfort between the relevant government agencies. What are needed are initiatives that can strengthen business-to-business linkages and people-to-people contacts which can, in turn, provide a broader underpinning to the overall bilateral relationship. The Hollande visit has rightly sought to focus on these sectors. If these can be effectively implemented, it will help establish a more balanced relationship between the two countries, with overlapping networks of stakeholders from all sections in both societies.
Source- The Hindu
Government may ask central bank to consider roads as a priority sector:-
Background :-One of the main reasons behind the delay in highway projects is shortage of funds. While the road contractors said banks were reluctant to fund projects due to mounting non-performing assets, the government officials said the ‘managerial inefficiencies’ of developers have stalled these projects.
Details:-
The government will soon approach the Reserve Bank of India (RBI) Governor Raghuram Rajan with a proposal to include road projects under the priority sector list for lending purposes and review the non-performing assets norms to revive Rs. 40,000-crore worth of highway projects that have not taken off due to bureaucratic delays and cost overruns.
The banks provide a certain portion of ‘priority sector’ lending in the form of small value loans to farmers for agriculture, micro and small enterprises, poor people for housing, students for education and low income groups and weaker sections.
At present, 40 per cent of loans given by banks should go to priority sectors defined by the RBI. Out of this, 18 per cent should go toward agriculture lending.
What is meant by Priority Sector?
Priority sector refers to those sectors of the economy which may not get timely and adequate credit in the absence of this special dispensation. Typically, these are small value loans to farmers for agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low income groups and weaker sections.
What are the different categories under priority sector?
Priority Sector includes the following categories:
(i) Agriculture
(ii) Micro and Small Enterprises
(iii) Education
(iv) Housing
(v) Export Credit
(vi) Others
Targets and Sub-targets for banks under priority sector:-
|
Categories |
Domestic commercial banks / Foreign banks with 20 and above branches (As percent of ANBC or Credit Equivalent of Off-Balance Sheet Exposure, whichever is higher) |
Foreign banks with less than 20 branches (As percent of ANBC or Credit Equivalent of Off-Balance Sheet Exposure, whichever is higher) |
| Total Priority Sector |
40 |
32 |
| Total agriculture |
18 |
No specific target. |
| Advances to Weaker Sections |
10 |
No specific target. |
Source- The Hindu and RBI
NASA’s airborne survey of coral reefs :-
Background :- Coral reefs are home to a quarter of all ocean fish species.If 33-50 per cent of the world’s coral reefs have already been degraded or lost due to climate change and human impacts, most of the functioning reef ecosystems may well disappear by mid-century, say reef scientists.
Details:-
As a first step to estimate the extent of damage to coral reefs, NASA has embarked on an air-borne three-year field experiment called The COral Reef Airborne Laboratory (CORAL), which aims to survey the conditions of the major reefs of the world through remote-sensing.
Dr. Erich Hochberg’s team will survey the condition of entire reef systems in Hawaii, Palau, the Mariana Islands and Australia. The regions were chosen because they represent a wide range of reef types (fringing, barrier, atoll, oceanic and continental) and a wide range of environmental conditions (from pristine to heavily impacted).
CORAL will involve the aerial deployment of a spectrometer called PRISM (Portable Remote Imaging Spectrometer) developed and managed at NASA’s Jet Propulsion Laboratory in Pasadena, California, which will detect the spectral signature of the various components of a reef such as coral, algae, sand etc. which will enable assessment of the condition of the reef.
For example, as coral is degraded, it is replaced by algae and hence the ratio of algae to coral is an indicator of reef condition. PRISM records the spectrum (all the different colours) of incoming light from the ocean below, across the ultraviolet, through the visible region and up to the near infrared. The CORAL data processing takes into account the complex interactions of sunlight with the atmosphere, ocean, and reef.
The signatures are used for identifying reef areas that are coral, algae, etc. CORAL also uses those signatures to model photosynthesis.
The PRISM data are validated by in-water measurements. There are three fundamental types of data to be gathered by PRISM: optical, reef benthic cover (area of the ocean-bottom covered by the reef), and reef primary productivity.
Measuring the oxygen concentration is very important as productivity is indicated by the change in oxygen over time for a given area of the reef. A more productive reef releases more oxygen.
Coral reefs are home to a quarter of all ocean fish species. They protect shorelines from storms and provide food for millions of people, yet very little of the world’s reef area has been studied scientifically. Virtually all measurements have been made by expensive, labour-intensive diving expeditions. Many reefs have never been surveyed, and those reefs that have been studied were measured only at a few dive sites.
Source- The Hindu
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Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.
Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.
Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.
In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.
Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.
“Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.
India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.
With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.
They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.
India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.
As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices
The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).
The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.
Here is an approximate break-up (in Rs):
a)Base Price | 39 |
b)Freight | 0.34 |
c) Price Charged to Dealers = (a+b) | 39.34 |
d) Excise Duty | 40.17 |
e) Dealer Commission | 4.68 |
f) VAT | 25.35 |
g) Retail Selling Price | 109.54 |
Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.
So the question is why government is not reducing the prices ?
India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.
However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.
That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.
Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.
Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.
But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.
Globally, around 80% of wastewater flows back into the ecosystem without being treated or reused, according to the United Nations.
This can pose a significant environmental and health threat.
In the absence of cost-effective, sustainable, disruptive water management solutions, about 70% of sewage is discharged untreated into India’s water bodies.
A staggering 21% of diseases are caused by contaminated water in India, according to the World Bank, and one in five children die before their fifth birthday because of poor sanitation and hygiene conditions, according to Startup India.
As we confront these public health challenges emerging out of environmental concerns, expanding the scope of public health/environmental engineering science becomes pivotal.
For India to achieve its sustainable development goals of clean water and sanitation and to address the growing demands for water consumption and preservation of both surface water bodies and groundwater resources, it is essential to find and implement innovative ways of treating wastewater.
It is in this context why the specialised cadre of public health engineers, also known as sanitation engineers or environmental engineers, is best suited to provide the growing urban and rural water supply and to manage solid waste and wastewater.
Traditionally, engineering and public health have been understood as different fields.
Currently in India, civil engineering incorporates a course or two on environmental engineering for students to learn about wastewater management as a part of their pre-service and in-service training.
Most often, civil engineers do not have adequate skills to address public health problems. And public health professionals do not have adequate engineering skills.
India aims to supply 55 litres of water per person per day by 2024 under its Jal Jeevan Mission to install functional household tap connections.
The goal of reaching every rural household with functional tap water can be achieved in a sustainable and resilient manner only if the cadre of public health engineers is expanded and strengthened.
In India, public health engineering is executed by the Public Works Department or by health officials.
This differs from international trends. To manage a wastewater treatment plant in Europe, for example, a candidate must specialise in wastewater engineering.
Furthermore, public health engineering should be developed as an interdisciplinary field. Engineers can significantly contribute to public health in defining what is possible, identifying limitations, and shaping workable solutions with a problem-solving approach.
Similarly, public health professionals can contribute to engineering through well-researched understanding of health issues, measured risks and how course correction can be initiated.
Once both meet, a public health engineer can identify a health risk, work on developing concrete solutions such as new health and safety practices or specialised equipment, in order to correct the safety concern..
There is no doubt that the majority of diseases are water-related, transmitted through consumption of contaminated water, vectors breeding in stagnated water, or lack of adequate quantity of good quality water for proper personal hygiene.
Diseases cannot be contained unless we provide good quality and adequate quantity of water. Most of the world’s diseases can be prevented by considering this.
Training our young minds towards creating sustainable water management systems would be the first step.
Currently, institutions like the Indian Institute of Technology, Madras (IIT-M) are considering initiating public health engineering as a separate discipline.
To leverage this opportunity even further, India needs to scale up in the same direction.
Consider this hypothetical situation: Rajalakshmi, from a remote Karnataka village spots a business opportunity.
She knows that flowers, discarded in the thousands by temples can be handcrafted into incense sticks.
She wants to find a market for the product and hopefully, employ some people to help her. Soon enough though, she discovers that starting a business is a herculean task for a person like her.
There is a laborious process of rules and regulations to go through, bribes to pay on the way and no actual means to transport her product to its market.
After making her first batch of agarbathis and taking it to Bengaluru by bus, she decides the venture is not easy and gives up.
On the flipside of this is a young entrepreneur in Bengaluru. Let’s call him Deepak. He wants to start an internet-based business selling sustainably made agarbathis.
He has no trouble getting investors and to mobilise supply chains. His paperwork is over in a matter of days and his business is set up quickly and ready to grow.
Never mind that the business is built on aggregation of small sellers who will not see half the profit .
Is this scenario really all that hypothetical or emblematic of how we think about entrepreneurship in India?
Between our national obsession with unicorns on one side and glorifying the person running a pakora stall for survival as an example of viable entrepreneurship on the other, is the middle ground in entrepreneurship—a space that should have seen millions of thriving small and medium businesses, but remains so sparsely occupied that you could almost miss it.
If we are to achieve meaningful economic growth in our country, we need to incorporate, in our national conversation on entrepreneurship, ways of addressing the missing middle.
Spread out across India’s small towns and cities, this is a class of entrepreneurs that have been hit by a triple wave over the last five years, buffeted first by the inadvertent fallout of demonetization, being unprepared for GST, and then by the endless pain of the covid-19 pandemic.
As we finally appear to be reaching some level of normality, now is the opportune time to identify the kind of industries that make up this layer, the opportunities they should be afforded, and the best ways to scale up their functioning in the shortest time frame.
But, why pay so much attention to these industries when we should be celebrating, as we do, our booming startup space?
It is indeed true that India has the third largest number of unicorns in the world now, adding 42 in 2021 alone. Braving all the disruptions of the pandemic, it was a year in which Indian startups raised $24.1 billion in equity investments, according to a NASSCOM-Zinnov report last year.
However, this is a story of lopsided growth.
The cities of Bengaluru, Delhi/NCR, and Mumbai together claim three-fourths of these startup deals while emerging hubs like Ahmedabad, Coimbatore, and Jaipur account for the rest.
This leap in the startup space has created 6.6 lakh direct jobs and a few million indirect jobs. Is that good enough for a country that sends 12 million fresh graduates to its workforce every year?
It doesn’t even make a dent on arguably our biggest unemployment in recent history—in April 2020 when the country shutdown to battle covid-19.
Technology-intensive start-ups are constrained in their ability to create jobs—and hybrid work models and artificial intelligence (AI) have further accelerated unemployment.
What we need to focus on, therefore, is the labour-intensive micro, small and medium enterprise (MSME). Here, we begin to get to a definitional notion of what we called the mundane middle and the problems it currently faces.
India has an estimated 63 million enterprises. But, out of 100 companies, 95 are micro enterprises—employing less than five people, four are small to medium and barely one is large.
The questions to ask are: why are Indian MSMEs failing to grow from micro to small and medium and then be spurred on to make the leap into large companies?
At the Global Alliance for Mass Entrepreneurship (GAME), we have advocated for a National Mission for Mass Entrepreneurship, the need for which is more pronounced now than ever before.
Whenever India has worked to achieve a significant economic milestone in a limited span of time, it has worked best in mission mode. Think of the Green Revolution or Operation Flood.
From across various states, there are enough examples of approaches that work to catalyse mass entrepreneurship.
The introduction of entrepreneurship mindset curriculum (EMC) in schools through alliance mode of working by a number of agencies has shown significant improvement in academic and life outcomes.
Through creative teaching methods, students are encouraged to inculcate 21st century skills like creativity, problem solving, critical thinking and leadership which are not only foundational for entrepreneurship but essential to thrive in our complex world.
Udhyam Learning Foundation has been involved with the Government of Delhi since 2018 to help young people across over 1,000 schools to develop an entrepreneurial mindset.
One pilot programme introduced the concept of ‘seed money’ and saw 41 students turn their ideas into profit-making ventures. Other programmes teach qualities like grit and resourcefulness.
If you think these are isolated examples, consider some larger data trends.
The Observer Research Foundation and The World Economic Forum released the Young India and Work: A Survey of Youth Aspirations in 2018.
When asked which type of work arrangement they prefer, 49% of the youth surveyed said they prefer a job in the public sector.
However, 38% selected self-employment as an entrepreneur as their ideal type of job. The spirit of entrepreneurship is latent and waiting to be unleashed.
The same can be said for building networks of successful women entrepreneurs—so crucial when the participation of women in the Indian economy has declined to an abysmal 20%.
The majority of India’s 63 million firms are informal —fewer than 20% are registered for GST.
Research shows that companies that start out as formal enterprises become two-three times more productive than a similar informal business.
So why do firms prefer to be informal? In most cases, it’s because of the sheer cost and difficulty of complying with the different regulations.
We have academia and non-profits working as ecosystem enablers providing insights and evidence-based models for growth. We have large private corporations and philanthropic and funding agencies ready to invest.
It should be in the scope of a National Mass Entrepreneurship Mission to bring all of them together to work in mission mode so that the gap between thought leadership and action can finally be bridged.