Disclaimer :- This is an exclusive UPSCTREE write up.The italicized sentences are the inputs we derived from other sources.
Background:-
It was an afternoon of a Thursday, unlike any, it was significant because it was a particular day of a particular year – November 19,1863 and it was the Abraham Lincoln speaking from the podium of Gettysburg, Pennsylvania.
Yes, that’s right.It was not a date of great war or signing of a great treaty , it was just a speech that had the power to influence the generations of the time and generation yet to come.
And a single sentence of the speech left undying impression on Human landscape forever.
“government of the people, by the people, for the people, shall not perish from the earth”
That single line had such power that it ultimately defined democracy.No body writes about democracy without writing the sentence irrespective of whether it is an essay to be written by a school-goer or an erudite examining the functioning of democracy.
More than a century has passed since that afternoon and more and more countries became democracies in the process.Yet , the sentence still has profound meaning for the ruled and for the ruler.
Democracy was the utopia that started with great expectations , it delivered some and it faltered to deliver some.But, democracy is not a one day or one year affair – it is a work in progress and it will always be as such
And, like any work in progress , it had to change,reform , adapt ,endure and deliver continuously.
Change is constant , and in order to be a constant affair, democracy has to change.Change begin with reforms, reforms begins with adaptation , adaptation ensures endurance , and when there is endurance – deliverance is guaranteed.
A look around all democracies in the world, tells us that , people are undoubtedly proud of it , people are satisfied with it and people are dissatisfied with it too.It evokes mixed response and mixed emotions.
To make it more robust, more meaningful and more relevant – there is a call for another round of Gettysburg address.But this time, no leader has to take podium or give a speech , instead it requires calculated rearrangement and calibrated decision making.What those decisions are and what those rearrangements thus calls for assessment.
Another round of – “For the people, of the people and by the people “:-
Recently , the private sector’s response to customer demands has also raised public expectations for government services. In this context, what should governments focus on prioritizing and getting right?
At its simplest, what governments should be focusing on is what citizens want. At one level, that’s a very trite answer, but where we think there’s an interesting layer to that is that there do seem to be a set of outcomes that citizens increasingly care about.
Those outcomes require departments and agencies to work together in ways that they’ve never done before. More and more governments are setting a smaller number of very meaningful outcomes that citizens want, and they end up being things like reducing street crimes or making the street clean or delivering services in real-time.
A big thing that governments have to get right, and get right at the outset, is that digital is not just about digital. It’s integral to every discussion you have on major policy issues. That just like big corporations, you can’t just put digital in a corner of government activity and leave that to a check-savvy department. You have to integrate it with the main purposes of government. You have to put the muscle of a bigger purpose behind it to actually drive it through.
One point to raise here, is whether to use the word prioritize. Governments struggle with that tremendously because it implies trade-offs have to be made. While it’s easy to identify a long list of things that governments want to do, be it because fiscally they have to or because citizens want them to, the challenge is often what they do not do. Usually getting that list is pretty straightforward, but the most difficult part is getting a cabinet together and for them to actually say, “At what point do we say this is no longer a priority? Or is this a priority maybe for later?”
In a modern democracy, when there are more voices from more parts of society and the political spectrum, it can be hard for government to make choices. To some extent, you’re squeezed. You’ve got more things that you have to deal with. There’s not a lot more money to be able to work to address that with.
That’s a huge opportunity for government, and it’s also a challenge in the sense if you went back 10, 15 years, for most citizens their expectations of the department of an agency were set by another government department or another agency. Today, their expectations are driven by the private sector. They’re driven by their digital experience with a bank, with their mobile-phone provider, with their pay-TV provider.
One little insight that we’ve seen from several countries that have done this quite well is that, if you’re a consumer company, historically, if you were a customer of mine, I used to look at you in terms of how productive my relationship with you was over a one-year period. Increasingly, what world-class consumer companies are doing is looking at the value of a customer over a lifetime. Essentially, what is the value of that customer journey, that customer experience, over the whole time of the relationship? Believe it or not, governments have never done that. They’ve always looked at you, , and what the nature of your relationship was over the last year ?
Thus, reforms are important, but what is more important is – increasing people’s participation demands better service across range of issues.And to deliver that , the government has to keep check and reassess , not once in a decade but probably once in a year.That could make democracy more meaningful.
Democracy transcended it’s core that is- people’s participation.In a modern democracy , people are not there just to vote , they are here to demand.And the demands have moved from ideological arena to delivery of day-to-day services.The demands can be as simple as – baby food in trains , 24hr electricity , cleaning the clogged drainage system of a city or getting a passport with in a day.
A close look at the demands tells us that , whatever the government services are there – they don’t have the luxury of time anymore.A citizen does not expect to get his/her passport in a month anymore ,he/she wants it in a day.In a faster age , delivery got to be faster, else democracy will lose its meaning.
In modern democracy, the demands are not about getting the political right anymore. It is about getting the social and economic justice – not in 100 years but in lightning speed.Governments will be judged on this parameters and will be voted in or out on this basis.
Speed is the new core of democracy and the mantra is – “democracy is there, just make the services simpler,faster and real-time”.
If one wants to achieve speed , one needs to do away with discretion in decision making, and make it digital and transparent. Corruption will erode as discretion erodes.So speed will help in curbing all other negative externalities that became synonymous with democracy such as – bribery, corruption, policy-paralysis etc.Speed will indeed help in restoring the public faith that mutated to public cynicism over the past decades.
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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.