In Essay test –E03 , we gave a topic- Is globalization is digging its own grave in the form of de-globalization ?
We believe this is a potential question for upcoming Mains exam (Essay or GS paper) and the developments around the world suggest the same. UPSC, does not ask you the issue as is, it goes little deeper and asks you the undercurrent of the issue in the form of a theme and so are we.
A question reached us with regards to the essay in the student portal and publishing it for all to benefit. The question being :-
What’s difference between these two essays, whether these requires different approach? Do we need to take a stand in the first one because it is asked in a question format and justify the second one because it is a statement ?
1. Is globalization digging its own grave in the form of de-globalization? (Question given by us)
2. Globalization is digging its own grave in the form of de-globalization.
Answer:-
The difference is simple, The first one is a question – so you need to give an answer to that and you have to write your essay in such manner that you can justify your answer. In this type of essay first think of the conclusion and what is your answer to that question and then write the introduction and body of the essay keeping conclusion in mind. Sort of Reverse Engineering.
The later one is a statement, so you have to justify the statement but if you have something concrete that goes against the statement, then you can put that in to essay.
If we think of the topic itself:-
1)Is globalization digging its own grave ? Yes, it appears so, countries are trying to isolate themselves, especially those countries that were the main vehicle behind globalization. For example USA and the recent politics in USA suggesting more isolationism and protectionism etc, because when globalization did help the corporation in USA , it took away their job to other parts of the world and thus the new politics is based around protectionism, more jobs at home etc. The recent case of BREXIT also signifies this trend of de-globalization.
2)But that is just the appearance of de-globalization , and globalization is here to stay. That’s the stand you should take to answer both the essay. Just because a statement is given, that does not mean it should be your ultimate stand, you can justify it to certain length but if evidence suggest otherwise then go for it.
The reason we gave it as a question is due to the fact that you have to take a stand and your options are not limited, but in real exam when the question is asked in the form of a statement – usually one has to justify it (As the experience of UPSC suggests)
For this kind of topic, UPSC will ask it as a question rather than a statement as we did, because what the examiner is expecting from you is – Your critical understanding of the issue and you general understanding of how economies work and the how “invisible of hand of market” operate (Here you can justify that – in a globalized world, companies will look for more profit and look ways to cut cost, that’s the reality.Commercial corporations can not sustain without profit and if the policy environment chokes them, they will go somewhere else which is more conducive- that’s is the reality of business or as they say- invisible hand of the market)
Refer these two editorials as well-
http://upsctree.com/2016/06/19/daily-editorials-robin-hood-principle/
http://upsctree.com/2016/10/01/daily-editorials-globalization-answer/
More reference material and critical analysis will be provided when we provide topic wise strategy.
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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.