U.S., China ratify Paris climate deal
The move by the world’s two biggest polluters is a major step forward for the 180-nation accord, which sets ambitious goals for capping global warming and funnelling trillions of dollars to poor countries facing climate catastrophe.
Two biggest pollutors
China is responsible for almost a quarter of the world’s emissions, with the U.S. in second place on around 15 per cent, so their participation is crucial.
The Paris pact calls for capping global warming at well below two degrees Celsius (3.6 degrees Fahrenheit), and 1.5 C (2.7 F) if possible, compared with pre-industrial levels.
Individual commitments
Under the Paris accord, China has pledged to cut its carbon emissions per unit of GDP by 60-65 per cent from 2005 levels by 2030 and increase non-fossil fuel sources in primary energy consumption to about 20 per cent. In its Paris commitment, the U.S. promised to cut its own emissions 26-28 per cent below 2005 levels by 2025.
Giant panda no longer endangered, experts say
The International Union for Conservation of Nature said in a report that the panda is now classified as a “vulnerable” instead of “endangered” species, reflecting its growing numbers in the wild in southern China. It said the wild panda population jumped to 1,864 in 2014 from 1,596 in 2004, the result of work by Chinese agencies to enforce poaching bans and expand forest reserves.
The report warned, however, that although better forest protection has helped increase panda numbers, climate change is predicted to eliminate more than 35 per cent of its natural bamboo habitat in the next 80 years, potentially leading to another decline.
CSCs may assemble LED lamps to boost rural economy:-
Looking at tapping the 2.29 lakh Common Service Centers (CSCs) in the country to boost rural economy, the government plans to enable assembly and manufacturing of LED lights at these centers.
CSCs can be a great system for generating revenues and employment in rural India. Making LEDs is not tough…all these will be bought by Energy Efficiency Services Ltd (EESL),
20 nations for global forum to address excess steel capacity
Major steel producers China, India and Japan along with other G20 nations have called for increased sharing of information as well as more cooperation by forming a global forum to address the issue of excess steel capacity.
The development assumes significance in the backdrop of the problem caused in international markets due to excess steel capacity amidst softening of prices, which eroded sales and profits of firms across countries, especially at a time when the global economy recovery is weak. The forum facilitates increased information sharing and cooperation.
This move also assumes significance as it comes in the backdrop of nations such as the U.S. imposing heavy duties on imports of cheap steel from countries such as China.
The decision was announced by G20 leaders recently. G20 leaders recognised the “structural problems, including excess capacity” in some industries, exacerbated by a weak global economic recovery and depressed market demand that have caused a negative impact on trade and workers.
The leaders also recognised that “subsidies and other types of support from government or government-sponsored institutions” can cause market distortions and contribute to global excess capacity and therefore require attention.
Indian Perspective :-
India, the world’s third largest steel producer, too is facing a spate of cheap imports from China, Japan and Korea.This has hit the sales and profits of domestic steel producers and also impacted their liquidity, which in turn has affected their capacity to repay loans and meet interest payment deadlines having a cascading effect on the number of non performing assets (NPAs) with the banks.
Steel sector in India accounts for the highest number of NPAs with the banks.
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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.