*Highlighted parts are important from exam perspective,especially analysis portion of this editorial, historical and political details sets the background and gives holistic understanding but not be of much use in exam.Kindly bear that in mind while reading.
Background :-
Prime Minister Narendra Modi’s visit to the United Arab Emirates (UAE) had the potential to be remembered like Prime Minister P.V. Narasimha Rao’s visit to Singapore in September 1994. Through his famous Singapore Lecture, Narasimha Rao unveiled India’s “Look East” Policy. Through the joint statement that he signed with UAE’s leadership, Mr. Modi has unveiled India’ Look West Policy
Historic Contours:-
Narasimha Rao’s “Look East” Policy succeeded because South-East Asia began to “look West” to India, seeking a balancer to China. Mr. Modi’s “Look West” Policy will succeed because West Asia is “looking East” worried about the emerging strategic instability in its own neighbourhood and the structural shift in the global energy market.
Political Contours:-
The foundation for Mr. Modi’s successful outreach to West Asia was in fact laid by his predecessor when India invited the King of Saudi Arabia to be the chief guest at the Republic Day Parade, in 2006.
This was followed by Prime Minister Manmohan Singh’s visit to Riyadh and the India-Saudi defence cooperation agreement signed in 2014.
Growing India-Saudi cooperation in the field of terrorism may have also contributed to India’s relatively mild response to Saudi aggression in Yemen, but it did set the stage for wider engagement at a strategic level with the other states of the Gulf Cooperation Council (GCC).
Mr. Modi’s visit to the UAE was preceded by significant visits to other GCC states by External Affairs Minister Sushma Swaraj. That Ms. Swaraj made Bahrain her first stop in the region, last September, was welcomed by Bahrain’s India-friendly leadership and showed growing sophistication in Indian thinking about the region.
With a minority Sunni leadership and a majority Shia population, Bahrain has tried hard not to get drawn into the wider sectarian conflicts in West Asia.
Moreover, with half of the island kingdom’s working population hailing from India, mostly Kerala, and given the very cordial people-to-people relations between Bahrainis and Indians, the visit showed that India had a special relationship to the region that few other major powers can ever lay claim to.
Finally, over the last year, the Modi government has put forward a nuanced view of the region openly declaring friendship with Israel, seeking better relations with Iran and, at the same time, cementing a thriving relationship with the GCC states.
It is expected that Mr. Modi may follow up his successful visit to the UAE with a productive visit to Iran and a “historic” one to Israel, being the first Indian Prime Minister to visit Tel Aviv.
Transformational visit
While all this fits into a pattern, one should not underestimate the transformational significance of the UAE visit and the Dubai declaration.
The Joint Statement between the United Arab Emirates and India is an important articulation of a significant shift in the Arab world’s view of India. The statement is truly comprehensive and wide-ranging. It talks of historic ties of “commerce, culture and kinship”, drawing attention to the unique history of Arab interaction with Indian communities of the west coast, from Gujarat to Kerala.
The joint statement, outlining closer government-to-government (G2G) relations, draws attention to the vibrant business-to-business (B2B) and people-to-people (P2P) relationships and commits the UAE to a sharp increase in its investment in India. What is striking to an observer of India-West Asia relations is the assertion of not just a “shared” past but of shared challenges in the present and a shared future. It then proceeds to state: “A shared endeavour to address these challenges, based on common ideals and convergent interests, is vital for the future of the two countries and their region.” The statement expresses the hope that: “Proximity, history, cultural affinity, strong links between people, natural synergies, shared aspirations and common challenges create boundless potential for a natural strategic partnership between India and UAE.”
That these are not just words but the expression of new thinking in both capitals is demonstrated both by the visuals of the visit and the follow-up action both governments have committed themselves to. More to the point, it makes pointed reference to the growing congruence of thinking on vital security issues, especially cross-border terrorism.
GCC looks West
What is significant about the new strategic partnership outlined by the UAE and India is the fact that it is defined not just by India’s “Look West” policy, based on its energy and financial needs, but that it is equally defined by the GCC’s “Look East” policy, soliciting greater Indian engagement with West Asia. Several factors have contributed to this fundamental shift in West Asian strategic thinking.
First, the structural change in the global energy market with West Asian oil and gas increasingly heading to South and East Asian markets rather than to the Trans-Atlantic markets.
Second, partly as a consequence of this change in flows and partly owing to the fiscal stress faced by the trans-Atlantic economies, West Asia is looking to India and other Asian powers to step in and offer security guarantees to the region. Many GCC states have welcomed defence cooperation agreements with India.
Third, in the wake of the Arab Spring and the mess in Egypt and Iraq, the Gulf states find India to be a more reliable interlocutors than many western states.
Fourth, under pressure from radical and extremist political forces within West Asia, most states in the region have come to value the Indian principle of seeking and securing regional stability as an over-riding principle of regional security.
In the specific case of India-UAE relations, it appears the Emirati have come to appreciate India’s view that state-sponsored or supported cross-border terrorism poses a grave threat to regional security and so must be curtailed and stopped.
In short, it would seem, the India-UAE strategic engagement is the product of a mutual “look-at-each-other” policy.
If China’s rise offered the backdrop for South-East Asia’s “look at India” policy, the West’s failures and weaknesses, and a weakening of the strategic trust between the West and West Asia may have contributed to the GCC’s “look at India” policy.
Analysis
A ‘Look West Policy’ (LWP) like India’s famed ‘Look East Policy’ has often been spoken about, but there has not been a formal institutionalisation of the same.
This will need a concentrated focus – like the LEP – for the region, to formulate effective policies.
While trade is a significant component of this relationship, the essence of the LWP will be the multi-dimensionality of its character.
As much as India trades with the region, also important are the issues of security, culture, people-to-people linkages, and those of a wider geopolitical and geostrategic nature.
Look West Policy: Primary Rationales for Induction
Diaspora & remittances: The West Asian region is home to millions of non-resident Indians; and they were responsible for approximately half of the US$69 billion worth of remittances that flowed into India in 2012.
However, the introduction of the Nitaqat laws in many Gulf countries has resulted in several thousands of these workers having to return to India.
While it is unfair to view the returnees as a liability, one cannot ignore the economic and social impact of this mass re-migration.
India is not prepared to assimilate all these people into its own economy just yet. Already, unemployment rates are high, and the economy is not doing well. Job creation will take a while, and until then, there will be some strain on the economy.
Energy: India, being a growing economy, is perpetually energy-hungry. West Asian nations are among the primary suppliers of oil and gas that keep the Indian economy running.
Stable and more improved relations between India and the region are key to securing and expanding on these sources.
Projects such as the Iran-Pakistan-India pipeline lay suspended due to several other reasons. However, proposed projects such as the Oman-India Pipeline, an undersea gas pipeline – that Iran too has expressed interest in – look promising. India’s attempts at ensuring energy security therefore cannot bypass engagements with the region.
Maritime security: Be it trade or energy supply routes, or even national security, the significance of an effective maritime security infrastructure in the Indian Ocean – the maritime link connecting India with several of its key West Asian partners – is pivotal to ensuring safety, stability, and disaster-management for the region.
The Indian Ocean Region is a major geographical stretch through which a large chunk of the world’s business is conducted.
Already, there is a constant threat of piracy in the western Indian Ocean. A concentrated policy will be needed to identify specific issues and areas of cooperation between India and West Asia, in order to ensure smooth and secure movement.
Furthermore, in recent times, there have been many debates on the concept of the ‘Indo-Pacific’ to boost connectivities between the Indian Ocean and the Pacific Ocean. The two regions already have robust connectivities, but more can be done.
However, if this concept of the Indo-Pacific has to become a reality, there is a need for enhanced cooperation in various areas among the key players in each region, before connecting the regions.
Eventually, the LWP and the LEP can lay the foundations for the realisation of the ‘Indo-Pacific’.
National and regional security: Any form of tumult in the West Asian region invariably has an impact on India and South Asia as a whole.
For strategic reasons, India seeks peace and political stability and security in the West Asian region – sentiments reciprocated by the countries of the region in their assessments towards West Asia as well as South Asia.
So far, India has been pragmatic in its policies towards the West Asian region –excellent examples of which are balancing its relationships with Palestine and Israel; and Saudi Arabia and Iran, among others.
However, there is more that needs to be done, and for that, there needs to be better, more polished and astute understanding of the region in our country – especially in the light of the impending US withdrawal from Afghanistan; the thawing in the US-Iran bilateral; the ongoing civil war in Syria and its implications; implementation of the Nitaqat policies in the Gulf countries; and the rising fundamentalism, especially in the franchisee-ing nature of terror networks, among others.
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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.