January 9 commemorates the day Mahatma Gandhi returned from South Africa in 1915, after honing satyagraha, or peaceful protest, against the colonial and racist regime there. In 2002, the National Democratic Alliance (NDA) government of Prime Minister Atal Bihari Vajpayee decided to celebrate it annually by holding events including bestowing awards on prominent members of the Indian diaspora. The 15th edition of Pravasi Divas this year is now on in Bengaluru.
“Diaspora” is an omnibus phrase which brackets people of Indian origin who have emigrated since the 19th century to all corners of the world. Roughly it falls into two categories: pre- and post-Independence. The latter further subdivides into migration to the West, including Australia and New Zealand, and workers in the West Asian countries — numbering over seven million — who began flocking there following oil cartelisation by the Organisation of the Petroleum Exporting Countries after the Arab-Israel war of 1973 and the steep rise in oil prices.
The Indian in West Asia
The earnings bonanza allowed the hereditary rulers of West Asia to unleash a spending and construction boom. Despite cycles of economic expansion and contraction, as oil prices rose or fell, the six Gulf Cooperation Council (GCC) states have learnt to live with the perils of single commodity dependent economies. Some such as Dubai, with almost depleted oil reserves, have remodelled themselves as entrepôt for regional trade and a destination for tourism and convivial living, besides emerging as a financial centre.
Both Abu Dhabi and Qatar are modelling themselves as centres of culture and sports, civil aviation hubs and more spartan living. They also have poured earnings each year into sovereign funds to act as a cushion during the low oil price years.
But they face two new challenges. One, the shale oil revolution in the United States combined with slower global growth and environmental concerns may have already pushed the world into a post-OPEC phase and perennial low oil prices. Two, the entire region to the west of India up to the Mediterranean is now swept by Shia-Sunni contestation and the challenge posed by radical Islam. Thus instability may persist for decades.
Therefore, Indians in GCC countries, ranging from skilled and unskilled workers to those holding executive jobs or running businesses, may have to face more challenging circumstances of economic slowdown, “Arabisation” or more jobs to locals, and threats from terror-related events. Indian workers, particularly the vast majority from Kerala, are still the favoured ones of the locals but are under pressure from more skilled workers from countries such as the Philippines or cheaper labour from Nepal, etc. In India, the Union and State governments have failed to upgrade skills of Indian workers going to West Asia. Congress-led governments have been particularly guilty, allowing the Kerala lobby in the Union cabinet to drive India’s GCC policy. Often ministers have had kin located there, compromising their ability to act independently.
As a rising power, India’s prestige suffers when its citizens are seen doing menial jobs. Moreover Indian strategic options get limited fearing reprisal against workers. That is why for decades India has let its citizens be subjected to local labour rules that are medieval and regressive, such as employer seizing the travel documents of the worker on arrival. Similarly, it should not require tweets to the Minister of External Affairs to get simple consular acts performed. Their safety and security as indeed sanctity of their contracts must be addressed by local missions, which should be accountable for any slip-ups.
Triumph over adversity
India has a largely positive record dealing with the diaspora that left India as indentured labour in the 19th century — in the period from 1833 to 1917 — particularly for the Caribbean where labour shortages ensued following the abolition of slavery. Coincidently, the Chief Justice of the Supreme Court, J.S. Khehar, hails from East Africa.
The expulsion of Indians from Uganda by Idi Amin in the 1970s tested Indian diplomacy and its ability to protect the diaspora. India passed the buck to Britain as the guarantor of their safety as most held British documents.
Mauritius, with Indians constituting the largest group and 48.5 per cent of the population being Hindus, has seen the community consolidate political power, with strategic support from Indian governments. Located strategically in the Indian Ocean, this country has been an asset for India, safeguarding the Southern maritime flank.
Contrariwise, India was unable to support 49 per cent of Indo-Fijians in their desire for a multi-ethnic government when, in 1987, Lt. Col. S. Rabuka overthrew the elected government. Their numbers have shrunk since then.
Persons of Indian origin have headed governments in some Caribbean countries such as Guyana and Trinidad and Tobago, the two nations with huge Indo-Caribbean populations.
Generally, Indian policy in the past has been to not be seen as meddling in their internal affairs sensing that it may be counterproductive. Two vital links have been religion and cricket. But India has been unable to build on that base by boosting investment and business links and better connectivity. That raises the question, which even China is beginning to pose now: to what extent would India be willing to go to protect the diaspora when it runs into political turbulence in their countries of abode?
The diaspora in developed countries:-
Finally, the issue of diaspora in the U.S., the United Kingdom and Canada. With rising numbers and greater earnings, they are becoming more proactive to rally in support of Indian interests. Their lobbying in the U.S. with politicians worked famously to swing the Congressional vote for the U.S.-Indian nuclear deal in 2006.
While the U.S. leads as the country with the highest number of Indian origin persons numbering around four million, the U.K. and Canada are next with 1.45 million and 1.2 million, respectively.
Sikhs are the largest component of the diaspora in Canada, at 34 per cent compared to 27 per cent Hindus, with the rest being Muslims and Christians. That is why Canadian Prime Minister Justin Trudeau joked that he had more Sikhs in his cabinet — this includes his Defence Minister — than Mr. Modi. Sikhs are at the number two spot in the U.K and the U.S.
The Wall Street Journal estimates that there are 15.6 million persons born in India living abroad. This number has grown by 17.2 per cent since 2010. The Chinese diaspora is 50 million strong, with 32 million settled in Southeast Asia. For China, this community became the bridge to integrate their economy to global supply chains once Deng Xiaoping opened Chinese doors in the 1980s. They also funded investment in Chinese economic zones.
Undoubtedly, the Indian diaspora’s remittances in the past have been of vital assistance to Indian foreign exchange reserves. But the challenge now is to go to the next stage — of harnessing not just their financial but also their intellectual capital.
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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.