The peace agreement reached between the Afghan government of President Ashraf Ghani and warlord Gulbuddin Hekmatyar speaks volumes about the current situation in the country.
Hekmatyar is not the type of leader a legitimate government may like to make peace with. The “butcher of Kabul” faces charges of killing thousands of Afghans during the U.S.-backed anti-Soviet jihad in the 1980s and the civil war in the early 1990s.
He fell out with his American patrons during the civil war involving different mujahideen groups, and turned against the U.S.-led coalition troops after their 2001 invasion of Afghanistan.
But even after being declared a “global terrorist” by the U.S. in 2003, and his militia, the Hezb-i-Islami, being placed on the UN list of foreign terrorist organisations, Hekmatyar, now believed to be living in Pakistan, continued to fight the Afghan government and the coalition troops.
Over the years his influence has dwindled, but he still commands a sizeable group of rebel soldiers who can continue to irritate Kabul. But why should the Afghan government negotiate a peace deal with a weakened warlord who faces charges of war crimes?
Under the agreement, Hekmatyar will be made part of all government decisions and actions. Besides, the Hezb-i-Islami fighters will be integrated into the Afghan armed forces and Mr. Ghani will request the UN to remove the terrorist tag.
One plausible explanation is that the Afghan government is desperate to find a breakthrough in the 15-year-old civil war. Mr. Ghani’s previous attempts to reach out to the Taliban have come to nothing.
Despite the recent setbacks to their leadership, the Taliban now control more territories than ever since they were ousted from power in 2001.
They have demonstrated the capability to strike any location they choose to. By reaching a peace deal with Hekmatyar, Mr. Ghani is sending the message to the Taliban that peace between warlords and the government is not impossible, provided the former are ready to shun violence and work within the Afghan Constitution.
The President may also be hoping that if Hekmatyar rallies the various political and militant factions of the Hezb-i-Islami behind the government, it would strengthen the regime’s position in the long term. But it is a gambit.
The accord is unlikely to have any immediate impact on security as the Taliban are still at war. The deal could be counterproductive politically as well because of Hekmatyar’s record — having him associated with the government could dent its legitimacy.
But for Mr. Ghani, presiding over a regime grappling with infighting, incompetence, lack of resources and massive security challenges, there are not too many easy choices that are without risk.
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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.