There is an old joke that when a man in New York sneezes, a man in Delhi catches a cold. Globalization has merely amplified this. Now, when a bank in New York sneezes, factories in Shenzhen cough, farmers in Kenya lose sleep, programmers in Bengaluru check their phones in anxiety, and someone in Iceland starts discussing the end of civilization.
The modern world is wonderfully connected—and therefore wonderfully vulnerable.
Globalization is, at its heart, the shrinking of distance. Goods cross oceans, capital crosses borders, ideas cross cultures, and information crosses the world before a government office has finished drafting its press release.
It has created opportunities on a scale previously unimaginable. Yet the same invisible threads that connect the world can also strangle it. Globalization is therefore neither a boon nor a bane. Like most powerful human inventions, it depends upon the hands that use it.
The blessings of globalization are difficult to deny. It has expanded trade and created enormous markets for goods and services. A farmer can sell produce beyond his village; a craftsman can reach customers abroad; a young Indian engineer can work for a company headquartered thousands of kilometres away without leaving her bedroom. Countries such as India have benefited enormously from the expansion of information technology, business-process services, pharmaceuticals and global supply chains.
Globalization has also carried knowledge across borders. A medical discovery in one country can save lives in another. Scientific communities can collaborate across continents. Students can attend courses offered by universities they may never physically visit. During the COVID-19 pandemic, the world saw both the power and the necessity of international scientific cooperation. The virus travelled globally with remarkable efficiency; fortunately, knowledge travelled almost as fast.
Perhaps the greatest gift of globalization is cultural exchange. Food, music, literature, cinema and ideas have ceased to respect customs officers. A Japanese anime can become popular in India; an Indian film can find an audience in South Korea; yoga can travel from ancient India to modern gyms across the world. Such exchanges can weaken prejudice by replacing the imagined “foreigner” with an actual human being.
Globalization has also contributed to poverty reduction by integrating developing economies into world markets. Hundreds of millions of people have gained access to employment, consumer goods, technology and better standards of living. In this sense, globalization has been one of the great engines of economic transformation.
But every engine has exhaust.
The first danger is inequality. Globalization may enlarge the economic pie, but it does not guarantee that everyone receives an equal slice. Highly skilled workers, multinational corporations and owners of capital often capture a disproportionate share of its benefits. Meanwhile, workers in vulnerable industries may find their jobs disappearing because production has moved to cheaper locations. The global market can reward efficiency while showing little sympathy for the man who has just discovered that his efficient replacement is a machine.
The second curse is the weakening of local economies and cultures. When global brands enter every street corner, small producers may struggle to compete. Traditional crafts can disappear under the pressure of mass-produced goods. Cultural exchange is admirable; cultural replacement is something else. A world in which every city has the same shopping mall, the same coffee chain and the same fast-food menu may be globally connected but culturally rather boring.
Then comes the environmental paradox. Globalization has encouraged production, transportation and consumption on an unprecedented scale. Goods are manufactured in one country, assembled in another, packaged in a third and sold everywhere. The result is economic efficiency accompanied by carbon emissions, resource depletion and ecological stress. The planet, unfortunately, does not recognize the distinction between a profitable supply chain and an unprofitable one.
Globalization has also created new forms of vulnerability. The pandemic demonstrated how disruption in one part of the world can paralyse production elsewhere. Semiconductor shortages, energy crises, wars and geopolitical tensions have shown that excessive dependence on distant suppliers can become a strategic weakness. What once looked like efficiency can suddenly look like fragility.
The digital dimension makes the paradox sharper. The internet has democratized information, but it has also democratized misinformation. Social media connects families and strangers, but it can also connect extremists, conspiracy theories and angry mobs with extraordinary speed. A lie can travel around the world before truth has found its spectacles.
There is, however, a temptation to respond to these problems by rejecting globalization altogether. That would be like burning the library because one of its books contains a bad idea. The answer is not isolation but intelligent integration.
The future requires a globalization that is more inclusive, sustainable and humane. Governments must invest in education and skills so that workers can adapt to changing economies. Social security must protect those who lose jobs through technological or economic disruption. International institutions must address tax avoidance, climate change, pandemics and financial instability. Supply chains must become resilient rather than merely cheap. And economic growth must be measured not only by the volume of goods produced but also by the quality of lives created.
India has a particularly important role in this transformation. As a large democracy with a young population, a growing economy and deep civilizational diversity, India need not choose between complete openness and complete protectionism. It can pursue strategic integration: welcoming technology, investment and global markets while protecting vulnerable communities, local industries, cultural diversity and ecological interests.
Mark Twain might have observed that civilization is the art of getting what we want without getting what we deserve. Globalization is a magnificent example. We wanted cheaper goods, faster communication, greater mobility and wider opportunity—and we received them. We also received inequality, cultural homogenization, ecological damage and global crises capable of arriving at the speed of a click.
The challenge, therefore, is not to decide whether globalization is a blessing or a curse. It is both. Fire cooks our food and burns our house; the ocean carries ships and drowns sailors. The moral question is not whether we should abolish fire or drain the ocean, but whether we possess the wisdom to use them.
Globalization has made humanity more connected than at any other point in history. The real test is whether it can also make humanity more cooperative. If it can, globalization may become not merely the triumph of markets over borders, but the triumph of human imagination over distance. If it cannot, we may discover that the world has become one village—and that, unfortunately, everyone in the village has learned to shout at once.
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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.