Background:- You might have heard it before, how do you tackle a bully… STAND UP to it !!! Unfortunately, “bullying” has been China’s geopolitical policy. The bully is backed by a trillion dollar economic muscle which it got by being the “Sweat Shop” of the world and of course no country wants prosperity at that cost of human rights violation and what not. Now, it just can not keep its hands in its pocket, because it is not in the very nature of bullies.
In diplomacy there is a saying that “Speak softly and Carry a big stick, you will go far” and that is what India needs to do now. To stand up to a bully you don’t need bravado, a “slap in the face” will do just fine.
Many though that when India could not get NSG, it was India’s loss, WRONG, China had to fire its bureaucrats because it faced the diplomatic isolation, almost all supported India, even Mexico and Italy after the PM’s visit. So China’s isolation is apparent.
It also knows that its sweat shops are going to be closed sooner than later, and you no need humans to assemble what can be done by machine now with a bit of Artificial Intelligence. Hence the OBOR initiative, to sell its products and dominate the region geopolitically.
Nevertheless, the bullying is back and lets get into the matter at hand.
Details :-
Nothing illustrates this better than China’s recent efforts to test India’s responses in the tri-junction of Sikkim, Bhutan and southern Tibet, where it is building a road from where it can threaten the Chicken’s Neck region of India, which connects India to the rest of the North-East. It destroyed some bunkers on the Indian side, and has trespassed into areas claimed by Bhutan. In the resultant standoff, it arrogantly reminded us of our 1962 defeat.
To which, Defence Minister Arun Jaitley mildly retorted that the India of 2017 is not the India of 1962. China has – not unexpectedly – responded that even China is not what it was in 1962, and will take “all necessary measures” to safeguard its territory.
The China of 2017 is acting like that T-Rex in Jurassic Park, which tests a different part of the electrified fence each time to check for weaknesses. It tests India repeatedly in areas of weakness, whether it is in Ladakh, or the North-East. In 2013, a platoon-sized Chinese army contingent pitched tents 30 km south of Daulet Beg Oldi and demanded that India demolish bunkers some 250 km south in Chumar as these were reportedly a threat to the Chinese. After a standoff, India appears to have obliged.
Something similar is happening in Doko La, an area held by Indian troops near which the Chinese are trying to build a road through Bhutanese territory. Indian and Chinese troops are in a faceoff because India is intervening on behalf of Bhutan, with which India has a 50-year treaty.
The Chinese are trying to test the status quo here for a simple reason: technically, they are not encroaching on Indian territory or territory claimed by India, but doing it with Bhutan, which has no power to resist. If Bhutan and India cave in to this bullying, China will have moved its borders forward a wee bit. It will start believing that in an eyeball-to-eyeball confrontation, India will, often, blink first.
To be sure, China is operating from its own sense of weakness, despite apparent strength. It knows that with every passing year, its hopes of becoming hegemon of Asia will diminish. Seen from the Chinese side, the window of opportunity for it to act is narrow.
First, China knows that it enjoys relative impunity right now thanks to the space opened up by Donald Trump’s confused policies. The US policy on Asia is no longer coherent, and India cannot count on the Trump administration to come to its aid if attacked by China. The EU is mired in its own economic woes, and Russia has been bought off with Chinese business deals. Japan is not a military power, but will start developing its own defence over the next decade. If China wants to force any issue with India, it must do so in the next five years.
Second, China knows that India’s own internal weaknesses will take a while to sort out. It could take nearly a decade for our economy and military preparedness to rise to a level where it becomes invulnerable to Chinese threats.
This can happen during the 2022-2025 period, depending on our rates of growth. Currently, China’s GDP is about five times India’s in nominal dollar terms ($11.8 trillion versus India’s $2.5 trillion, according to the IMF), but only 2.5 times in terms of purchasing power parity (PPP, with China at $23 trillion and India at $9.4 trillion). By 2022 or 2025, India’s PPP-based GDP will be half of China’s.
This is why China is trying to flex its muscles now, when India is in a position of relative weakness. Five or 10 years later, both the Indian economy and the military will be too big for China to confront through force of arms. And the US and Europe may also be in better shape than now to rein in China.
Third, China also faces internal vulnerabilities, and again the time horizon for offensive external action is narrow. Its population growth is decelerating, and now rises at the annual rate of about 0.5 per cent, against India’s 1.2 per cent.
China’s working age population has been declining since 2012, and will fall 25 per cent by 2050. This means both a steady rise in wages, which will worsen its competitiveness, and a fall in the growth rate in future.
In contrast, India’s demography is in a sweet spot, and the working age population continues to rise. These are positive indicators for future growth.
Another concern is China’s excessive internal debt, which is now reckoned at 260 per cent of gross domestic product (GDP). This forced rating agency Moody’s to downgrade Chinese debt in May, and is indicative of the possibility that as growth slows, the debt problems could get worse.
China’s belt-and-road initiative is intended to create growth outside China by offering its Asian and African neighbours soft loans, which, in turn, will create construction opportunities for Chinese firms.
China believes that it must act while India is still not big enough. To strengthen its bargaining power with India, it is also buying out potential allies in the neighbourhood (Nepal, Sri Lanka, Myanmar, etc). The intrusion in Bhutan is intended to convey the same message. The bully is telling that tiny kingdom that partnering with India can be injurious to your health.
So, what should India’s response be?
One, we must bide our time. This is not the time for belligerence. We must talk softly, and keep beefing up your military power so that China knows it will get a bloody nose even if it has more firepower right now. This means avoiding unnecessary rhetoric in the public sphere, including in the media.
Two, we must engage China diplomatically to convey the sense that its belligerence can only be counter-productive. China, in fact, does not need to be told that if it attacks India, the rest of Asia will gang up against it despite its blandishments. So, targeting India will not help it anywhere.
Three, we must attempt to drive a wedge between Pakistan and China, China is turning a blind eye to this, because it is using Pakistan to get at India instead of acting on its own – except by offering pinpricks in Ladakh and now Bhutan. But as Chinese investments in Pakistan, including the port of Gwadar, increase, Chinese workers will be under threat from Pakistan’s various insurgencies on the western borders, including the restive Baloch freedom fight.
India needs to keep its head down and focus on building its own internal military and economic strengths for the next decade. After that, China can’t do much. We have to talk softly, and grow the size of our stick in the next decade.
Bullies need standing up to, but there is no need to talk loudly or lose eye-contact in the process.
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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.