Amid the standoff between Indian and Chinese troops in Doklam area in the Sikkim sector, national security adviser Ajit Doval’s visit to China has come and gone. Nothing much has changed on the ground.
Beijing continues to harangue and wage its psychological warfare, sometimes by reminding India of 1962 and sometimes by suggesting that countermeasures from Beijing would be unavoidable if the government continues to ignore the Chinese warnings.
Chinese officials even went to the extent of informing a visiting Indian media delegation that Bhutan has conveyed to Beijing through diplomatic channels that the area of the standoff is not its territory though, of course, no evidence for this claim was provided. Thimphu later denied these claims.
China is also provoking India by asking what New Delhi would do if it “enters” Kalapani region in Uttarakhand or at some place in Kashmir. This is the first time that the issue of Kashmir has been raked up by China at the official level.
“The Indian side has also many tri-junctions. What if we use the same excuse and enter the Kalapani region between China, India and Nepal or even into the Kashmir region between India and Pakistan,” Wang Wenli, deputy director general of the boundary and ocean affairs of China’s ministry of foreign affairs, said.
This comes after minister of external affairs Sushma Swaraj’s assertion in Parliament a few days back that war was not a solution and India would resolve the border standoff with China through dialogue. But she also made it clear that India’s reasonableness shouldn’t be mistaken for weakness. “Just because we want to have friendly relations with our neighbours, they shouldn’t cross the line.
India always wanted smooth relations with China. But the alignment of boundaries involving India, China and Bhutan has to always be finalized in consultation with all three countries,” she said, underscoring New Delhi’s resolve not to be cowed down by Beijing’s relentless high-pitched campaign.
This crisis between China and India is different from other such episodes in the past but what makes it unique in recent memory is New Delhi’s determination so far not to concede the standoff on China’s terms. Beijing has tried everything. It has used its media to bully India; it has threatened India officially; it has used colonial era records selectively; it has tried to rally world public opinion. But India has not budged.
And that, in essence, foreshadows the future of the global order. Underlying all this petulance about boundaries and territories, behind all this façade of sovereignty, the Sino-India standoff in Doklam is about whether the future of Asia will be one with China as the dominant actor, dictating the terms of acceptable behaviour to other nations or whether the future of Asia will be a multipolar one in the real sense of the term. India has decided to stand its ground because there is far too much at stake in responding to Chinese bullying.
China talks of a multipolar world order, but in reality, it has always desired a unipolar Asia. Its assertiveness in staking its maritime territorial claims in recent years might have convinced it that there is no real opposition to it in the region and beyond. The West is too preoccupied with its own internal challenges to pose any serious problems in China’s way. And the regional states are too weak to do anything about Chinese belligerence.
The Asean (Association of South-East Asian Nations) turned out to be a paper tiger when it came to the crunch. China’s divide and rule policy has fractured any sense of unity in South-East Asia. A rather weak and ineffective negotiating framework for a code of conduct in the South China Sea was recently adopted by Asean under Chinese pressure, reflecting the challenges being faced by the larger Indo-Pacific at a time when the US remains distracted and lacks a clear Asia policy under Donald Trump.
And so, India remains the last nation standing, a stumbling block in China’s drive for domination of the Indo-Pacific. Already, the ambitious Belt and Road Initiative has made China central to the evolving global economic order. Even when nations realize the folly of their joining this mega connectivity initiative, they see no real alternative.
New Delhi is the sole major power that has decided to publicly oppose Xi Jinping’s vanity project. The other major power centres remain constrained in their policy responses to China. Japan has domestic political and legal constraints despite Shinzo Abe’s proactive foreign policy. Australia’s economic future is so deeply intertwined with China’s that its elites are today having to debate the choice between the US and China.
The Indian government, in contrast, has been robust in its response to China’s rise. It quickly realized that China remains determined to pursue a unilateral foreign policy and Indian interests will suffer if New Delhi does not make a change in its foreign policy behaviour. While a section of the Indian elites continues to believe that India can shape Chinese behaviour by its policies, policymakers have been confronting the consequences of China’s growing capabilities in multiple ways. Though a tad late, New Delhi has been focusing on building its border infrastructure and has been active in trying to reach out to other like-minded powers in the region such as Japan, Australia, Indonesia and Vietnam to shape a favourable balance of power in the region.
The Doklam standoff, therefore, comes at an inflection point in India’s relations with China. For India, there is only one option: standing up to China resolutely to protect its core interests. Otherwise, it will have to acquiesce in shaping a China-centric Indo-Pacific. And for most Indians, that clearly is not an option even worth thinking about.
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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.