NEW DELHI : In October last year, India’s foreign secretary Harsh Vardhan Shringla and Army chief Manoj Mukund Naravane teamed up for a visit to a crucial neighbour—Myanmar—that raised eyebrows due to its rarity.
The uncommonness of the visit underlined the state of politics in Myanmar—where the military and Nobel laureate Aung San Suu Kyi and her party, the National League for Democracy (NLD), co-existed in an uneasy space till the military retook power on 1 February.
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The Shringla-Naravane visit—seen as prescient given the military takeover—also reflected India ‘s strategy to deal with Myanmar: engage the military while being supportive of democratic forces. It’s a policy that has worked for New Delhi since the early 1990s.
“India has been cognizant of the power centres in Myanmar—that power has been with the military and that the civilian institutions are gradually coming into their own,”. Therefore, India has been balancing its outreach to both sides and it seems like a sensible idea given our interests in Myanmar.
A resurgence of the insurgency in the northeast and an assertive China which has been making increasingly determined inroads into India’s periphery are India’s main concerns. In fact, some analysts have pointed out that Suu Kyi has been on more cordial terms with China than the Tatmadaw (the army) given the latter’s suspicions about Beijing’s tacit support for rebel groups such as the Arakan Army.
This puts a question mark on how close Beijing and the new regime will get to each other. But tightening global sanctions could potentially force a rethink. The military’s takeover also comes at a time when New Delhi’s efforts to get Indian industry to do business in Myanmar was just starting to pay off. There are currently over 100 private Indian companies in the country, with investments to the tune of $1.2 billion.
Trouble in Myanmar
In the days since the military takeover, three pro-democracy protesters have died. There is no sign of a let up in protests. The crowds joining in only seems to be getting bigger and, among them, are members of the minority groups and the revered Buddhist monks—suggesting broad-based support across society.
According to the military and its head, Senior General Min Aung Hlaing, the November 2020 elections in which Suu Kyi’s NLD won more than 80% of the vote was flawed. It said it was forced to step in because Suu Kyi’s government had failed to investigate allegations of fraud. Analysts, however, hold the view that Min Aung Hlaing was more worried about the marginalization of the military since the army backed Union Solidarity and Development Party was trounced by the NLD for the second time in 2020. In the 2015 polls too, the NLD had won by a landslide.
Predictably, the developments have drawn global condemnation. The US, UK and Canada have called for an immediate restoration of democracy and swiftly backed it up with targeted sanctions. The European Union is expected to follow suit.
China, which is heavily involved in infrastructure projects in Myanmar (as well as its 5G telecom network, has been largely silent, citing its policy of non-interference. Its state-backed media referred to the military takeover as a “cabinet reshuffle”. Of the total foreign direct investment in Myanmar, China accounts for over 25%.
Analysts, however, are divided over whether the military takeover will mean the rekindling of “familial ties” between the Myanmar and China. For one, military leader Min Aung Hlaing is widely seen to be suspicious of Beijing’s possible support to Kokang rebels, who are ethnically Chinese, as well as others. The Myanmar-Russia defence relationship has also been deepening in recent years—an effort by the army to swing away from Beijing. But biting sanctions can bring the Tatmadaw back into the Chinese orbit, analysts say, which will be worrisome for New Delhi.
“The generals would not like to turn to China for support in the first instance, but forced to a corner, (they) may have no choice,”
The stakes for India
“China’s primary interest in Myanmar is to pursue its strategic and economic projects under the Belt and Road Initiative and the China-Myanmar economic corridor that includes the Kyaukphyu deep sea port,”. The port, seen as a key outcome of Chinese president Xi Jinping’s visit to Myanmar in January 2020, is of strategic significance as it will give Beijing a foothold in the Bay of Bengal and the Indian Ocean.
Suu Kyi’s government had greenlighted the port project. If built, it will be the third Chinese-built port in India’s immediate neighbourhood—after Gwadar in Pakistan and Hambantota in Sri Lanka.
Myanmar’s entry into the ASEAN in 1997 meant that the economically vibrant grouping is at India’s doorstep. It’s a linkage that Delhi values greatly, given its priority to develop the northeast with help from ASEAN. But for that, keeping a lid on insurgency is a prerequisite—for which Myanmar’s generals hold the key.
In the late-1980s, India had firmly backed Aung San Suu Kyi. In 1993, Suu Kyi was awarded the Jawaharlal Nehru award for international understanding. But almost immediately after, New Delhi changed tack when the insurgency in its north-eastern region took a serious turn, coinciding with a blow-up of militancy in Kashmir. New Delhi concluded that it needed to befriend the Tatmadaw since insurgents from the north-east were using Myanmar as a base to launch attacks against India. Some groups also used Myanmar as an escape route to China. With the Myanmar military in its corner, New Delhi launched coordinated joint operations against the insurgents in the mid-1990s. And these have continued.
“Today, there is substantial military cooperation between the Myanmar and Indian armies to curb militancy,”
Indian security personnel have handed back or even eliminated Arakan rebels crossing into India for shelter, just as the Myanmar Army has handed over or eliminated Indian separatists hiding there.
The tricky act of cooperating with the Burmese military while simultaneously nudging the country towards a democratic transition has been a 30-year tightrope walk that India has indulged in. “There have been many conversations (about democracy) but they have always been quiet ones,”. India has shied away from ‘megaphone diplomacy,”; referring to the global condemnation of the generals.
Economic links
India’s use of “development projects as the main instrument of its diplomacy to engage the then military government began after the pro-democracy agitation of 1988. This has expanded over time, especially over the last 10 years.”
The Indian foreign ministry says that around $1.7 billion has been spent in development partnership, which include connectivity and infrastructure projects like the Kaladan multi-modal transit transport project connecting Kolkata port to Sittwe port in Myanmar. Another major connectivity project is the India-Myanmar-Thailand trilateral highway, which is to be later extended to Vietnam.
Most of the big-ticket economic investments in Myanmar have been shepherded by India’s state-backed firms, primarily in the area of energy. Private firms had, for long, been reluctant to get caught up in the crosshairs of international sanctions.
But this had just started to change. The India private sector’s presence went up after 2016, when the last round of sanctions imposed by the US on Myanmar was lifted. Nearly all of the 100 Indian companies have a presence in Yangon, Mayanmar’s financial, commercial and logistics nerve centre. A decade of peace and democratic stability had begun to transform Yangon’s skyline, with glitzy hotels and a newly established stock exchange vying for attention. Irrespective of which side comes on top in the street protests, stability is likely to go for a toss in the near term.
For India, private sector involvement is crucial to supplement government investments as a counter to China’s efforts to co-opt Myanmar into its multi-billion-dollar BRI.
Going forward, India’s well-entrenched dual track approach won’t sit well with new allies like the Quad, a grouping of US, Japan, Australia and India. The new Biden-led US administration has forcefully come out against the military takeover. Most notable has been the US reference to Myanmar as “Burma”, the name the country was known by before 1990 when the military changed it.
India’s national interests should be paramount. We are reaping the dividends now of befriending the military for decades. Even now, the task (of eliminating insurgencies) is not over. New Delhi should not let considerations about the US stand in the way of Indian interests.
For now, the protesters and the military seem to be exercising restraint. “The Myanmarese military are very disciplined, guided by the ideology that they are the custodians of the state and the people are their children,. On the other side is a mostly young population, exposed to some level of democracy and new technology.
There are three possible outcomes- The military will prevail, the people will prevail or, the third, an impasse. For anyone wanting to know how this will end—keep a close eye on the crowd size on Myanmar’s streets.
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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.