India’s negotiators ought to be commended for their efforts in ensuring a successful border disengagement at Pangong.
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In the aftermath of the India-China agreement reached on February 10 for pullback in the Pangong Lake area, there has been much speculation about the gain and loss for India. Some have averred that the mutual withdrawal amounts to the creation of a “buffer zone on Indian territory”.
Others have alleged it to be a “surrender of Indian territory”. Yet others have questioned the withdrawal of India’s presence along the Kailash range on the South Bank of Pangong since it enabled India to dominate the Chinese garrison at Moldo.
Things are moving
Another charge has been levelled — of inadequate budgetary allocation for defence in the face of a “two front war”. The fact of the matter is that the increase in the outlay for capital procurement announced by the Finance Minister on February 1 for FY 2021-22 represents a 18.75% jump over the previous financial year, the highest in 15 years.
Moreover, the government has enhanced the delegated financial powers up to ₹200 crore in senior ranks below the rank of vice chief as well, to facilitate procurement. Improved procedures and oversight have ensured better utilisation with no surrendering of funds over the last four years.
The charge that India is not according proper priority to national security is baseless. Military modernisation, indigenisation and defence exports are top priorities. The building of long overdue roads, bridges, culverts and other infrastructure in the border areas, in mission mode, has spurred mobility and capacity for a rapid induction of forces.
The Darbuk-Shyok-Daulat Beg Oldi (DSDBO) Road has facilitated seamless access all the way up to Sub-Sector North (SSN) which abuts the Karakoram Pass and the Siachen Glacier. It has provided an axis for developing lateral roads towards India’s frontline in Eastern Ladakh.
Another example is the eponymous Atal Rohtang Tunnel, approved by the government of Atal Bihari Vajpayee. The Tunnel, inaugurated in October 2020, makes for a much shorter logistics loop connecting the Middle and Western Sectors of the India-China boundary on the Indian side.
Many defence reforms recommended by the Naresh Chandra Committee have been implemented in recent years. The creation of the Department of Military Affairs (DMA), the appointment of the Chief of Defence Staff, and, the soon-to-be-a-reality Theatre Commands, are but a few examples.
The buffer zone stands
India has not surrendered any land in Galwan, Pangong or Depsang since the border crisis broke out in April/May 2020. The assumption that the disengagement implemented at Pangong, especially that the temporary moratorium on patrolling by both sides will result in a buffer zone entirely “in our area”, is incorrect.
India has neither accepted the unilateral definition of China’s so-called Line of Actual Control (LAC) of 1959 nor its subsequent mutants. As such, a buffer zone on the other side of any so-called Chinese LAC is still a buffer zone on India’s side, given that India regards the whole of Aksai Chin as an integral part of its territory. By using the benchmark of the so-called Chinese LAC to identify India’s territory and China’s, the naysayers are actually legitimising the illegal Chinese presence across the LAC.
During the late 1950s and early 1960s, the idea of a mutual pullback by 20 kilometres, which would have resulted in buffer zones, had been proposed by China and rejected by India. Later, India had accepted the modified “Colombo Conference Proposals” mooted by six non-aligned countries in December 1962 after the war, which would have permitted Indian civilian administration to be present alongside the Chinese in the vacated areas.
China had reservations and backed out in March 1963 after initially acquiescing. It was ready to consider them only as a basis for further bilateral negotiations. Much water may have flown down the Chip Chap, Galwan and Chang Chenmo rivers since then, but it is not as if pullbacks and buffer zones have never been considered before.
The pullback on the North Bank of Pangong has resulted in the Chinese ceasing their patrolling between Fingers 4 and 8 for the first time in several decades. After the 1962 debacle, Indian patrols limited themselves to visiting Finger 8, which evolved as the de facto Indian line in this sector, but this access too was restricted by vehicle-mounted Chinese patrols along that stretch in recent decades.
Given that China perceives its line to run further west of Finger 3, India has done well to maintain its permanent presence at the Dhan Singh Thapa Post near Finger 3 on what the Chinese regard as their side of the LAC.
As former Northern Army Commander Lt. Gen. D.S. Hooda has stated in a recent opinion piece, by agreeing to relocate east of Finger 8, the PLA is pulling back from its claimed “customary boundary line” and “this is definitely not a minor concession”. It is, as he has pointed out, in line with India’s consistent demand to restore the status quo ante that existed in April 2020.
Different implications
The word status quo ante in regard to the India-China boundary matters has different implications for the ground situation depending entirely on the timeline being referred to. In seeking a restoration of status quo ante on the North Bank of Pangong with reference to April-May 2020, the advantage secured by India on the South Bank was naturally a plus point, and put to good effect by Indian negotiators.
If the retention of the heights along the Kailash range is deemed so important for leveraging concessions elsewhere, as some claim, why is it that no previous government acted to occupy the heights earlier, including during the face-off in Depsang in 2013?
After all, differences over the LAC are hardly new. The fact is that Indian troops secured the heights on the South Bank precisely to offset China’s “first mover” advantage on the North Bank. Moreover, if India’s objective is to achieve status quo ante, India too would logically be required to revert to its pre-April 2020 status.
The potential linkage between the heights of the Kailash range and Depsang, or for that matter Gogra and Hot Springs, cannot be arbitrarily conjured up. The situation in the pockets of differences is sui generis.
At the end of the 10th round of the India-China Corps Commander Level Meeting, the two sides have positively appraised the smooth completion of disengagement at Pangong, acknowledging that it was a significant step that provided a good basis for resolving the remaining issues along the LAC.
Instead of commending our military and External Affairs Ministry negotiators for their efforts in ensuring a successful disengagement at Pangong, some commentators have questioned the absence of “iron-clad agreements” for resolving the differences at Depsang or Gogra/Hot Spring, which are still being discussed.
The negotiators ought to be given a chance. The truth is that there were no iron-clad guarantees in any of the agreements and protocols signed so far either, whether in 1993, 1996 or in 2005. Bilateral differences are best negotiated from a position of strength as has been done at Pangong, while maintaining high vigil and striving for positive outcomes elsewhere.
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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.