By Categories: Polity

The concept of sovereignty is widely believed to have originated at the end of Europe’s Thirty Years War, with the Treaty of Westphalia, in which, for the first time, the absolute authority of a nation-state over its territory was recognized. [wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]

Until then, rulers could only claim dominion over the territory they controlled—meaning that sovereign power diminished the further you were from its centre. According to Westphalian notions of sovereignty, on the other hand, citizens owed allegiance to the territory—regardless of how far away they were from its capital—and through the territory, to the sovereign authority.

Even though the treaty was signed in 1648, it wasn’t till a couple of centuries later, with the Industrial Revolution, that the territorial underpinnings of sovereignty began to bear fruit. 
 
Technologies like the steam engine, railways and telegraph compressed distances within countries, allowing rulers to access far-flung territories with greater ease and efficiency.
 
This territorial rescaling (as Charles Maier puts it) significantly enhanced national prosperity, letting greater value be extracted from the land and its people than was previously possible.
 
Nation-states now had every incentive to preserve the sanctity of their territory. They hastened to articulate a universal public law under which sovereign states would have exclusive jurisdiction over all property and persons who happened to be located within their territory—but, at the same time, would not be allowed to exercise jurisdiction over property and persons outside that territory.
 
This symmetrical doctrine is the fundamental basis for modern international relations. It supports the sovereign right of nations to establish their own laws, and acknowledges that anyone who chooses to enter the jurisdiction of a foreign state must abide by its rules, no matter how different they are from the place they came from.
 
This is the reason why anyone who commits a criminal act within the territory of one state can escape prosecution by simply crossing a border to another state—and, quixotically, why that other state cannot prosecute the fugitive for a crime committed beyond its borders.
 
The internet, the world’s most recent space-compression technology, has shrunk distances like nothing that came before it. Not only has it compressed distances within countries, it has shrunk distances between them and created the deeply interconnected world that we inhabit today.
 
However, unlike in the past, when space compression respected territorial sovereignty, the internet pays no heed to national boundaries or the different laws that each sovereign nation enforces within its borders.
 
It is, to that extent, completely unmoored from the notion of Westphalian sovereignty, and it allows the actions of individuals and corporations situated in one country to affect those in another without ever crossing physical borders.
 
This fundamental feature of the internet has, since its very inception, forced us to engage with issues of jurisdiction differently when it comes to the digital realm. In the early days of the internet, we tried to look the other way, sweeping jurisdictional challenges under the carpet of web exceptionalism.
 
That approach is increasingly falling out of favour. Now that the internet is essential infrastructure, governments around the world are less and less inclined to allow private corporations to control what transpires on it or have exclusive access to the data that traverses through it.
 
In 2018, when the Justice Srikrishna Committee released a draft data protection law for India, it included, for the first time in a data protection law, explicit localization provisions that required certain kinds of personal data to be processed only in India.
 
There are many benefits that we enjoy and have come to take for granted precisely because there are no restrictions on data flows. We need look no further than the speed of our pandemic response to appreciate the important role the internet has played in getting genomic data on the novel coronavirus to scientists around the world in a short time, giving them a head start in vaccine development.
 
Had scientific information not been able to flow from one corner of the world to the other, we would simply not have been able to develop not one, but five major covid vaccines in such record time.
 
Regardless, governments around the world have grown increasingly interested in asserting greater sovereign authority over the data of their citizens, with a view to curbing the power of private corporations that operate as gateways to our internet access as well as ensuring that the manner in which this data gets used conforms to national law.
 
Notably, despite the initial opposition globally to India’s data localization policy, digital borders have hardened everywhere since then.
 
Last week, Microsoft announced the launch of its new European Union Data Boundary service, which makes a hard commitment to all the companies that sign up for this service that their data will never move out of the EU.
 
It seems that at least one big technology company is willing to regionalize its cloud offerings, choosing to capitulate to the European demand for regional sovereignty instead of placing all its eggs in the ‘safe harbour’ basket. One wonders if other tech companies will follow suit.

 

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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.

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