With the launch of Brazil’s Amazonia-1 satellite last week from Sriharikota, a new chapter has begun in India’s space history. The satellite, a 637-kilogram entity, was the first dedicated commercial mission of NewSpace India Limited, a two-year-old commercial arm of the Department of Space.
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This is not the first time that NSIL has organised a launch of foreign satellites aboard an Indian Space Research Organisation (ISRO) launch vehicle. The organisation has had launches last November as well as in December 2019. However, the primary satellites aboard both these missions were Indian satellites — the RISAT-2BRI and the EOS-01 — with smaller satellites from several other countries, as well as India, piggybacking on them.
The Amazonia mission also saw 18 other satellites being launched and was the first fully commercial mission. India has so far launched 342 foreign satellites from 34 countries using its Polar Satellite Launch Vehicle platform and many of them have involved ISRO’s first commercial entity, the Antrix Corporation.
There is still confusion on how exactly the responsibilities of NSIL differ from those of Antrix. But with the formation of the Indian National Space Promotion and Authorization Center (IN-SPACe) — a regulatory agency — as well as plans of an independent tribunal to adjudicate disputes among private space entities, there is a potential explosion of market opportunities from space applications on the anvil.
Though the private sector plays a major role in developing launch and satellite infrastructure for ISRO, there are now several companies that offer myriad services. Many of these companies want to launch their own satellites, of varying dimensions, and the experience with ISRO has not been smooth always. The most conspicuous has been the controversy involving Devas Multimedia, to which the Government of India owes nearly $1.2 billion going by an order of a tribunal of the International Chamber of Commerce and upheld by a United States federal court last year.
NSIL, it is said, is also a move by India’s space establishment to insulate the prospects of the space industry in India from repercussions of the Devas-Antrix imbroglio. Much like unfettered access to the Internet has spawned industries that were inconceivable, similarly, space applications and mapping have barely scratched the surface in terms of the opportunities that they can create.
NSIL has a broad ambit and will be involved in collaborations spanning from launches to new space-related industries. NSIL is also expected to be more than just a marketer of ISRO’s technologies; it is to find newer business opportunities and expand the sector itself. NSIL must endeavour to not be another Antrix but be continuously in start-up mode. It must conceive of ways to aid space start-ups reach out to rural India and facilitate more recruits from India’s young to facilitate careers in space applications and sciences. It must see itself both as an Indian ambassador and disruptor in the space arena.
Devas-Antrix imbroglio:-
Background – The government has directed Antrix Corporation, the commercial arm of India’s space agency, to file a petition to wind up Devas Multimedia, a Bengaluru-based firm that has filed lawsuits seeking hundreds of millions of dollars in compensation from it over a cancelled satellite deal.
About – Antrix and Devas are engaged in a legal battle, both in India and in the United States, after the government cancelled a satellite deal in 2012 citing national security issues. In 2005, Antrix signed a deal with Devas to build two communication satellites, which were to use the S-band spectrum and offer hybrid satellite and terrestrial communication services throughout the country. The deal soon got caught in a political imbroglio after allegations that the S-band had been offered at a throwaway price.
Following this, Devas went to an international tribunal claiming damages for scrapping the deal. It also subsequently appealed in a US federal court saying its investors as well as senior executives were US nationals. Deutsche Telekom had invested $75 million in Devas, whose other investors include Columbia Capital and Telecom Ventures.
In October last year, a US court upheld the tribunal’s order for damages and asked Antrix to pay $1.2 billion to Devas. Subsequently, in November, India’s Supreme Court stayed the execution of the award till a case on the same issue had been decided by the Delhi high court.
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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.