The Report-
A report—True cost of sanitation—was published jointly by the LIXIL Group Corporation, Water Aid and Oxford Economics recently. Oxford Economics mainly works on economic forecasting and modelling.
The World-
It says that in 2015 lack of access to sanitation cost the global economy around US $ 222.9 billion
Asia-Pacific-
The economic burden of poor sanitation is the heaviest in Asia-Pacific, which is almost 77 per cent of the total amount. Latin America and the Caribbean and Africa each account for approximately 10 per cent of the global cost.
India-
On a national level, in terms of total cost, India suffers the most, with US $ 106.7 billion wiped off the GDP in 2015. It is almost half of the total global losses and 5.2 per cent of the nation’s GDP.
According to the 2015 report of the Joint Monitoring Programme of the United Nations International Children’s Emergency Fund and the World Health Organization, around 44 per cent of Indians defecate in the open.
A 2011 report published by Water Aid says that sanitation access lowered the odds of children suffering from diarrhoea by 7-17 per cent and reduced the mortality rate of children under the age of five by 5-20 per cent. Water Aid is an international organisation dealing with water, health and sanitation.
Water, Sanitation and Hygiene (WASH) Performance Index-
- developed by the Water Institute at the University of North Carolina
- It assesses performance in the following four categories: water access, water equity, sanitation access and sanitation equity.
- Pakistan performed exceptionally well by occupying the fifth place on the index whereas India’s rank stands at 93.
Solutions-
The report talks about how to move towards sustainable solutions. Three solutions suggested are as follows:-
- Innovative solutions: sanitation systems in the developed world require vast amount of land, energy, and water. They are expensive to build, maintain and operate. Innovation is a key to solving the sanitation crisis. It is not limited to designing new sanitation hardware. The report says that there should be planning in place so that sanitation products reach consumers. LIXIL is developing sanitation solutions for regions where water intensive systems are not appropriate. It delivers human-centric innovation that enhances people’s living spaces.
- Political prioritisation: the social and economic impacts of improving sanitation are irrefutable. Politicians at the international, national and local levels must put sanitation at the top of their agenda and reflect this in national planning and budgeting. This point has proved true for India in many cases. Such prioritisation has helped states like Sikkim and Kerala to move towards cleanliness
- Collaboration and coordination: The sanitation crisis can be solved if there is collaboration among different stakeholders. The government, communities, NGOs, researchers, academia, corporate and the private sector should come together to solve the complex sanitation issues. This approach enables each stakeholder to efficiently leverage their core skills, thereby ensuring that effective programmes can be taken to scale up with the necessary speed. Sanitation success in India and Bangladesh came only when communities were involved in the programme
- India is talking about attaining a clean state by October 2019. Sanitation crisis in the country needs to be solved at a war footing to reduce the economic burden caused due to health problems connected to poor sanitation.
- This needs not only construction of toilets, but usage. Managing liquid and solid wastes is also important that needs special care. Innovative technologies with low-water usage can be of great help in this regard.
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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.