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Opposition might be calling it a blunder, but here is GST explained for common man

Pradeep Mahaur
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Opposition might be calling it a blunder, but here is GST explained for common man

GST is the most discussed subject in current context I have found that this taxation is a complete blunder as per the opinion of political parties in opposition and a boon for everyone else. Narendra Modi Government, world bank, IMF, foreign investors, small and medium businessmen most of them are favoring GST. It is a matter of surprise that when everyone is favoring and praising GST our political parties who are in opposition are contradicting everyone’s viewpoint and opposing it out-and-out.

Looking at their comments and discussions it seems that as if GST is a blunder. Out of curiosity I also discussed about GST with many of my known people and finally found two people who were against GST  one friend is working with a bank, I asked him the reason and he could not come up with any satisfactory reply. Second one was a grocery shop owner, he was opposing GST with all bit-and-might,  I asked him that all goods you get are GST paid and whatever you sell you just pay the taxation on difference of your cost and selling price this is the same you were doing earlier with VAT so how does it make any difference in your life, and obviously again no valid reason could be found.

The only thing that influenced both of them to be against GST was the negative propaganda of opposition. They must be listening to Rahul Gandhi which created a notion in their brain that something is wrong with GST.

Why is Rahul Gandhi against GST?

Rahul Gandhi calls it as GST ‘Gabbar Singh Tax” but till date he could not give any valid reason which can convince anyone on the real ground of his disagreement. He has only one reason to oppose, and the reason is that he wants to oppose NDA Government. It really doesn’t matter to him whether the policies of Govt. are good or bad he has to oppose everything. He opposed Demonetization, he opposed budget, he opposed foreign tours of our prime minister which brought in strategic gains on global front, so he is not concerned about viability of his comments he only feels that he can do some good to his party by opposing Narendra Modi Government.

World Bank President ‘Jim Yong Kim’ stated that the “Goods and Services Tax (GST) is going to have a hugely positive impact on the Indian economy. Not only this, India jumped up 30 notches into the top 100 rankings on the World Bank’s ‘ease of doing business index” which means it has become easier to start and run a business in India.

This is a clear win for India as it will support FDI inflow which will benefit common citizenry by increasing employment opportunities. World Bank is an international organization created by shared ownership of 189 member countries and India is one of the members.

Shree Rahul Gandhi has posted a remark on Twitter, suggesting that India’s 30-spot jump in “ease of doing business Index” does not represent reality and also that India Doesn’t Need Certificate from World Bank. These imprudent and injudicious comments by Vice president of “Indian national congress” are infelicitous remarks, which show lack of factor of responsibility. A person representing the oldest political party currently in opposition, talks in such a manner which can potentially scale back our global image, then we cannot hold back from calling him jinx of India.

Let opposition speak in their opposing pitch but for common citizenry I am answering some common questions that can be there in the mind of common citizens regarding GST.

Why introducing GST was so Important?

The purpose of introducing GST (Goods and Services Tax) was to make Indian Indirect tax structure more simple and uniform. The indirect tax structure of India was full of annoyance due to multiple rates in different states, such as, at state level VAT (Value Added Tax), at central Govt.  CST (Central Sales Tax), CD (Custom Duty), ED (Excise Duty) , some states had entry tax, others had octroi and few more taxes on goods and services in different states,  each tax had different rates, calculation method and legal procedures of forms and filing the tax return.

If a company was selling their products all over India it was supposed to pay different tax at every state and stage, also had understand the tax procedures, rules regulations of every state. If the same company wants to keep same MRP all over India then it will be making more profits per unit sale in one state and on the other hand may be incurring loss or very low profit margins in others. So the basic Idea of GST is converting India into a single market. GST is a value added tax which is levied on both goods and services, and which replaced all other indirect taxes.

What are the benefits of GST for a common Citizen?

  • Employment Generation – GST will boost FDI and also motivate internal investors to invest in business, because of hassle free tax structure all over India.he mix of Home investment and FDI will boost economy and generate employment opportunities.
  • Increase in GDP As demand will grow naturally production has to grow and hence it will increase GDP in near future. The growth will now be fundamental and more sustainable.
  • Reduction in Tax Evasion and Gray markets GST is a single tax which will include various taxes, making the system efficient, transparent and with very little chances of Tax Evasion and corruption.
  • More Competitive Product As all states have same MRP and there is no confusion on tax structure so it will be easy to analyse the profitability per product all over India which will boost production and due to increase in production there will be more competitive and cost effective products for Indian consumers. Scale of production will also play a role in making Indian products globally competitive.
  • Increase in Revenue GST replaced all 17 indirect taxes with single tax. Increase in product demand and number of tax payers will ultimately increase tax revenue for state and central government.
  • Easier Policy Making As GST is same in all states it is easier for Govt to understand how to support any particular Industry, product or service, no matter where it is located in India.

What are the issues in GST?

  • GST Does not reduce Indirect tax Burdon: GST should not be considered as tax relief, although Govt. has recently given tax relief on many goods and services but objective of GST is to provide a uniform taxation system. Because of GST number of tax payers will increase and as a result there is a possibility of tax relief in future.
  • Gray Market: There was a parallel market especially in sectors like electronics, Garments, clothing, commodity and metal etc. but these markets also pose to be an improper competition to genuine tax payers, so loss of few will be benefit for many.
  • Teething Problems: This is a genuine issue and every new system will have this kind of issue, server problems in website, hitch on online filing etc fall in the same category. But these are initial hiccups and will fade by time.

How the political parties against GST are taking advantage?

If there is no genuine issue in GST then the point comes that why is the opposition shouting so loud against GST? I found some reasons behind that

  • Show Sympathy to tax evaders: It’s true that tax evaders and traders dealing in gray market will be badly hit because of GST, but that will also promote business of genuine tax payers and will also open up opportunities of employment. Now these tax evading traders will defiantly speak against the GST and opposition wants to win sympathy card from them.
  • Utilize Teething Problems: Whenever there will be any new structure or reform no matter how well planned it is there will be some initial issues with system and processes. Now opposition wants to confuse people on these initial hiccups and utilize the opportunity to make some people against the system and generate few voters for them.

Although there can be some teething issues with GST which are temporary in nature, but GST (Goods and Services Tax) is implemented in overall interest of the country and its citizens. Passing out from the initial hiccups it will benefit our economy in long run. The politicians who are opposing GST and other appriciable policies of Govt. will find it difficult to dupe people in future and they are actually ruining their own left over space in Indian politics.  Indian society is very progressive now and the future lies with those politicians who are willing to take the nation steps forward towards becoming a developed and mature economy of the world.

My open letter to Deepika Padukone

annie
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My open letter to Deepika Padukone

Dear Deepika,

Before saying anything, let me tell you that I am one of your biggest fan.

Now coming to my point on why I need to write this letter to you, 2 days ago i read your statement regarding release of your film Padmavati. I support that part that film makers and actors are only answerable to censor board. India is a free nation and every one have a right to say what he/she want to or do what he/she like, we know the meaning of freedom. Censor board is a government approved institution and if they are okay with a film, we are no one to say no to it. My problem with your statement starts when you asked “where have we reached as a nation? We have regressed?”

Are yo even serious before making such statement?

I thought why not give you a little history lesson before calling your attempt to destroy history idiotic. You are playing Padmavati, a queen who still is called “Maa” by a large number of people. And Allaudin Khilji  was most barbaric king to ever invade India at that time. Your film Industry has won history of glorifying Killers/Invaders/Mafia/Gangsters.

And to top that you want Indians to take it as Freedom of Expression (FoE). Ever thought of anyone who faced brutality of your glorified new heroes? Indian public is highly influenced by Bollywood, ever thought about your responsibility to give better role models to new generation?

I know an actor is a director’s puppet, have heard it many times. Does an actor sells his/her morality after receiving paycheck? Is earning big only motive of Bollywood? You guys want all freedom from society but are never ready to contribute towards society. And trust me I don’t want to get personal with actors otherwise it won’t even take a minute for anyone to show Bollywood who is more Regressive and backward. In the end I have just one thing to tell you and all other belonging to Bollywood, whenever you guys will use your FoE to glorify Killers/Criminals, we as a society have all right to take you back to school and teach you about morality and sensibility.

Stop your hypocrisy and let society decide what they want to see and what they don’t want to see. It’s public who pays for tickets of your movies and it’s public who pays for riots caused because of stupidity of film makers and actors. Never hurt public, and never abuse your nation behind FoE shield, because in world of Internet “Ye jo public hai ye sab janti hai”.

Financing clean politics with taxpayers money in India

fsaberi
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Financing clean politics with taxpayers money in India

Fighting elections cost money. More often than not, its dirty money. The entry barrier for a common man with common means to opt for public service is very high. It is almost an impossibility.

Our national defense expense allocation for 2017–18 is 3,59,854 crores. Which works out to be approximately 2,700 Rupees per capita if we were to divide the expense equally among 130 crore Indian citizens.

If we are spending 2,700/- per head for defense, should we not be spending a fraction to ensure clean elections, to select clean candidates.? I strongly believe that state funding of elections, party/candidate expense will reduce corruption massively and enable many honest and committed people to enter public service. How do we enable this?

Suggestion:

Lets assume per head expense of 100 Rs (As compared to 2,700/- Rs. of per capita defense expense). All that a citizen needs to do is to go to the election commission website or nearest government contact center and choose using his/her credentials (Aadhaar/ Voter-Id) to whom this 100/- will be disbursed. A citizen can choose to give the entire amount to one political party or have it split in percent ratios to multiple political parties. This choice can be made once annually and the chosen amount disbursed to chosen from taxpayers money. This scheme can also be extended to registered Independent candidates who signup for public service and garner some stipulated number of citizen endorsements.

At 100/- Rs per head, the total candidate & election funding corpus works out to be 13,000 crores, which is quite sufficient considering the top two national political parties received much less than 1000 crores each (see fig.) from donations last year. Imagine candidates and political parties being able to fight elections and win without any strings attached funding from corrupt lobbies. This way, the taxpayer foots the bill to ensure the candidates elected owe their careers to no one but the taxpayer.

Of course like all government schemes, this too can be subject to misuse, but I am sure those can be controlled with adequate checks and balances.

Besides ensuring clean funding, there are other amazing benefits that this scheme can ensure. It can incentivize political entities to be mindful of commitments to people on a year-on-year basis instead of the current 5 year cadence. Both ruling party and opposition’s ability to garner annual funding with people’s mandate will now depend on public perception and ground work seen by voters on a yearly basis and the amount of funding secured each year will be am important indicator of their performance.

Dear Modi Sarkar, please strengthen the National Commission for Protection of Child Rights

karm22
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Dear Modi Sarkar, please strengthen the National Commission for Protection of Child Rights

Other than frequent debates about the BJP exhibiting ideological bias in the content of history and literature textbooks (a charge the Left parties aren’t free from in states where they are in power, as you can see here, here, here, here, here and here) as also how to handle student-protests, such as in FTII, Pune, and HCU, Hyderabad, these debates being important in their own way, the policies of the Modi government in this very crucial sector of education haven’t been discussed as much. I must say, despite my strong disagreements with the Modi sarkar as an Indian citizen on very many issues, that some of their policies in the education sector are undoubtedly praiseworthy, such as getting scientists to take some classes for school and college students (including even eminent scientists) and instructing universities to include more about the northeast in their curricula.

However, my intended focus in this piece is to discuss the subject of reforming the Right to Education (RTE) Act (not to be confused with the Right to Information Act) introduced by the UPA government in fulfillment of a Directive Principle mentioned earlier under Article 45 of the Indian constitution, neglected by all preceding governments, and access to free education from the age group of six to fourteen years was made a fundamental right under Article 21A of the constitution, setting down some infrastructure norms that have to be met by all schools, reserving 25% of the seats in private schools for economically backward children with the government bearing their financial burden (while I normally dislike government interference in private setups, this is something I wholeheartedly support, notwithstanding the challenges, and such income-based reservations at the primary level should, in my opinion, be the only reservations in education we should have), prohibiting all forms of physical punishment to students as also prohibiting detention till Class VIII.

Yes, I am critical of certain aspects of the Act, like no detention till Class VIII, and I once met a Class VI student in a good Delhi-based private school who didn’t know his multiplication tables, which are necessary even for basic market purposes. In fact, I am glad to see that it has been rolled back by our Union HRD Minister Prakash Javedkar (and the rollback was supported by AAP leader and Deputy Chief Minister of Delhi, Manish Sisodia, who said the policy in itself was good but had to be rolled back because of poor implementation), even though I know that mindless bashing of formal education has become increasingly intellectually fashionable in the current scenario. There are problems with some other provisions too, like extensive infrastructure norms for recognition (rather than focusing on learning outcomes) leading to shutdown of low budget private schools, while government schools being given all the time to adhere to the norms, also something this government should look into. Unfortunately, despite pleas by economic right-wing intellectuals to ease the license Raj on low budget private schools by even amending the RTE Act, which have been made since 2014 now that the BJP was (and remains) in power in the centre with a full majority, nothing much has been done on this front, though low budget private schools provide affordable, better-quality education to the poor, even in places with no government schools, and the right to run a school is a fundamental right under Article 19(1)(g) of the constitution as per the Supreme Court in the landmark TMA Pai case.

The AAP government of Delhi, despite known for cracking down on elite schools, has indeed, in its limited capacity, sought to facilitate smooth, corruption-free functioning for low budget private schools. Yes, the Modi government at the centre has taken a cue from what the Gujarat government did when Modi was Chief Minister wherein his government focused on learning outcomes more than infrastructure norms in the state RTE Rules to ease pressure on education entrepreneurs, and now, the centre has mandated all states to do so, but why can’t all those near-draconian infrastructure norms only for private schools be considerably eased? There are also other issues like teachers’ incentives for government schools, for which it can take a leaf out of the Pakistani legal framework. Mention must also be made of a misplaced Supreme Court verdict which exempted only unaided minority schools from the 25% quota for the economically backward, but that was a judgment against the then Congress-led UPA government, which, despite being justifiably infamous for appeasing the wrong kind of elements within minority religious groupings (given its lopsided Communal Violence Bill, among other things), did not seek any such exemption.

Even after the verdict, then Union HRD Minister Kapil Sibal  had actually appealed to minority schools to abide by the quota, despite having not being mandated to do so by the Supreme Court, and I hope the Supreme Court, which declared triple talaq illegal, sent Afzal Guru, Ajmal Kasab and Yakoob Memon to the gallows despite appeals to the contrary and had emphatically rejected as unconstitutional religion-based reservations in non-minority colleges introduced by the Andhra Pradesh government, reverses this particular minority-appeasing decision as well. As Anjali George and Ashish Dhar of the Hindu right-of-centre Indic Collective Trust rightly point out, “It is difficult to imagine how asking a church-run school to take in a certain number of students from the poorer sections of society would interfere with its autonomy or its Christian identity.”

The RTE Act has placed on the National Commission for Protection of Child Rights (NCPCR) and its counterparts in the states, the State Commissions for the Protection of Child Rights (SCPCRs), set up under the Commissions for the Protection of Child Rights Act, 2005, to safeguard child rights (their mandate includes a host of issues like child labour, children on railway platforms, children in juvenile justice homes, health concerns of children, children in reality shows etc.), the responsibility of monitoring the Right to Education Act, giving it the same powers in this regard as it has under the statute by virtue of which it has been constituted. These powers amount to receiving complaints of child rights violations (and in this context, any violation of the RTE Act) or taking suo moto cognizance of them, conducting investigations and forwarding the matter to the concerned executive or judicial authorities as also carrying out academic surveys concerning child rights and making policy recommendations or even suggestions as to statutory reforms in this sphere. It may conduct public hearings at its own discretion at the behest of some voluntary organisation and only when the concerned executive departments have not taken due action, but the outcome of such hearings can obviously be challenged in a court of law. However, the NCPCR cannot punish any bureaucrat for inefficiency in complying with its instructions.

As someone who was, back in July-September 2012, working as a research associate in the Centre for Civil Society (CCS), a leading public policy think-tank based in New Delhi, I interacted with several NCPCR officers during the course of a study I was carrying out on the efficacy of this body in monitoring the RTE Act, and I indeed did find them to be well-meaning, fairly proactive and professionally committed. However, in real terms, there is a wide gulf between their intentions and on-the-ground impact, the fault for which lies primarily not with the NCPCR but with its limitations under the law.

A Right to Information (RTI) query reveals that as of March 2012, the NCPCR received 2,850 complaints regarding the RTE Act. However, it has been able to resolve just 692 cases, or just 24% of the entire lot, by now. Breaking down the numbers year-wise, from 1st April 2010 to 31st March 2011, the NCPCR resolved only about 54% of the cases, and from 1st April 2011 to 16th March 2012, only about 6%!

Mr. Umesh Gupta, who filed the RTI application and with whom I had the fortune of interacting with in person, was quoted in a news report as saying — “Not only is the data shocking, but the numbers actually denote the lowering efficacy of the NCPCR in monitoring the proper implementation of the RTE Act over the two years.”

According to a staff member of the NCPCR who was interviewed by me in person in August 2012, an estimated 60-70% of the complaints related to government schools failing to meet infrastructure norms laid down under the RTE Act or there being no school in a certain area (though when I met Mr. Umesh Gupta later, he denied this, saying that most complaints are admission-related), and getting these problems solved obviously takes time, ranging across a few months, and the work of having these schools built or infrastructure norms met in existing schools is not done by the NCPCR itself but other education-related government bodies. While loew budget private schools need more freedom from the red tape, government schools (a necessity in a developing country like ours) need more accountability, which can’t come if the refulatory body is a toothless tiger.

That apart, in the context of admission-related complaints in government schools, often bureaucrats in concerned government bodies (such as in the context of Delhi, the Directorate of Education, Delhi, and the Municipal Corporation of Delhi) don’t give timely responses to the NCPCR. He stated that the NCPCR had requested for inquiries to be instituted against those inefficient bureaucrats by the concerned departments. However, the NCPCR is powerless to take action against them.

In my humble opinion, the NCPCR as a body (and this also applies to the SCPCRs) can have meaningful efficacy only if it has more power to execute its decisions and penalize government officers for non-compliance by way of fines and by having that non-compliance included in their reports to be considered for their promotions. The Central Information Commission (CIC) has that power with reference to monitoring the RTI Act, and I saw one of the former commissioners, Mr. Shailesh Gandhi (who happens to be one of the most respected personalities in the recent history of the Indian bureaucracy), making full use of it while in service, when I was interning under his esteemed self, back in my law school days, and the CIC has played a stellar role in recently taking on all political parties on the issue of black money. Till the NCPCR is given such powers, it sadly just remains a toothless tiger! I have made this suggestion on www.mygov.in, the online suggestion portal of the Modi sarkar, as you can see here. This issue is relevant even to J&K, where again the BJP is in power in coalition and where the central RTE Act doesn’t apply owing to Article 370 (the desirability of which is another debate altogether), as discussed here.

While the figures that came to be revealed by Mr. Umesh Gupta’s RTI query in 2012 may well have improved since then, an interview of a former NCPCR insider published in the magazine ‘Governance Now’ in 2013 still demonstrated problems in the RTE division of the NCPCR. Given that the current government is willing to give the RTE Act a re-look, strengthening the NCPCR should be a priority not only in the context of education but even other child rights issues, which would require coordination between the Ministry of Women and Child Development and the HRD Ministry.

How I wish our television news debates were geared towards public policy issues to solve real, day-to-day problems of Indians, rather than making some stupid, random Tu-Tu-Main-Main exchanges between politicians the primary focus of attention, giving them unnecessary publicity.

Why “Name & Shame” strategy needs to be relooked

Shakti Avasthy
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Why “Name & Shame” strategy needs to be relooked

After a successful #MeToo Campaign, a controversial offshoot emerged in the garb of women empowerment where a California based law student Raya Sarkar deployed crowd sourcing by creating a spreadsheet containing anonymous complaints against sexual predators.

This name & shame strategy is unsuitable in a civilized society, has potential for becoming another avenue for misuse by women, is a reflection of why feminism remains unfulfilled glory and reflecting deeper malaise in society where Institutions have repeatedly failed women.

Several arguments make name & shame strategy unsuitable as: this strategy is akin to mob violence, lynching, kangaroo courts where legal principle of “innocent until proven guilty” is violated. The “presumption of innocence” which also a part Universal Declaration of Human Rights, article 11, states: “Everyone charged with a penal offence has the right to be presumed innocent until proved guilty according to law in a public trial at which he has had all the guarantees necessary for his defense.” This basic principle forms the bed rock of Constitutionalism in India and has been repeatedly followed in legal recourse.

Thereafter, the anonymous complainers adopt the role of victim, lawyer, as well as judge.

Further, sexual misconduct is a highly interpretative term. What might be a minor wrongdoing could be interpreted as offense, a classic case was seen recently where a doctor in Karachi was sacked for sending friend request to one of the patients. This was possibly done because the patient was sister of Oscar winning director Sharmeen Obaid-Chinoy and hence the complaint was taken seriously.

Moreover, name & shame goes directly against “Right to Reputation” mentioned by Supreme Court in Subramanian Swamy case (2016). Apex Court said “Right to one’s reputation which has been held to be a facet of Article 21 – (Right to life) is basically vis-à-vis the State, and hence, Article 19(2) – (Freedom of speech & expression) cannot be invoked to serve the private interest of an individual” [pdf].

It takes a lifetime to build upon a reputation and seconds to destroy it. Reputation is necessary for personal well-being, mental health & happiness. Reputation of not just the alleged person but also of the family, relatives, organization where person is working, etc. “Name & shame” without proof and evidence has potential to ruin the hard earned reputation of people.

Also, it is hard to deny the prevalent trend of misuse of laws by women which are not gender-neutral, and this name & shame exercise is not gender-neutral. A classic case to prove this is misuse of Section 498A of the Indian Penal Code (harassment to a woman at the hands of her husband and his relatives) often used in dowry related cases. This has been acknowledged by Supreme Court in several cases like Arnesh Kumar vs. State of Bihar (2014), more recently in Rajesh Sharma and Ors v State of UP and Another (2017). Justice Kailash Gambhir (Delhi HC) guidelines on 498A cases, 2008 were also given in similar regard. Hence, it becomes tough to argue that why anonymous complaints will not become another avenue for “witch-hunt”, pursuing “personal vendetta” and undermining Rule of law.

An intellectual discourse within feminists is divided on such methodology. Liberal feminists strive for sexual equality via political and legal reform, and recent post by a famous feminist Nivedita Menon against the ongoing paradigm is a reflection of liberal feminist against such social media lynching. However, radical feminists who attack patriarchy believing that women are denied “authentic subjectivity” (Simone De Beauvoir) could well support the cause. Such adherence to ideas of ideology has led situation where core feminist agenda has been overshadowed by differences between feminism and feminism in India remains an example of unfulfilled glory.

However, all such incidents also reflect a deeper point on how society sees the route to Justice. We have a judiciary with over 3 crore cases pending, and with vacancies unfulfilled at each level. We have a police which is unable to justify PM Modi’s acronym SMART (strict and sensitive, modern and mobile, alert and accountable, reliable and responsible, tech-savvy and trained). And we have a society deeply entrenched in patriarchy where women are still seen relative to men, and thereby crimes go unabated.

One can not deny the problem women face & how Indian institutions are failing them, but two wrongs don’t make a right. Even governance failure doesn’t permit such recourse in a civilized society where education, skill development, empowerment are enhancing at a rapid pace and women are a part of it. The solution lies in information dissemination where initiatives of Government need to be promoted & if such initiatives fail Government needs to be held accountable.

Like, recently government launched SHe-box portal where sexual harassment at workplace can be reported, mandatory panic buttons in mobile phones, helplines like 181, 182, etc. Someone, may argue of the lack of functioning of these initiatives, but the better and proper recourse would be to highlight along with “name & shame” if these initiatives don’t work instead of undermining Rule of Law under the garb of anonymity in social media.

Charles Darwin, Rahul Gandhi and Congress Mukt Bharat

singhrakeshk
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Charles Darwin, Rahul Gandhi and Congress Mukt Bharat

Charles Robert Darwin an English naturalist wrote “On The Origin of Species by Means of Natural Selection, or the Preservation of Favoured Races in the Struggle For Life”. in 1859 which is considered as the foundation of modern theory of evolution. In this short write up I have extracted some quotes from this book to understand Rahul Gandhi who has been projected as eternally evolving politician from Indian main stream media:
“Man selects only for his own good: Nature only for that of the being which she tends.”
― Charles Darwin, The Origin of Species

‘Journalists’ have been trying to evolve Rahul Gandhi since time immemorial, but voters have been repeatedly doing what is good for population at large.

“Nevertheless, so profound is our ignorance, and so high our presumption, that we marvel when we hear of the extinction of an organic being; and as we do not see the cause, we invoke cataclysms to desolate the world, or invent laws on the duration of the forms of life!”
― Charles Darwin, The Origin of Species

Nevertheless, so profound is their ignorance and so high their presumptions and arrogance that they marvel when they hear “Congress Mukt Bharat” and as they do not see the cause, they invoke cataclysms or invent news article proclaiming re-re-emergence of Rahul Gandhi, “I think it inevitably follows, that as new species in the course of time are formed through natural selection, others will become rarer and rarer, and finally extinct. The forms which stand in closest competition with those undergoing modification and improvement will naturally suffer most.”
― Charles Darwin, The Origin of Species

I think it inevitably follows that as new parties in course of time are formed through every election, success for Congress will become rarer and rarer. The parties that stand in closest competition with those undergoing modification and improvement will naturally suffer most.

“A grain in the balance will determine which individual shall live and which shall die – which variety or species shall increase in number, and which shall decrease, or finally become extinct.”
― Charles Darwin, The Origin of Species

A leader in the balance will determine which party shall live and which shall die-which party or coalition shall increase in strength and which shall decrease and finally become extinct. And despite ‘journalist’s’ best effort Rahul Gandhi seems to be destined to be that seed which will expedite the extinction of Congress.

“But with regard to the material world, we can at least go so far as this— we can perceive that events are brought about not by insulated interpositions of Divine power, exerted in each particular case, but by the establishment of general laws.”—Whewell: “Bridgewater Treatise”.”
― Charles Darwin, On the Origin of Species

But with regard to political arithmetic we can at least go so far as this- we can perceive that electoral victories are brought about not by insulated imposition of dynastic power exerted in this particular case by repeated evolution of Rahul Gandhi but by establishment of an organically growing political outfit based on merit and hard work.

“This preservation of favourable individual differences and variations, and the destruction of those which are injurious, I have called Natural Selection, or the Survival of the Fittest.”
― Charles Darwin, The Origin of Species

This preservation of favourable variations due to meritocracy and hardwork and destruction of those which are injurious such as corrupt dynasties is what I call natural selection or the survival of the fittest in electoral politics.
“One general law, leading to the advancement of all organic beings, namely, multiply, vary, let the strongest live and the weakest die.”
― Charles Darwin, The Origin of Species

Thus one general law leading to advancement of all political ideologies, namely multiply, vary, let the strongest live and weakest die, will ensure the end of the dynasty which generally prevents this kind of natural selection process as it insulates the dynasty scions from open competition.

I have no doubt in my mind that repeated efforts to evolve Rahul Gandhi will lead to eventual death and dismemberment of Congress party. Contrary to popular belief it’s not Narendra Modi but Rahul Gandhi who will be remembered as the man who fulfilled Mahatma Gandhi’s dream of Congress Mukt Bharat.

Electric mobility: What to expect

Raghav Ramji
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Electric mobility: What to expect

Earlier this year, I had an opportunity to try-out a modern electric car. It is difficult to ignore the sensory delight that such cars offer. Other than the generic look and purpose of the car, everything is radically different. The experience of driving an electric car and its impact on the environment are something we have read about in hundreds of articles, but what often gets missed out is the economics of it all. And this is the most challenging aspect of electric mobility.

According to a report[1], there are approximately 1.2 Billion cars in the world. CNBC reported[2] in 2014 that annual global sales that year hit a record 82.8 million. The automobile industry is a source of employment to millions of people and its impact in terms of sheer economic activity is testament to that. The economic relationship that the automobile industry shares with almost every other commodity in the world is staggering – steel, minerals, plastics, oil, aluminum, rubber, textile, electronics, to name just a few. And this is just scratching the surface. But it is this industry that is witnessing the disruption that is electric mobility.

With countries like China, USA, Norway, Germany, and many others driving the push towards electric car adoption, each country is setting some percentage target of total volume of cars to be electric. China is doing this most aggressively. The Financial Times reports[3] that China produced 45% of total electric cars sold globally in 2016 and is planning to produce up to 7 million electric and hybrid cars by 2025. The report goes further to state that China is evaluating a time-frame within which to ban conventional automobiles sometime between 2025 and 2040. Germany and Netherlands have similar ideas[4], even as their plans have been met with mixed responses from the general public, particularly in Germany[5] where the trinity of range, infrastructure, and price influence purchase greatly.

Slow as the adoption may seem, as is true of any new technology, one thing is clear – the adoption is happening and it presents economic challenges. At the resources level, the economics of electric cars is entirely different when compared to conventional automobiles. By far, the most significant component of such a car is its battery. With it comes the reliance on Lithium and Cobalt. The eight countries with the largest lithium reserves[6] are led by Chile, China, Argentina, and Australia; followed by Portugal, Brazil, USA, and Zimbabwe. The reserves total up to about 13 million metric tons according to the US Geological Survey[7]. What is to note is that with increased adoption of electric mobility, the battery production is expected to rise several folds versus current capacity. The impact of this will be felt by the glass, ceramics, metallurgy, and even medical industries where lithium has alternative uses. Drawing lithium away from battery production will lead to higher prices of these other products that are not growing in demand as quickly.

The other chief ingredient is Cobalt, and this has even more alternative uses than lithium. Since the push for electric mobility began, the price of cobalt has already tripled[8] in just 2 years, although this is in part attributed to the lack of ethically sourced cobalt i.e. without the use of child-labor[9] as is the case in the Republic of Congo, which has the largest reserves of the metal. The estimated reserves[10] globally are reported to be about 7 million metric tons. The use of cobalt in many industrial alloys, paints and pigments, and oxidation catalysts further drives prices upwards. Cobalt alloys are used in the medical industry for orthopedic implants and prosthetics. Therefore, it will be interesting to see how we, as people and as nations, come to terms with these trade-offs.

While we are still at commodities, one can speculate that oil will be affected too. The closer we get to a complete ban on conventional internal combustion engines, the harder it gets for oil; even though plastics are not going away any time soon. The increasing demand for oil generated by the growth in conventional automobiles (and the higher prices of oil) in the past also made it economically feasible to extract oil from reserves that were otherwise not deemed viable when the price of oil was low. The increased adoption of electric mobility is going to have the reverse effect. Even as there is demand for plastics, its growth may not justify current oil production. As a result, oil production will fall to more economically viable levels. The impact will be seen in oil-driven economies of the Middle-East, Russia, and others. Nations which collect revenues from taxation from the sale of oil such as India, will also, in all probability, face fiscal pressure.

Employment will also see a massive makeover. At this point, it is wise to note that we cannot determine exactly how many kinds of new employment opportunities may emerge from electric mobility. There is no predictive theory to support this besides speculation from what we already know. To dispel any panic, it may not be all doom and gloom[11] as some people may be speculating. We can acknowledge the potentially greater structural employment problem that we will witness. How nations address the skill-gaps remains to be seen but it should, and will, generate serious discussion. The certainty is that employment within the oil industry will take a hit and so also will businesses that are solely engaged in conventional automotive technology such as exhaust, gearbox transmission, head gaskets, pistons, cylinder linings, etc. almost all of which are not required in an electric car. What is in fact interesting to note is that many of these businesses have been pro-active and are already invested in the electric mobility business by expanding their businesses also to electric drivetrains, motors, research into lightweight materials, electronics, power management, battery management, software, and the like. Auto-makers themselves will need to add jobs to their new electric mobility departments but at the same time, might have to let go some jobs from the conventional assembly lines.

Electric mobility also means fresh infrastructure spending – power generation through wind, solar, tidal, geothermal, nuclear, as we move away from environmentally harmful methods of power generation, and then setting up of charging infrastructure. These are going to generate a great deal of new jobs. We might as well go a step forward in stating that electric mobility lays the foundations for autonomous vehicles. This translates to incredibly high use of electronics and computing. Today, if you are someone who is engaged in machine learning or data science, you are, in all probability seeing rapid advancement. Computing and data analytics is definitively going to see plenty of opportunities for employment. The growth in battery use is also going to drive battery disposal and recycling industries since batteries, through charging and discharging cycles, experience degradation over time. Considering the hazards associated with battery disposal and recycling, we can expect enforcement of tighter environmental regulations while at the same time, lucrative business opportunities leading to more employment.

At this point, it appears as though India is just not in the thick of things as far as electric mobility is concerned. Considering the size of its market, India cannot afford be too far behind. Now although India opened up its markets through the economic liberalization movement of 1991, the baggage of its socialistic past is still evident in politics. In the course of the last few years however, there has been a commitment from the top to ensure electric power generation and distribution across the country. Naturally, for India to become a market for electric mobility, it has to ensure availability of electricity and also prepare capacity for the enormous load that electric mobility will bring with it. Even though China is ahead in the adoption of electric mobility, a reported 72% of its power generation is from coal[12]. India has a similar situation where it relies 66% on fossil fuel based power generation[13] . This is often cited when discussing the clean credentials of electric mobility. Power generated from non-renewable sources generate significantly higher emissions and pollutants than automobiles[14]. The Government of India, in 2016, has signaled its intent in pushing aggressively for renewable energy in the Draft National Electricity Plan of 2016[15].

According to The Economist, 2018 shall be the tipping point for electric cars[16] which will see both greater adoption, and also switching from conventional automobiles to electric cars. This presents serious challenges also for carmakers. China and India are both huge markets but only one of them is prepared to absorb the effects of this increased electric mobility. India is still not done electrifying itself entirely and the realization cannot come sooner that going forward, the next couple of years are crucial for India’s power sector. Historically, government bureaucracy has always been terrible at managing such urgency, and in India, where power generation is still dominantly under government control, it is hard to be optimistic. There has never been a better case than now for the Government of India to consider greater privatization of the power sector which currently stands at 44%. Even as other problems like power-theft, cross-subsidization, crippling financial situation, and supply chain issues continue to plague the power sector.

While electric mobility, once a visionary idea, is fast becoming a reality, and there is optimism surrounding its adoption; its economics presents unique challenges. It will be interesting to see how nations, politicians, and regulatory agencies approach these challenges even as the debate about electric mobility’s clean credentials still goes on.

 

  1. Green Car Reports. http://www.greencarreports.com/news/1093560_1-2-billion-vehicles-on-worlds-roads-now-2-billion-by-2035-report
  2. CNBC. https://www.cnbc.com/2014/01/09/global-auto-sales-hit-record-high-of-828-million.html
  3. The Financial Times. https://www.ft.com/content/00b36a30-a4dd-11e7-9e4f-7f5e6a7c98a2
  4. Electrek. https://electrek.co/2016/06/14/all-new-cars-mandated-electric-germany-2030/
  5. Quartz.com. https://qz.com/953748/why-germans-dont-want-electric-cars/
  6. Statista. https://www.statista.com/statistics/268790/countries-with-the-largest-lithium-reserves-worldwide/
  7. The United States Geological Survey. https://minerals.usgs.gov/minerals/pubs/commodity/lithium/
  8. Mining. http://www.mining.com/web/electric-cars-yet-turn-cobalt-market-gold-mine-nornickel/
  9. The Washington Post. https://www.washingtonpost.com/graphics/business/batteries/congo-cobalt-mining-for-lithium-ion-battery/
  10. The United States Geological Survey. https://minerals.usgs.gov/minerals/pubs/commodity/cobalt/mcs-2016-cobal.pdf
  11. Business Insider. http://www.businessinsider.com/electronic-vehicles-and-auto-manufacturing-jobs-2016-10?IR=T
  12. U.S. Energy Information Administration. https://www.eia.gov/todayinenergy/detail.php?id=33092
  13. Central Electricity Authority. http://www.cea.nic.in/reports/monthly/installedcapacity/2017/installed_capacity-10.pdf
  14. U.S. Environmental Protection Agency. https://www.epa.gov/ghgemissions/global-greenhouse-gas-emissions-data
  15. Central Electricity Authority. http://www.cea.nic.in/reports/committee/nep/nep_dec.pdf
  16. The Economist. https://youtu.be/zGFb6CcG0DA

Positive and negative effects of foreign debt loans on Indian economy

Ajeet Panigrahi
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Positive and negative effects of foreign debt loans on Indian economy

In last few years, we are hearing a lot about foreign investments in our Country. From Manufacturing to Infrastructure, from Government to Non-government sectors, all the sectors are at some point taking loans from different foreign entities. As charted below, it can be seen that the debt figures are growing at an average rate of 7.30% year on year.

Any government that comes to power always announces any form of such investment by some external agency proudly, with a lot of pomp and show. With the figure currently standing at around 19% of our Gross Development Product, it becomes important to understand, drill down and see if it will have positive or negative impact on us.

Most of the loans taken by India are either for Government Loans or Non-government Loans. Most of these loans are in form of Commercial Borrowings, Non- Resident Indian Deposits, International Monetary Fund Loans, Bilateral or Multilateral borrowings, etc.

Most of the Non-government borrowings are by private corporate entities who avail it for their business expansion. However, the case with Government borrowing is different, as it is required for various social & economic development projects which have very low revenue generation capabilities. As a result, viability of the borrowings, the repayment of the debt and entity from which the loan is taken becomes a critical issue, which if not taken care may have adverse effects.

Now coming to the Government loans, most of the loans in our country is from World Bank, Asian Development, European Institutes or Japanese Institutes. Globally even China is known to be major investor. A basic in-depth analysis of their economic status, term-loan policies and central bank rates reveals the purpose of giving loans. While World Bank & Asian Development Bank were created to help poor countries reduce poverty, foster economic growth and cooperation, the same doesn’t seem to be the case with other Institutions from Japan, Europe or China as they claim. Their purpose of giving loans seems to be something else as seen from the given chart trends.

As it can be seen in European nations, Japan or US, the Long term borrowing rates seen to be reducing. If the same is rate assumed and interpolated for next decade, it can be easily said to go negative. Which means that banks will start charging interest even for the deposits, which is not good for any growing economy. Hence these countries are giving long-term loans at interest rates ranging from 0.1% to 2.5% as it will ensure their money value at least remains static and they continue to grow, even if marginally. So giving such loans are their need as well.

Even the trends of central bank rate strengthen the fact that for most of the European nations and Japan, giving infrastructure loans are their need. This serves the interest of both the entities involved i.e the institution giving the loan and the entity receiving it. However the interest rates of loans extended by China, varying from 2% to 4% (link 1, link 2), seems different as it is well below their own Central bank rate. In this case, mutual interest doesn’t seem to be the prime motive. This when seen in line with Tajikistan (ceding land china on account of non-repayment), Sri Lanka (Mattala Rajpakasa International Airport being declared world’s emptiest airport and unable to generate revenue) and Cambodia (almost 80% of its total debt owed to China) cases rings the bell. It seems more of like a debt trap than a development loan.

The risk any term loan carries is the risk on account of Forex rate. Most of the term loans availed by the borrowers are either in Dollars, Euros or other global currencies and not in their local currencies. Which means due to varying exchange rates, an additional risk on account of Exchange rate becomes a major factor. The extent of impact may even overshadow the lower interest rates by the lender and needs to be checked on timely basis.

Keeping this mind, whenever any government announces any loan with pomp and show, one should study the different aspects and conditions as mentioned and then make any pronouncement regarding the loan/investment availed as growth is good only if sustainable. Not doing so may expose to the risk of falling into the unending debt trap as seen in many cases.

Humanitarian crisis in Yemen due to attack by Saudi Arabia

Bhimashankar Sanga
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Humanitarian crisis in Yemen due to attack by Saudi Arabia

Saudi Arabia is bombing Yemen to smithereens, causing a precarious food situation. Yemen is the only place in the Arabian peninsula where you can farm, especially coffee. Now, the odious regime is attempting a neocolonialist idea of ethnic balkanization, thus creating unending genocidal ethnic conflict in Yemen.

Saudi-lead and US-armed military coalition’s incessant bombing has resulted in the outbreak of cholera and famine, destroying the country’s infrastructure: farms, ports, bridges, water plants, etc. and creating one of the worst humanitarian crises in modern times.

All of this Yemen conflict is religious, Houthis (Zaidiyyah Shias) vs Sunnis.There are two Yemeni factions supported by foreign elements-the Houthis are supported by Iran, and the Hadi-led Yemeni government (the one that is considered the legitimate Yemeni government by the UN) is supported by Saudi Arabia.

The Houthis are a Yemeni minority who decided to overthrow the Al-Qaeda supporting dictator. Saudi didn’t like having a Shia group being south of them,created the war in Yemen by trying to make the nation submit through practically genocidal mad bombing and also robbing them of their resources.

Saudi Arabia will do anything in order to distract from their own in-fighting within their royalty. The Houthis have never attempted to overthrow the Sunni majority in Yemen for centuries. They used to have their own hermit kingdom until Arab pressurized the two states to merge. Houthis never took marching orders from Iran. Anti-Iranian think tanks have tried making spurious connections between the Houthis, Zeidi Shia and Iran for a while, but never provided evidence.

Saudi Arabia’s posturing risks destabilizing Yemen. Yemen would not have faced famine if it wasn’t for a major chunk of the “outside world” deciding to unleash hell on the country.

The many inconsistencies of Rahul Gandhi

bakaiti
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The many inconsistencies of Rahul Gandhi

Here’s a look at the many inconsistencies and political opportunism of Rahul Gandhi:

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