Disinformation Fact Sheet Human Rights Misinformation Policy World

Russia-Ukraine Crisis: India’s Foreign Policy Implications

Rahul Pawa / New Delhi On February 23, 2022, Russian President Vladimir Putin announced a “special military operation” in Ukraine. Russia has long opposed Ukraine joining the European Union (EU) and North Atlantic Treaty Organization (NATO), the West’s defensive military alliance. He accused NATO of threatening Russia’s “historic future as a nation” and announced Russia’s military operation in Ukraine. “The purpose of this operation is to protect people who, for eight years now, have been facing humiliation and genocide perpetrated by the Kyiv regime,” Putin added. Subsequently, several media outlets reported explosions in numerous locations and large-scale Russian military operations throughout Ukraine. Ever since Ukraine’s pro-Russian president, Viktor Yanukovych, was overthrown in 2014 after months of protests against his government, Russian President Vladimir Putin has regularly flagged Ukraine of being taken over by extremists. Russia responded by seizing Crimea’s southern region and sparking a revolution in the east, backing hardliners against Ukrainian soldiers in a war that has claimed 14,000 lives. Regardless, the current issue has its roots in the disintegration of the Soviet Union. Ukraine, a former Soviet republic, had the world’s third-largest nuclear arsenal when the Soviet Union disintegrated in the early 1990s. The US and Russia collaborated with Ukraine to de-nuclearise the country. In a series of diplomatic deals, Kyiv returned hundreds of nuclear warheads to Russia for security assurances against a possible Russian assault. However, the assurances did not stand; below, we examine the 2022 Russia-Ukraine Crisis and discuss India’s foreign policy implications in that context. Download Explainer – Russia Ukraine Crisis (Author is the Director for Research at Centre for Integrated and Holistic Studies)

Human Rights Media Policy World

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Human Cost Should Deter War!

India’s independent approach to Russian invasion on Ukraine balances its relations with NATO, European partners Amrit Pal Kaur / New Delhi Critics from either side of foreign policy matrix may have issues with India charting an independent and balanced course on Russia’s invasion of Ukraine as against NATO allies and European Union opposition to this intrusion. Pro-NATO and European think tanks have made out that India missed the bus in playing a decisive role in world affairs yet again by keeping off the conflict mostly unconcerned and untouched. Soviet era Russia’s backers have hailed India’s ‘sensible’ decision not to go whole hog with NATO alliance given her varied offensive and defensive interests. But then, Modi government hardly had many options in changing course of events leading to military aggression on Ukraine by Russia while both NATO and European Union went ahead with severely sanctioning Moscow. China that subtly supported Russian invasion chose to talk of winding down the violence though the two countries communist leadership has been led by oligarchs. Prime Minister Narendra Modi’s telephonic conversation with President Vladimir Putin is a milestone in long chain of events that led the present invasion. India’s appeals for peace and getting back to diplomatic dialogue on outstanding issues relating to Ukraine cannot be ignored by the world community. Russia’s ‘military operation’ in Ukraine has virtually sealed the possibility of rapprochement with Europe that continued to hang in balance during last 30 years. India’s external affairs minister S. Jaishankar rightly mapped the genesis of Ukrainian issue that emanates from complexities of ‘Post Soviet Politics, expansion of NATO and relationship between Russia and Europe.’ In last three decades, Russia concluded numerous arms-reduction treaties with Western countries including 1997 Russia-NATO Act, Budapest Memorandum, Treaty on Conventional Armed Forces in Europe (1990), Intermediate Range Nuclear Forces Treaty (1987) and Open Skies Treaty that put an end to cold war in Europe and opened avenues for cooperation between Russia and Europe. Some genuinely believe that Russia did not reap benefit of the cooperation with Europe. Breaking point perhaps was granting NATO membership to Ukraine that brings Europe’s sphere of influence to Russia’s doorstep. President Putin’s statement that Russia wants demilitarization of Ukraine and it ‘does not intend to occupy’ the country implies that the conflict goes beyond their bilateral relations and points to involvement of greater Western powers. In this larger struggle for supremacy, one country which has been asked to pick sides is India. As an emerging market economy, credible and substantial international power, India has largely seen herself as a stabilizing factor that pushes seriously for peace and prosperity. Such is the case especially after India became an equivalent member of QUAD after shunning ‘hesitations of history’ that defined non-alignment. Indian position has come into greater focus due to its close relations with Russia, USA and European Union. Its membership and current chairmanship at UNSC has only accentuated India’s stake given that she been a longtime votary of independent foreign policy and pluri-lateral world order. Since India has had close civilizational links with both sides, it’s pragmatic and logical to abstain from voting on Ukraine issue at UNSC. India’s representative at UN Tirumurti spelt out India’s stand and asked countries to find peaceful, diplomatic solution through Minsk mechanism. It’s rather impractical to expect India to severe its relations with Russia that has been her single largest defense partner with 60 per cent share in defense inventory. On the other hand, India has also nursed progressive relations with US as well as Europe for over 20 years, since Vajpayee-Clinton era. India as a fast-developing country has its own pressing needs with over 1.4 billion to feed and enable spread of prosperity. Therefore, expectations on either side for India to align may not fit into the New Delhi’s scheme of things. Her compulsions to lift a vast majority out of poverty and put herself on growth mode are what drive India’s foreign policy. In fact, these very imperatives pushed India’s position striking a fine line between Russia and West at large. Instability on eastern flank of Europe brings home the acute need to develop in house inventory of defense mechanisms and systems without depending on imports. Self-reliance is the key to great power status. ‘Make in India’ initiative in the defense sector is a significant component of the policy choice made by the government. Russia’s invasion of Ukraine is bound to create ripple effects already being felt in India though New Delhi has stayed away from swinging either ways. Crude prices touching $ 105 per barrel in spot markets would translate to larger fuel import bill thereby upsetting budget numbers outlined by Finance Minister Nirmala Sitharaman. As Russia apart from OPEC has been large exporter of hydrocarbons in particular to Europe, the crisis will increase fuel prices and shortage in almost all of Europe. For instance, Finland imports most of its crude while Hungary gets 83 per cent, Austria – 62 per cent and Germany imports 46 per cent of its natural gas. Russia’s output had kept fuel prices competitive while curbing the Gulf dominance, its engagement otherwise will give space for the monopolies that’s bound to distort market prices, distribution as well as access. Precarious growth of world economy that’s bracing post-Covid will be badly hit. Most importantly, it will create crude induced inflationary pressures in countries like India where over 80 per cent fuel demand is met through imports. Recent World Bank report Global Economic Prospects argued that the world is walking towards global slowdown as the fiscal support in the wake of corona virus pandemic wanes, increase in debts and inequalities would kick in across the world. There is no denying that Europe and the world at large are treading choppy waters. Though the ongoing invasion may not go the cold war way, it will certainly wreak havoc on lives of innocent people caught in the crossfire. Human cost involved in the war should act as deterrence and the countries involved should

Business Policy

980

Sri Lankan Economic Crisis: Way Out Not in Sight!

Shift to organic farming without buffers, hoarding & profiteering led to food, fuel crisis; economic outlook uncertain! Ayodhya Ram When India extended $ one billion worth aid and loans to pull the funds starved Sri Lankan economy out of morass this January, not many would have understood its importance. But, Sri Lanka’s central bank governor Ajith Nivard Cabraal, heaved a sigh of relief as the olive branch offered by India helped him avert a default with global lenders and in particular China. For the island nation, adhering to loan repayments was important to prevent an accentuated food and fuel shortage given the non-availability of sufficient agricultural products in different states that in turn led to skyrocketing of commodities prices and runaway inflation. As reports suggest, India’s emergency financial assistance was offered in terms of currency swap, deferred loan repayments and dedicated lines of credit after the Sri Lankan government led by Gotabaya Rajapaksha made a request to Prime Minister Narendra Modi in late December 2021. Publicly available data suggests that Sri Lankan government is battling a massive economic, food and fuel crisis owing to some of its own policies. Sri Lanka has the obligation to service US $ 7.3 billion outstanding debt in 2022. This includes bonds worth $ 500 million that were to be discharged in January 2022 and another $ one billion in July this year. For the moment, Sri Lanka has preserved itself from the ignominy of a payments default that has other serious repercussions as well. But, the latest crisis provides the perfect backdrop to take a deep dive look at the South Asian island economy. In fact, the economic crisis so acute that Sri Lanka has run out of cash to buy diesel and petrol. The government did not have even the foreign exchange to pay for the two shipments that arrived last week. Last month, Sri Lankan government had bought 40,000 tonnes of diesel and petrol from India to meet emergency requirements. Drastic policy changes like imposing a ban on imports of fertilizers and pesticides, decline in revenues from tourism and hospitality, hoardings of essential food items, depreciation of the Sri Lankan rupee, mounting foreign debt have roiled the island economy with families and individuals scurrying for relief and support from the government. Short supply in basic food items like rice, sugar, milk powder, cooking oil has only brought focus to the crisis that’s in full show. People queuing up outside the supermarkets to buy essential items have hogged headlines. Starvation due to unavailability of food items and limited purchase power is something that the Sri Lanka’s government needs to tackle. Grievously impacted livelihoods and lack of even low paying jobs point to a medium term mess that the country has into. Policy issues like shift to 100 per cent organic farming phasing out chemicals, fertilizers and hazardous plant nutrients is a laudable move. Inadequate planning and wrong approach to achieving 100 per cent natural and organic farming seems to have played havoc with Sri Lankans lives. Scaling up the global supply value chain in agricultural commodities and inducing sustainable agricultural practices is reportedly the stated objective of Sri Lankan government’s new policy framework. Shoddy planning or lack of transition plan during the shift to organic agriculture seems to have contributed to the present economic crisis leading to shortage in food items. Shift to organic farming should have been done in a phased manner by maintaining stability of agricultural products, adequate buffers and planned counter-measures to tackle the crisis. The transition space was not available for Sri Lanka because of also because of dwindled incomes[1]. Sri Lankan President Rajapaksa had imposed a ban on chemical fertilizer and pesticides citing the many incommunicable diseases[2]. The decision was part of a larger plan to achieve 100 percent organic farming and preserving foreign exchange reserves that got drained owing to import of both food items and farm ingredients like fertilizers. It cannot be possible overnight. Agriculture sector represents 8.36 percent of the county’s GDP[3]. Import of fertilizers has been reduced to $ 8.2 million in 2020 which was earlier $ 32.2 million in 2019[4]. Sri Lankan economy dependent on two streams of foreign exchange earnings: tourism that was hit hard by the coronavirus pandemic for over two and half years. Workers’ remittances were also adversely impacted as several of its citizens employed abroad lost their jobs. As per Central bank of Sri Lanka statistics, tourism sector earned only US $ 261.1 million last year as against US $ 4.38 billion in 2018. The income from workers’ remittances which is another major source of foreign exchange also fell to US $ 5.491 billion last year from a high of US $ 7.1 billion during 2020. Both were the prime sources for the foreign exchange reserves[5]. Heavy reliance on borrowings from abroad has also impacted the Sri Lankan economy leading to the present food crisis as scarce resources were channeled to repayments. Earnings, Debt Profile Earnings 2018 2019 2020 2021 1 Tourism 4,380 USD Mn 3,606.9 Mn[1] 682.4 Mn 261.1 Mn[2] 2 Workers’ Remittances 7,015 USD Mn 6,717 Mn[3] 7,103 Mn 5,491 Mn[4] Figures in USD Millions Country / Organization Year Loans 1 Asian Development Bank July 2021 $ 150 million[1] 2 China March 2021 $ 1.5 billion[2] 3 Bangladesh June 2021 $ 200 million[3] 4 The World Bank Sep 2020 $ 56 million[4] 5 International Monetary Fund Sep 2021 $ 787 million[5] Sri Lanka borrowed over $ three billion from both multilateral and bilateral sources including Asian Development Bank, IMF, World Bank and countries like China and Bangladesh in less than 12 months. By far, China has been the biggest lender at US $ 1.5 billion in March 2021. And, most funds mobilized by Sri Lankan government went to service the debt availed from Xi Jingping’s China. Foreign exchange shortages have forced Colombo to ban import of more than 600 non-essential goods.[6] Traders’ hoarding and profiteering from essential commodities in part led to food and fuel shortages and

Disinformation Fact Sheet Human Rights Misinformation

541

Factsheet: Minorities in India

There is a need for course correction on false narratives around Indian minorities, particularly Christians. One cannot gloss over the affirmative actions on socio-economic development framework intended to uplift minorities and achieving inclusivity. Download Factsheet

Disinformation Fact Sheet Human Rights Misinformation

605

Hijab: History, Mystery and Propaganda

Hijab is not part of any religious faith & the controversy fuelled by Islamists was to portray India as being inimical to Muslims’ interests Neha Dahiya & Rohan Giri Hijab controversy unfolded in Indian southern state of Karnataka when six girl students in Udupi government run pre- university college started wearing Hijab to the classroom beginning December 2021. They were turned out of classrooms for not following uniform rules. These girls started protesting outside the college and insisted on wearing Hijab with claims that it was part of their religious practice. And, they argued for freedom to practice their religion and attire associated with it. The girls in class 11 & 12 also admitted that while taking admissions they had signed an undertaking to abide by the college uniform or dress code. The girls became overnight global celebrities owing to protests while being anonymous until they followed the college norms upto December 30, 2021. The controversy intensified and led to massive protests for and against wearing hijab in several educational institutions across Karnataka and elsewhere in Indian states. The issue gained momentum drawing ire from political parties, activists, and leaders. If one were to dissect the controversy, hijab has roots in Persian and known as ḥajaba or the veil in Arabic. In Quran, hijab is termed as ‘Khimar’ which means curtain or partition in literal or metaphorical sense. Khimar originates from trilateral verb ‘khamara’, which again means ‘ghatta’, to conceal, hide, or cover something. Quran Surah al-Ahzab, verse-53 says, “Let them wear their Khimar over their juyub” referring to their chest. Allah instructed the believing women to bring the fabric to their front by drawing Khimar over their chests, as a covering. Khumurihina (plural of Khimar) used in this Quran verse refers to scarves that females wore on the Arabian Peninsula at the time. Given the clear distinction, justifiably one wonders as to why Hijab is used while Quran refers to it a scarf or Khimar. Subsequently, verse 30 in chapter 24 and verse 54 in Chapter 33, Holy Quran asked both men and women to act with “decency” and “integrity,” both physically and morally. The Quran did not mandate a strictly religious “uniform,” and the first spiritual message did not mean to impose strict or “fixed” dress rules once and for all as propagated by Islamist fanatics but rather to “recommend” an “attitude” or “ethic” towards the body and soul. Khimar versus hijab is not one of Islam’s pillars but rather relate to moral principles, behaviour and relational ethics. Only when religious faith is exercised freely can it meaning something. As a result, discussing Islamic obligation to wear a hijab or Khimar is spiritually and technically incorrect as the Quran states, “No compulsion in religion.” (256 of Al-Baqara). Muslim girls U-turn on uniform code in Udipi town may not have been incidental if one were to examine chronology of events that metamorphosed into an international controversy of sorts. It seems more like a pre-planned propaganda by radical Islamists to create fear psychosis within larger Muslim minorities that total over 200 million painting a dystopian picture about current state of affairs and drive oft-repeated myth that the state was against Muslims. Groundwork for the propaganda began in September 2021 when Campus Front of India (CFI), the notorious student wing of the radical Islamist outfit of Popular Front of India (PFI), began recruiting students from institutions across the country including Udupi. Aliya Assadi, Ayesha Hajeera Almas, Ayesha, and Muskaan Zainab, the four initially stated victims of Hijab controversy created Twitter accounts a month after CFI started its membership push. They subsequently began participating in hashtag campaigns to promote CFI extremist islamist agenda. Almas AH who spearheaded the Hijab controversy was interviewed by BBC, where she claimed that they were not CFI members and only contacted the organization when stopped from attending classes. But, Twitter handles of these girls present diametrically opposite side of the story. On November 1, 2021, they copy-pasted tweets of CFI against the new education policy. A cursory look at the content posting by these girls denotes that it has been done by design simultaneously. On November 8, 2021, these girls participated in CFI hashtag to disrepute Supreme Court decision relating to Ayodhya Ram Janmabhoomi (Birthplace of Lord Ram) issue. On the same day, these girls promoted #BabriMasjidVictimsofJustice hashtag posted by CFI president to oppose the Supreme Court verdict. Likewise, on November 19, 2021, these four Muslim girls participated in CFI #SaveKarnatakaFromFascists campaign against the state government. On December 12, 2021, the purported victims of hijab issue posted copied tweets and same hashtags of CFI in support of arrested criminal Rauf Shareef. Hence, protest for Hijab was motivated by radical Islamist organizations and these girls were only paraded to depict that Muslims were victimized in India. Hijab is not a compulsion as per Islamic faith and certainly not above education for kids from the minority communities in particular. Yasmin Nigar Khan, granddaughter of Khan Abdul Ghaffar Khan & president of All India Pakhtoon Jirga-e-Hind said a uniform code should be followed in schools. If girls wear a burqa or hijab in school premises, then there will be an issue of identification. There should be no politics in this. In schools, all students are equal and religion should be followed to an extent only. Karnataka high court in its interim order pending hearings restrained all students regardless of their religion or faith from wearing scarves, Hijab, saffron shawls in the classroom. There are provisions and restrictions for face covering or wearing a Hijab due to several reasons in different countries. For instance, in 2004, France imposed a fine equivalent to Rs 13,000 on those that wore hijab. Similarly, Syria where the Islamic State or ISIS has had considerable hold, hijab was banned in colleges way back in 2010. In 2012, President Putin’s administration in Russia banned hijab in schools and colleges. Three years later, Belgium banned niqab and Burqa in 2015. On the other hand, Bulgaria made covering of

Human Rights Insurgency

569

Balochistan, an Inhuman Laboratory for Pakistan

Balochis are oppressed at home, neglected abroad, and treated as an inconvenient relic from the past that would not go away. Rohan Giri / New Delhi Last week’s attacks on Pakistan Army Frontier Corps bases at Panjgur and Naushki by Balochistan Liberation Army (BLA) brings to fore the struggle of Baloch people seeking independence from the repressive security regime led by General Qamad Javed Bajwa. BLA’s Majeed Brigade attack on Pakistan’s army establishment is yet another grim reminder of state-sponsored disappearances, day light murders and abuse of Baloch people that serve as inhuman nuclear laboratory for Pakistan that’s long been a rogue state. While Balochis under forceful occupation of Pakistan faced reprisals’ of grave nature and human rights violation, two separate attacks last week bring to fore their struggle to regain lost self-respect and statehood. Lack of basic amenities in Balochistan also highlights the highhandedness of Pakistan’s army and the government led by Prime Minister Imran Khan. Khan may not have been on equitable terms with his army chief General Baweja. But then, the duo seems to have been one in dealing a death blow to Balochis campaign for freedom. Balochis have also been seeking trial of both General Bajwa and Prime Minister Khan by UN-led Human Rights Organizations that wax eloquent on other mundane issues. Balochistan that’s been least populous area under forceful occupation of Pakistan is rich in natural resources but figures at the bottom on human development indicators like education, employment, and medical amenities. Independent & Sovereign Balochistan Balochistan is flanked on the east by Pakistani provinces of Punjab, Sindh, and the Federally Administered Tribal Areas (FATA), and on the west by Afghanistan, Iran, and Arabian Sea. Prior to 1947, Balochistan region was made of four princely states, Kalat, Lasbela, Kharan and Makran. Three months before independence from British rule, Muhammad Ali Jinnah demanded an independent state of Kalat that would have four Baluchi ruled princely states. Through a communiqué on August 11, 1947, Kalat was awarded the status of an independent and sovereign state. However, by October 1947, Muhammad Ali Jinnah had changed his mind and asked that Kalat be formally part Pakistan as a province. The Khan of Kalat was passionate about maintaining their independence and sovereignty. Pakistani army went to Balochistan fraudulently on March 26, 1948 and all the four princely states run by Balochis were occupied on April 1 1948. Pakistani army’s crimes, abuses, torture, arbitrary arrests, executions, and indiscriminate violence increased in the aftermath of capturing Kalat. From then on, Balochistan’s people had embarked on path of liberation struggle due to these excesses. Baloch Freedom Movement In 1948, Muhammad Ali Jinnah forcibly merged this larger princely state with Pakistan by mounting pressure on Nizam Ali Khan of Balochistan. Ali Khan had to give in under pressure. The Baloch do not consider this deal legal and since then, nationalist Baloch have been on warpath to get rid of slavery under successive Pakistani regimes. Nawab Nauroz (Nowroz) Khan also known as Babu Nowroz has been the symbol of Balochistan freedom movement. They were waging a guerrilla war against Pakistan for the independence. Navroz was arrested and thereon reports suggested his murder in Pakistani captivity. Hundreds and thousands of Baluchis have sacrificed their lives in the freedom struggle. Now, Balochis have openly countered Pakistani army brutalities with weapons. Several organizations like Balochistan Liberation Front (BLF), Balochistan Liberation Army (BLA) and Balochistan Nationalist Army (BNA) have had repulsed Pakistani Army’s inhuman ingression on their lives. Balochistan has been in constant state of instability following Pakistan army’s occupation and its intent to resolve the issue through force. Reports also suggest that Pakistan security apparatus was not against deployment of army contingents and conduct raids through Pakistan Air Force to crush the rebellion in Balochistan. In 1974, Pakistan’s Army led by General Tikka Khan, whose tactics earned him fame as the ‘Butcher of Balochistan’. He dropped bombs on Balochis. On May 28, 1998, Chagai, the occupied region of Balochistan was shaken by a series of nuclear bombings that were designed to test Pakistan government’s nuclear capabilities. Since then, Balochistan became central to inhumane nuclear testing for Pakistan. ‘Kill and Dump’ policy Balochistan is a neglected, exploited and ignored region. On the pretext of territorial security and integrity, Pakistan and its security agencies have made it their hobby to violate human rights of Baloch people. Over years, human rights activists in Baloch have been accused of sedition, labeled as terrorists and subsequently kidnapped by security forces or killed in clashes. In several cases, their dead bodies were found on roadside, brutally disfigured or their skeletal remains found in mass graves. Karima Baloch’s assassination in Canada on December 20, 2020 had signature imprint of Pakistan’s ISI. Karima had gone missing before she was murdered, and her body was eventually discovered near Toronto’s waterfront. The Pakistani army launched a “kill and dump” policy in 2009 with zero tolerance for Baloch dissent. Pakistani military establishments utilised brute force to demoralise those demanding freedom and destroy the Baloch national spirit. Never ending brutalities notwithstanding, Pakistan’s security establishment has failed till now in breaking the determination and dedication of Balochis indigenous struggle. A non-violent community has been resorting to violence to protect itself. Pakistani army repeatedly unleashed violence and inhuman acts on the Baloch people each day. Baloch community has taken up arms for humanitarian and defence while the world’s famed human rights organizations and leaders remained mute witnesses to excesses of Pakistan’s army. Pakistan Army had illegally occupied Balochistan on the strength of arms. It is well known that Pakistan is a haven for terrorists. Although Pakistani terrorists have been linked in several terrorist attacks around the world, Balochistan refused to be involved in such acts of terror barring incidents that are part of their freedom struggle. Balochis espouse peace and tranquility. (Author is an operations manager at CIHS, New Delhi) E-mail – [email protected] Reference: http://southasiajournal.net/accession-of-independent-balochistan-to-pakistan/ https://www.vifindia.org/sites/default/files/Balochistan-Forgotten-War-Forsaken-People.pdf https://www.eurasiareview.com/06102020-pakistan-kill-and-dump-in-balochistan-analysis/

Business

470

Tread with caution: taxes & resources

Finance Minister may lean on Chanakya and Thiruvalluvar yet again to sell tax reforms, manage meagre resources and still provide relief to honest taxpayers K.A.Badarinath / New Delhi “Taxation should not be a painful process for the people. There should be leniency and caution while deciding the tax structure. Ideally, governments should collect taxes like a honeybee, which sucks just the right amount of honey from the flower so that both can survive. Taxes should be collected in small and not in large proportions” said Chanakya in arthashashtra of 1534 BC vintage. This should hold good for finance minister Nirmala Sitharaman when she rises to present her tax proposals for 2022-23 as part of the union budget in parliament on February 1. Chanakya’s celebrated treatise, arthashastra on socio-economic principles has been her beacon in last three budgets. Her predecessor and mentor, late Arun Jaitley had leaned heavily on the celebrated Indian administrator to tide over tight economic situation in the past. This time round, it may not be any different. And, one can expect Nirmala Sitharaman to dip into Chanakya’s teachings next Tuesday in articulating her taxation package. Her tax proposals in all probability should not only push growth but allow enough resources in the hands of individuals, families and companies to meet expenses, consume and invest as the case may be. Buoyant GST collections that ranged between Rs 130,000 – 140,000 crore during April – December 2021 and improving situation following Omicron induced Covid 19 third wave should provide her the confidence to roll out an acceptable tax package that will push consumption led demand for goods and services. First thing the finance minister may attempt is heed the advice on pruning the ten corporate income tax rates that range between 5.2 per cent to 42.744 per cent applicable to domestic and foreign companies based on their turnover, area of operation and uniqueness. Effective taxation will have to be brought down taking revenue considerations on board. Can effective tax rates for companies actually be brought under 5 – 35 per cent bracket is perhaps what Finance Minister should consider? Her corporate tax proposals may have to include the foreign companies that may expand their presence as part of on-going Make in India and Production Linked Incentives campaigns. Getting rid of all surcharges and cesses levied at every touch point on corporate income tax and GST may have to be considered by the finance minister though its easy said than done. Revenue considerations notwithstanding, reining in the fiscal deficit to below six per cent should be considered while rejigging the tax table. Same is the case with redrawing income tax rates for individuals. While there have been suggestions for aggressively taxing the rich individuals, wealth creators and job givers may be allowed the leeway to get on their work without liquidity squeeze. There have been suggestions to consider the work from home allowance provided by companies for inclusion under standard income tax deductions provisions owing to over two years pandemic. Similarly, professionals and workers have lost their pay big time and millions have been given the pink slips. Finance Minister Sithraman may have to find ways for providing them some relief as has been done in last budget. Her predecessor Arun Jaitley has been popular with both companies and individual taxpayers as he managed to provide succour to each one of these categories in every one of his five unblemished budgets. Sitharaman will do well in adopting this time tested approach. Not just the actual tax burden, as Chanakya’s arthashastra surmises, taxes should be easy to calculate, convenient to pay, inexpensive to administer and equitable in its burden on various stakeholders. Taking forward these tax reforms – on both direct and indirect fronts – is need of the hour. One big avenue for mobilization of revenues has been sale of government stakes in large state-run companies as part of its determined bid to get out of the business of being in business. While LIC initial public offer and offer for sale (OFS) should bring in about Rs 115,000 crore, getting divestment and strategic salee of BPCL where Rs 55,000 crore has been targeted should be done next fiscal. Similarly selling IDBI Bank at a valuation of Rs 25,000 crore and two more state-owned banks should be pursued aggressively, if that helps reorganizing the banking sector. Similarly, selling Shipping Corporation, Pawan Hans and BEML in part or as on where basis should bring in another Rs 40,000 crore. Well most of these companies and banks were on her radar already. But, the sale did not move forward this fiscal for a number of factors. Achieving disinvestment targets may help find resources for ambitious capital investments as well as development expenses especially in infrastructure, health and education apart from providing water at every door step. Barring a few tweaks in GST rates as per recommendations of GST Council that she heads, drastic restructuring on the economic front may have to wait especially from taxation side. As Tamil saint philosopher Thiruvalluvar in Tirukkural postulated, finance minister may have to take a pragmatic view of both domestic and external economic situation while unveiling the finance bill. Yet another predecessor of Sitharaman, Palaniappan Chidambaram had taken refuge in Tirukkural to sell UPA’s economic agenda. The tamil philosopher saint may not have had finance ministers in mind while writing 1300-odd aphorisms. But, saint Thiruvalluvar’s couplets have withstood the test even in twenty first century on tax breaks, prioritizing expenses from the government kitty. Kural’s chapter on knowledge of power came handy for Chidambaram to ward off unwanted pressure from different lobbies and stakeholders. Take care not to give up exertion in the midst of work, the world will abandon those who abandon their unfinished work. Accumulate wealth in order to spend it. These two kurals of Thiruvalluvar can guide finance minister in her jest for reforms, managing resources and economy. Over to Finance Minister! (Author is Director & Chief Executive of Centre for Integrated and

Human Rights

503

Winter Olympics: China heading for isolation

Communist Party of China and President Xi’s track record of human rights violations and unabated expansionism have riled the world Amritpal Kaur / New Delhi Winter Olympics and Paralympics this year being held in China beginning next week were to be showcased as President Xi Jingping’s acumen and dexterity with which he engaged the world. If reports were anything to go by, it’s not working for President Xi Jingping and his Communist Party of China that’s burning midnight oil to prevent the country’s total isolation in the international community. First came the political and diplomatic boycott of Chinese winter Olympics by the world powers to send out a strong message against well documented human rights violations of Uighur muslim minorities. Though most countries may still send in their sporting contingents, their officials will skip to protest against abuse and genocide unleashed against Uighurs. Going back to its origin in 1896, Olympics have been touted as the bridge to mitigate differences among countries and forging a bond of friendship. On the contrary, Winter Olympics 2022 being held at Beijing have walked into a grave shadow of all round acrimony due to China’s arbitrary actions with a number of Southeast Asian neighbours’ boycotting the games. Looming threat of Omicron variant of COVID-19 and massive internet crackdown by the powerful regulator in China has also not gone well with sporting nations. Since the last decade, Chinese growth story has translated into its assertiveness and obsession for blanket security theology. Its resurgence has made China more vocal treading on the verge of covert violence. One dimension of such an upturn has been China’s territorial disputes with its neighbours like USSR and Myanmar but with varying outcomes that range between amicable solution and outright arm twisting. However, amicable solutions have been scarce and far in between. In fact, the last amicable resolution of border dispute that China achieved was in 2011 with Tajikistan. On the contrary, the past decade shows a marked change in the Chinese modus operandi in dealing with such disputes. Since 2009 Beijing has been claiming unilaterally South China Sea its territorial waters by pushing forward Nine-dash Line which demarcates the whole of the water body as its territory. South China Sea has been a central to territorial dispute between China and its South East Asian neighbours. And, this got accentuated beginning 2013 when China started developing Spratley Island and Paracel Island region. The Chinese state has been claiming ownership of most uninhabited islands in South China Sea Zone at a fast pace. These Islands include Cuarton Reef, Fiery Cross Reef, Gaven Reef, Hughes Reef, Johnson South Reef, Mischief Reef, Subi Reef. Though Vietnam had been reclaiming some islands, what set the alarm bells ringing was the urgency with which Chinese started to develop these shoals. During 2014-16, China reclaimed more islands and territories than all other nations combined in the region’s history. Graver aspect of this Chinese belligerence is militarizing these islands. South China Sea is a narrow body which is also strategic as an important marine route that accounts for substantial world trade at over $ 3 trillion annually. Chinese attempt to capture scattered islands and fortifying them as its military zones has unnerved several of its friends and foes alike. Discreet reclamation of territories led to coining of term, ‘Salami Slicing’, that denotes Chinese attempt to expand its territory, one shoal at a time. Chinese expansionism has been in full display in its tussle with its India. Though settlement of Himalayan border issue has been an elusive phenomenon, over a period India and China had developed a mechanism to keep bilateral relations cordial while taking a piecemeal approach to disputed territory. Passage of Border Peace and Tranquility Agreement (1993) during the Narasimha Rao era is a case in point. Subsequently, technical agreements to manage the border issues were adopted after tough negotiations in 1996, 2005, 2012 and 2013. However, recent skirmishes in the high Himalayas including Galwan crisis, Pangong Tso tussle, Depsang Plain offensive in 2020 is a worrying signal. According to experts, China is engaged in salami slicing of Himalayan border by taking one post at a time. It has also been speculated that China is keeping the Himalayan fault lines simmering to hem India and gain simultaneous advantage in the Indian Ocean as an emerging blue water navy. This expansionist posture, mastering the seas around and major sea lanes of communication, it’s a crucial move in the strategic chess that China continues to play. Chinese arm twisting and expansionism is visible in the recently enacted Land Border Act (2021). On the face of it, the act charts the course that China is to adopt in the border determining process. It states that territorial sovereignty is inviolable and China would ‘resolutely defend territorial sovereignty and land border security.’ But, the trouble with this assertion is that only India and Bhutan do not have a settled border with China. Further, China’s ‘official map’ unilaterally claims entire Arunachal Pradesh, Barahoti plains of Uttarakhand and territory till 1959 claim line in the Ladakh region as its own land mass. The act of China declaring complete ownership of rivers running through its territory setting aside claims of lower riparian states had led to more disputes with neighbours. As far as India is concerned, its recently adopted Land Border Act has no validity since it has no veracity or solid ground. China seems to be waging a psychological offensive against its neighbors, through posturing, unilaterally declaration of unacceptable claims on disputed territories as well as constantly shifting goal posts. Since the Sixth Plenary Session of Communist Party of China in November 2021, it has been obvious that President Xi would continue into his third term as Chinese President. He has already put himself in the list of great leaders of China next only to Mao Zedong and Deng Xiaoping with his thought enshrined in the Chinese Constitution. Winter Olympics for him could have been a virtual crowing, a cherry on top of

Business Policy

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Growth, Growth & more Growth should be the mantra!

Work opportunities for seekers & carving out more job-givers be the focus, emphasis on big picture will drive economic expansion K.A.Badarinath / New Delhi When finance minister Nirmala Sitharaman rises to present her fourth budget in continuum on February 1, the dedicated app, tablet or bahri katha will in all likelihood croon ‘naya bharat’ – New India — big time. One should not miss this soft singing for the determined bid she will make by laying threadbare plans to build ‘New India’ of her leader Prime Minister Narendra Modi’s dreams. As the country gets ready for next economic prosperity cycle, 75-years post-independence, this plan and vision to turn India into a global economic power house would definitely be significant. Finance Minster Sitharaman who’s credited with steering the economy through the Covid 19 pandemic deftly cannot afford to ignore or set aside the challenges that besiege Indian economy in medium term. Well, if third wave of corona virus infections is waning out as experts believe, this should signal a comprehensive plan to rebuild what was lost to the pandemic and nurture the dream of $ 5 trillion economic muscle that drives the global growth impulses. GDP growth of 9.2 per cent projected for 2021-22, highest in 17-years should be the basis for rolling out the big picture while holding the handle firmly to sustain this growth momentum next five years in a row. Crude prices hitting $ 100 from current $ 86 per barrel may be the first big challenge she needs to factor in her budget package. Fuel induced inflationary pressures is what could moderate her big plans. Let’s not forget that fuel inflation was 10.95 per cent in December, 2021, 13.35 per cent in November 2021 and 14.35 per cent. With oil imports to cross $ 100 billion again next fiscal, reining in consumer centric inflation will still be a tricky preposition given that it touched 5.59 per cent in December 2021. Pointing to inflationary pressures leading to interest rate hikes is not to distract the Finance Minister away from her top priority to put the economy on high growth trajectory. We should be able to live with 4 – 6 per cent retail inflation next three years even as Nirmala Sitharaman goes about methodically in fiscal consolidation to putting economy on firm expansion mode. Unlike US and Europe that are swept with 30 – 40 years high consumer inflation, India still has headroom in inflation management as well as moderating interest rates. Growth, growth and more growth should be the only mantra that dictates Finance Minister’s budget package which got deviated last two years owing to Covid 19 management and related expenses. A conscious call will have to be taken on front-ending capital and infrastructure investments with at least 10 per cent increase in budget expenditure that was pegged at Rs 34,83,236 crore for 2021-22. Government will have to tango both domestic and foreign investors to sustain healthy growth momentum with expansion in industry, services as well as exports. Since farmers have delivered and continue to do so with about four per cent agriculture growth, emphasis should be on industrial expansion and double digit growth of services with focus on external markets. In this big picture, keeping the fiscal deficit at six per cent may not be a breeze next fiscal but doable given that 6.8 per cent target set for 2021-22 is all set to be achieved. Healthy growth in goods and services tax revenues is a big plus in deficit management. About Rs 1.29 lakh crore collection in December 2021 and Rs 1.31 lakh crore in the month before only hints at pent up consumer demand that’s driving sales and resultant revenue mop up. Merchandise exports at about $ 400 billion in 2021-22 are again a possibility. During January 1 – 7, 2022 alone, exports grew by about 25 per cent to $ 7.63 billion. Even in December 2021, India clocked an export growth of 36.2 per cent to $ 23.8 billion in just three weeks. This momentum needs to be sustained to touch a possible $ 500 billion in the entire next fiscal. Putting together a big package to boost India’s share in global merchandise exports is something that Finance Minister Nirmala Sitharaman can do. Given the adage that taxes are not exported, boosting tax revenues through exports is not what should happen. Instead exports linked manufacturing will help increase the work opportunities that have been hard to come by. Setting up export-linked manufacturing infrastructure will drive growth in near future. This brings us to oft discussed question of growth versus jobs. Without creating jobs for millions of aspiring youngsters or an environment for job-givers, the $ 5 trillion dream means nothing for 1.4 billion Indians that are on the move. Official data shows that 1.39 million net new jobs were created in November 2021 registering 37.9 per cent increase year on year basis. Finance Minister Sitharaman will have to carve out opportunities for workers in informal sector where millions may have to get into manufacturing, services and export-linked merchandise production. This needs to get a little innovative, if her budget package has to be accepted and sustained. (Author is Director & Chief Executive Officer at Centre for Integrated & Holistic Studies. Views expressed are author’s own.)

Business

493

Unleash Unicorns, Support Start-Ups

Let India home to one million start-ups, 1000 unicorns in four years. Extend tax incentives, holidays; slash patents, trademark fees further K.A.Badarinath / New Delhi When Union Commerce and Industry Minister Piyush Goyal proposed creating 75 unicorns during seventy fifth year of India’s Independence, cynics sneered and questioned the entire start up ecosystem that evolved organically in last six years. On social media pages, these doomsayers even bracketed Indian start- ups as some kind of a scam in the making without recognizing the inherent talent, technology skills and aspiration of Indian youth that has gone in to provide multiple cost-effective solutions and businesses. Cynics and naysayers should take a walk rather than questioning the pace with which digital enterprises have reported growth, success, attracted international capital and were toasted the world over. Many of these start-ups have not only moved up as unicorns with over $ one billion valuation each but effectively challenged established large technology companies with deep pockets. There’s no reason why we cannot create 75 unicorns given that 44 such firms came into being in 2021 with eye popping valuation of $ 89.19 billion. This is more than unicorns that were created in the previous decade. Chasing US with 487 and China’s 301digital enterprises, India has upended as the fulcrum for third most valued technology start-ups with unicorn status. Today, India boasts being home to 82 unicorns valued at $ 274.17 billion. As per independent research and consultancy firm Hurun Global, these unicorns spread across sectors like education technology, financial services, software services to e-commerce in pharmacy and groceries have made waves especially during Covid 19 when lock downs and movement restrictions have been a norm. Every seventh unicorn created globally has been done by youngsters in India and Bengaluru emerging as the epicentre for these digital enterprises with immense value. Rightly, Prime Minister Narendra Modi lauded emergence of a flurry of unicorns in just 12 months while celebrating the Swami Vivekananda Jayanti that marks national youth day. There’s no denying that India has the potential to evolve as the unbeatable destination for unique digital enterprises given the country’s love for everything around technology, innovation and creativity that’s virtually flummoxed the world. Over 50,000 such enterprises are in various stages of development taking off from incubation. From providing innovative security solutions, environment management, healthcare, space to industry 4.0, these start-ups have changed rules of game redefining Brand India as the mouse movers did in last two decades. These start-ups were primarily responsible for upping the valuations of traditional businesses and moving India’s position on the Global innovation index to 46 last year from 74th position in 2016. While a firm base for these lilliputian enterprises has been laid in last six years, shifting focus to manufacturing, automation, research and development start-ups may galvanise the traditional enterprises as well as businesses. Similarly, finding technology driven solutions faced day to day is an area that the unicorns as well as start-ups can add value. Targeted expansion in number of decacons with a valuation of $ 10 billion and above can be attempted in next phase. Right now, India is home to just four of them in Byju’s, Oyo Rooms, Paytm and Flipcart. A comprehensive strategy to nurture at least ten decacons should be put in place by the government in partnership with the start-ups ecosystem. Doubling the number of unicorns run by our women entrepreneurs to 26 next one year by the time we celebrate the startup day on January 16 is again doable. Let’s not forget that eight of the unicorns run by women emerged in just one year with Falguni Nayar (Nykaa), Gazal Kalra (Rivigo), Ruchi Kalra (OfBusiness), Divya Gokulnath (Byju’s), Ghazal Alagh (MamaEarth) and Saritha Katikaneni (Zenoti), among others made it to the list. Union budget to be presented on February 1 should be the right forum to review, revise and make fresh booster dose announcements for the sunrise start-ups and unicorns that have not only evolved businesses in trying times but created work opportunities for talented youngsters. Right now, start-ups pay only 20 per cent of patent filing fees. Barring a nominal fees, can we do away with major chunk of the compliance burden? Both product and process patents have seen a huge up tick at 28,000 last year as against 4000 in 2013-14. Start-up ecosystem has contributed big time to the high value patented products and processes. If finance minister Nirmala Sitharaman has the leeway, should she not consider providing 90 per cent discount on trademark filing fees for start-ups? Already, these digital enterprises enjoy 50 per cent discount on trade mark filing fees. Reduction in the compliance burden has in last six years has led to registering over 250,000 trademarks as against 70,000 in 2013-14. Improving the patenting and trademarks regime apart from extending the zero-tax impost should help India top the high value start-ups game in next four years. States like Karnataka, Andhra Pradesh, Tamil Nadu and Telangana should in particular pick up the gauntlet to blossom a million start-ups by 2025. Moving these start-ups the value chain with a mix of artificial intelligence, robotics and internet of things can be the next phase to look at. (Author is Director & Chief Executive Officer at Centre for Integrated & Holistic Studies. Views expressed are author’s own.)

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