Besides informal sectors, the lower strata of society and daily wage workers faced the greatest impact due to social distancing as well as reduced household income
The second wave of the Covid-19 pandemic has taken a vicious toll on India's health, but the economic toll has also been heavy, though nothing like the carnage seen in the first quarter of the last fiscal year, when GDP growth crashed 23.9 per cent in response to the Centre's no-notice lockdown. India's GDP shrank 7.3 per cent in 2020-21 (in real terms adjusted for inflation). This is the worst performance of the Indian economy in any year since Independence.
Almost all the sectors have been adversely affected as domestic demand and exports sharply plummeted with some notable exceptions where high growth was observed. A major concern of the second wave is that the virus has spread into India's hinterland and could wreak havoc in villages, towns and small cities. Lockdowns may help break the chain of transmission, however they will just postpone another surge unless the gap period is utilized to vaccinate the people.As of now, the country's GDP growth is likely to be below the expected 10 per cent.
To complicate the situation further, the wholesale price-based inflation shot up to an all-time high of 10.49 per cent in April, on rising prices of food items, crude oil and manufactured goods, and experts believe that the uptrend is likely to continue. This is the fourth straight month of uptick seen in the wholesale price index (WPI)-based inflation. In March, 2021, it was 7.39 per cent.
Centre's flagship welfare schemes have kept pace despite slowdown. Schemes like MGNREGA, Ujjwala, NSAP and PM Awas Yojana have seen a big jump in both physical and financial achievements in FY21 as additional succour was provided by the Centre to people affected by Covid-19. Merchandise exports surged a record 196 per cent year-on-year in April as the country had witnessed a Covid-induced lockdown throughout April last year. However, what comes as a pleasant surprise is that even in absolute terms, exports in April stood at $30.6 billion, up almost 18 per cent from the same month in 2019 (before the pandemic struck).
In these times, the suffering of the common man can't be penned in words. As mentioned before the wholesale price-based inflation has jumped to double digits. There has been a sudden surge in prices of edible oil and pulses. In the past few weeks, tur prices in retail markets have been over Rs 7,000 per quintal, which is almost Rs 1,000 more than its 2020-21 MSP. Urad prices are ruling even higher, at around Rs 8,000 per quintal. The market price of moong is also near its MSP of Rs 7,196 per quintal. To keep retail prices from rising further, the central government on Saturday allowed free import of tur, urad and moong. The move, following a gap of three years, comes weeks before the beginning of sowing for the kharif season.
Fuel prices in India continued to inch towards the Rs 100-mark. The spike in diesel prices have contributed to a growth in freight rates across ways of transport. High transport cost leads to increase in higher inflation, impacting industry. High fuel prices will have an impact not only on people but also on the automotive sector - a large source of employment in the country - as vehicle sales may see a sharp drop. A contraction in demand will impact lakhs of MSMEs that supply goods to the sector. The public transportation sector is already mulling a hike in rates in view of rising operational costs.
Firming international crude oil rates and extremely high taxes levied on fuel are the key reasons behind the latest round of petrol and diesel price hike in the country. The biggest reason behind higher fuel prices in the country is the high rate of central and state taxes. Even when international crude oil prices plummeted in 2020 due to lower demand, Indians kept paying higher rates for petrol and diesel due to the various taxes levied. At the moment, Indians pay one of the highest taxes on fuel in the world.
This pandemic has taught many money management lessons. It hurts the most when your loved ones fall sick and the financial strain to ensure that they get the best medical care makes the hurt a double whammy. This blow, at a time when a large section of the working population has witnessed pay cuts and job losses too, adds to the pressure. As if these were not enough, work from home and focus on hygiene and wellness have simultaneously increased routine monthly expenses for many families.
Most Indian corporates expect the ongoing pandemic to influence the direction of their business strategy over the next three years.What is striking about the trends in high-frequency unemployment rates is their volatility throughout the Covid-19 period save those during absolute lockdown. The volatility has some implications for the labour market and earnings. This confuses people as to whether to enter the labour market or not. This could rather lead to 'discouragement effect' in the sense that people might be dropping out of the labour force far more speedily than they did before. Also, they disrupt the earnings of workers which would have led to two effects, dis-savings (exhaustion of the cash reserves and may be pawning of small assets) and resorting to fresh borrowing which could be weaker and thereby they may end up paying usurious interest rates. As informal sectors were impacted in terms of job losses, the lower strata of society and daily wage workers faced the greatest impact due to social distancing as well as reduced household income.
We are all aware of the flurry of activity at the start of the current financial year: interest rates on small savings schemes, of which the post office schemes are a part, were reduced drastically through a government notification, on March 31. The very next day, the order was withdrawn and the erstwhile rates were maintained.As per a historical decision of the government, the rate of interest on small savings schemes are aligned with the government security (G-Sec) rates of similar maturity with a spread of 25 basis points (bps), with certain exceptions.
But there is a huge gap in existing interest rates in comparison to the general existing formula. Currently the Post Office Savings Deposit rate is at four per cent, whereas interest rates on many small saving instruments are higher, like in National Savings Certificate (NSC), Kisan Vikas Patra (KVP), Term Deposits, etc. The next review is due on June 30. In case the rates are revised downwards, it is advisable to lock in at the currently available rates, where applicable, by June 30.
''The prospects for the Indian economy, though impacted by the second wave, remain resilient, backed by the prospects of another bumper rabi crop, the gathering momentum of activity in several sectors of the economy till March, especially housing, road construction, and services activity in construction, freight transportation, and information technology (IT),' RBI said in its annual report.
We will continue to see a surge in the gig economy across all sectors. Furthermore, organisations will be tempted to move away from legacy models of hiring by choosing performance over pedigree. Our growing reliance on collaborative tools and technologies, such as artificial intelligence, machine learning, and cloud computing, will yield new skill sets and roles in the coming years.
The author is a GST specialist and analyst. The views expressed are personal.
This summit could be the beginning of a new world order based on cooperation & alliances
Rich economies known as G7 meet in person this week in the UK during one of the most volatile times in human history. Experts may term it a political meeting witha new president in the US and other participating leaders facing tough questions and scrutiny back home over the handling of the pandemic. This summit could be the beginning of a new world order based on mutual cooperation and strategic alliances for solving some of the toughest challenge's humanity faces. India is an invited country to the summit and the Prime Minister will attend a virtual meeting with global leaders. What makes India's participation key to this summit is the other bunch of nations who have been invited to participate. India for some time has been trying to shed the cold war era mindset of maintaining a safe distance from 'at war' adversaries and move closer to the western powers. The aggressive military moves of China in India's northern and north-eastern borders, coupled with open support to India's western neighbour for spreading hatefulmisinformation, its aggressive naval exercises in South China sea,it facing questions about the origin of the pandemic and finally China's techno-military dominance in global ICT supply chains makes this case compelling. India is happy to collaborate with the Western powers (read G7) to tackle the global problems while making its presence felt in the room. India's constant push on Quad is a welcome step in the right direction. India in a way is likely to take a Quad synched position on various issues at the G7 summit, as most of the other member countries of the Quad are part of the meeting.
India has a unique position to offer to the world and reiterate its increasing economic and strategic importance. The invite to India by UK Prime Minister Boris Johnson (despite opposition from one of the G7 members)signifies a growing close bonding between UK. This could serve as a bookmark reminder for leaders controlling 40 per cent of global GDP to understand the newemerging world challenges, specially after, and in the middle of, the Covid crisis, and how strategic alliances with countries such as India could be beneficial for the long run. India for sure is likely to raise the issue on vaccine cooperation including removal of patents. It is significant to note that India is one of the key and largest vaccine manufacturers in the world and the current vaccination process being undertaken within domestic boundaries could be the biggest ever in human history. It is important to note China despite having a large population and large economy has not been everable to make it to high table of G7 since 1975 (the year when this intra governmental alliance leaders first met). This is an ideal opportunity for India to push its case on strategic alliances and multilateral agreements on the healthcare front beyond vaccine manufacturing. India is in a unique position to offer thousands of healthcare professionals for the globe to access. India's Prime Minister has openly expressed the desire to develop the nation as the pharmacy of the world, with relatively cheapermedicine and world-class healthcare professionals. The G7 group of nations have some the most advanced research facilities in pharmaceuticals, emerging biological/health threats to humans and use of new technology such as artificial intelligence to predict and control diseases. India could well collaborate with G7 and emerge as one of the key players on the healthcare front besides protecting its interests on the borders with strategic defense ties.
(The author is a policy analyst. The views expressed are personal)
( Courtesy Pioneer )
Then there are all the suggestions that the UFOs are optical illusions, meteorological phenomena or electromagnetic events
The Silly Season has come early this year. Normally it happens in August, when wicked people all over the northern hemisphere temporarily stop doing evil things to take their children to the beach and enjoy the last of the summer. With no bad news to report, desperate journalists will run any story, however silly.
Why is it Silly Season in June this year? Because the US Department of Defence has announced that it will release a report on 'Unidentified Aerial Phenomena' (UAPs), which is what people who want to sound grown-up say instead of 'Unidentified Flying Objects' (UFOs).
The key parts of the report were leaked at once, and there's nothing really new in it apart from the categorical assurance that the UFO 'sightings' were not actually just top-secret US technology. The story practically took over the US media for a day, and much of the rest of the world's as well. Even readers of this column asked me to comment on it.
The only reason that UFOs/UAPs were such excellent media fodder in their heyday in the 1950s, and that they are making a comeback now, is the hope and/or fear that 'the aliens are among us.' 'Flying saucers', in other words, controlled by aliens who may or may not be friendly.
There are rival, non-alien-related explanations, but they all fail. For example, there is the hypothesis that these mysterious flying objects are really ultra-advanced Chinese or Russian technology being tested over the United States, but that's utterly implausible.
"Any sufficiently advanced technology is indistinguishable from magic,", as Arthur C. Clarke's Third Law puts it, but at no time in modern history have the major powers of this planet been that far apart in technology. Besides, one does not test one's most advanced flight technology over what is potentially enemy territory.
Then there are all the suggestions that the UFOs are optical illusions, meteorological phenomena or electromagnetic events. Most alleged UFO sightings undoubtedly do fit into one of those categories, but there is a residue of cases where no obvious explanation is available. However, that does not entitle us to assume that we are being watched by aliens.
I'm not saying that 'aliens' don't exist. The fact that life has emerged on this planet shows at least the possibility that it exists on other planets too. Same goes for intelligent life and technological civilisations. And there are squillions of planets in the universe, so in theory there could be at least a few zillion civilisations.
On the other hand, there is the problem of the Great Silence. As physicist Enrico Fermi put it back in 1950: "Where is everybody?" The universe is very old, so if civilisations were common, and long-lived enough to develop interstellar travel, then they would have spread throughout the universe by now. Their existence would be obvious.
That is Fermi's 'Paradox'. It's seventy years old, and still unanswered. However, there is one chilling possibility that some experts do take seriously.
Conditions in the universe have been suitable for life for at least the past ten billion years, so the first civilisations might have emerged that long ago. Not necessarily anywhere near our own galaxy, but if even one civilisation cracked the problem of long-term survival, it could have spread throughout the universe in less than one billion years even without faster-than-light travel.
Would it subsequently allow rival civilisations to emerge, some of which would certainly be dangerous to it? Or would it constantly monitor planets with life to ensure that if any such rivals do emerge, it can destroy them before they became dangerous?
It's a far-fetched hypothesis, but it's completely rational and it would resolve Fermi's Paradox. Yes, the universe is full of life, but no, there are not a lot of civilisations: one of the earliest ones has been strangling all the others in their cradles for billions of years. And, of course, it avoids communicating by means detectable to dawn civilisations like our own.
I don't believe this is true, but it COULD be true. It would certainly provide a justification for the presence of an autonomous monitoring system set to report to home base about any emerging civilisation problem on Earth (and on a bajillion other planets with life)- or just to destroy the new civilisation automatically once it has crossed a certain threshold. What I find completely incredible is the notion that such a ruthless, universal, billions-of-years-old civilisation would be monitoring us with devices that we can actually see. That does not compute.
The author is a Gwynne Dyer's new book is 'Growing Pains: The Future of Democracy (and Work).' The views expressed are personal.
(Courtesy Pioneer )
All segments of our population, percolating down from the politicians, have done grave injustice to our great nation. Even the citizenry has!
As a nation, COVID-19 has put us all to a severe stress test and extracted a heavy toll. However, our collective conduct and response to it was unsatisfactory. This is a once-in-a-century health crisis. Ironically, it is being fought at a political level, at common man’s expense. The irresponsible, motor-mouth media coverage and open hostility to logic and reasoning are quite astonishing.
First came the question — Why the lockdown? Then politics on migrant sufferings ensued; followed by vaccine hesitancy created by a few parochial politicians. Later, it was “why vaccine diplomacy”? The Government felt it had prevailed over COVID-19 better than any other country. Alas, the triumph was short-lived. The pandemic chose not to follow the eloquent graphs and, instead, spread like wildfire at the second instance — engulfing the country with ruthless speed.
Consequently, the health system collapsed with patient overload. The country felt humiliated by falling flat on its face and now gasping for breath. The critics quickly got their mojo back and floored the Government on several counts of alleged mismanagement. Amid this spectacle, media and the political class chipped away the national spine.
Showcasing bruises rather than the breakthroughs achieved, the Opposition and media offered their own narrow politics and collective depravity. They gravely compounded the confusion and trauma of the common man with their insensitive utterances and reporting, with lasting consequences. But are only politicians and media to be blamed? Reckless public flouting rules exacerbated it. In a country like India, it can be a recipe for disaster. It is akin to offering the pandemic vector, velocity and virulence, all at the same time. No wonder the country was on the skids in the second wave.
The mayhem on TV news channels gave the impression that States and their administrators were running like headless chickens. Common sense, sensitivity and conscience were also given a hasty burial. The motor-mouth media scavenged every ounce of this tragedy. The forensic reporting of the deaths and burials and ambulance-chasing continued regardless, assaulting and shocking the viewers’ senses. Tracking the death numbers became a competitive sport. As if arriving at a statistically correct figure would lend more credence to journalistic reporting. Instead of erring on providing a measured tone and tenor, media got busy framing the macabre. In the process, it inflicted incalculable psychological trauma and emotional scars on an entire generation.
Foreign media laid bare their fangs. They have dissed us before and their continued interest in framing narratives for India — as an inferior nation that can’t get anything right — continues with charming regularity. Misrepresenting India pays rich dividends to the western press. Their entrenched prejudices towards our country fail to meet the journalistic standards they avow to follow. They hunted for stories at the burial grounds. Invading the privacy of families, without consent, they gleefully and luridly captured drone shots of burning pyres. The western press couldn’t resist using the tantalising visuals to deck up their front pages. Even in this hour of universal human tragedy, the foreign media swooped so low; and how!
Adding to this rot are the ever-bankable, omniscient award-winning fiction writer celebrities. One wonders, what do these creatures eat and breathe to radiate such toxicity? Commenting on statecraft, health and policy decisions are perhaps the same things for them as writing fiction. One thing is clear, the western press has no appetite for any meaningful engagement with the country, its aspiration or its trials and tribulations.
Also, perplexing amidst all this was the hyper-ventilating doctors posting emotionally charged appeals on social media. Such outbursts needlessly created further panic among the common public. Maybe the intent was to spread awareness on the ruthlessness of the pandemic — but it compounded hopelessness. We can’t afford doctors, our frontline workers, to break down and be seen shaken and helpless. It sends a jarring message. Imagine a soldier at our borders broadcasting to the world all the hardships he is suffering on duty, would that be acceptable to us?
Umpteen “experts” and talking heads added chaos and cacophony more than comfort. The pandemic communication protocols are weak and need to be strengthened. A pool of well-trained medical professional who can articulate and provide consistent messaging in the most reassuring manner should form the backbone of any pandemic communications scenario in future. It’s time medical education emphasises on teaching and “patient communications” as key soft skills and management subject area. Doctors require training on how to deliver critical health information to public and elicit trust and confidence among it. Most practising doctors seem to be incapable of drawing upon this vital skill.
Finally, a citizenry with no individual responsibility and expecting everything to be done by the Government is sheer delinquency. An irresponsible and devil-may-care attitude of the citizens was visible all through the pandemic. Nothing will work unless we do!
(The author is a communications specialist based in New Delhi. The views expressed are personal.)
China is trying to boost its influence by providing COVID-19 vaccines to the Southeast Asian nations
As China hosted the 10 Asean Foreign Ministers earlier this week, the fault lines between the Communist State and the Quad grouping seem to be deepening, largely with regard to the Indo-Pacific region and the South China Sea. China’s expansionist blueprint, especially under the Belt and Road Initiative, is an open secret. To counter India’s “Vaccine Maitri” initiative and a similar broad-based plan among the Quad members — an informal grouping of India, Australia, Japan and the United States —now China has pledged to provide COVID-19 vaccines and to cooperate in vaccine research with the Southeast Asian countries as it aims to boost influence in the region to counter the US amid recent military incidents involving the Philippines and Malaysia in the South China Sea. The Communist country is basically looking to push back against the recent regional outreach of the Quad. Chinese officials have in recent weeks stepped up Quad’s criticism. In Sri Lanka and Bangladesh recently, China’s Defence Minister called on both the countries to reject “military alliances”, which is their loose translation for the Quad. For its part, Quad’s diplomatic and military arrangement was widely viewed as a response to increased Chinese economic and military power.
In the latest round of developments, three-quarter of the Quad members — that is, minus India so far — have come out in the open to say that it’s pertinent to be wary of China amid the unfolding events as it attempts to tighten its hold in the Indo-Pacific region by exerting influence among the neighbouring countries. US Secretary of State Tony Blinken said in Washington that China is the single nation that militarily, economically, diplomatically and politically has the ability to try to “disturb” the rules-based order that America, its friends and allies strongly defend. Speaking of bilateral ties, China was mentioned as both the “most consequential and most complicated relations that the US has”. Around the same time, in Tokyo, Japan and Australia shared concern about China’s increasingly assertive actions in regional seas and its “coercive or destabilising” behaviour. It’s about time that India too openly came out to speak in support of its partners in Quad — which is just an informal strategic dialogue that is maintained by talks among the member countries — and didn’t fight shy of calling a spade a spade.
( Courtsey Pioneer )
With nothing seemingly going his way in the Congress, Jitin Prasada has taken a leap of faith
The election season is upon Uttar Pradesh. Even though the State Assembly, last constituted in 2017, has breathing time till March 2022, politics has already warmed up with one of the prominent UP Congress faces, Jitin Prasada, shifting allegiance to the BJP. The latter, being the incumbent party readying to return to power, got a fillip with Prasada’s entry. Political pundits promptly did some caste calculations to point out Prasada being a Brahmin, his shift would boost the sentiments of members of that caste in the BJP and even bridge any schism caused by the Brahmin-Rajput political rivalry in the State. It is not the case that the BJP is desperately looking for Brahmin support right now. Be that as it may, the young leader’s departure first and foremost perhaps represents the frustration among Congress leaders of his stature in UP and, secondly, tells the story of the Congress itself at a time when the party would be looking to the coming Assembly elections to somehow resurrect itself politically. It drew a blank in West Bengal, lost to the Left Front in Kerala and was thrown out of power in Puducherry in the last round of Assembly elections. The coming round is a tougher task, with six of the seven States having the BJP Governments. Uttar Pradesh is where the fight is, really. It has the highest political stakes for all parties, the BJP in particular, but the Congress has its back to the wall.
For one, Rahul Gandhi lost his Amethi seat in 2019. His sister, Priyanka Gandhi Vadra, is a member of neither House in the Assembly though she is the All India Congress Committee (AICC) general secretary for the State. The brother-sister duo is occasionally seen at events in the State, but that just about sums up the Congress presence there. Senior Congress leaders like Pramod Tiwari, Salman Khurshid or Imran Masood appear to have been sidelined or faded away, though Tiwari at least managed to hand over his Assembly seat to his daughter. The only leader of sorts is Priyanka’s appointee, the current UPCC chief, but he has little acceptance among the old guard. The party cadre is divided into numerous camps, with nobody from Delhi there to hear them out. Jitin Prasada was lucky in that the high command made him election in-charge for West Bengal at least. The local Pradesh Congress Committee refused to recognise him and he remained largely ignored. The AICC did not help him out, either. He cut a sorry figure, returning with a zero win. Perhaps that was the last straw. He may not have seen much benefit remaining in the Congress — he had already lost the last three elections he contested in UP. His career, politics and stature at stake, he acted decisively, taking up the BJP offer that came to him “sometime ago”. Now it is the turn of the Congress high command to act, not just to prepare for the elections, but to prevent Prasada’s exit sparking a cascade.
( Courtesy Pioneer )
The gaming market in India has seen tremendous boom in the last few years and will continue to grow as the development and advancement in technology continues to happen even as we speak.
"The audience for the gaming industry is no longer limited to the gen x population but has opened its arms for all age groups which makes the industry a giant open market," feels Sapna Bhutani, co-founder of Mystery rooms � real-life escape games.
Bhutani co-founded Mystery Rooms with an aim to breaking the monotony of the city life and offer experiences that encourages the "4 C's" of 21st-century learning that is communication, collaboration, creativity and critical thinking.
IANSlife speaks to Bhutani who shares her views on how the pandemic gave a boost to the Indian gaming industry, and more:
What is your company offering?
Bhutani: Mystery Rooms as India's first live escape experience has opened a window to wide experiences that a person can have today besides just watching a movie or going on a dinner night. Limited number of available options in entertainment and lack of choices to organise a unique personalised event with just your people around had made the city life monotonous.
Suitable for all age groups, it's actually one of a kind experience where kids can play together with their parents or even grandparents. It is a means of safe adventure and adrenaline rush that you can experience without having to jump from the mountains or diving deep in the sea! Besides being an entertainment destination, Mystery Room is also a unique team building exercise that every corporate is engaging in. Solving a Mystery Room mission involves brushing up all mandatory skills which end up making the teams efficient and all the more bonded.
Today, Mystery Rooms aims not only at breaking the monotony of the city life but at offering experiences that are fun, adventurous, highly immersive, captivating and that encourages the 4 C's of 21st-century learning i.e. Communication, Collaboration, Creativity,and Critical Thinking.
How do you see the gaming industry in India taking shape?
Bhutani: India is one of the global leaders in the gaming industry owing to its vast user base. The industry has seen tremendous boom in the last few years and will continue to grow as the development and advancement in technology continues to happen even as we speak. The audience for the gaming industry is no longer limited to the gen x population but has opened its arms for all age groups which makes the industry a giant open market. In the current challenging times, the gaming platforms have become virtual social spaces serving consumers' desire to connect with their friends or family in a fun way.
What changes have the lockdown brought to the industry?
Bhutani: The pandemic has affected every industry in its own way but has also created an opportunity for every business to grow online and make ways to reach its customers. Mystery Room has always been very cautious about the safety of its customers and employees and has adapted all possible measures to make the experience in our physical escape rooms safe and secure. Also, Mystery Rooms experiences are completely private which means that you need not come in contact with anyone outside your team.
The lockdown helped us widen our horizon and create experiences that our customers can enjoy being at home. This was indeed never a plan but we had to find a way to reach our customer and stay connected with them amidst these crazy times.
Mystery Rooms launched its first ever online game in the initial days of the lockdown and was an instant hit. Since then we have broadened the choices of online experiences available at Mystery Rooms that once can enjoy from the comfort of their home being connected with their team members from anywhere in the world. Since these games are played online, they helped us penetrate the international market and today we have regular customers from countries like US, UK, Canada etc. Owing to the amazing response we have received for these at home experiences, we will continue to host them post Covid.
With outdoor games getting limited during Covid times, how do you think mystery rooms can help?
Bhutani: Mystery Rooms is currently offering an array of on-line experience to its customers across the globe which is as engaging and stimulating as any of our physical rooms. They not only give you an opportunity to connect with your friends but also help you challenge your wits while you are still bound to the boundaries. The following are our appreciated products for virtual birthday parties and online team events
1. Mystery Kits: These are easy to set up Print And Play missions which one can enjoy with their family.
2. Live Streaming- An highly immersive experience hosted by our Gamemaster in our physical location through Live
3. Online Games- These anytime anywhere mystery games are available on our portal and are a hit amongst corporate.
4. Mystery Box: Delivered to your door steps Mystery Box is a ready to play escape room experience packed in a box.
You started in 2014, what difficulties did you face?
Bhutani: Anything that's new in the market takes some time to absorb. Initially it was difficult to break the ice between the consumer and this novel experience owing to the uniqueness of the concept and the high price factor. But the market was somehow waiting for a new entertainment product. Millennial love trying out things that are unique and challenging. With extensive marketing and the first few months of discouragement, we were finally able to make the mark. Word of mouth marketing worked amazingly and soon we had to plan expansion.
What are your plans for future?
Bhutani: We have headed towards technology driven rooms which are highly immersive and more interactive in nature. Technologies like Augmented Reality are also being integrated in our future rooms. Presence of a character to make the mission all the more real is being introduced in our upcoming center in Gurgaon. The brand aims to reach all cities of India through the Franchise model in order to make the Mystery Rooms experience accessible in every corner of the country.
(Puja Gupta can be contacted at puja.g@ians.in)
( Courtesy IANS )
It will end a lucrative business model of the MNCs that park most of their profits in tax havens, bringing curtains down on the golden era of the havens themselves
The June 4-5 agreement between the G7 Finance Ministers (FMs) from the USA, Britain, Germany, Canada, France, Italy and Japan to plug the cross-border tax loopholes used by the giant multinational companies (MNCs) to evade taxes has immense potential to reform and revolutionise the global tax system. The reform blueprint is based on two pillars: first, to distribute the profits equitably among countries where these are generated, enabling them to tax such profits, and second, adoption of a minimum corporate tax rate of at least 15 percent globally.
By forcing the MNCs irrespective of their nature of business to pay taxes where they operate, it can bring to an end the decades-long "race to the bottom" in which some countries compete with each to attract corporate giants with ultra-low tax rates and exemptions, depriving the governments of other countries where the MNCs reap most of their profits of billions of dollars in taxes - money badly needed by them now to prop up their pandemic-ravaged economies. It will also bring to an end a very lucrative business model of these MNCs that park most of their profits in tax havens, bring to an end the golden era of the havens themselves. The tech giants which operate remotely through digital medium like Google, Amazon, Facebook, Apple etc. would also start feeling the pinch.
Rich nations like G7 as well as emerging economies have equally struggled in vain for decades to make the MNCs operating within their jurisdictions to pay taxes to them. But using a tax avoidance strategy called Base Erosion and Profit Shifting (BEPS), MNCs have been artificially 'shifting' their profits year after year from higher-tax jurisdictions to tax-havens where they pay little or no tax, thus 'eroding' the 'tax-bases' of the former. Countries like Ireland, Luxembourg, Cyprus, Caribbean countries like British Virgin Islands, Bahamas or Cayman Islands, and Central American countries like Panama have used their tax rate arbitrage to attract the MNCs- about 40 percent of MNCs' overseas profits are estimated to be shifted to low-tax countries in this way.
The tax losses are stupendous - estimated to be $50 billion for the USA and over $10 billion for India. A global minimum tax rate of 15 per cent would preclude countries from undercutting each other, yielding an estimated $50 billion-$80 billion in extra tax annually from the MNCs. Governments would still have the sovereign power to set their own corporate tax rates but not below the floor rate and if the MNCs still continue to shift their profits to a country with a lower tax rate, their home governments can 'top-up' their taxes to the minimum rate to eliminate the benefits from shifting of profits.
The US tax rate was cut down to 21 per cent from 35 per cent by then President Donald Trump in 2017, which his successor Joe Biden now proposes to increase to 28 per cent. The average OECD corporate tax rate in 2020 was 21.5 per cent, with 18 out of 37 members charging higher rates. Only three countries charge rates lower than 15 per cent: Ireland (12.5 per cent), Hungary (eight per cent) and Switzerland (8.5 per cent).
The average tax rate for Asian countries is around 23 per cent; while China and South Korea charge 25 per cent, Singapore charges only 17 per cent rate. In 2019, India also sharply reduced its corporate tax rates to 22 per cent for domestic companies (15 per cent for new manufacturing companies) without any deductions, aligning its corporate tax rate to global standards.
However, there are several zero-tax territories, mostly small economies like Bermuda, British Virgin Islands or Cayman Islands, in which even the crumbs thrown by the MNCs by way investment on subsidiaries and opportunity for employment that they create howsoever limited could be a bonanza. Corporate and financial services account for more than 50 per cent of government revenue in many of these small economies. Over many past decades, the low-tax or tax-less countries have thus enticed investments with lax rules that favour the MNCs and serve as conduits for them to avoid tax in other countries.
The Economist reported an IMF study in 2019 which found that such "phantom" investments by MNCs had pushed Luxembourg's stock of foreign-direct investment to $4 trillion, "an improbable one-tenth of the global total". Many small countries like Ireland, Cyprus, Hong Kong and Singapore have also benefited in this manner.
To book profits in low tax regimes, MNCs have all the leverage and wherewithal to relocate their subsidiaries and headquarters in any country across the globe - they can relocate their production units anywhere by arm-twisting the smaller countries to agree to their terms. By choosing a suitable transfer pricing mechanism, they can always transfer profits to their subsidiaries located within such jurisdictions to avoid paying taxes in countries where they generate most of their revenues by selling their products while booking profits in the tax havens. It would be in the interest of these countries to have their taxing rights over these companies in their own jurisdictions.
As the communique from the G7 had stated, "We commit to reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20 per cent of profit exceeding a 10 per cent margin for the largest and most profitable multinational enterprises." The principle is that MNCs must pay taxes equitably in every market where they generate their profits, thereby apportioning their global profits to countries where their customers and users are located.
The business model of MNCs that rely on the tax havens would collapse like a pack of cards, as would the economy of tax havens themselves - especially of those that lack other significant sources of revenue - once the G7 proposals are translated into an international treaty, contours of which may be finalised in the broader G-20 meeting at Venice in July, which, in addition to the G-7 countries includes emerging economies like China, India, Brazil, Russia, South Africa, Indonesia and others. An agreement would usher in nothing short of a tax-revolution that would nudge the other countries also to fall in line. MNCs and tax havens would be the losers - indeed it might signal the ultimate end of the tax havens' business model, while large economies that give the MNCs most of their profits which are now being siphoned off to the tax havens would stand to gain the most. Countries like Ireland whose economy has boomed with the influx of billions of dollars in investment from the MNCs would be deeply unhappy and unlikely to give in, as would be the tax havens themselves.
To tax the digital transactions of global digital giants like Apple, Google etc. that carry out their activities remotely from another country, India had imposed a six per cent Equalisation Levy in 2016 on incomes accruing to foreign e-commerce companies from India in certain business to business transactions above a threshold. Several other countries had followed suit. This, however, hardly compensated for the revenue loss. Once the new tax regime comes into force, it will bring to an end such digital taxes as they will become redundant. India which is one of the largest and fastest expanding global internet markets has much to gain from the new tax regime, but must follow up with further reforms of its tax system and reduction of factor costs to attract international investment and industries.
The author is a former Director General, Comptroller & Auditor General of India. The views expressed are personal.
( Courtesy Pioneer )
It’s an Indian medical conundrum: How long will the doctors tolerate violence against themselves?
Seneca, the great Roman philosopher and statesman once said on the importance of doctors: "People pay the doctor for their troubles, but for his kindness, they still remain in his debt. " We are fighting against an invisible and an infinitesimal enemy in size, the coronavirus, which brought mankind to its knees, and it is our bounden duty to give every possible aid to the phalanx of our front warriors - the doctors and healthcare workers. Doctors have been revered in India as the proxies of god since ancient times. But attitudes have changed with time and doctors are subjected to hardships by the very people they strive to save.
Of late heinous instances of doctors and healthcare workers being assaulted and mistreated are being reported across the nation. It is a shame that during such a critical phase of pandemic, when the whole medical system is on trial, people are not recognizing these gods in white coats.
In the last fortnight, there have been at least four to five cases reported of violence against healthcare workers, including vandalism in hospitals. A video infamously went viral on social media platforms in which a junior doctor at a Covid-19 care centre in Assam, Dr Seuj Kumar Senapati, was mercilessly beaten with utensils and crockery items by a mob which was the outraged over the death of a Covid-19 patient.
The mob, not only assaulted the doctor, but also rendered heavy damage to the care centre. There have been 28 arrests made by the police so far, including the main accused. The National Human Rights Commission has been strictly scrutinizing the case and has demanded an action taken report from the Director-General of Police within four weeks. Assam, having the fifth highest literacy rate in our country, simply cannot live down this shame.
A similar case is from Karnataka where a senior pediatrician, Dr Deepak was seriously assaulted following the death of a six-year-old boy due to complexities after a dengue attack. A relative of his and three others attacked the doctor while he was returning home riding on his bicycle after finishing his duty.
The doctors do have every right to protest such violence. In the Assam incident, the doctors even boycotted OPD services and the IMA, Assam chapter threatened to boycott Covid-19 services if doctors' safety is not ensured. In several towns and cities, doctors and healthcare workers are wearing black badges to express solidarity with the victims.
Its psychology that when in pain anger is a bosom friend. How long will the doctors tolerate violence against them? As it is they are under tremendous pressure, working long, stressed hours. The safety equipment they wear is anyway cumbersome - they have to wear two masks, PPE kits, double gloves and a face shield for stretches of up to 12 hours. There is no guarantee of timely, hot meals or the much-needed rest. And the unrelenting queues of patients.
The IMA has released this data; Last year, 748 doctors across India succumbed to Covid-19 in the first wave and 642 in the second wave. They must receive praise We for facing the virus storm to keep people safe. In the very least they should not be de-motivated by bouts of violence that helps no one and only hampers medical care to other patients
(The author is a student of BA (Economics) in BJB College, Bhubaneswar, Odisha. The views expressed are personal.)
( Courtesy Pioneer )
Permission to mine for diamonds in a 364-hectare area in MP will lead to felling of 225,000 trees besides permanently damaging rare plant species and adversely impacting ground water table
Even as India celebrated the World Environment Day recently, the environment itself had little to cheer for. The fact that the ambitious vows and pledges taken to protect the environment are only a symbolic exercise has been made evident by the ongoing controversy involving the Madhya Pradesh government granting diamond mining rights to Aditya Birla Group (ESSEL Mining) to mine for diamonds in the Buxwaha forest area of Chatarpur.
The grant of permission for mining a 364-hectare area will lead to felling of approximately 225,000 trees besides clearing the forest area which comprises rare plant species and also adversely impact ground water table. In addition to this the indigenous communities also stand to be adversely impacted as about 8,000 local forest dwellers will get displaced.
The rights to mine the Bunder diamond block estimated to contain 34 million carats of rough diamonds was won by Essel Mining in 2019. The project with an outlay of Rs. 2500 crore investment is supposed to eventually become the largest diamond mine project in Asia. However, so far, the project could not make much headway due to ecological concerns pertaining to air and water pollution besides loss of biodiversity. These concerns combined with stiff resistance from the local population has kept the project in a suspended state. There is a need for urgent measures to ensure that the work does not begin in the area unless a renewed environmental impact assessment report is commissioned that has the inputs of local environmental experts and the opinion of the local communities as well.
Even as the public opinion builds up against the diamond mining project, an environment activist from Jabalpur Dr.P.J. Najpande has filed a petition against the project in the National Green Tribunal. Conservation committees too have been formed for the districts of Sagar, Damoh and Chaterpur as these districts stand to be the most affected by the diamond mining projects. The committees are preparing the grounds for registering demand for a proper tree audit and a public hearing on the matter with the presence of all affected stake holders. These efforts however are from either the local communities or environmental conservationists, but sincere and impactful interventions form the government are yet to be seen.
In India, Andhra Pradesh, Chhattisgarh and Madhya Pradesh are the three states that produce the most diamonds in the country with Madhya Pradesh accounting for over 90 per cent of the produce which is an average 39,000 carats per year. Given these figures it is easy to understand why there is so much pressure on Madhya Pradesh as far as diamond mining goes.
The Bunder mining block falls in the Bundelkhand region of Madhya Pradesh, which is a traditionally water-stressed region. The project pre-feasibility report clearly states the project is water-intensive as it requires an estimated 5.9 million cubic meters per day which is a tall order for an already water-challenged region. Unfortunately, this is yet to ring alarm bells for the government even though the Central Ground Water Authority has declared the region to be in a semi critical area water resources wise.
The ecological biodiversity of Madhya Pradesh has already borne the brunt of projects such as the river interlinking project linking the Ken and Betwa rivers which is threatening 2.3 million trees. On the other hand, the Bundelkhand Expressway project has resulted in the felling of over 1,90,000 trees. The diamond mining project promises to deliver yet another blow to the environment from which the state may not really recover this time.
In this mad drive for development and prosperity the environment is not the only collateral damage; the people especially at the grass root level who labour at these diamond mines in Madhya Pradesh are the worst affected. The labourers at the mines, especially in the Panna district, already suffer from malnutrition, chronic poverty and migration related problems such as housing and unemployment.
The exploitation of earth's natural resources is not only causing the abuse of the environment but is also resulting in immeasurable suffering to the people who are directly impacted by these activities. The government cannot be a mute spectator to this devastation and take ages to respond even as natural resources, environment get exploited while the social fabric is tattered. The alacrity in government actions alone will establish genuineness of its concern and commitment for the environment and Buxwaha forests in Madhya Pradesh are earnestly waiting for the same.
The author is an environmental journalist. The views expressed are personal.
( Courtesy Pioneer )
Crushed, the tourism industry is hoping that the run of bad luck would soon be over
The travel and tourism industry, along with associated arms like the hospitality and aviation sectors, has been in the doldrums for at least two seasons in a row. Depression has set in, hope has touched nadir, jobs have been lost and revenue — both for individual players and the Governments, alike — is shying away from the invested entrepreneurs like Vijay Mallya from the Indian law-enforcement agencies. But the Centre and State Governments’ ongoing inoculation drive, as it gathers momentum, has injected a sense of optimism and enthusiasm among the stakeholders. From Kashmir to Uttarakhand to Himachal Pradesh to Goa and Kerala, basically almost all the States where the economy thrives on travel, tourism and hospitality, it’s the same story of despair. But Wednesday brought with it a sliver of hope and positivity when Culture and Tourism Minister Prahlad Patel fanned the embers of their dying hope. He said in unequivocal terms that the ongoing vaccination drive is going to drive the revival of the tourism sector. Giving the entrepreneurs in the above-mentioned sectors another reason to smile, he added that the Government is working on a uniform policy and setting up protocols for travellers getting vaccinated against COVID-19.
Speaking to a conglomerate of well-known companies operating in the related fields, he lauded their efforts in coming together to “promote the interests of the smallest and often under-represented operators”. Meanwhile, in Goa, the tourism stakeholders were trying to decipher Chief Minister Pramod Sawant’s statement that re-opening of tourism would be considered after its entire population is vaccinated with at least one dose. Similarly, in Kerala, the tourism sector is in peril as the State has lost three consecutive seasons for the first time. The two consecutive floods in 2018 and 2019, and now the COVID-19 pandemic have flattened the tourism sector. The tour operators are clueless as to when they will see a return to the good old days. In Kashmir, too, the sector has been hit two successive years. In March this year, tourist arrivals had picked up to 1,25,000 from about 19,000 in January before the second wave of COVID-19 hit home. Here’s hoping that the lives and livelihood of all of them, as well as of their families, get back on track as early as possible.
( Courtesy Pioneer )
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