The COVID-19 pandemic has heightened economic inequalities across the world says the Inequality Kills Report.
Try substantiating this:
Q. Extreme inequality is a form of ‘economic violence’—where structural and systemic policy and political choices are skewed in favor of the richest and the most powerful people. Critically examine.
What is the “Inequality Kills” Report?
“Inequality Kills: The unparalleled action needed to combat unprecedented inequality in the wake of COVID-19” is a report released in January 2022 by Oxfam, a U.K.-based consortium.
The report argues for sustained and immediate action to end the pandemic, address global inequality and initiate concerted measures to tackle the climate emergency.
The central argument of the report is that inequality is a death sentence for people that are marginalized by social and economic structures and removed from political decision-making.
Key highlights
Billionaire variants: Identifying this process as “the billionaire variant”, the report says that this vertical aggregation of global wealth into the hands of a few is “profoundly dangerous for our world”.
Pauperization: 160 million people were rendered poor during the pandemic, while the ten richest people doubled their fortunes since the start of the pandemic.
Vaccine apartheid: Holding governments to account the report identifies “vaccine apartheid” (unequal access to vaccines between countries) and the lack of universal vaccination programs in many countries.
Inflation: It also demonstrates how emergency government expenditure (estimated at $16 trillion) that was meant to keep economies afloat during this crisis, inflated stock prices.
Collective: This resulted in billionaires’ collective wealth increasing by $5 trillion during the pandemic.
Why does the report say that inequality kills?
For the writers of the report inequality is not an abstract theory.
Instead, they see it as institutionalized violence against poorer people.
Extreme inequality is a form of ‘economic violence’—where structural and systemic policy and political choices that are skewed in favor of the richest and the most powerful people.
This results in direct harm to the vast majority of ordinary people worldwide.
Implications of inequality
Crime and violence: The report identifies higher inequality with more crime and violence and less social trust.
Impact on marginalized: The brunt of inequality and the violence is borne, for instance, by women across the world, Dalits in India, Black, Native American and Latin persons in the US and indigenous groups in many countries.
Victimization of women: Pointing to the example of women, the problem runs a lot deeper as 13 million women have not returned to the workforce and 20 million girls are at risk of losing access to education.
Way ahead
The “Inequality Kills” report proposes far-reaching changes to structures of government, economy and policy-making to fight inequality.
Vaccine sharing: It urgently asks for “vaccine recipes” to be made open-source so that every qualified vaccine manufacturer can manufacture them.
Taxing the opportunists: The report then asks for governments to claw back the wealth from billionaires by administering solidarity taxes higher than 90% especially on the billionaires that have profited during pandemic.
Taxation reforms: The report asks for permanent cancellation of tax havens, progressive taxation on corporations and an end to tax dodging by corporations.
Welfare: The report then suggests that this regained wealth be redirected towards building income safety nets, universalizing healthcare for everyone, investing in green technologies and democratizing them, and, investing in protecting women from violence.
Recently, West Bengal’s tableau for the Republic Day parade was rejected without assigning any reasons or justifications.
Who manages the R-Day Parade?
The Defence Ministry is the responsible authority for the Republic Day parade and the celebrations.
Around September, it invites all the states, the UTs, Central Government departments, and a few constitutional authorities to participate in the parade through tableaux.
Managing Tableaux
The Defence Ministry shares the basic guidelines about what all the tableaux can or should include.
The tableaux of two different states/ UTs cannot be too similar, as the tableaux, together, should showcase the diversity of the country.
The tableaux cannot have any writing or use of logos, except for the name of the state/ UT/ department, which should be written in Hindi on the front, English on the back, and a regional language on the sides.
The Ministry also asks the participants to use eco-friendly material for the tableaux, and avoid the use of plastic or plastic-based products.
How are the tableaux selected?
The selection process is elaborate and time-consuming.
The Defence Ministry constitutes an expert committee of distinguished persons from fields like art, culture, painting, sculpture, music, architecture, choreography, etc.
Process of selection
(1) Submission of sketches
First, the submitted sketches or designs of the proposals are scrutinised by this committee, which can make suggestions for any modifications in the sketch or design.
The sketch should be simple, colourful, easy to comprehend and should avoid unnecessary detail.
It should be self-explanatory, and should not need any written elaboration.
(2) Music and Visuals
If there is a traditional dance involved with the tableau, it should be a folk dance, and the costumes and musical instruments should be traditional and authentic.
The proposal should include a video clipping of the dance.
(3) 3D Models
Once approved, the next stage is for the participants to come up with three-dimensional models for their proposals.
These are again examined by the expert committee for final selection, taking in view several criteria.
In making the final selection the committee looks at a combination of factors, looking at the visual appeal, impact on the masses, idea/ theme of the tableaux, degree of detail involved.
Do they have to be of a particular size?
The Defence Ministry provides each participant with one tractor and one trailer, and the tableau should fit on that.
The ministry prohibits use of any additional tractor or trailer, or even any other vehicle to be part of it.
However, the participant can replace their ministry-provided tractor or trailer with other vehicles, but the total number should not be more than two vehicles.
The tractor has to be camouflaged in harmony with the tableau’s theme, and the ministry stipulates a distance of around six feet between the tractor and the trailer for turning and manoeuvering.
The dimensions of the trailer on which the tableau will be placed is 24 feet, 8 inches long; eight feet wide; four feet two inches high; with a load-bearing capacity of 10 tonnes.
The tableaux should not be more than 45 feet long, 14 feet wide and 16 feet high from the ground.
(Republic Day celebrations from this year will start on January 23 instead of January 24 to include the birth anniversary of Netaji Subhas Chandra Bose.)
Kathak legend Pandit Birju Maharaj has recently passed away.
About Kathak
Kathak is one of the eight major forms of Indian classical dance.
The origin of Kathak is traditionally attributed to the traveling bards in of ancient northern India known as Kathakars or storytellers.
The term Kathak is derived from the Vedic Sanskrit word Katha which means “story”, and Kathakar which means “the one who tells a story”, or “to do with stories”.
Wandering Kathakars communicated stories from the great epics and ancient mythology through dance, songs and music.
Its origin
Kathak dancers tell various stories through their hand movements and extensive footwork, their body movements and flexibility but most importantly through their facial expressions.
It evolved during the Bhakti movement, particularly by incorporating the childhood and stories of the Hindu god Krishna, as well as independently in the courts of north Indian kingdoms.
Kathak is unique in having both Hindu and Muslim gharanas and cultural elements of these gharanas.
Kathak performances include Urdu Ghazals and commonly used instruments brought during the Mughal period.
Major gharanas
Kathak is found in three distinct forms, called “gharanas”, named after the cities where the Kathak dance tradition evolved – Jaipur, Banaras and Lucknow.
While the Jaipur gharana focuses more on the foot movements, the Banaras and Lucknow gharanas focus more on facial expressions and graceful hand movements.
Performance details
It involves both Nritta (pure dance) and Nritya (expressive dance).
Stylistically, the Kathak dance form emphasizes rhythmic foot movements, adorned with small bells (Ghungroo) and the movement harmonized to the music.
The legs and torso are generally straight, and the story is told through a developed vocabulary based on the gestures of arms and upper body movement, facial expressions, neck movements, eyes and eyebrow movement, stage movements, bends and turns.
The main focus of the dance becomes the eyes and the foot movements.
The eyes work as a medium of communication of the story the dancer is trying to communicate. With the eyebrows the dancer gives various facial expressions.
A Kathak performance can be solo, duo or team. In a technical performance, the speed and energy the dancers exchange with the audience increases in multiples, that is the tempo doubles or quadruples.
The position of women in the armed forces, which is described as a male-dominated establishment generally, offers a limited window for any kind of change in the role of women in occupational and bureaucratic structures. However, breaking the glass ceiling, two women officers have been selected to train as helicopter pilots at Combat Army Training School, Nashik. Till now, women officers were only limited to performing ground duties in the Army Aviation Corps.
The Supreme Court last year ruled that women could serve as army commanders further granting permanent commission and promotions equal to their male counterparts.
India’s women in uniform: A timeline
The role of women in the Indian Army began in 1888 when the ‘Indian Military Nursing Service’ was formed during the British Raj.
During 1914-45, British Indian Army nurses fought in World War I (1914–18) and World War II (1939-45), where 350 nurses either died or were taken prisoner of war or declared missing in action.
But it was only in 1992 that the organisation opened doors and started inducting women in non-medical roles. In 2015, India also opened new combat air force roles for women as fighter pilots.
During 1914-45, British Indian Army nurses fought in World War I (1914–18) and World War II (1939-45), where 350 nurses either died or were taken prisoner of war or declared missing in action.
However, despite all these developments, the women in the Indian armed forces that constitute 3% of the Indian army are still not allowed to be a part of the active combat.
Since 2008, women were inducted as permanent commissioned officers in the legal and education corps and as permanent commissioned officers in eight more non-combative corps in 2020.
A timeline of women’s inductions into the military –
Year
Service
Branches that opened up for women
1991
Navy
Education, Logistics and Law Cadre of Executive Branch
1992
Army
Army Service Corps, Army Ordnance Corps, Army Education Corps, Judge Advocate General Branch
1993
Navy
Air Traffic Controller
1994
Air Force
Transport and helicopter pilots
1996
Army
Engineers, Signals, Intelligence, Electrical and Mechanical Engineering branches opened up for women.
2001
Navy
Naval Constructor Cadre of Engineering Branch
2008
Army
Women became eligible for Permanent Commission in Army Education Corps and Judge Advocate General Department
2008
Navy
Observers
2015
Air Force
Fighter pilots
Present context
The Supreme Court on Tuesday asked the Union government to explain the admission of merely 19 women in the prestigious National Defence Academy (NDA) for 2022.
The court also asked the Centre to place the figures on record the total number of candidates, including women, who appeared in the NDA, Rashtriya Indian Military College (RIMC) and Rashtriya Military School (RMS) entrance tests.
The NDA exam was held and 8,009 candidates qualified for the Service Selection Board test as also medical tests, out of which 1,002 candidates were women and 7,007 men.
Supreme Court’s ruling to grant Permanent Commission (PC)to women officers
In 2020, the Supreme Court upheld the right of serving Short Service Commission (SSC) women officers of the Navy to be granted Permanent Commission (PC) on a par with their male counterparts.
The Court has directed that SSC women officers found suitable for the grant of PC shall be entitled to all consequential benefits, including arrears of pay, promotions and retirement benefits as and when due.
All serving women SSC officers in at least seven wings, including the executive, engineering, electrical, education, law and logistics, will be eligible to apply.
The grant of PCs will be subject to: (i) availability of vacancies in the stabilized cadre; (ii) Suitability of the candidate; and (iii) recommendation by the chief of Naval Staff.
Women in Uniform: A global scan
India has limited experience as regards the induction of women in the armed forces. The first batch had joined in 1992. Therefore, our knowledge of the complexities and long-term effects of the issues involved is highly limited.
On the other hand, women have been serving in the militaries of developed countries for a long time. These countries have acquired a deep understanding of all the issues involved.
Let’s have a look:
United States
The United States is considered a pioneer and a trend-setter as regards induction of women in the services.
There are approximately 200,000 American women on active duty in the US armed forces. They constitute nearly 20 percent of its strength.
Women are also participating in Iraq operations in large numbers, albeit in support functions as they are forbidden to be placed in direct ground combat with enemy. They, however, are assigned ‘combat support’ duties on voluntary basis.
Prior to November 1975, if women became pregnant, they were given the option to terminate pregnancy or seek discharge.
A number of important steps were initiated during President Clinton’s time. Women were permitted to join as combat aircraft pilots and could also be assigned for prolonged duty on combat naval ships. The scope of combat-risk assignments for women was redefined to open additional appointments to them.
Israel
Though Israel has conscription for women (as well as men), a large number of them are exempted for various reasons.
Women are generally not allotted active battle field duties. They serve in many technical and administrative posts to release men for active duty.
Although they make excellent instructors as well, most women occupy lower and middle level appointments. Only a handful reaches senior ranks.
Other Countries
In the Australian Army, women are still not allowed in the field/battle. In Russia, women generally serve in nursing, communications and logistic support functions.
Like all Islamic states, Pakistan does not permit women in the armed forces. It is feared that women would create distraction and cause disruption of internal order.
There is also a great deal of concern for the safety of women from the organisational environment itself.
Why males have ever dominated the armed forces?
Militaries across the world help entrench hegemonic masculine notions of aggressiveness, strength and heterosexual prowess in and outside their barracks.
The military training focuses on creating new bonds of brotherhood and camaraderie between them based on militarised masculinity.
This temperament is considered in order to enable conscripts to survive the tough conditions of military life and to be able to kill without guilt.
To create these new bonds, militaries construct a racial, sexual, gendered “other”, attributes of whom the soldier must routinely and emphatically reject.
Dimensions of the Issue
Indeed, the court’s strong statements against the gender stereotypes employed by the government come as a welcome relief. Equally, ensuring that women can hold permanent commissions in the army recognizes the equal effort and service that they put in.
Gender is not a hindrance: As long as an applicant is qualified for a position, one’s gender is arbitrary. It is easy to recruit and deploy women who are in better shape than many men sent into combat.
Military Readiness: Allowing a mixed-gender force keeps the military strong. The armed forces are severely troubled by falling retention and recruitment rates. This can be addressed by allowing women in the combat role.
Effectiveness: The blanket restriction for women limits the ability of commanders in theatre to pick the most capable person for the job.
Tradition: Training will be required to facilitate the integration of women into combat units. Cultures change over time and the masculine subculture can evolve too.
Cultural Differences & Demographics: Women are more effective in some circumstances than men. Allowing women to serve doubles the talent pool for delicate and sensitive jobs that require interpersonal skills, not every soldier has.
The road is not so simple
Capabilities of women
The Centre states that although women are equally capable, if not more capable than men, there might be situations that could affect the capabilities of women such as absence during pregnancy and catering to the responsibilities of motherhood, etc.
The arguments are presented on the basis that a role in combat would require tough training, whereas the current training for women is different and at a much lower level than that of their male counterparts.
However, Lieutenant Colonel Mitali Madhumita and IAF squad leader Minty Agarwal are examples of women who stand as a testament to the capabilities of women in commanding positions.
Adjusting with the masculine setup
To then simply add women to this existing patriarchal setup, without challenging the notions of masculinity, can hardly be seen as “gender advancement”.
In fact, in order to succeed within the army, women are forced to deride their femininity and work harder than men to establish parity in the eyes of their counterparts.
They are forced to blend in while standing out for their exceptional work in order to be taken seriously.
Fear of sexual misconduct
This superficial approach to gender equality defines parity solely based on the opportunity to participate hence fails to address several fallouts most notable of which is sexual harassment and abuse.
Sexual harassment faced by women military officers is a global phenomenon which remains largely unaddressed, and women often face retaliation when they do complain.
Extensive and rigorous data on the pervasiveness of sexual harassment in the Indian armed forces is not available.
However, a relatively small 2015 study, which questioned 450 members of the armed forces on sexual discrimination in their workplace, found that sexual harassment is rampant in the military.
Gender progressiveness could be an illusion
In reality, there are several factors behind the decision to include women in the forces, including using the illusion of gender progressiveness within the army to shame populations for their gender inequities, brand them as backwards and use this to justify military control.
Women’s inclusion is criticized as just another manoeuvre to camouflage women’s subjugation and service as women’s liberation.
Battle of ‘Acceptance’
The only way to command is to show the lower ranks that the orders are fair and just, both in spirit and action.
Acceptance of women in the military has not been smooth in any country. Every country has to contend with sceptics who consider it to be a counterproductive programme.
They tend to view it as a political gimmick to flaunt sexual equality, or, at best, a necessary liability.
Additionally, every country has to mould the attitude of its society at large and male soldiers in particular to enhance acceptability of women in the military.
For trained soldiers “acceptance” is not an option; they have undergone rigorous regimentation to accept orders from the command.
Job Satisfaction
Most women feel that their competence is not given due recognition. Seniors tend to be over-indulgent without valuing their views.
They are generally marginalised and not involved in any major decision-making. They have to work twice as hard as men to prove their worth. Additionally, a woman is always under scrutiny for even minor slip-ups.
Many women complain that despite their technical qualifications, they are generally detailed for perceived women-like jobs. Either they get routine desk work or are asked to perform duties related to social minutiae.
Doubts about Role Definition
The profession of arms is all about violence and brutality. To kill another human is not moral but soldiers are trained to kill.
They tend to acquire a streak of raw ruthlessness and coarseness. This makes the environment highly non-conducive and rough for women.
Women, in general, are confused about the way they should conduct themselves. If they behave lady-like, their acceptance amongst male colleagues is low.
On the other hand, their active participation in casual repartee carries the danger of their losing colleagues’ respect.
Societal Impact
The government has argued that if a woman is taken captive by insurgents/terrorists or as a Prisoner of War (PoW) by an enemy state, then it would become an international and deeply emotive issue which could have an impact on the society.
However, times have changed and this cannot be a valid reason for denying command roles and permanent commission to women.
Physical and Physiological Issues
The natural physical differences in stature, strength, and body composition between the sexes make women more vulnerable to certain types of injuries and medical problems.
The vigorous training might also have an effect on the health of women officers.
The natural processes of menstruation and pregnancy make women particularly vulnerable in combat situations.
Such positions usually leave the commanding officer with no privacy and during adverse situations, the lack of sanitation can have an impact on their health.
Comfort Level
Most women accepted the fact that their presence amongst males tends to make the environment ‘formal and stiff’.
The mutual comfort level between men and women colleagues is often very low.
Men miss their light-hearted banter which is considered essential to release work tensions and promote group cohesion. They consider women to be intruding on their privacy.
Whose concern is National Security…
Many defense analysts are disgusted with the ongoing emulsive debate incorporating issues of national security with gender justice. Few of their opinion are discussed as under:
The recent debate about the entry of women officers in the armed forces has been highly ill- informed and subjective in nature.
People have taken stands and expressed opinion without analysing the matter in its entirety. It is imprudent to consider it as an issue of equality of sexes or gender bias or even women’s liberation.
It is also not a question of conquering the so-called ‘last male bastion’.
That would amount to trifling a matter that concerns the well-being and the war-potential of a nation’s armed forces.
Armed forces have been constituted with the sole purpose of ensuring defence of the country and all policy decisions should be guided by this overriding factor.
All matters concerning defence of the country have to be considered in a dispassionate manner.
No decision should be taken which even remotely affects the cohesiveness and efficiency of the military. Concern for equality of sexes or political expediency should not influence defence policies.
Way Forward
Defense readiness is one major aspect which is required to be borne in mind throughout while considering their employability options. The career aspects and opportunities for women need to be viewed holistically keeping the final aim in focus.
Misleading information such as using the patriarchal nature of the society as an excuse to deny women their deserving opportunities should be stopped. India has come a long way, and society should be supportive of women being inducted in to combat roles.
So far combatant roles are concerned, an all-women combat squadron should be designed and studied extensively before any further development or decisions are made.
The training provided to men and women should be similar to eliminate differentiation on the basis of physical standards.
It is the responsibility of the Government to create both administrative and social infrastructure for the easy induction of women into the Armed Forces. Administrative issues should not be cited as a barrier to women’s entry in the Armed Forces.
The framework for the induction of women should be incorporated into a policy. As for the concern of preserving the female officers’ modesty and dignity, there should be elaborate codes of conduct to ensure no adverse incident occurs.
Finally, no decision should be taken which even remotely affects the cohesiveness and efficiency of the military. Concern for equality of sexes or political expediency should not influence defense policies.
Consumer goods distributors in Maharashtra has been protesting against Colgate’s alleged unfair treatment of traditional distributors vis-à-vis B2B (Business-to-Business) technology companies such as Reliance’s JioMart, Udaan and others.
The disruption caused by B2B companies
Nearly half-a-million of India’s distributors pick up goods from consumer companies such as Colgate and deliver them to 13 million small local stores located in 7,00,000 villages and towns across the country through a web of millions of traders and other intermediaries.
Enter the new age technology B2B companies.
They have developed technologies to connect directly to the kirana store through a mobile phone app, bypassing the intermediaries.
They supply goods to the local store for lower prices than the charged by the distributor.
Unable to match such prices and facing the peril of losing business, India’s distributors claim these are unfair practices and want manufacturers such as to stop supplying goods to the technology companies.
Issue of disruption caused by the pricing power and predatory pricing
Creative destruction: New innovations disrupting an existing process and rendering incumbents futile is generally a healthy process of ‘creative destruction’, as the Austrian economist, Joseph Schumpeter, postulated.
But this disruption in India is driven not entirely by technology innovation but also through pricing power.
These technology companies bear the loss on the products they sell to the local store.
Further, they offer extensive credit terms and working capital to the local stores.
In other words, these technology companies rely not just on their mobile phone app innovation but also steep price discounting and cheaper financing to win customers.
Evidently, these companies use the money to not only build new technologies but also to undercut competitors and steal market share.
This practice, called predatory pricing, is illegal in most countries including India.
These companies are supplied with funds from foreign venture capital firms, which in turn are largely funded by American pension funds and university endowments.
The flip side is that India’s millions of distributors and intermediaries have no access to such finance.
These small companies are cut off from the endless stream of free foreign money that gushes into new age ‘startups’ and established large corporates.
Problems created by predatory pricing
While consumers may benefit from lower prices, the livelihoods of millions of distributors, traders and their families suffer.
To be sure, this is not just an India problem but a global one.
Social media companies such as Facebook give away their products for free and e-commerce companies such as Amazon sell at lower prices, benefiting consumers enormously, but also causing immense social strife and disharmony.
But in India’s case, there is an added complexity of foreign capital flows.
Access to this capital is only available to a tiny proportion of Indian businesses but threatens the livelihoods of millions of Indian families, as in the case of distributors, causing massive income and social disparities.
This unequal access to capital creates leads to anti-competitive behaviour.
Consider the question “What is predatory pricing? What are the issues created by predatory pricing?”
Conclusion
To be clear, this is not a Luddite argument against e-commerce or technological innovations. The issue is about illegal predatory pricing and abuse of pricing power by startups and big corporates through preferential access to easy foreign money.
Recently, the University Of Maryland School Of Medicine announced that it had successfully transplanted a genetically-modified pig heart into a patient with severe ailments.
What is Xenotransplantation?
Xenotransplantation, or transplanting organs across different species, was first tried in humans in the 1980s.
The experiment was abandoned after the famous case of the American Baby Fae who was born with a congenital heart defect and received a baboon heart in 1984.
However, pig heart valves have been used for replacing damaged valves in humans for over 50 years now.
Nowadays, harvesting organs from genetically engineered pigs is seen as a viable alternative to meet organs shortage.
How the pigs are genetically engineered?
The donor pig underwent 10 genetic modifications, by which the genes responsible for the rapid rejection of foreign organs by the human body were inactivated or knocked out.
Four pig genes were removed, and six human genes were added.
“GalSafe” pigs, or pigs that had undergone editing to knock out a gene that codes for Alpha-gal (a sugar molecule) were used.
Alpha-gal can elicit a devastating immune response in humans.
GalSafe pigs have been well studied, and are approved by the US Food and Drug Administration (FDA) for use in pharmacology.
Why pursue xenotransplantation?
Modern scientific supporters of xenotransplantation argue that the potential benefits to society outweigh the risks, making pursuing xenotransplantation the moral choice.
None of the major religions object to the use of genetically modified pig organs for life-saving transplantation.
A crucial case in India
Harvesting organs from genetically engineered pigs is seen as a viable alternative to meet organs shortage.
According to the health ministry, around 0.18 million people in India are estimated to suffer from renal failure every year, but only about 6,000 renal transplants are carried out in the country.
About 25,000-30,000 liver transplants are needed annually in India but only about 1,500 are being performed.
In the case of the heart, 50,000 people suffer from heart failure and are in need of a heart transplant.
Yet, only 10-15 heart transplants are carried out in India each year.
Issues with Xenotransplantation
Besides scientific challenges, there are several ethical challenges to overcome:
Animal rights: Many, including animal rights groups, strongly oppose killing animals to harvest their organs for human use.
Decreased life expectancy: In the 1960s, many organs came from the chimpanzees, and were transferred into people that were deathly ill, and in turn, did not live much longer afterwards.
Religious violations: Certain animals such as pork are strictly forbidden in Islam and many other religions.
Informed consent: Autonomy and informed consent are important when considering the future uses of xenotransplantation.
Threats of zoonosis: The safety of public health is a factor to be considered. We are already battling the biggest zoonotic disease threat.
Notwithstanding the eventual introduction of the Cryptocurrency and Regulation of Official Digital Currency Bill in Parliament, cryptocurrencies continue to proliferate.
Provisions in Income Tax Act 1961 to tax cryptocurrencies
Cryptocurrencies not mentioned in Income Tax Act, 1961: Although the Income Tax Act, 1961 (“IT Act”) does not specifically mention cryptocurrencies, it does cast a wide enough net to bring crypto transactions under its ambit.
Capital asset: Trading in cryptocurrency may be classified as transfer of a ‘capital asset’, taxable under the head ‘capital gains.
Business income: If such cryptocurrencies are held as stock-in trade and the taxpayer is trading in them frequently, the same will attract tax under the head ‘business income’.
Even if one argues that crypto transactions do not fall under the above heads, Section 56 of the IT Act shall come into play, making them taxable under the head ‘Other sources of income’.
Challenges in taxing cryptocurrencies
The above provisions in themselves are not sufficient in order to put in place a simple yet effective taxation regime for cryptocurrencies.
[1] Varied interpretations:
First, the absence of explicit tax provisions has led to uncertainty and varied interpretations being adopted in relation to mode of computation, applicable tax head and tax rates, loss and carry forward, etc.
For instance, the head of income under which trading of self generated cryptocurrency (currencies which are created by mining, acquired by air drop, etc.) is to be taxed is unclear.
Since there is no consistency in the rates provided by the crypto-exchanges, it is difficult to arrive at a fair market value.
Similarly, when a person receives cryptocurrency as payment for rendering goods or services, how should one arrive at the value of the said currency and how should such a transaction be taxed?
[2] Identifying tax jurisdiction
It is often tricky to identify the tax jurisdiction for crypto transactions as taxpayers may have engaged in multiple transfers across various countries and the cryptocurrencies may have been stored in online wallets, on servers outside India.
[3] The anonymity of taxpayer
The identities of taxpayers who transact with cryptocurrencies remain anonymous.
Exploiting this, tax evaders have been using crypto transactions to park their black money abroad and fund criminal activities, terrorism, etc.
[4] Lack of third party information on crypto transaction
The lack of third party information on crypto transactions makes it difficult to scrutinise and identify instances of tax evasion.
One of the most efficient enforcement tools in the hands of Income Tax Department is CASS or ‘computer aided scrutiny selection’ of assessments, where returns of taxpayers are selected inter alia based on information gathered from third party intermediaries such as banks.
However, crypto-market intermediaries like the exchanges, wallet providers, network operators, miners, administrators are unregulated and collecting information from them is very difficult.
[5] Physical goods/services may change hand in return for cryptocurrencies
Even if the crypto-market intermediaries are regulated and follow Know Your Customer (KYC) norms, there remains a scenario, where physical cash or other goods/services may change hands in return for cryptocurrencies.
Such transactions are hard to trace and only voluntary disclosures from the parties involved or a search/survey operation may reveal the tax evaders.
Steps need to be taken
Statutory provision: The income-tax laws pertaining to the crypto transactions need to be made clear by incorporating detailed statutory provisions.
Awareness generation: This should be followed by extensive awareness generation among the taxpayers regarding the same.
Separate mandatory disclosure: The practice of having separate mandatory disclosure requirements in tax returns (as is the case in the United States) should be placed on the taxpayers as well as all the intermediaries involved, so that crypto transactions do not go unreported.
Strengthen international legal framework: Additionally, the existing international legal framework for exchange of information should be strengthened to enable collecting and sharing of information on crypto-transactions.
This will go a long way in linking the digital profiles of cryptocurrency holders with their real identities.
Training tax officers: the Government must impart training to its officers in blockchain technology.
The United Nations Office on Drugs and Crime’s ‘Cybercrime and Anti-Money Laundering’ Section (UNODC CMLS) has developed a unique cryptocurrency training module, which can aid in equipping tax officers with requisite understanding of the underlying technologies.
Consider the question “What are the provision in Income Tax Act 1961 to tax the cryptocurrencies? What are the challenges in taxing cryptocurrencies? “
Conclusion
It is certain that cryptocurrencies are here to stay. A streamlined tax regime will be essential in the formulation of a clear, constructive and adaptive regulatory environment for cryptocurrencies.
In the first export order for the BrahMos supersonic cruise missile system, the Philippines has approved a $374.96 mn contract for the purchase of a shore-based anti-ship variant of the missile from India.
About BrahMos Missile
BrahMos missile derives its name from the combination of the names of Brahmaputra and Moskva Rivers.
They are designed, developed and produced by BrahMos Aerospace, a joint venture company set up by DRDO and Mashinostroyenia of Russia.
It is a two-stage missile with a solid propellant booster as the first stage and liquid ramjet as the second stage.
The cruise missiles like BrahMos are a type of system known as the ‘standoff range weapons’ which are fired from a range sufficient to allow the attacker to evade defensive fire from the adversary.
Such weapons are in the arsenal of most major militaries in the world.
Its capability
BrahMos missile flies at a speed of 2.8 Mach or almost three times the speed of sound.
It is the main weapon system of the Indian Navy warships and has been deployed on almost all of its surface platforms.
An underwater version is also being developed which will not only be used by the submarines of India but will also be offered for export to friendly foreign nations.
Various versions
The versions of the BrahMos that are being tested have an extended range of around 400 km, as compared to its initial range of 290 km, with more versions of higher ranges currently under development.
Various versions including those which can be fired from land, warships, submarines and Sukhoi-30 fighter jets have already been developed and successfully tested in the past.
The earliest versions of the ship launched BrahMos and land-based system are in service of the Indian Navy and the Indian Army since 2005 and 2007 respectively.
A controversy recently broke out after the National Commission for Protection of Child Rights (NCPCR) recommended that the Delhi government suspend its flagship ‘Desh ke Mentor’ programme.
What is the Desh Ke Mentor Programme?
The programme was launched in October 2021 and is aimed at connecting students in classes IX to XII with voluntary mentors.
People between the ages of 18 and 35 can sign up to be mentors through an app created by a team at the Delhi Technological University and will be connected with students based on mutual interests.
The mentorship entails regular phone calls for a minimum of two months, which can optionally be carried on for another four months.
The idea is for the young mentors to guide students through higher education and career options, preparation for higher education entrance exams, and dealing with the pressure of it all.
How is a person selected to be a mentor?
The registration process takes place on the Desh ke Mentor app.
The volunteer has to fill in information about themselves such as their date of birth, education qualification, profession, organisation they work with and so on.
However, it is optional for them to upload any proof of identity.
Once the registration is complete, the mentor is connected to a set of children of the same gender as themselves whose interests align with theirs.
Students have to take parental consent before becoming a part of the programme.
What are the concerns raised by the NCPCR regarding this process?
It has stated that assigning children to a mentor of the same gender as them does not necessarily assure their safety from abuse.
It has also expressed concern over the lack of police verification of the mentors.
It has a psychometric test which has not been scrutinized by professional practising experts.
It has also stated that limiting interactions to phone calls also does not ensure the safety of children since “child-related crime can be initiated through phone calls as well.”
Back2Basics: National Commission for Protection of Child Rights (NCPCR)
The NCPCR is an Indian statutory body established by an Act of Parliament, the Commission for Protection of Child Rights (CPCR) Act, 2005.
It works under the aegis of the Ministry of Women and Child Development and began operational on 5 March 2007.
It works to ensure that all Laws, Policies, Programmes, and Administrative Mechanisms are in consonance with the Child Rights perspective as enshrined in the Constitution of India and the UN Convention on the Rights of the Child.
As defined by the commission, a child includes a person up to the age of 18 years.
To mark the contribution of the overseas Indian community in the development of India, the Pravasi Bharatiya Divas is celebrated on 9th January every year.
Indian Diaspora: A backgrounder
Indian Diaspora is a generic term used for addressing people who have migrated from the territories that are currently within the borders of India.
From Google CEO to Nobel laureate scientist Har Gobind Khorana, the list of Indians abroad and their contribution to the world goes endlessly.
One of the greatest economic contributions of Indian Diaspora has been in terms of remittances.
Historical perspective
Imperialism led-migration: The incorporation of the British Empire in India can be linked to the existence of modern Indian Diaspora all over the world.
Indentured labor: Dating back to the nineteenth century, Indian indentured labor was taken over to the British colonies in different parts of the world.
World Wars: In the post World War II period, most of the Indian labor and professionals got scattered and it was a worldwide phenomenon.
European reconstruction: The reconstruction of Europe after the war was provided by Indians and other South Asians, particularly in the United Kingdom and Netherlands.
Modern brain-drain: Most recently, Indians have made their presence visibly felt in professions in countries like the United States, Canada, and Australia.
Major sections of Indian Diaspora
(1) Indians in the Gulf
Around 8.5 million Indians live and work in the Gulf countries, one of the largest concentrations of migrants in the world.
The geographical and historical proximity makes it a convenient destination for Indians.
Today migrants from across India are working and living in the Gulf countries (Saudi Arabia, UAE, Qatar, Bahrain, Oman, and Kuwait).
(2) Indians in USA
In recent decades the population has grown substantially, with 2.4 million Indian immigrants resident in the United States as of 2015.
This makes the foreign-born from India the second-largest immigrant group in the US after Mexicans.
Categorizing Indian’s abroad
Overseas Indians, officially known as Non-resident Indians (NRIs) or Persons of Indian Origin (PIOs), are people of Indian birth, descent or origin who live outside the Republic of India:
(A) Non-Resident Indian (NRI)
Strictly asserting non-resident refers only to the tax status of a person who, as per section 6 of the Income-tax Act of 1961, has not resided in India for a specified period for the purposes of the Act.
The rates of income tax are different for persons who are “resident in India” and for NRIs.
(B) Person of Indian Origin (PIO)
Person of Indian Origin (PIO) means a foreign citizen (except a national of Pakistan, Afghanistan, Bangladesh, China, Iran, Bhutan, Sri Lanka and/or Nepal), who:
at any time held an Indian passport OR
either of their parents/grandparents/great-grandparents were born and permanently resident in India as defined in GoI Act, 1935 and other territories that became part of India thereafter provided neither was at any time a citizen of any of the aforesaid countries OR
is a spouse of a citizen of India or a PIO.
(C) Overseas Citizenship of India (OCI)
After multiple efforts by leaders across the Indian political spectrum, a pseudo-citizenship scheme was established, the “Overseas Citizenship of India”, commonly referred to as the OCI card.
The Constitution of India does not permit full dual citizenship.
The OCI card is effectively a long-term visa, with restrictions on voting rights and government jobs.
Significance of Indian diaspora
(A) Contribution in the freedom struggle
Mahatma Gandhi’s struggle for ending institutionalized discrimination against Indians in South Africa became an inspiring legend for enduring sentimentalism about the diaspora in modern India.
The diaspora also became a vehicle for promoting the cause of Indian independence among the political elites of major countries.
As the independence movement gathered momentum at home, it began to influence many Indian communities abroad.
(B) Diaspora as Cultural extension
The act of migration is not just limited to geographical limits; rather it is a cultural extension.
Let us take the example of the Sikh community. The Sikhs are one of the largest migrants from India to the UK, Canada and many other countries.
They have very well maintained their culture and ethnic existence for decades.
(C) Remittances
Money sent home by migrants is one of the largest financial inflows to developing countries.
According to a World Bank Report, India received approximately 87 billion dollars in remittances in 2021 with USA being the biggest source, accounting for over 20% of these funds.
Without these remittances, India’s balance of payment position would have looked worse.
(D) Diaspora as ‘Agents of change’
Diaspora acts as ‘agents of change’ facilitating and enhancing investment, accelerating industrial development, and boosting international trade and tourism.
Diaspora’s motives to invest in India are long-lasting as many of them wish to establish a long-term base in India.
(E) Technological development and entrepreneurship
Another tangible long-term advantage in nurturing ties with an active diaspora is an accelerated technological sector and increased socio-economic development.
Some examples to illustrate this phenomenon are Bengaluru, Gurugram and Hyderabad as thriving IT hubs that not only house multinational companies (MNCs) but also multiple Indian start-ups.
(F) Enhancing India’s global say
India’s permanent membership to the UNSC can become a reality with support from the diaspora.
Apart from political pressures and ministerial and diplomatic level lobbying, India can leverage its diaspora to influence states such as Canada and Mexico to support India’s membership
Most Importantly,
(G) Diaspora diplomacy
The diaspora’s ability to spread Indian soft power, lobby for India’s national interests, and contribute economically to India’s rise is now well-recognized.
A less tangible but important advantage in having a large immigrant group is “diaspora diplomacy”.
The recent engagement of Indian leaders in US general elections is a continuation of the extraordinary political investment in engaging the Indian diaspora.
India’s engagement with Diaspora: A policy-wise perspective
Many of the themes of India’s contemporary diaspora policy had their origins in the approach of the Indian national movement before independence.
The nationalist backlash against the Indian communities in Africa and Asia in the 1950s and 1960s saw Delhi consciously distance itself from the diasporic communities.
As India turned inwards, Delhi also took a dim view of the “brain drain” as many well-trained Indians began to look for opportunities elsewhere.
It was only in the late 1980s that Delhi began to rethink its approach to the diaspora.
Change in recent years
PM Rajiv Gandhi was the first to appreciate the potential role diaspora could play in advancing national development and improving India’s ties with the US.
In 2000, the Pravasi Bharatiya Divas was commenced to be celebrated and also led to the formation of a separate Ministry for Overseas Indians under PM AB Vajpayee.
Other innovative initiatives like the Know India Programme (KIP) and Study India Programme (SIP) were launched.
These have engaged the youth living abroad and the Tracing the Roots Scheme, through which some Indians have been able to trace their roots in India.
Most recent initiatives
India has been following the spirit of 4 Cs i.e. Connect – Contribute – Celebrate – Care.
There is a dedicated Diaspora Welfare Officer.
The authorities have been ensuring 100 percent grievance redressal through E-Migration Portal, Madad Portal, and CPGRAMS.
Various policy initiatives
Education: NRI seats are reserved in all the medical, engineering and other professional colleges.
Voting rights: The Representation of the People (Amendment) Bill 2017 the provision would help non-resident Indians (NRIs) to participate in the electoral process through ‘proxy voting’.
Know India Program (KIP): It is a flagship initiative for Diaspora engagement which familiarizes Indian-origin youth (18-30 years) with their Indian roots and contemporary India has been refashioned.
Minimum Referral Wages (MRW): A number of policies were announced keeping in mind the protection of welfare and interest of Indians abroad; for example, the 2014 Minimum Referral Wages (MRW).
Easing the passport facility: The last three years saw the launch of Head Post Offices as passport centers enabling thousands more to apply for a passport.
Challenges faced by Diaspora
Racial antagonism: Rising incidence of hate speech and crimes against Indians by the locals due to racism, communalism emboldened by coming of nationalist and ultra-nationalist governments to power in many countries.
Protectionism: Fear of losing jobs and educational opportunities to outsiders has resulted in stricter visa rules in many countries including the USA, Australia, etc.
Terrorism: Sectarian crisis, increasing terrorist activities and war in the Middle East countries (Yemen, Oman, Libya, Syria etc) leave our diaspora vulnerable to attacks.
Political Polarization: Many Indians abroad are turning against India since the change of government and some extreme right wing factionists.
Anti-national tendencies: India has had problems with negative campaigning and foreign funding, coming from abroad, for separatist movements like the Khalistan movement.
Way forward
India has enjoyed being viewed more favorably by the world since 2014, and the diaspora can further these perceptions.
India needs both additional resources as well as better systems to deal with the recurring challenges of supporting citizens abroad.
The diaspora can step up and act as Indian ‘ambassadors’, as it is insufficient and ineffective for a country or its missions abroad to rely only on press releases to change public opinion.
The diaspora can provide the requisite strategic impulse, which makes it all the more important to unlock their potential.
