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Demonetization and Indian budget 2017 – An introduction

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[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] T [/yt_dropcap]he BJP government in India has unveiled annual budget on February 01, trying for recovery after deadly cash crunch, unleashed by PM Modi by his shock therapy, making people feel badly stranded at a crossroads without cash and not really knowing where exactly to go for getting their own money deposited in banks.

While demonetization forces the people to deposit all their money to banks, especially in rural areas where economy is hidden, Jaitley claimed his budget is focused on increasing rural incomes and boosting infrastructure, besides ushering in long-pending reforms in the financial sector.

Prime Minister Narendra Modi’s surprise decision last November on a night as the results of US presidency poll were pouring in, to scrap high-value banknotes worth 86 percent of India’s cash in circulation has hit consumer demand, disrupted supply chains and hurt capital investments. PM Modi did find some space in international news but he could not equal or outsmart Trump’s grand victory defeating the “official candidate” Hillary. Clinton

As Gujarat CM, Modi had promised a vibrant economy during his 2014 maiden elections to parliament from Varanasi in UP, but India economy has only survived now- let alone becoming a strong one. That is below the target rate of 8 percent or more that Modi needs to create enough jobs for the 1 million young Indians who enter the workforce in India – a nation of 1.3 billion where half the population is below the age of 25.

Indian Finance Minister Arun Jaitley presented his budget as five states are going to assembly polls later this month the outcomes of which could decide the future politics of India as well as political alliances and equation. Arun Jaitley said that the impact on growth from the government’s cash crackdown would wear off soon. “We are seen as an engine of global growth,” Jaitley said as he delivered the opening remarks of his fourth budget.

Budgets are essentially statements on the status of national economy and they are meant to allocate resources for every sector of the nation and specify the sources of resources including taxes needed for developmental projects, etc. Generally the budgets remain as unfulfilled promises and project proposals as a lot of resources are being diverted and siphoned off by many “important” persons for their personal and private purposes, thereby making corruption inevitable at the source.

The budget talked about concessional tax rates being provided to those moving toward non-cash payment mechanisms, and making it mandatory for many Government transactions to move to digital, which again are important steps in this direction. The reduction of personal income tax at the lowest slab to 5 percent is more a gesture of goodwill for those who bore the pain of demonetization, rather than a big reward.

The budget makes clear the intention of the Government to fight black money and digitize the economy. Limiting the amount of cash per transaction to Rs. 3 lakh, reducing the limit of cash donations to trusts/political parties to Rs. 2,000 per person, and coming up with an innovative way of funding political parties (electoral bonds) are all excellent initiatives. The implementation, though, needs to be watched.

Jaitley’s chief economic adviser advocated slashing personal income tax and accelerating cuts in corporate tax rates. He cautioned, however, against pursuing debt-fuelled fiscal expansion. Still, economists are penciling in a federal fiscal deficit of 3.3 percent of GDP for 2017/18. That would be higher than the 3 percent pledged earlier but lower than 3.5 percent that the government has budgeted for the year soon to end.

The BJP budget has been in consistent with the government’s focus over the last two years on “fundamental” growth, rather than subsidies and loan waivers. It focused on increasing rural incomes and boosting infrastructure, besides ushering in long-pending reforms in the financial sector.

The rollout of a nationwide Goods and Services tax (GST), expected in July after years of delays, and could also weigh on economic growth. Countries that have introduced GST in the past have often faced a relative economic slowdown before the benefits of a unified tax regime feed through.

The budge, as well as the government, has not taken into account the suicides of farmers in rural areas, although the budget also provided for an additional Rs.20, 000 crores for the long-term irrigation fund under NABARD. The total allocations to rural, farm, and allied sectors saw a whopping 24 percent hike in outlay at over Rs 1, 87,000 crore.

The impetus given to affordable housing by according it the status of an ‘Infrastructure Industry’ and increasing the area eligible for affordable housing are steps in the right direction, which would ensure that more people in the country can afford to buy their own homes.

Reportedly, assets worth $7.6 trillion are stashed in tax havens across the globe. Jurisdictions known as ‘tax havens’ across the world offer powerful MNCs and rich individuals banking secrecy and the ability to sidestep financial regulations that apply to ordinary people. However, this secrecy sure hurts the public, as profits and wealth go untaxed, countries lose revenue and allocations in budgets shrink. Reportedly, assets worth $7.6 trillion are stashed in tax havens across the globe.

Not only the rich lords hoard black cash in the country, but the cross-border movement of money that is illegally earned, transferred or utilized (through trade manipulation, organized crime and corruption) or tax avoidance by multinational companies also cause over $1 trillion every year to illicit financial flows in developing countries, including India.

Double Taxation Avoidance Agreements (DTAAs) have been misused and exploited in the past, to avoid paying any taxes – resulting in double non-taxation – and re-routing black money through tax havens for investment in India. The General Anti-Avoidance Rules (GAAR) have also been adopted by the government, extends to deny double taxation avoidance benefits if deals in tax havens are found to be avoiding taxes.

The Union Budget has announced a few new laws to address financial crime – one for confiscation of property of economic offenders and another to deal with illicit deposit schemes. India will start exchanging information with other countries, and receive information regarding Indian citizens’ assets abroad starting September 2017, on an automatic and periodic basis.

Still, economists are penciling in a federal fiscal deficit of 3.3 percent of GDP for 2017/18. That would be higher than the 3 percent pledged earlier but lower than 3.5 percent that the government has budgeted for the year soon to end.

While opinions vary on how long the disruptions caused by Modi’s crackdown on untaxed and illicit wealth will last, there is near unanimity among economists that Asia’s third-largest economy needs a helping hand.

The issue of combating blackmoney was not given proper thoughts. The budget speech did not draw attention to a number of initiatives taken by the government in the past few months to curb the menace of tax avoidance.

Government of India should seek to address these loopholes in the norms of international taxation at the national level, while simultaneously support the establishment of a representative and well-resourced global tax body under the auspices of the UN.

Observations

Demonetization has only further complicated the life of common people and has not succeeded in India because basically every politician and official dealing with economic affairs are corrupt and make wealth illegally that the state defends. Black money also has not many headway in real terms because there is no visible evidence that black money is disappearing from Indian scene. Without sincere intention by officals and politicians nothing can be set right in the country- the rulers since 1947 has only added rot to Indian system which is now defunct. Importantly, no politician party seems to be sincere about abolishing corruption and black money as that could negatively affect the funding of politics and polls by the rich and corporate lords that shamelessly thrive thanks to state protection and policies in their favor.

Budget statements are just the usual gimmick to fool the poor voters.

India acclaimed to be a “bright spot” in the world economy, and Finance Minister Arun Jaitley repeated the same as he unveiled his annual budget, adding that the impact on growth from the government’s cash crackdown would wear off soon.

The BJP government’s budget has kept in pace with the economic policy of India for the last many years since the large scale privatization cum divestment program during the Congress reign with Manmohan Singh as finance minister to promote WB and IMF polices, to release the money of the state sectors for use by the private compote lords and global multinational magnets to increase their own wealth instead of taking care of welfare programs of common men.

The BJP budget this year was a usual one and as former finance minister Chidambaram said there are no real high lights. Those who had expected relief for those who suffered as Modi imposed demonetization without adequate preparation too launch his pet financial dream of ending black and other dirty money in the country. Now it is clear that the black money is here to stay no matter what measures the government adopt mainly because they only corporate lords who control the government want all these dirty cash circulation so that they could make more profits- after the objective of all governments – both elected and electionless – serve the cause of the rich and corporate lords and for which, unfortunately, common people vote a party to power.

The worst of the cash crunch is now almost over, leaving behind a shaky nation, and the government expects it to be fully cleared by the end of April. A private manufacturing survey showed business is slowly returning to normal. Still, the finance ministry forecasts that growth could dip to as low as 6.5 percent in the current fiscal year to March, before picking up slightly in the coming fiscal year to between 6.75 and 7.5 percent. That is below the target rate of 8 percent or more that PM Modi needs to create enough jobs for the 1 million young Indians who enter the workforce in India – a nation of 1.3 billion where half the population is below the age of 25.

The BJP which, like the Congress party, promotes the rich and corporate lords to sponsor cricket and IPL type joint sport exercise to keep the people under illusions, pursues the congress policies by keeping in view the goals of World Bank and IMF, denying subsides and freebies to poor and under privileged- thereby they want to remove the poor classes altogether and increase the illegal wealth of the rich. That is basic of capitalism that fuels wars of imperialism for acquiring more resources- now energy resources of West Asia.

The merging of the Railway Budget with the general budget was done seamlessly and was touted as a historic move, ridding us of the colonial era practice of separate budgets. However, the rationale for merging the railway budget with general budget this year as a new experiment has caused confusion as a separate budget for rail steadily raised the facilities and working of the sector, increasing rails and spending more resources year by year. Unlike other transport sectors, railways have achieved great strides over years and rail system today is not what it was say 10 years back. As the largest employment sector railways is also the cheapest mode of transport in India.

The nation expected the finance minister and PM Modi to give details of demonetization efforts of the fo government giving a brief about the amount of blackmoney it should get and what are the new techniques being employed to tackle this grave anti-national mischief by liquor-cricket bosses like Mallya- a BJP MP with links everywhere especially with cricket bosses and other corporate lords. The Modi government refuses to take the people into confidence on demonetization.

Perhaps, the intentions of the government to guide the country onto the path of inclusive growth are clear. While there will always be some misses and hits in the budget, the Modi Government, unlike the Congress and even Vajpayee governments that religiously promoted corruption and blackmoney as their key policy, has shown the political will to fight corruption and black money, which have become strong appendages of our economy.

Taxes the major revenues for the governments but the Modi government is eager to be sympathetic to big business houses with tax rebates. The minister’s roadmap in the FY-2015 budget promised to reduce the corporate tax rate to 25% within four years, even after three years.

In a difficult year, represented by growing global uncertainties, lower economic growth at home and increasing oil and commodity prices, the finance minister has done to sticking to the fundamentals and doing what is good for the economy, rather than for the vote bank.

While avoiding populist measures and focusing on investment activities that have a multiplier effect, Arun has also tried to garner additional resources through higher tax compliance, rather than higher tax rates. In fact, contrary to popular expectation, the definition of long term capital gains for property transactions was brought down to two years from three years.

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South Asia

Pakistani Gwadar Port: A double-edged sword for Iran

Vahid Pourtajrishi

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Authors: Vahid Pourtajrishi & Elaheh Shirvani

Gwadar port is located in the province of Baluchistan in Pakistan and on the coast of Arabian Sea. The port’s plan was first established in 1954 when it was owned by the Oman’s kingdom. The distance between Gwadar and Karachi, the main commercial city of Pakistan, is 533 km and the distance to Iran’s border is 120 km. After 200 years of Oman’s Kingdom governance over Gwadar Port, by US mediation in the negotiations between Pakistan and Oman, finally this port was sold to Islamabad on 8th Dec. 1958 at the price of 3 million dollars.

The initiary plans for the development of Gwadar was first introduced in 1992 but due to lack of resources on one hand and international sanctions against Islamabad for examining atomic bomb on the other, the plan did not become operational. Finally by the agreements that were reached between Pakistan and China and China’s investment in this project, the first phase of the development plan started to be studied and constructed in 2002. In 2007 the construction of the first phase was completed and on 15th March 2008 Gwadar Port was launched by the entrance of a 70000 ton cargo. (www.psagwadar.com.pk)

The new plans for developing Gwadar were first proposed by the Prime Minister Parviz Mosharaf in 2007 (New York Times, Jan 2013).
Gwadar Port’s Construction Trends:
In fact construction of Gwadar is divided into two separate phases which are as follows:

Phase I (2002-2006)
As it was mentioned earlier, the first phase of this project was first introduced in 2002 and was completed in 2006 by the cost of 248 million dollars. The measures which were taken in the first phase are as follows (the official website of Gwadar Port www.gwadarport.gov.pk):
•    Docks: construction of 3 multi-purpose docks with the capacity of commercial ships of 30000 tons
•    Length of dock: 6.2 m
•    Dimensions of the port’s entrance channel: 4.5 km length, 12.5 m depth
•    Turn-round tank: 450 m
•    Repair dock: a dock with the length of 100 m
•    The required infrastructure equipment in the port including staff boat, hauler, researching ships and etc.
But as we are aware, development of Gwadar Port goes back to the financial agreement which was signed between china and Pakistan (CPEC) in 2015. At the time of signing the contract, China guaranteed to invest 1.62 billion dollars for the construction and development of this port based on BOT contract (China Daily News Paper, July 2016). The goal of this project was connecting Pakistan to western China.

The two countries plans for development and construction of phase II are:
•    Construction of 2 container docks along 3.2 km of Gwadar coast
•    Construction of 1 bulk cargo terminal
•    Construction of 1 grain special terminal
•    Construction of 1 Ro-Ro terminal
•    Construction of 2 oil terminals
•    Port’s entrance channel: the depth of channel will be increased to 14.5 m
•    Construction of a four-lane highway to connect Gwadar Port to Makran Coastal Hwy
•    Construction of a new airport
•    Construction of a gas terminal with a capacity of storing 500 million cube meters daily (for storage of the transported gas from Iran based on peace pipeline contract)
•    Construction of special economic zone with the area of 2292 hectares
•    Construction of water desalination center
•    Construction of 360 MW power plant for electricity production with fossil fuel

Future plans estimated in phase II:
•    Increasing port’s entrance channel to 20 m
•    Constructing150 docks by the year 2045
•    Increasing cargo arrival and departure capacity up to 400 million tons per year

But what draws the attention of each and every expert in the field of international transport is the reason behind Chinese investment in this new port and investigating the future of rival neighboring ports such as Chabahar Port in Iran.

1)    China’s One belt-One road Policy:
As we know, one belt-one road Policy was introduced by China’s president Shi Jen Ping. The new Silk Road or one belt-one road plan is an investment plan in the infrastructure of more than 60 countries of the world and development of two commercial routes of “Silk Road Economic Belt” and “Maritime Silk Road” which were introduced by China in 2013. This plan plus China’s military power can lead to China’s hegemony in East Asia and turn this country into a super power (Monthly Review, Jan 2017). “Silk Road Economic Belt” links the traditional Silk Road to Europe through Central Asia, Russia and Middle East. “Maritime Silk Road” connects China to southeast of Asia and Africa via the sea. The reason behind introducing these two plans was that China’s economy including the development of the local economy infrastructure and exporting goods to the developing countries was not as effective as before. Furthermore, western economies have encountered recession and there was a decrease in returning of the local investment due to the industrial production surplus in China. Therefore the mail goal of the plans was to strengthen Chinese economy and turn the Chinese manufacturing companies into international companies which operate to develop the infrastructure in different countries under the brand “one belt-one road”. China has specifically designated 65 countries as the targets of infrastructure investments.
In order to develop goods and energy transport in Moscow highway to Kazan in Russia, Beijing is seeking investments to launch projects such as Kazakh Railway from Khorgas to Aktau Port on the bank of Caspian Sea, some pipelines from Turkmenistan to China, China-Kazakhstan-Uzbekistan railway, Trans-Asia railway from China to Europe via Kazakhstan and Russia, Silk Road railway from China to Iran (via Kazakhstan) and China-Pakistan highway (Financial Times, 14th Sep, 2015).

2)    One belt-one path, Chinese Version of US’s TPP
By the time that Donald Trump was elected as the president of US in 2017, most of Obama’s adventurous goals and ambitions regarding a liberal economy and international trade reached to an end. One of the international accords of US during Obama’s government was the Trans-Pacific Partnership (TPP). Most of the opponents of this accord believe that accords such as TPP will do nothing for US except extensive costs.
In fact one belt-one rath is a substitute for Obama’s unsuccessful TPP which is proposed by Beijing this time.

3)    Gwadar Port and China-Pakistan Economic Corridor (CPEC)
China-Pakistan Economic Corridor is considered as one of Beijing’s solutions for achieving one belt-one road policy and confronting the difficulties of passing through Indian Ocean without India’s disturbance as the most important regional rival of China. Providing the requirements for one belt-one road project will be burdensome and costly. The initiary investment for CPE was estimated about 46 billion dollars by China but later this amount was increased to 54 billion dollars. As estimated by Pakistan, the worn-out transport network of this country results in wasting almost 3.5% of Pakistan’s GDP. As the framework of this project, new networks of transport will be built which will connect Gwadar and Karachi ports to northern Pakistan, Western China and Central Asia. Based on the statistics given by Chinese experts, modernizing the mentioned transport network will cost 11 billion dollars, make 2.3 million job opportunities between the years 2015-2030 and increase the country’s economic growth by 2-2.5% annually. Based on what was mentioned earlier, CPEC is considered as China’s main plan for achieving the required technical and economic infrastructures in Pakistan.

4)    Chabahar Port
In fact Chabahar International Port is the most important project of Gwadar port which is considered as one of the main competitions between Iran and Pakistan. Chabahar port at a glance:
1.    Entrance to Persian Gulf and Indian Ocean which consists of a sensitive and suitable geographical location
2.    The only ocean port in Iran
3.    Consists of more than 541 km maritime border
4.    The least land distance to Afghanistan, Pakistan and Central Asia. Transit of goods via this port is considered as the most economical port with the least transportation cost
Chabahar and International Transit of Goods
Chabahar port is the intersection of two important corridors; North-South and East-West corridor. In the recent measures taken by Pakistan’s government, Makran’s Coastal Highway was established in South of Pakistan which links Karachi port in Pakistan to Gwadar and then to Rimadan Border Market in Chabahar (Iran).
Chabaahr-Zahedan-Mashhad Railway Project, 1350 km
Chabaahr-Zahedan Railway is located in Sistan and Baluchestan province in Southeast of Iran. This railway connects Chabahar Port to the city of Zahedan and then Mashhad. Currently the speed limit is estimated to be 120 km/h for passenger trains and this number is 90 km/h for freight trains.
Based on the estimations, 300000 passengers and 1.3 million tons of freight will be carried by this railway in the first year of its operation and these numbers will be increased to 500000 passengers and 35 million tons of freight by the twentieth year.
Technical Specifications of the Project:
–    Maximum gradient of the route: 15 in 1000
–    Minimum radius within curve: 1000 meter
–    Number of specific tunnels: 17
–    Total length of tunnels: 11000 meter
–    Number of tunnels: 20
–    Number of stations: 5 main stations and 25 grade III stations
Based on the contract between Iran and India, New Delhi has undertaken to invest 500 million dollars for developing and launching Chabahar port based on BOT contract.
Lack of required rail infrastructure is the main difficulty of Chabahar port to transport the cargo to Afghanistan. Due to this reason the cargo needs to pass through Pakistan by road which decreases the competitiveness of Chabahar port since this will become a permanent challenge for the customers in long term. To transport freight from Chabahar to Herat in Afghanistan, 1784 km of rail is needed which is way less than Gwadaar-Karachi-Afghanistan route.

5)    The Role of the Railways of the Islamic Republic of Iran:
Based on Chabahar’s project development plan, this port has been linked to the transit routes of Afghanistan, Turkmenistan, Turkey and Azerbaijan Republic via rail and in fact Chabahar links to the North-South Corridor at Bafgh intersection.
–    According to China’s strong support of the construction and development of Gwadar port, the future of Chabahar is completely dependent on its construction speed.
–    On the other hand, Kabol and Afghanistan do not fulfill their duties to RAI. Afghanistan is the only country which benefits from both Chabahar and Gwadar projects since linking to these two ports can solve Afghanistan’s geo-economic problems for connecting to international waters.
–    Attempting to rehabilitate Pakistan’s worn-out lines and linking it to Zahedan is considered important since in this way Afghanistan’s attempts to become the rail transit path between Pakistan, Central Asia and Turkey will remain unfruitful.
–    Another treat for Gwadar port project in one road-one path framework is China and Pakistan’s attempt to connect to Europe via the Caspian Sea.
Based on UIC reports, there are a total of 7 routes for connecting China to Europe. Due to inappropriate consition of the infrastructure along the route and the need for development, the travelling time for China to Europe via Tehran cannot be estimated.

Hurry up Iran!
Based on what was mentioned before, what is obvious is that the time factor plays an important role in making Iran as the key to access Poland as the main Europe transit hub. Iran needs to act faster in launching and strengthening all the corridors passing through the territory of Iran. Iran needs to put India under pressure by emphasizing the threats made by India’s rivals, i.e. China and Pakistan, to complete the project in the shortest time possible.
Another measure proposed to Tehran for confronting with the negative impacts of Gwadar port on the rail transit through south of Iran is to launch ITI corridor which is a win-win project for China and Iran since by putting Islam Abad-Zahedan route into operation, at least some parts of China’s exported goods to Europe can be transported through Iran to Turkey instead of being transported via the insecure route of Afghanistan. ITI corridor is way less expensive than the corridor passing through Caspian Sea. This is an opportunity for Iran to attempt to activate ITI corridor before China launches Afghanistan’s route.

First published in our partner Mehr News Agency

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The Not-So-Missing Case of Indian Innovation and Entrepreneurship

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Photo by Anastasia Zhenina on Unsplash

Hitendra Singh and Gauri Noolkar-Oak*

Recently, an article published in Modern Diplomacy caught our attention. The author has cited Mr. Wozniak, co-founder of Apple, and found his famous statement on Indians lacking enterprise and innovation to be ‘music to his ears’. He has then gone on to paint Indians in broad strokes – ironic, for it is something he has accused Indians of doing – and labelled them as a nation lacking entrepreneurial and innovative spirit. While his reasoning certainly has an element of truth and an instant appeal, our response looks to add nuances to his argument and provide a more realistic and complete picture of enterprise and innovation in India.

To begin with, the terms ‘entrepreneurship’ and ‘innovation’ cannot be used interchangeably; not all entrepreneurs are innovators, and vice versa. There are more than 50 million medium and small businesses operating in India which contribute 37% of India’s GDP and employ around 117 million people. These numbers sufficiently prove that entrepreneurship is alive and kicking in the Indian society; Indians are running businesses not only in India but are leading and successful entrepreneurs in many countries of Asia, Africa and rest of the world. Hence, an argument that Indians lack entrepreneurship does not hold much strength.

In the case of innovation and creativity, a different story is emerging. It is slow but is happening and it is solving some of the largest social and developmental challenges in India – from grassroots, to research labs, to top-tier institutions such as ISRO and various DRDO labs. At a global level, India has not only moved up six places in its GII ranking in 2017, but is also ranked second in innovation quality. India has also won international acclaim for its innovative and cost-effective technology; such as its first mission to Mars in 2014, the Mangalyaan, was successful in the first attempt, made entirely with domestic technology, and cost less than the Hollywood movies ‘Gravity’ and ‘The Martian’. It is surprising that the author spots lack of innovation in a household broom but does not see innovation in a nation that sends a successful Mars mission on a budget that is less than that of a Hollywood movie about Mars.

At the national level, grassroots innovation and entrepreneurship are gaining more and more institutional recognition; the National Innovation Foundation (NIF) and the annual Festival of Innovation at the Rashtrapati Bhavan are perhaps the only high-level government initiatives supporting and celebrating innovation in the world. Additionally, many universities and educational institutes across the country host innovation competitions, festivals and incubators.

Several remarkable individuals are nurturing India’s growing innovative and entrepreneurial spirit.Prof. Anil K. Gupta founded SRISTI (Society for Research and Initiatives for Sustainable Technologies and Institutions) in 1993 and the Honey Bee Network in 1997 to connect innovators from all sections of the society to entrepreneurs, lawyers and investors. For more than 12 years, he has walked around 6000 kilometres across the country, discovering extraordinary grassroots innovations on the way. Dr. Raghunath Mashelkar, an eminent chemical scientist, has led multiple scientific and technological innovations in the country, earlier as the Director-General of Council of Scientific and Industrial Research, and now as the President of the National Innovation Foundation.

And then, there are thousands of common men and women, hailing from various walks of life, innovating continuously and creatively to solve pressing everyday problems in the Indian society. There are the famous Arunachalam Muruganantham, who invented a cost-effective way of manufacturing sanitary napkins, and Mansukhbhai Prajapati, who invented a clay refrigerator which runs without electricity. Then there are Mallesham from Andhra Pradesh, who sped up the process of weaving Kochampalli sarees and reduced the physical pains of the weavers, and Shri Sundaram from Rajasthan, who found a way to grow a whole tree in a dry region with just a litre of water. Raghav Gowda from Karnataka designed a cost-effective and painless machine to milk cows, while Mathew K Mathews from Kerala designed a solar mosquito destroyer. Dr. Pawan Mehrotra of Haryana has developed a cost-effective version of breast prosthesis for breast cancer survivors while Harsh Songra of Madhya Pradesh has developed a mobile app to detect developmental disorders among children.

Three women from Manipur, OinamIbetombi Devi, SarangthenDasumati Devi and Nameirakpam Sanahambi Devi invented an herbal medicine that is proven to promote poultry health. Priyanka Sharma from Punjab developed a low-cost biochip to detect environmental pollutants, while Dr. Seema Prakash from Karnataka revolutionised eco-agriculture by inventing a cost-effective plant cloning technique. AshniBiyani, the daughter of Future Group CEO Kishore Biyani, leads the Khoj Lab, which collaborates with the NIF to help commercialise grassroots innovations and ideas.

These and thousands of such examples present a very encouraging picture of the creativity and innovation of Indians. The innovation that the author admires are rooted in a context. Apple and Google (or Lyft or Uber or Spotify) could be created because there was an end consumer who was looking to pay for their products. There are many India innovator-entrepreneurs, such as those mentioned above, who have created products for a necessarily less glamorous but useful India context. Products like brooms and packaged food add convenience to the time-stretched urban and middle and upper middle classes; with a large unskilled and semiskilled workforce competing vigorously for such jobs, does the Indian society have an incentive to invest in innovating them?

Having said that, it is true that upsurge of innovation in India is relatively recent, i.e. about two to three decades old. It is also true that the Indian society has been experiencing socio-economic affluence on such a broad scale only for the past three decades, since the market reforms of 1991. It has been 70 years since Indians have gained sovereignty and control over their resources. The top five innovative countries according to the GII – Switzerland, Sweden, Netherlands, USA and UK – have been sovereign states for about at least two and a half centuries. It would perhaps then be more accurate to compare India’s current innovation scenario with, for instance, the USA’s innovation scenario in the mid-19th century.

Further, given the economic and resource drain faced by the Indian society over centuries, Indian innovation was geared more towards surviving rather than thriving. This explains the ‘group mentality’ strongly rooted in mainstream Indian society; staying and cooperating in a group increased one’s capacity to cope with and survive through all kinds of adversity. Individualistic aspirations, beliefs and actions were then a price to be paid for the security blanket it offered. And yet, once relative stability and affluence began to set in, the innovative and creative instincts of Indians lost no time in bursting forth.

Long story short, both innovation and entrepreneurship are thriving in India. They might not be as “macro” or glamourous as Apple or Uber, but they are solving fundamental problems for the Indian masses. Undoubtedly, there is a lot of room for improvement and growth – India has a long way to go to be recognised as a global leader in innovation and entrepreneurship. However, the scenario is not by any means bleak, as these many examples point out. The trajectory of enterprises and innovation in India is only upward. The future is promising.

* Gauri Noolkar-Oak is Policy Research Analyst at Pune International Centre, a liberal think tank based in Pune, India.

Views expressed by the authors are personal and do not reflect those of the organisation.

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Changing Perceptions: How Pakistan should use Public Diplomacy

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Traditionally in International Relations the concept of “hard power” remained the basic focus for states so as to achieve power and dominance in international anarchic system but with the changing scenarios in the age of globalization, economic interdependency and rapid spreading of information through various tools, “Soft Power” concept emerged which had great impact on states’ foreign policies. This term of soft power was first coined by Joseph Nye in mid-1960’s which could be defined as the ability of the state to influence others without coercion and this soft power technique basically revolves around three major instruments such as Culture, political values, and foreign policies. Apart from soft power concept, there is another basic concept called as “Public Diplomacy”. This could be described as the further dimension of soft power because by practicing Public Diplomacy state can initiate their soft power policies and can achieve the desired outcomes by winning the hearts and minds of foreign audience and non-governmental entities because by doing so it will enable government and decision making bodies of foreign states to act accordingly.

In context of South Asia particularly taking into consideration the important developing state Pakistan whose basic concern is to maintain friendly and neutral relations with other states Public diplomacy could, however, help it to maintain its relations in the regional complex structure where India is seen as the dominant power and alongside India the powerful rise of China as an external actor in South Asia. By efficient usage of Public diplomacy, Pakistan can improve its bilateral ties with the neighboring states.

The image of Pakistan in foreign media is portrayed as the state which is full of many internal and external challenges and it is also not portrayed as the safe country to travel into. In order to improve the image, Pakistan firstly needs to improve its relations with states within the region and for that India which is considered as hostile neighbor Pakistan should effectively use its public diplomacy tool it should introduce exchange programs because by educating youth and by deploying positive image in their minds Pakistan can influence them which could bring change in the coming years and also by increasing tourism activities. This would make foreigners aware of the fact that Pakistan is a secure state. Similarly, cultural activities, sports diplomacy, literature, art, and media could also have a great impact so as to change the perceptions.

Hence it could be suggested that for the development of state it is important for Pakistan to improve its public diplomacy by changing perceptions of public and elite of neighboring states it should take basic steps which could change the negative image which is in limelight since 9/11. Pakistan by enhancing the public diplomacy in other states as the tool to implement its soft power policies would, however, be able to economically, culturally and politically improve its stance in the International arena.

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Algerian controversy over Salafism puts government control of religion on the spot

A controversy in Algeria over the growing popularity of Saudi-inspired Salafi scholars spotlights the risk governments run in a region in...

Newsdesk10 hours ago

Strong outbound tourism demand from both traditional and emerging markets in 2017

Virtually all source markets reported higher tourism spending in 2017, reflecting continued strong demand for international tourism across all world...

Tech12 hours ago

A European approach on Artificial Intelligence

The EU Commission is proposing a European approach to make the most out of the opportunities offered by artificial intelligence...

South Asia13 hours ago

Pakistani Gwadar Port: A double-edged sword for Iran

Authors: Vahid Pourtajrishi & Elaheh Shirvani Gwadar port is located in the province of Baluchistan in Pakistan and on the...

Europe14 hours ago

Will the EU split into the East and the West?

On March 1, 2018 the European Parliament has adopted a resolution initiating a disciplinary procedure against Poland. Warsaw is accused...

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