📰 In Kohima, a cemetery with a tennis court
It is one of several World War II graves maintained by the Commonwealth War Graves Commission
•Nagaland’s capital Kohima probably has the only cemetery on earth that sports a tennis court.
•The United Kingdom-based Commonwealth War Graves Commission (CWGC) has listed five sites with unusual features. These sites are associated with World War I and World War II.
•The Kohima War Cemetery is one of 23,000 World War graves across the continents maintained by the CWGC, an intergovernmental organisation of six member-states who ensure the men and women who died in the wars will never be forgotten.
•Present-day Nagaland and adjoining Manipur comprised the only theatre of World War II in the Indian subcontinent.“In 1944, following hard fighting in the Burmese jungle, the Japanese forces in the region pushed across the Chindwin River and into India. In their path was the Fourteenth Army, made up of forces from across the Commonwealth,” the CWGC wrote on its site.
•“This invasion hinged upon two key points, (Manipur capital) Imphal and Kohima. Defeat for the Fourteenth Army here meant that the Japanese could strike further into India,” it said.
•Kohima was of key strategic importance, at the highest point of the pass through the jungle mountains to Dimapur, now Nagaland’s commercial hub adjoining Assam. The fall of Dimapur would have meant leaving the Allied defenders of Imphal at the mercy of the Japanese soldiers fighting alongside Subhash Chandra Bose’s Indian National Army.
•“On 3 April, a Japanese force of 15,000 attacked Kohima and its 2,500-strong garrison. The ridges at Kohima lead to two weeks of difficult, bloody fighting as the defending forces were pushed back to the former house of the British Deputy Commissioner,” the CWGC said.
•The lawn of this house had a tennis court where the British officers played for recreation.
•“The surviving defenders, encamped around the garden tennis court, prepared for their final stand. As the Japanese forces prepared to attack, they were attacked in turn by the lead tanks of a relief force, saving the garrison and pushing the attackers back,” the CWGC said.
•Despite this setback, the Japanese force continued to fight for Kohima before they were finally forced to withdraw in May. Those who had fallen in the defence of Kohima were buried on the battlefield, which later became a permanent CWGC cemetery, with further burials from the surrounding areas,” it added.
•Designer Colin St. Clair Oakes incorporated the tennis court into the design of the cemetery.
•Among the other unusual sites listed by CWGC are the World War I “crater cemeteries” – Zivy Crater and Litchfield Crater – in the Pas de Calais region in France. The craters were caused by mine explosions.
•Another site listed is the Nicosia (Waynes Keep) Cemetery or the “cemetery in no man’s land” in Cyprus, requiring the presence of armed guards. This is because the cemetery is on the border of a patch of land disputed between the southern and northern parts of the island since the 1970s.
📰 Friend in need: On India-Sri Lanka ties
India and Sri Lanka have shown an ability to quickly act on promises to each other
•External Affairs Minister S. Jaishankar’s virtual meeting with Sri Lanka’s Finance Minister Basil Rajapaksa on Saturday, with an assurance that India will support Sri Lanka “in all possible ways for overcoming the economic and other challenges posed by COVID-19 pandemic”, was significant and timely. A crucial week lies ahead for the Sri Lankan economy, when President Gotabaya Rajapaksa must make a decision on whether to service debts to bonds with an instalment of $500 million due on January 18, or to default for the first time ever, given the island’s precarious finances. Mr. Gotabaya is expected to address Parliament this week on how he will deal with the economic crisis. This includes a credit crunch, a slump in GDP spurred by COVID-19 losses to tourism, exports and remittances, foreign reserves that dwindled from $7.5 bn in 2019 to $1.6 bn in November 2021, and pending debt repayments of more than $7 bn expected in 2022. The most immediate problems come from rising unrest. In the preceding weeks, the Rajapaksa government reached out to India and China, which are most likely to help given their respective interests in the island. Mr. Gotabaya even received a visit from Chinese Foreign Minister Wang Yi, who discussed a full debt restructure of Sri Lankan borrowings. Beijing has also extended a currency swap arrangement of $1.5 billion. It was to India, however, that Mr. Rajapaksa turned with a humanitarian appeal and SOS. Mr. Jaishankar, Finance Minister Nirmala Sitharaman and Mr. Basil decided on a “four-pronged” initiative, that included Lines of Credit (LoC) towards the import of fuel, food and medicines, currency swap and debt deferrals from India to Sri Lanka, as well as the conclusion of the Trinco-oil farms project.
•Matters have moved swiftly since Mr. Basil’s visit and it is heartening that the Trincomalee project MoU was signed earlier this month after decades of delays. Subsequently, India has extended $400 million under the “SAARC currency swap” arrangement and agreed to a partial deferral of a $500 million settlement from Sri Lanka by two months; the $1.5 bn LoC for essential imports is reportedly under way. It would be naive to assume that New Delhi’s assistance will paper over other problems in the complex relations between India and Sri Lanka. Amongst other issues, the friction over fishermen’s rights and pending political solution for war-torn Tamil areas remain sticking points, while concerns over Colombo’s strategic ties with China have often led to open disagreements. It is important to note, however, that in times of peril, New Delhi and Colombo have established a robust channel of communication and demonstrated an ability to act on promises quickly, proving that adage about friends (and neighbours) in need.
📰 A ‘lifeline’, animal farmed
The recent transplant of a pig’s heart into a man highlights the close connection between species
•A few days ago, from the midst of the daily gloom of COVID-19, came uplifting news of a pathbreaking surgical procedure in a New York hospital. A pig’s heart was successfully transplanted into a 57-year-old man dying of heart failure. The ‘xenotransplant’, as interspecies transplants are called, was a reminder of the endless possibilities to treat otherwise untreatable diseases.
•Transplantation to replace failing organs is one of the spectacular achievements of medicine in the last century. The number of transplants has increased, the list of organs transplanted has grown and outcomes have got better. But the field is also a victim of its own success as the numbers of those needing transplants now far outnumbers the availability of human organs. Both living and dead humans are being sourced as donors but because of scientific, ethical and social challenges, the number of human donors remains restricted. The desperation for organs also creates a fertile ground to lure the vulnerable to sell their organs as we witnessed in the recent kidney scandal in Assam.
•Given organ shortage, it is intuitive that scientists would turn to animals. It also overcomes another hurdle in human to human transplant; one does not have to seek consent from an animal which can be sacrificed for the organ. Of course not all agree with such a narrow utilitarian approach.
Brief history
•The use of animal organs to replace diseased human ones is a very old idea. Some of the earliest blood transfusions were from animals. Early kidney and liver transplants were attempted from baboons and chimpanzees as these primates were considered closest to humans. In the early 1960s, a surgeon called Reemtsma in New Orleans performed 13 chimpanzee to human kidney transplants. One of the recipients, a schoolteacher, went back to work and lived for 90 days. However, most of these transplants failed and were gradually given up.
•The interest in pigs as a source of human organs is recent. There are several reasons why scientists have now zoomed in on these otherwise shunned creatures as a source. One interesting reason is that in the western world, it is socially more acceptable to breed pigs for this purpose. From a scientific viewpoint, pigs are genetically modifiable to reduce the chances of rejection by the human body. There are concerns about the transmission of pig viruses through the transplant but this barrier has also been partly overcome by bio protection and genetic manipulation. But COVID-19 will regnite this debate.
•In what sounds somewhat dystopian, there are now companies breeding genetically modified pigs in special farms for the express purpose of transplantation. One such U.S.-based company Revivicor supplied the pig heart for the New York transplant.
•Will this transplant boost xenotransplantation? Will this mean the end of organ shortage? Even the most optimistic scientists will agree that these are still open questions but the developed world is inching in this direction. It is a matter of time before more xenotransplants are attempted. When this happens, there will be the question of whether the organ will function in the long term. And, whether it will transmit hitherto unknown diseases to humans. A dying individual offered a xenotransplant as the only life-saving option may not care for such questions.
•The animal rights movement is not impressed. PETA has decried the pig heart transplant. It said: “Animals aren’t tool-sheds to be raided but complex, intelligent beings. It would be better for them and healthier for humans to leave them alone and seek cures using modern science.” Coming from meat-eating countries, this sounds somewhat paradoxical. The easy public acceptance of the pig compared to other animals as a source says something about our double standards.
•There was a curious fallout of the New York case in India. The local media suddenly remembered the bizarre story of a heart transplant attempted by a surgeon called Baruah in the 1990s. Some went on to describe this as the world’s first attempt. Baruah, working out of his Guwahati clinic, had transplanted the lung and heart of a pig into 32-year-old Purno Saikia. It was clearly a premature experiment using an unsuspecting poor Indian as a guinea pig. It ended in disaster for the patient and Baruah who was struck off his medical degree.
•Though somewhat shaken by COVID-19, humanity’s desire to prolong life at all costs is a given. An increasingly common cause of death and suffering is end stage failure of critical organs (heart and liver). And since new organs replace failing ones successfully, we will continue to widen the net for sourcing them. But in our quest towards immortality, recent events show that in good and bad ways, our lives depend not only on other humans but also on other species cohabiting the planet; all creatures big and small.
📰 Storm warnings of a megacity collapse
What urban India needs today is not flashy retrofitted ‘smart’ enclaves but sound, functional metropolitan cities
•The unpredicted spell of staggering rain over Chennai on December 30, 2021 capped a season of repeated monsoon inundation and urban paralysis, coming as a stark reminder to political leaders that they are underestimating the risk of urban collapse due to extreme weather events.
•Tamil Nadu’s capital, with an international airport and a major seaport, was gridlocked after heavy rain at the tail end of the northeast monsoon, presenting a dystopian picture of ambulance sirens wailing in still traffic, people deserting vehicles to walk to rail terminals in blinding rain and workers unable to return home until late in the night. The nightmare revived memories of the great deluge of 2015, although the death toll was not comparable. Suburban gated communities on the city’s IT corridor and inner city residents alike were affected, and COVID-19 was momentarily forgotten, as rail and Metro lines were quickly overwhelmed.
A non-starter
•The catastrophic 2015 flood, an unprecedented event, raised expectations of a major shift in priorities for urban development. That deluge was akin to the great flood of 2005 in Mumbai, which too raised hopes that policies would be redrawn. In spite of immense community support and active mobilisation for change, both cities witnessed a regression, as informality remained dominant, laws were just on paper, and unsustainable changes were made to the urban environment. Permanent, elite constructions were favoured at the cost of ecology.
•The monsoon of 2021 in Chennai, with its black swan evening of 24 cm rain, raises a question: would urban development be more sustainable and equitable if the guiding principle is climate change? This new approach would prioritise ecological and sustainability concerns over aesthetics, and reject market-oriented ‘fantasy plans’, as some scholars describe an increasingly flashy vision of urbanisation. While green roofs, electric vehicles and solar power would be welcome, they would not replace conservation of natural flood plains, rivers, mangroves, marshes and gardens. It would be the future-proofing that India’s cities need, to avert sudden dysfunction caused by climate events.
Report’s inputs
•In its report on Reforms in Urban Planning Capacity in India (September 2021), NITI Aayog cites the COVID-19 pandemic as a revelatory moment that underscores the dire need for all cities to become healthy cities by 2030. Climate impacts are certain to affect cities even more fundamentally and permanently.
•Consistent with the approach of the present Central government, NITI Aayog recommends 500 priority cities to be included in a competitive framework, adopting participatory planning tools, surveys and focus group discussions to assess the needs and aspirations of citizens. There is considerable importance given to technological tools, private sector talent and mapping strategies to identify a city’s assets and to plan spatially. What is needed is a central role for democratically-elected local governments, to ensure greater inclusion and a sense of community. In Tamil Nadu, urban local bodies have not had elections for a decade, while the long coastline of the State has been hit by cyclones that have crippled Chennai and other towns.
It is multidimensional
•All dimensions of a city’s growth, starting with affordable housing, play a central role in adapting to future climate change. They can lower carbon emissions growth even during infrastructure creation if biophilic design and green materials are used. A large volume of new housing stock is being created in the 7,933 urban settlements in the country today, of which the bulk is in a small number of million-plus cities.
•Less than half of all cities have master plans, and even these are ruled by informality, since both influential elites and the poor encroach upon commons such as wetlands and river banks, as Chennai and Mumbai have witnessed. After a catastrophic flood, the emphasis is on encroachment removal directed almost entirely at the less affluent.
•A top-level department for climate change adaptation is best suited to serve as a unifier, bringing all relevant departments in a State, such as housing and urban development, transport, water supply, energy, land use, public works and irrigation to work with elected local governments that set priorities and become accountable. Neglect of municipal councils, lack of empowerment and failure to build capacity among municipal authorities have produced frequent urban paralysis in extreme weather. In Chennai, the focus after every flood has been on the storm water drain network, while commercial encroachment of the vast marshland in Pallikaranai, a natural sponge for the city, gets insufficient attention. This experience echoes the fate of encroachments along Mumbai’s Mithi river, where the Mithi River Development and Protection Authority, after the 2005 flood, favoured removal of dwellings, while sparing ‘permanent structures’ that were too big to touch.
Leaning on market forces
•The encroachment of important commons reflects the extreme dependence on market forces to supply affordable urban houses. In Chennai, speculative values have outpriced the middle class and young workers aspiring for their first home, sending them out of the city to relatively cheaper suburbs. Most of these suburban investments do not reflect their true value, even if they are layouts ‘approved’ by the Chennai Metropolitan Development Authority, because outlying town panchayats have little capacity or funds to create even basic infrastructure such as water supply, sanitation and roads.
•For many residents, monsoon 2021 was no different from others before it. They may live in gated towers along the IT corridor but they struggled to stay afloat, using boats or trucks to get supplies and to travel. Such images rarely get media play, as they represent the unflattering reality of high house prices. Suburban home buyers would gladly transfer some part of the price for infrastructure building, rather than let it be cornered solely by speculators. Now that Chennai is working on a new master plan and a climate action plan, with planned investments in infrastructure including Metro rail links to the western and southern suburbs, it should introduce regulation to ensure value capture.
A familiar story
•Loose metropolitan boundaries with little control over neighbouring local governments produce amorphous building regulations. In Chennai’s case, unplanned densification is occurring in three neighbouring districts which are linked to the core city by local transport and are hence part of a larger metropolitan area. Here, traditional natural assets such as wetlands, reservoirs and watercourses are being lost rapidly. This is typical of other major Indian cities as well, where population growth at the peripheries has been accelerated by anomalous land and housing price increases at the core and absence of adequate good rental housing.
•India’s cities will continue to be drivers of economic growth with significant production and consumption, but that sunrise story is threatened by unsustainable urban development in the era of climate change. The experiences of Mumbai earlier and Chennai recently are storm warnings, and greater centralisation of governance can do little to address this. The need today is not for flashy retrofitted ‘smart’ urban enclaves but sound, functional metropolitan cities that can handle floods, heat waves, pollution and mass mobility to keep the engines of the economy running. Urban India would otherwise turn into a subprime investment.
A streamlined tax regime is pivotal to a clear, constructive and adaptive regulatory environment
•Notwithstanding the eventual introduction of the Cryptocurrency and Regulation of Official Digital Currency Bill in Parliament, cryptocurrencies continue to proliferate. In fact, a liberal estimate suggests that as many as 10 crore Indians may already have investments exceeding a total of $10 million in them. This not only creates an avenue for generation of tax revenue for the nation but also puts forth a Herculean challenge for the tax authorities who have to track and tax transactions involving cryptocurrencies.
•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. Trading in cryptocurrency may be classified as transfer of a ‘capital asset’, taxable under the head ‘capital gains’. However, 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’.
•However, this in itself is not sufficient in order to put in place a simple yet effective taxation regime for cryptocurrencies. Since cryptocurrencies are unlike any other asset class, stored and traded virtually, there are varied challenges which need to be addressed in order to streamline the process of taxing crypto transactions.
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. If these are taxed under capital gains, what should be taken as the cost of acquisition for the purpose of computation? If the acquisition cost is to be taken as the fair market value of the said cryptocurrency as on date of generation, how does one arrive at this value? Since there is no consistency in the rates provided by the crypto-exchanges, it is difficult to arrive at a fair market value. Conversely, there are divergent views in the market treating such an income as ‘business income’ or ‘other sources of income’, which are taxable at individual tax rate slabs (which may be higher than those applicable to capital gains). 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?
•Second, 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. In such cases, it becomes difficult to pinpoint which jurisdiction’s tax laws would become applicable and what kind of tax treatment would be effected especially in light of various nations having differing tax treatment for crypto assets including imposition of a general ban on them.
•Third, the identities of taxpayers who transact with cryptocurrencies remain anonymous. Each crypto address comprises a string of alphanumeric characters and not the person’s real identity, giving tax evaders a cloak of invisibility. Exploiting this, tax evaders have been using crypto transactions to park their black money abroad and fund criminal activities, terrorism, etc.
•Fourth, 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. Another consequence of this lack of information is that the tax authorities are left with hardly any tools to verify any crypto transactions which do get reported. They are instead forced to fully depend on the data provided by the taxpayers.
•Fifth, 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.
•While the aforementioned challenges provide enough food for thought to policymakers, certain steps can be taken to provide a robust mechanism for taxing crypto transactions going forward.
•To begin with, the income-tax laws pertaining to the crypto transactions need to be made clear by incorporating detailed statutory provisions. These could include provision of a definition for crypto assets for tax purposes and guidelines addressing the major taxable events and income forms associated with virtual currencies. This should be followed by extensive awareness generation among the taxpayers regarding the same.
•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. 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 is important
•Furthermore, the Government must impart training to its officers in blockchain technology. In this regard, it may be noted that 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. Tax authorities should also equip themselves with the latest forensic software (such as Elliptic Forensics Software is being used by the USA Internal Revenue Service and GraphSense used in the European Union) which can analyse a high volume of crypto transactions at a time and raise red flags in cases of suspicious transactions.
•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.
📰 Predatory pricing is prising Indian livelihoods apart
The economic dogma of lower prices, regardless of the means, as a sole and worthy pursuit is being challenged
•Last week, and all of a sudden, people in the small town of Talode in Nandurbar district in Maharashtra could not buy Colgate toothpaste from their only local store. It was because Nandurbar’s distributor had decided to boycott Colgate’s products and not supply them to the kirana store in Talode. Further, all consumer goods distributors in Maharashtra were protesting against Colgate’s alleged unfair treatment of traditional distributors vis-à-vis B2B technology companies such as Reliance’s JioMart, Udaan and others.
Breaking the flow
•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. A vast majority of these distributors and traders are small family businesses that have developed relationships with their local stores over many decades.
•The kirana store in Talode sells a 100g tube of Colgate toothpaste to the consumer for ₹55, the maximum retail price (MRP). The Nandurbar distributor sells Colgate toothpaste to the Talode store for ₹45 and the manufacturer, Colgate, sells it to the distributor for ₹40. This is an illustrative but typical example of the current supply chain for consumer goods products in India.
•Enter the new age technology B2B companies. They have developed technologies to connect directly to the kirana store in Talode through a mobile phone app, bypassing the intermediaries. They supply Colgate toothpaste to the local store for ₹35, lower than the ₹45 charged by the distributor. Ostensibly, the people of Talode will also benefit from these lower prices at their local store.
•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 Colgate to stop supplying goods to the technology companies. Colgate has refused to do so and, hence, the distributors have decided to boycott its products.
Hardly ‘creative disruption’
•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 if this disruption is driven not entirely by technology innovation but also through pricing power, would it still be healthy?
•These technology companies bear a 15%-20% loss on every Colgate toothpaste they sell to the local store. They deliberately offer their product at a price lower than what it costs them, to lure local stores away from the traditional distributors. 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.
•Udaan has suffered total losses of more than ₹5,000 crore in just five years and JioMart reports even greater losses. Indian companies are able to absorb such heavy losses because they have access to copious amounts of money. These companies are flush with funds from foreign venture capital firms, which in turn are largely funded by American pension funds and university endowments. To put it cheekily, an American senior citizen is discounting Colgate toothpaste for a Talode villager while displacing the Nandurbar distributor, thanks to what economists call global capital flows. Such capital flows foster innovation and yield enormous consumer benefits is the neo-classical economic doctrine.
•The flip side is that India’s millions of distributors and intermediaries have no access to such finance. They are typically small businesses built over many decades by pledging their personal assets as collateral in return for meagre bank loans. These small companies are cut off from the endless stream of free foreign money that gushes into new age ‘startups’ and established large corporates. Evidently, these companies use the money to not only build new technologies but also to undercut competitors and steal market share. They are able to sustain huge losses for several years until they destroy incumbents and gain dominant market share. After which, they will presumably raise their prices to turn profitable. It is similar to what India experienced in the telecom sector with Jio.
•This practice, called predatory pricing, is illegal in most countries including India. Behind the veil of technology innovation of these startups lies a murky abuse of pricing power. If this was true ‘creative destruction’, then these technology companies would lure the Talode store owner only with their innovative app and efficiency than also suffering losses on every sale and offering cheaper finance.
•While consumers may benefit from lower prices, should the livelihoods of millions of distributors, traders and their families suffer only because they do not have equal access to easy money as these technology companies? The distributor and trader in Nandurbar and the kirana store owner in Talode belong to the same local community. Surely, there will be social ramifications within that community for some of these families being thrown in disarray?
A global problem
•To be sure, this is not just an India problem but a global one. The conventional economic notion that lower prices, regardless of the means adopted, are a sole and worthy pursuit is under severe challenge. 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. The new Chairperson of the Federal Trade Commission in America, Lina Khan, who is a fierce critic of abuse of pricing power by technology companies, is seeking to frame new rules to check such anti-competitive behaviour.
What India faces
•But in India’s case, there is an added complexity of foreign capital flows. Large sums of free money printed in America are finding their way to India’s stock and start-up markets. 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. Even erstwhile champions of free capital flows are now cautious about their social implications.
•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. By some estimates, there are more than 20 million families (100 million people) in India whose livelihoods depend on intermediary roles in the consumer goods supply chain. If suddenly these families are displaced and left stranded, it can cause enormous social unrest in the nation. Perhaps, the residents of Talode may even be willing to pay slightly more for their tube of toothpaste if they realise that some families in their community are being put to misery by free American money.
