Saturday, December 27, 2025

India’s no-show at SAARC summit likely to dent Pakistan’s image

SAARCHit hard by India’s decision to pull out of the SAARC summit slated to be held in November, Pakistan has suddenly raised a demand for inclusion of China and Iran in the South Asian Association for Regional Cooperation, fully well knowing that these two countries are not from South Asia. The SAARC is the South Asian countries association and currently includes India, Sri Lanka, Bangladesh, Pakistan, Afghanistan, Nepal, Maldives and Bhutan. Has Pakistan forgotten history that a proposal had been mooted by Bangladesh in 1970 for creation of an exclusive block of South Asian countries? The idea was to look for development of human resources, agriculture and science and technology to improve health and hygiene conditions in the member countries. Almost 11 years later, the proposal was accepted in 1981 and in August 1983, SAARC was formed with seven countries,while Afghanistan joined this block in year 2005.

India’s move was tactical and it made it clear to members that it was pulling out because Pakistan has been unable to guarantee foolproof security for years. The message was clear that Pakistan has not been able to host even a single international event of this stature. It is not only India that has pulled out of SAARC but Bangladesh and Afghanistan share similar views and have come out strongly against Pakistan. Ditto for Bhutan. For Pakistan, SAARC could not have come at such a wrong time — November, months after Uri attack. The trouble in Kashmir Valley and the Uri attack happened at a time when the hosts of SAARC should have exhibited impeccable international behaviour befitting of countries yearning for regional cooperation.

Pakistan was nursing false hopes that SAARC member countries would not take the extreme step of pulling out of the meeting to be held in Pakistan itself. The onus now lies on Pakistan if there is a question mark over SAARC’s survival in future. Member countries are openly questioning why Pakistan should be part of SAARC.

Not finding any escape route, Pakistan now dumped by SAARC is clamouring for participation of China and Iran. As Central Asian countries can’t be included in SAARC, Pakistan’s move seems flawed and ill-timed. After all, what has been Pakistan’s contribution to SAARC except terrorism? Little doubt that the overwhelming view amongst SAARC countries is to dump Pakistan and continue with SAARC sans Pakistan.

Indeed, India and other SAARC nations’ no-show does not spell the end of the SAARC movement but it does rob Pakistan of its day in the sun.

letters@tehelka.com

‘AAP ka paap’— Kejriwal in denial mode over MLA’s ‘hawala’ links

SatyenderKumarJain
Delhi Health Minister Satyendra Jain comes under the scanner of Income Tax Department

The Aam Aadmi Party, it seems has become controversy’s favourite child, the latest being Delhi Health Minister Satyendra Jain coming under the scanner of Income Tax Department for allegedly transferring over 16 crores through ‘hawala’ channels. ‘Hawala’ is an illegal system of transferring money whereby the funds are paid to an agent who then instructs his associates to pay the money to the recipient. The minister with ‘hawala’ links has been asked to appear before the Income Tax Department on 4 October.

The IT Department claims that four companies belonging to Satyendra Jain — Indo Metal Impax, Paryas Info Solution, Akinchan Developers and Manglyatan — transferred Rs 16.39 crore through ‘hawala’. In return, the minister allegedly received cheques issued to these companies, according to the IT department. The summons issued to Jain under section 131 (1) of the Income Tax Act 1961, by Deepak Garg, Additional Commissioner of Income Tax states, “Whereas your attendance is required in connection with the proceedings under the IT Act in the cases of Indo-Metal Impex Private Limited (for assessment year 2011-12 and 2012-13), Prayas Infosolutions Private Limited for assessment year of 2012-13 and Akinchan Developers Private Limited for assessment year 2011-12 and 2012-13.” As a proof of wrongdoing, the Income Tax officials have recorded statement of Kolkata’s ‘hawala’ accused Jeevendra Mishra who has reportedly spilled beans before investigators.

The question is: can AAP play the victim card as in the past, when its own minister has been summoned by the IT department in relation to four companies with ‘hawala’ dubious transactions? We all know that Delhi Chief Minister and
National Convener of AAP, Arvind Kejriwal, has served as Joint Commissioner of the IT Department and knows the implications and legality of the notice. He fully well knows that investment in India may not be a crime but transactions through ‘hawala’ fall in the category of crime. But when he tweeted “I summoned Satinder this morning. Saw all papers. He is innocent, being framed. If he were guilty, we wud have thrown him out. We stand by him,” it took everyone by surprise. After all, Kejriwal had entered politics on the promise of cleansing the body political but his party functionaries have allegedly been involved in all kind of scandals, controversies and criminal acts. He is the same Chief Minister who had come out with a list of 13 most corrupt politicians in the country. And the same Chief Minister is giving a clean chit to his minister in the backdrop of such a serious charge.

letters@tehelka.com

'The Comedy of Errors' may nip AAP in the bud

Gurpreet Singh Ghuggi, a comedian-turned-politician, has recently been made the Aam Aadmi Party's Punjab convener.  Photo credit: Prabhjot Gill
Gurpreet Singh Ghuggi, a comedian-turned-politician, has recently been made the Aam Aadmi Party’s Punjab convener. Photo credit: Prabhjot Gill

Like William Shakespeare’s early play The Comedy of Errors, touted as one of the most farcical comedies, the Aam Aadmi Party — which until last month had been the party to watch — has rendered itself as a party of comedians! Gurpreet Ghuggi, well-known comedian-turned-politician, has been made its convener and Bhagwant Mann, comedian-turned-MP, has become the poster boy for Punjab, that goes to polls in early 2017.

AAP’s pitch for power had strengthened with the induction of former resident editor, Indian Express and Hindustan Times Kanwar Sandhu, Congress leaders, Sukhpal Singh Khaira and Aman Arora, while hopes hinged on former BJP MP Navjot Singh Sidhu coming on board. Today, AAP is not only left with comedian-turned-leaders (with due respect to Arvind Kejriwal, national convener and Delhi Chief Minister who is also known for his antics) at the helm of affairs but it faces an imminent split that threatens to derail its ambitions for the forthcoming election in Punjab.

The party is amidst a political upheaval following removal of Punjab AAP convener Sucha Singh Chhotepur on the basis of a sting into his corrupt deals. Ever since, Chhotepur has been up in arms against the AAP leadership and fomenting a revolt within the Punjab unit and outside. Five of AAP’s 13 zonal coordinators belonging to the politically sensitive districts of Amritsar, Bathinda, Gurdaspur and Jalandhar had served an ultimatum on AAP demanding immediate reinstatement of Chhotepur as AAP convener in Punjab. The later assembly of AAP volunteers at Golden Temple in Amritsar on 3 September reposed full faith in the ousted leader. Support for Chhotepur got further momentum at a ‘Punjab Parivartan’ rally organised in Gurdaspur, which was nothing short of a revolt against the leadership of Kejriwal.

Besides being plagued by charges of corruption, AAP made a goof-up on the cover page of its manifesto, showing a picture of the party’s broom in the backdrop of the Golden Temple. This irked the community and evoked strong protests. However, the mother of all controversies ensued when Chhotepur protested against two lists of AAP candidates for the elections slated in February 2017. Not finding his chosen candidates in the first list released by the party, Chhotepur boycotted the event where party leader Sanjay Singh announced the names. The last nail in the coffin was the announcement of 13 more names which again did not have a single candidate of his choice. The protest against candidates has actually not only been restricted to Chhotepur but out of 32 nominees, 25 have faced protests from different volunteers to the extent of burning effigies of the candidates, including Baljinder Kaur, AAP’s women’s wing president, nominated from Talwandi Sabo.

As if all this were not enough, an audio sting surfaced on social media. Hardip Singh Kingra, who quit AAP after not getting the ticket from Faridkot, showed a sting clip in which a person allegedly close to Durgesh Pathak (AAP’s national executive member) demanded Rs 5 lakh from a volunteer for fixing a meeting with him.Kingra also accused Sanjay Singh of pocketing Rs 5 lakh out of Rs 30 lakh collected from volunteers during the Maghi Mela early this year. Pathak and Singh are observer and Punjab in-charge for AAP respectively.

Later, in a video uploaded on social media, Kejriwal commented, “I am sad that a number of leaders of my party have been found involved in corruption or moral turpitude. It is not acceptable. AAP was not founded to protect such persons. If tomorrow Delhi Deputy Chief Minister Manish Sisodia or anyone else, including me, is found indulging in corruption, he will face immediate removal.”

Masses may be willing to experiment with AAP, but whims and fancies of its leaders have to resonate with the general public. Also, both its tenets — graft-free governance and volunteer-centred  decisions — seem to be under attack

Amid the controversies, AAP made a major faux pas by inducting Harmail Singh Tohra, son-in-law of veteran Shiromani Akali Dal leader Gurcharan Singh Tohra. It sparked fresh dissent, with Kanwar Sandhu expressing his displeasure on Facebook. Little doubt that the party is not only facing a split but is staring at rebellion at several places where it has declared candidates. The party is also undergoing a leadership crisis. Till now it has failed to find a Sikh leader of stature to be its face in Punjab, which has traditionally been run by Sikh chief ministers. Kejriwal’s reported efforts to bring former Rajya Sabha MP Navjot Singh Sidhu to AAP fold did not work. The bitter cricketer-turned-politician, then went a step further and announced his own Awaaz-e-Punjab front, taking Kejriwal head-on.

The party’s popular face in Punjab, Bhagwant Mann, too has proved to be a liability as he first got into trouble for making a video of Parliament functioning and more recently was booked for insulting mediapersons during a rally at Bassi Pathana in Fatehgarh Sahib. Not only that, the indecisiveness on AAP’s part in not projecting a CM face is also going against the party. The delay has led the Opposition to claim that Kejriwal himself is eyeing the top position, giving the Opposition a slogan on a platter to reject Delhi CM, being an outsider.

Faced with such a situation, at a make or break rally, Arvind Kejriwal rolled out the party’s farmers’ manifesto at Baghapurana in Moga on 11 September. The large crowds that this rally attracted might help the party check the slide in its fortunes. If the aim of the rally was to mobilise crowds for a “show of strength” to bring the party back in the game, then the purpose has partly been met. The 31-point ‘Kisan Manifesto’ — promising to make farmers debt free by December 2018, re-enacting Sir Chhotu Ram Act of 1934 (Moneylenders’ Debt) under which the sum of interest payable would not be allowed to exceed the principal amount, full implementation of Swaminathan Commission Report on crop pricing by December 2020 — seems to be a desperate attempt to woo farmers, who account for a majority of voters.

The party has painfully discovered that masses may be willing to experiment with it, but whims and fancies of its leaders have to resonate with the people. Today, the party that rose like phoenix on the slogan of corruption-free governance and being run by volunteers, finds both its tenets under attack. To again quote from Shakespeare’s Hamlet, it’s like “that one may smile and smile and be a villain”. The Aam Aadmi Party has to act fast to live up to the expectations that it had aroused amongst common people before it is too late!

letters@tehelka.com

AAP seems to be in turmoil as new front emerges in Punjab

Delhi Chief Minister Arvind Kejrwal paying obeisance in Golden Temple at Amritsar
Delhi Chief Minister Arvind Kejrwal paying obeisance in Golden Temple at Amritsar

“Seems, madam? Nay, it is; I know not seems. ‘Tis not alone my inky cloak, No, nor the fruitful river in the eye, Nor the dejected ‘havior of the visage. These indeed seem.” These lines from William Shakespeare’s Hamlet aptly describe the state of Aam Aadmi Party today for which times seem bleak. Just when infighting rocked the Punjab unit of AAP, Delhi Chief Minister Arvind Kejriwal had to sack his third minister. Then came the Delhi High Court judgment setting aside the appointment of 21 AAP MLAs as chief parliamentary secretaries. Twelve of his legislators have faced arrest on various charges. This could not have come at a worse time, because polls in Punjab are a few months from now. Party cadres have crossed swords with each other in some places, with videos and pictures pointing to AAP leaders’ corrupt deals.

The Suchha Singh Chhotepur episode alone has hurt the party to an extent that damage seems irreparable. The party leadership, that was expected to dispel any misgiving with intellectual bandwidth, seems to have fallen into a trap laid by other political parties that were baying for its blood.

For sure, AAP’s victory in Delhi was an eye-opener for other parties. Political pundits were of the opinion that if there would be a challenger to Prime Minister Narendra Modi in times to come, it would be none other than Arvind Kejriwal. Ironically, however, the brute majority in Delhi has failed to give any respite to AAP from the Centre’s gameplan of steady strangulation with the help of ever-willing security agencies and uncooperative civic bodies. To add to it Delhi police is under the tutelage of the Centre.

Now politicians, cutting across the political spectrum, have joined hands to create a fourth front, Awaaz-e-Punjab, giving a new dimension to Punjab politics as it heads for the Assembly poll in early 2017. Former BJP MP Navjot Singh Sidhu, suspended Akali MLA Pargat Singh, Independent MLAs Balwinder Singh Bains and Simarjit Singh Bains and the breakaway faction of AAP, Democratic Swaraj Party, have formed the outfit to save Punjab from those who have destroyed it through corruption, deceit and moral turpitude. Sidhu, who has floated the front despite AAP’s overtures to bring him into its fold, alleges that Kejriwal wants only yes men. This has left AAP leaders stunned. Interestingly, they claim Awaaz-e-Punjab has not yet been turned into a political party. This may be a tactical move, say observers, because its mission is touted to be a drug-free Punjab and corruption-free governance. With all these developments, AAP seems completely in turmoil, not only in Punjab but in the country.

letters@tehelka.com

Urjit Patel is a worthy successor to Rajan

Raghuram_Urjit_Reuters“Urjit Patel is very important for the country”. Who said this? Not Prime Minister Narendra Modi, who has been instrumental in Patel’s selection as the next governor of Reserve Bank of India, succeeding Raghuram Rajan. Nor Finance Minister Arun Jaitley, who is currently at the helm of affairs.

Few people know that this statement came from Manmohan Singh, when he was prime minister in 2013. The occasion was when Patel had applied for an Indian passport, before taking up the offer to become the RBI deputy governor. Patel’s recommendation letter addressed to the home ministry was written by none other than Manmohan Singh, the then prime minister. It is believed that when Patel was picked up by the International Monetary Fund (IMF) to head its India office, the then prime minister, PV Narasimha Rao, the then finance minister Manmohan Singh and the then commerce minister, P Chidambaram had expressed admiration for Patel.

It is an established fact that though he was born in Kenya and studied in the UK and the US, the focus of Patel’s scholarly pursuits was none other than India. When Patel was heading the IMF’s India Chapter, Manmohan Singh requested the then IMF chief to “loan” him for two years to be an advisor in the finance ministry. Patel has not only won admiration from Congress leaders but also from the NDA leadership, including Modi when he was Gujarat chief minister. In the mid-1990s, when Patel drafted his first report to create the Infrastructure Finance Development Company, Chairman of Reliance Industries Mukesh Ambani asked him to lead Reliance’s energy operations, a job he held for two years. It was during this stint that Patel met Modi, following which the Gujarat government made him a non-executive director on the board of Gujarat State Petroleum Corporation.

Having been Deputy Governor for three years, Urjit knows the job he has been given. He belongs to the Raghuram Rajan league, having honed his talent at Oxford, the University of London and Yale. Born in Nairobi on 28 October 1963, Patel’s thought-papers were well appreciated at Yale and Oxford, from where he completed his MPhil, and in many global institutions including the IMF and World Bank. However, it was not only his qualification and impressive CV (PhD in economics from Yale, educated at Oxford, and stints in IMF and The Boston Consulting Group) but also because Jaitley too had strongly recommended the name of Urjit Patel for the coveted top slot at the RBI.

It is learnt that flamboyance is not Patel’s style. Like Thomas Carlyle, the famous Scottish philosopher, social commentator and teacher, “Speech is great but silence is greater”. He prefers to keep a low profile but has strong fundamentals. Little doubt that from PV Narasimha Rao to Manmohan Singh, from P Chidambaram to Arun Jaitley, Urjit Patel has been everyone’s favourite. In this case, the final seal of approval on his name came from Prime Minister Narendra Modi himself, who had detailed discussions with his Finance Minister, as there were at least five names in contention for this post.

Raghuram Rajan must be credited with bringing a major shift in our banking system by cleaning up bad loans. We should expect the new RBI Governor to carry forward his rich legacy to bring much-needed reforms in our banking

Besides Urjit Patel, the final list had formidable contenders like Chief Economic Adviser Arvind Subramanian, Economic Affairs Secretary Shaktikanta Das, the RBI’s former Deputy Governor Subir Gokarn, and noted economist Kaushik Basu.

When it came to a tie between Urjit Patel and Subramanian, Modi finally chose Patel. Usually, there is considerable time overlap between the incoming and outgoing governors, but a decision on the incumbent governor took lots of time. The final seal of approval came only on 20 August, just a fortnight before Raghuram Rajan relinquishes office on 3 September.

Urjit Patel’s name figured prominently in the list of four shortlisted candidates who could fit the bill. The government had formed a special search committee headed by Cabinet Secretary PK Sinha. Interviews were held at PMO residence at Race Course subsequently. The name of Subramanian was also considered in the final round but ultimately the choice fell on Patel, as both PM and FM approved his candidature for the top post. There is talk in the corridors of power that Basu and Gokarn were also strong contenders but when the PM was told that Basu may not be available immediately to step in when Raghuram Rajan gives up the charge, Patel’s name got all the more weightage.

Also, it was learnt that bringing Gokarn back from IMF would not be a wise decision as the government itself had recommended Gokarn to the IMF. For the record, Gokarn had been appointed as executive director to IMF only in November 2015 to represent India, Bangladesh, Nepal and Sri Lanka. Taking a U-turn would have meant “indecisiveness” on the part of the government on such vital decisions.

To be fair to Raghuram Rajan, he should be credited with bringing a major shift in our banking system by cleaning up bad loans, as non-performing assets (NPAs) were wrecking the banking system. We should expect the new RBI Governor to carry forward the rich legacy of Rajan to bring much-needed reforms in our banking system. It is a time of economic transition and a very critical juncture for our banking system. The bank of the nation, State Bank of India, is going ahead to merge subsidiary banks to become a bank to reckon with, not only in India but the world over. Rajan was often very vocal and could call a spade a spade, for which he was criticised by some political figures. Inflation has to be checked to provide succour to poorest of the poor. On the part of political leadership, care must be taken — as happened in case of the outgoing RBI Governor, who was criticised by a senior politician from the ruling party — Urjit Patel should not be a target of politicking and should be allowed to function sans controversies in the best interests of the country.

letters@tehelka.com

From Rio Olympics to Tokyo — the agony and the ecstasy!

maxresdefaultAs the curtains come down on the Rio Olympics and the Tokyo gears up to host the biggest sports jamboree in 2020, it’s time to take stock of India’s performance and what’s wrong with Indian sport! Indians have a habit of hero worship, which is why, when PV Sindhu and Sakshi Malik saved India from the disgrace of not figuring in the medals tally, a grateful nation spontaneously erupted in joy. Dipa Karmakar missed the medal by a whisker though her execution of the highly risky Produnova vault won her global applause.

The grateful nation savoured the moments of glory brought by these young women but the same moments brought to the fore the ugly side of our sports culture. Indeed, it is a difficult pill to swallow as Abhinav Bindra went down to silver-medalist Niccolo Campriani in a one-shot shoot-off; Jitu Rai lost; Sania Mirza and Rohan Bopanna lost the mixed doubles bronze medal; men’s hockey team lost while Saina Nehwal was hit by an injury. Here’s a list of what’s wrong with our sports: The four-year ban slapped on Narsingh Yadav for a doping violation; Dipa Karmakar not being allowed to take her physiotherapist to Rio; the hockey team missing the march past due to lack of jerseys; Sports Minister Vijay Goel disregarding rules; Abhay Chautala landing at Rio without the CBI’s permission; Haryana minister Anil Vij forgetting to buy tickets for matches; and a radiologist being made the Indian contingent’s chief medical officer just because he is the son of a senior functionary of the Indian Olympic Association, point to what is wrong with our sports.

The Rio Olympics have come as a rude shock but a much-needed eye-opener for India. That it took close to two weeks for India to open its medal account shows how far we are from realistically evaluating the performance of Indian athletes at the Olympics. The prediction of Indian Olympic Association of 15 medals, Sports Authority of India expecting 25 medals, the government-sponsored Target Olympic Podium Scheme (TOPS) to help the Indian athletes in their training and equipment needs, have all come to a cropper. The most apt comment from the Union Minister Maneka Gandhi: “All three girls have come from families that were given no government help. They come from poor backgrounds and have worked very hard. I hope this Olympics teaches everyone that if you look after a girl properly…first you let her be born, then educate her, promote her…promote her dreams…and she will get you wherever you need to go.” Time for introspection and preparation, so that we can go from gloom to ecstasy in Tokyo.

letters@tehelka.com

GST, the biggest tax reform since Independence!

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When Prime Minister Narendra Modi compared the Goods and Services Tax Bill to Lord Krishna and said that while the GST was ideated by someone, it was made a reality by someone else — a reference to the fact that it had been conceived by the Congress while its passage was overseen by the NDA — he was obviously referring to the biggest tax reform in the country. In Hindu mythology, Krishna is the son of Devaki and was brought up by foster-mother Yashoda. With 443 ‘ayes’, the GST Bill (122nd amendment) has been rolled out of Lok Sabha while it has already been passed by the Rajya Sabha. It will now have to be ratified by a majority of 29 state Assemblies.

With this, the Centre has cleared a major roadblock and is getting closer towards making GST a reality. The GST is a tax reform that has been on the cards for more than a decade. In the current tax regime, states tax sale of goods but not services. The Centre taxes manufacturing and services but not wholesale and retail trade. The GST, by bringing all indirect taxes under one roof, will simplify tax administration, leading to foolproof compliance. As a consequence, it will eliminate economic disparities in production, trade and consumption. it will actually cut down production costs to make exports more competitive. The GST, even in the diluted version that has been proposed now, would widen the tax base and bring in parity for both the Centre and the States. That is because, unlike, excise duty, the GST is paid only by the final consumer. In other words, the GST, like all indirect taxes, is a tax on consumption which would seek to bring about a uniform rate on all forms of consumption: it would tighten the tax net and widen it.

The biggest indirect tax reform since Independence, the GST Bill is expected to bring about an economic integration of the Indian economy. Little doubt that the country’s small-scale manufacturing units are eagerly awaiting for this piece of legislation that would be a game-changer for SMEs. Currently, if we add up all the taxes paid by the manufacturing firms, it almost comes up to 25 percent. After GST implementation, it will slide to about 18 percent, bringing great relief to these companies.
Politics over GST

Former finance minister P Chidambaram has been quick to comment, “Good Sense Triumphs,” while TMC MP Derek O’Brien dubbed the GST as “Girgit Samjhauta Tax” as it came after long years of confrontational politics. First mooted by the Vajpayee regime in 2000, the GST remained stuck at the discussion stage for almost 16 years despite an expert committee headed by the well known economist Vijay Kelkar backing it and 160 countries having already implemented it successfully. When in opposition, the BJP did everything to stop its passage and not let the Congress run away with the GST; when out of power, Congress did the same thing. The Congress softened its opposition to the Bill only after the government accepted its demand for dropping the additional one percent inter-state levy meant to compensate manufacturing states including Maharashtra, Tamil Nadu and Gujarat. Manufacturing states stand to lose revenue since the GST tends to shift the point of tax levy from the origin to where the goods or services are to be eventually utilised. The Congress demand for putting a cap at 18 percent GST rate in the Constitutional amendment has also been accepted.
GST may be a reality only by 2017

If all goes well and the GST is rolled out on 1 April 2017 as planned, Prime Minister Narendra Modi and Finance Minister Arun Jaitley will have something concrete to show off as reform. The GST as an indirect tax reform will also save businesses from Inspector Raj. Most goods are sure to become cheaper, but services may cost more in the aftermath of GST. Tax evasion will become difficult. As such the GST is a welcome step though it must be implemented with due caution as it has an inherent risk of turning the states into “glorified municipalities”. All said and done, this is a pathbreaking reform that is being described as a gamechanger for the Indian economy. Basically, it means that most of the existing taxes will be done away with and replaced by a single-point levy. It will remove a huge plethora of paperwork and red-tapism. It is a single tax at the final point of consumption. The fact that India is on the right track can be gauged from the fact that about 160 other countries have adopted the single goods and services tax.

The positives:

♦ It would simplify tax administration
♦ It would improve compliance
♦ It would remove multiple taxation
♦ It would create a single market
♦ It would tax goods and services at the same rates
♦ It would reduce taxes on manufactures
♦ It would make business more competitive
♦ It would eliminate evasion
The glitches:

♦ Tax on services may be up substantially from 14 percent to 20 percent
♦ Tax on retails would almost double
♦ Imported goods would be taxed at higher rate by around 6 percent
♦ Online GST Network may be difficult for small business to follow
♦ States may lose autonomy to change their tax rates.
♦ Manufacturing states may lose revenue
♦ Service sector will have to register in every state
With the implementation of the GST, the manufacturers will find doing business and compliance hassle-free as they will only pay a single-point tax instead of the numerous levies at each stage of the production process. Then there would be ease of movement throughout the country as goods can be moved from state to state with no tax barriers. Government revenues are expected to increase as simplification is an incentive to pay tax rather than evade or avoid it. Above all, the ease of doing business will improve.
However, on the flip side, the GST in the current form will not achieve the objectives of a single uniform tax as it will not be a single tax as originally envisaged because of pressure from state governments. If there is a central tax, a state tax and a third inter-state tax and key taxable items like alcohol and petroleum products are kept out of the purview of GST, it would not serve the whole purpose. These products are seen as huge cash cows for the Centre and states, so GST may not be applicable to them. Also, the stated aim of keeping the tax rate at 18 percent, looks like a distant dream as yet. No wonder lobbying has already begun to mobilise support for a lower GST. This is despite expert reports that show 18 percent as a revenue-neutral rate.

In other words, at this rate the same revenue will be raised as in the past if applied to all goods and services. Right now we can only say that the GST Bill is coming as the most significant economic reform since Independence!

letters@tehelka.com

Parochialism has to go if gender equality is to come in

Gang rape protest by Dijeshwar Singh 17

Years ago, as a student of English literature at the Panjab University, I was dismayed how the protagonist in Hamlet, the masterpiece by the bard William Shakespeare, could address in his soliloquies his lady love Ophelia as “Frailty, thy name is woman”. That showed the mindset that prevailed in sixteenth century England. Guru Nanak Dev had a word of advice for people when he penned “So kyon manda aakhiye jit jamme rajan” (Why call ‘her’ inferior? From her, kings are born”).

This fortnight’s cover story describes the poignant tale of being a woman in India. Ridhima Malhotra, who worked on the story, opined that “in our country, the real trauma of a sexual assault victim begins after the physical attack has ended. We live in a patriarchal society and this is reflected in the mindsets of all those who survivors come in close contact with after being abused, including their own families. In a sexual assault, the crime scene is the woman’s body. It cannot be treated like a regular crime scene such as a room or a road.” Kanhaiya Bhelari, who reports from Bihar, wrote that exactly 99 years ago, Mahatma Gandhi visited East Champaran district of the state to fight against the exploitation of farmers by the British. Today, people of the district are praying for the rebirth of Gandhi to ensure the end of atrocities against women. Mudit Mathur from Uttar Pradesh reports that deep-rooted gender bias and social inequalities have aggravated the situation in the most populous state of the country. The growing State practice of diluting the seriousness of the crime by doling out heavy compensation to silence the victims stems from the political leaderships’ age-old biases of gender inequalities. Prateek Goyal quotes from a report of National Crime Records Bureau that Maharashtra has recorded the highest number of cases of assault on woman with intent to outrage her modesty. In fact, during a Lok Sabha proceeding in 2015, Union Minister for Women and Child Development Maneka Gandhi stated that Maharashtra had recorded highest number (13,287) of cases of rape and assault on women in a year. MG Banga writes from Haryana that being in the vicinity of the national capital has meant prosperity but this has failed to transform the orthodox mindsets and prejudice that is reflected in Haryana having one of the lowest sex ratios in the country besides rise in cases of female foeticide, honour killing, rape and dowry menace.

As per our team of reporters, unless our elected representatives distance themselves from disgusting parochialism and each individual makes a conscious effort to be that change, nothing will change! We at Tehelka are waiting for that change to happen!!

letters@tehelka.com

The old order is giving way to the new one

Crowd at the Sarojani Nagar Market ahead of DipawaliSeventy has a sacred meaning in the Bible, as it is made up of the factors of two perfect numbers, seven (representing perfection) and ten (representing completeness). As such, it symbolises perfect order and a period of judgment.

The timing of the current issue of Tehelka (August 1-15) that is in your hands now has a special significance as India would be celebrating its 70th Independence Day. It is time to do some introspection into India’s growth story — India after independence till 1991 and the period after launch of reforms. When India attained independence, it was marred by poverty, illiteracy, lack of inclusive growth and widespread corruption.

Seventy years later, the scars of Partition live on in the public memory. Two wars and an emergency mark the later period. In 1975, a state of internal emergency was declared in the country by the then president of India Fakhruddin Ali Ahmed, on the advice of then prime minister Indira Gandhi. That single order granted full power and authority to Indira Gandhi to rule by decree. In independent India’s history, this period was the most despicable, considered as a blot on democracy and a black day in Indian history. Unemployment, corruption, illiteracy, lack of social security, brain drain, terrorism, scattered development, tardy agriculture growth marked the period from 1947 to 1991.

Before 1991 and later

The period after 1991 is marked by swift reforms. In his maiden speech as the union finance minister, Singh quoted one of France’s the greatest writers, Victor Hugo: No power on earth can stop an idea whose time has come. About 25 years later, India is among the world’s fastest economies and an emerging third world leader. There still are issues like poverty, corruption, unemployment, lack of social security, gender inequality but there are positives like a growing middle class, gradual phasing away of subsidies and a burgeoning economy that is the envy of developed nations. India has emerged as a potential superpower, the only Asian power that can overtake mighty China in the 21st century.

Little doubt that today the US ensured India’s entry into the nuclear club. Not only that, the US-backed India to the hilt for a permanent seat in the UN Security Council. India in 2016 is a member of G20, the group of most powerful nations in the world. However, when India’s journey for globalisation began in 1991, our country was a member of G77, a group of developing countries. A line of credit of $10 billion to Africa, $2 billion to Bangladesh shows how Indian economy is shaping up. Remittances from NRIs total $73 billion a year, and foreign direct and portfolio investment often exceed $60 billion per year. Commercial loans exceed $35 billion. Its per capita income has shot up from $375 in 2011 to $1,700 today, taking it from low-income to middle-income status. India is now the third-largest economy in the world after China and the US. The best part is that India’s growth rate has exceeded that of all European economies and Japan.

Between 1991 and 2016, a record 138 million Indians were raised above the poverty line. The journey is poised to be faster after 2016 in view of the current pace of growth. China was earlier hailed for raising 220 million people above the poverty line between 1978 and 2002. However, India’s rate of poverty reduction was much faster. Before 1991, India begged for food aid if the monsoon failed. When it suffered two successive droughts in 1965 and 1966, mass starvation was avoided only by US food aid. The Green Revolution changed that, and private seed production further improved productivity after 1991.

India suffered two successive droughts in 2014 and 2015. Yet this time, it remained a net food exporter. It became the world’s largest rice exporter in 2014. Post independence till 1991, it took years to get a telephone landline connection. With the mobile phone revolution, India by now has reached the level of the third largest smartphone market in the world. Significantly, India has the triple distinction- over a billion cellphones, instant availability coupled with cheapest telecom rates in the world. Even people below the poverty line have mobile phones. By 1991 only 20 percent of Indians had a TV set. Now two-thirds do. In 1991, Doordarshan had a TV monopoly. Today, the country has close to 1,000 TV channels.

India is set to experience a dynamic transformation as the population explosion would not be a liability but an asset turning into a demographic dividend. Women’s empowerment has added to its strength

NaMo wave

Now to mark two years of the Narendra Modi government, the Centre for Media Studies conducted a survey which suggested that Modi’s performance as the Prime Minister was liked by a vast majority (62 percent) and a big majority (70 percent) wished him to continue as the Prime Minister for another five-year term. Modi’s initiatives to improve administration and country’s image globally have received big thumbs ups from a majority of people. The survey encompassed 15 states and covered both the rural and urban population. Public perception of the Modi government is of corruption-free governance, a successful cleanliness drive named Swachh Bharat Abhiyaan and an excellent global rapport and a positive dialogue with Pakistan.

Youngest country

India at 70 is looking towards its young population with hope. Every third person in India today is a youth. Behold, in the next seven years, the average age of individuals in India would be 29 years. That would make India the youngest country in the world. In fact, India is set to experience a dynamic transformation as the population explosion would not be a liability but an asset turning into a demographic dividend. Women’s empowerment has added to the strength of India.

On the infrastructure front, the Indian road network has become one of the largest in the world, with the total road length increasing from 0.399 million km in 1951 to 4.24 million km now. Moreover, the total length of the country’s national highways has increased from 24,000 km (1947-69) to 92,851 km.  After seven decades of Independence, India has emerged as the third largest producer of electricity in Asia. It has increased its electricity generation capacity from 1,362 MW in 1947 to 1,13,506 MW.

Parliament has made elementary education a fundamental right for children in the age-group of 6-14 years.  At independence, India’s literacy rate was a paltry 12.2 percent, which increased to 74.04 percent, as per Census 2011. A decrease in death rates is considered one of the major achievements that came India’s way in this sector. While life expectancy was around 37 years in 1951, it almost doubled to 65 years by 2011.  After a long-drawn struggle, India has finally been declared a polio-free country. Independent India has taken confident strides in its road to scientific development which began with the launch of its first satellite Aryabhatta in 1975. Its first mission to Mars was launched in November 2013, which successfully reached the planet’s orbit on 24 September 2014. India is also aggressively pursuing both nuclear and missile programmes. India@70 is looking at a total transformation in all spheres. India is changing radically and it can be observed in attitudes, aspirations and ambitions of its people. Old orders have broken down and new worlds are being created.

letters@tehelka.com

When loan defaulters get rewarded with write-offs

l2015081468507As a student of literature and later as a journalist with the Indian Express group, I always found that we all meet our nemesis when good is rewarded and evil is punished.

Famous Greek tragedy Oedipus Rex by Sophocles, Hamlet by William Shakespeare and Dr Faustus by Christopher Marlowe are its most apt examples.

However, when it comes to our banking system, instead of action, the government shores up banks that create bad loans by waiving these off.

Recently, the government has given 22,915 crore to 13 public sector banks under the Indradhanush plan which proposes to give them 70,000 crore in four years.

Reason: the non-performing assets (NPAs) of banks have almost doubled in just one year, from 2.78 lakh crore in 2014-15 to 5.39 lakh crore in 2015-16.

As many as 29 public sector banks have written off a whopping 1.14 lakh crore of bad debts during years 2013 and 2015. Bad debts stood at 15,551 crore for the financial year ending March 2012, they had shot up by over three times to 52,542 crore by the end of March 2015.

Figures collected from various sources reveal that bad loans written off by banks during 2004 and 2015 amounted to more than 2.11 lakh crore.

The State Bank of India wrote off bad debt of 21,301 crore in 2015, Punjab National Bank (6,587 crore), Indian Overseas Bank (3,131 crore), ­Allahabad Bank (2,109 crore) and so on.

Standalone SBI figures may appear big but if we take into account the fact that SBI is about three times larger than the next largest bank in the country in terms of business, it would mean that it is amongst the banks with less NPAs.

The Ministry of Finance takes the plea that write-offs are basically technical and writing off of NPAs is a regular exercise conducted by banks to clean up their balance sheets without foregoing the right to recovery.

The argument that public sector banks have to do risky social sector lending does not seem justified because most willful defaulters are in the corporate sector.

The role of powerful vested interests, middlemen and corrupt bankers in the cases of non-performing assets is questionable.

Till regulatory authorities and enforcement agencies tighten up their noose, banks will continue lending to unscrupulous business houses and organisations while financial institutions would keep on technically writing off loans to clean up balance sheets. The question remains as to where will the buck stop!

letters@tehelka.com

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