We all need a Citizens' Charter

I belong to a very interesting Whatsapp Group, that was formed to debate issues important to the Indian Nation, and to share ideas and suggestions on Policy that could work towards the betterment of some aspect of public life. 

This group called Illuminati, had tasked me with the drafting of a Citizens Charter, which would list out some critical behavior expectations from an enlightened citizen, which all the members would debate and adopt or revise as per majority vote. I reproduce the first draft here, and I would love to receive comments and suggestions to make the same more useful or robust.

Illuminati Citizens Charter

We, the members of this movement to encourage an ever increasing number of Indian Citizens to agree to voluntarily submit themselves to a Citizens Charter defining the ideal standards of Ethical, Democratic and Egalitarian behavior expected of a Citizen of India. 

I, the undersigned, having appended my signature to this Charter, do pledge to abide by this Citizens Charter in letter and spirit, and shall do my utmost to encourage my family and friends to similarly abide by the same. 

1. Franchise. 

I solemnly swear that I shall always exercise my Right of Franchise. I shall unfailingly cast my considered vote for the most suitable candidate in all elections that I am eligible to vote in, whether they be for the Local Body, the State Legislature or the Parliament. I shall do my utmost to encourage such Candidates who I sincerely believe support Meritocracy, are Patriotic, and place the Nation and the Indian Constitution above narrow Self Interest and abhor considerations of Caste, Creed, Community or Religion based politics. 

2. Abhor Corruption. 

I pledge to do my utmost to discourage corruption in public life in any form. Whether it be a low level act to escape a traffic infraction or a high level one involving Corporates and Governments and, everything in between. I promise to never be personally involved in any corrupt act and also counsel others to abhor such practices if it comes to my knowledge and information. 

3. No Discrimination.

I will never practice discrimination of any sort and I will oppose, with all the vehemence at my disposal, any discrimination on the basis of Religion, Caste, Gender, Color, Race, Place of Origin or Sexual Orientation. If I come across anyone indulging in discrimination in word or deed, I promise not to be a mute spectator, and shall endeavor to educate and prevent or report such individuals. 

4. No Animal Cruelty. 

I shall never indulge in any act of cruelty towards animals and undertake to actively work towards the prevention of any act of cruelty to animals, whether they be pets, beasts of burden or wild animals. If I do consume animal products, I shall restrict myself to food products and avoid fashion and Fur products that are obtained by inflicting cruelty. I assure that I will make every effort to ensure that the products I consume are obtained humanely and I shall restrict my consumption to only permitted animals and avoid products obtained from Protected, Exotic or Wild animals and Birds. 

5. Reduce, Reuse, Recycle.

I swear that I shall responsibly consume scarce resources or products that have a deleterious effect on the environment. I shall be prudent in my use of Electricity, Fossil Fuels, Disposable Plastics and products manufactured using fuels and methods that add large quantum of carbon into the atmosphere, such as burnt bricks, etc. I shall actively promote the planting and nurturing of trees and prevent any wanton or irresponsible tree felling. Thus, I shall strive to minimize my Carbon Footprint and aim to achieve a Carbon Neutral existence for my family and myself. 

6. Civilized Drivers. 

I undertake to always drive my vehicles in a responsible and courteous manner. I promise to follow all the traffic rules and also adopt a civil and the Right-of-Way principle of driving, and strive to drive on public roads causing a minimum of inconvenience to other users. In the event that I am involved in any accident, I promise not to bolt from the scene, and shall make every effort to provide medical assistance to anyone injured in the accident. I also promise that I will report all accidents to the jurisdictional Traffic Police and undertake to assist them in their investigations. I shall endeavor to be a Good Samaritan on the roads and offer assistance to victims of vehicle accidents, and inform the authorities about the incident and assist them in their attempt to provide Medical Attention and to bring the guilty party to book. I will never permit my under aged children to drive a vehicle, and shall inculcate the highest standards of safety and courtesy in my children who are licensed to drive.  

7. Local Body Rules. 

I promise to help make my city, town or village more livable by following all the Bylaws and Civic Amenity Rules. I promise not to deviate from Sanctioned Plans and default on Setbacks and FSI regulations, and ensure that Light, Ventilation, Privacy and Safety are not denied to my neighbors due to my transgressions, as I expect my neighbors to care for my hygiene aspects. I undertake to also not tolerate others for their deviations from the bylaws and shall bring such deviations to the notice of the concerned authorities. I also promise to practice all mandated aspects of Good Urban Citizenry like Rain Water Harvesting, Waste Segregation at Source, Not Dumping of Waste in public areas and Never Littering or Spitting on the streets of my city. 

8. Athithi Devo Bhava. 

I promise to make my country welcoming to tourists and visitors both from within India and from outside. I will try to be Pleasant, Warm, Helpful and Accommodating of the needs of our guests and will try to ensure that all others do so too. I will try and prevent anyone from taking undue advantage of our guests in any manner and do my utmost to present a positive picture of our country and culture that expects us to treat our guests like God. 

9. Taxes and Duties. 

I solemnly pledge to truthfully and dutifully pay all the taxes and duties that are payable by me towards the Local, State and Central Governments. I will not take recourse to any illegal or questionable methods for assessing my taxes and undertake to do so only by using the legally permitted provisions and exemptions in a fair and transparent manner. I realize that taxes are my way of contributing to the development of my nation and I shall do my utmost to get everyone I know to similarly comply and contribute.

Place:                                                Name:

Date:                                                 Signature:

My Disappointments with Budget 2016

Is this Really an NDA Government?

Prime Minister Modi was decisively voted to office on the basis of his promise of 'Acche Din Aanewaale Hai' credo (Good Days are around the corner), and in a manner of speaking, to take up from where Prime Minister Vajpayee had left off. Big Bang Reforms, Job Creation, Wealth Creation and Robust GDP Growth were supposed to be a given, and a departure from the regressive Left of Center politics of the ungainly UPA Coalition Governments of the past was supposed to be a reasonable expectation. However, on several counts, Finance Minister Arun Jaitley disappointed me with his Budget for 2016. The large outlays for Rural Development without creating urban wealth and Jobs, makes this look like just another UPA-X Budget.

Direct Taxes - A Historical Anomaly

I cannot profess to be an expert on all aspects of the Economy and Union Budget preparation but I do understand this. We have been "Robbing Peter to pay Paul" since the past 65 years. The salaried class continues to bear an inordinate burden of the Direct Taxes and nothing is being done in every Budget to widen the tax base.

Why cannot the Government consider bringing all Aadhar Card holders (a known and verified database, with the yet un-enrolled eager to enroll, to enjoy the benefits of subsidies) into the IT net with a voluntary low rate of tax, say 5% with compulsory filing of Returns? 

There must be hundreds of million people in India, who are self employed, earning handsome incomes but not paying a rupee in tax and thus contributing nothing to Nation Building. If the Govt. brings all earning folk into a benign tax net and expands the Direct Tax Revenue, Salaried Class Income Tax rates can be cut and their disproportionate burden towards the nation reduced. Nothing done, disappointed. 

Reduce and Simplify Direct Taxes

Ideally, a simplified Tax Compliance mechanism where all the Salaried Class pays 10% Flat Tax Rate on income with no Exceptions and Rebates is something we need to work towards. No move towards implementation of the recommendations of the Direct Tax Code, which has been gathering dust for years. Disappointed.

A Harebrained Scheme to Tax Provident Fund Savings

So instead of rationalization of taxes to reduce the burden on the Salaried Middle Classes, we have a completely incomprehensible move to tax even their savings. The Provident Fund Saving is the only nest egg that a Private Sector Employee has to retire on. To want to tax that too is akin to twisting the knife in the back a couple more times, as though bleeding them dry was not enough. One day after I wrote my piece, The Times of India had pretty much the same thing to say.

Where is the much publicized Disinvestment?

The NDA from the Vajpayee days had a stated principle that the Government's job is to Govern and not to manufacture Soap, Operate Hotels or Run Airlines. The huge financial package for the loss making Public Sector every year could be used to build hospitals, schools, roads and other infrastructure, and the reticence of Modi to boldly take a position on the same is baffling. His early political learning seem to be very Left of Center, and perhaps, he still carries some baggage of Nehruvian Economics where all things were supposed to be Government run or controlled. In this one aspect, Prime Minister Modi is more old fashioned than his much senior NDA predecessor, who had a Disinvestment Ministry and wanted the Government to exit all non-critical ventures and unlock the wealth held in these properties and businesses. 

One was hoping that the Government would make some significant announcement in connection with 100% Disinvestment in a few Public Sector Undertakings and stop the continuous bleeding of tax payer money by supporting inefficiency and sloth that constitutes the sector today. Instead, we see some spineless Stake Sale of marginal significance. This is not a reflection of the 'Government should not manufacture soap' policy. Disappointed again.

I was hoping to see genuine investment in Farm Infrastructure

One is deeply distressed that the state of our farmers has not materially improved over the past 65 years. Surely, everyone should strive to ensure a situation where this noble profession would be a safe and remunerative one on which a farmer and his family could depend on? I believe every patriotic Indian should be deeply concerned about them and use their knowledge to help better their situation. 

I support a Farm infrastructure impetus. 

I have previously written on this subject to Agriculture Ministers, Food & Civil Supplies Ministers, Secretaries of Agriculture, even to FCI and Warehouse Corporation, but not one of them have responded to either initiate action, or to rule out the idea as un-viable. I appeal to the Government to constitute a Preliminary Study to check the feasibility of my suggestion, and provide some direction and hopefully later to obtain some commitments from the Government in the Budgets.

All Governments, regardless of their political persuasion since independence, have done nothing substantive to modernize the Farming Sector and tragically, the average Indian farmer even today remains stuck in the medieval age using cultivation methods which were developed thousands of years ago. True, a lot of progress has been made in the creation on a large talent pool of Agricultural Scientists and Graduates who are working to change the sector in terms of providing a Knowledge Base on Cultivation Methods, Crop Rotation and Soil Management, but the vast majority of the millions of farmers have no access to this expertise and have to come a long way just to catch up to subsistence. One is particularly concerned about the state of post cultivation collection, processing and storage of produce, which is in a 'rotten situation’ in more ways than one, fraught with corruption, leakages and unscientific methods, but no efforts or thoughts are being extended to remedy this.

Successive Governments have thus far, spent Thousands of Lakhs of Crores of Rupees in promising Remunerative Prices in the form of MSP, providing Free Power, Pushing (sometimes controversial) Seeds, Promoting Unsafe (and sometimes banned) Insecticide and offering Fertilizer Subsidy which have just kept the farmer dependent on the Monsoon, on Usury and his produce slowly turning Pesticide-Ridden and Non-Prime over the years. In addition to such upstream efforts, the government needs to invest in downstream capabilities, in the form of contemporary farm infrastructure and help the farmer modernize the entire chain of activity from soil preparation to the ultimate storage of grain. The Government is expecting Modern Retail Trade to make these investments, but has made the Retail Industry a minefield of regulations, deterring investment (more on this later).

I have recommended exploring the need to invest in farm infrastructure in addition to subsidy, which I have tried to bring to the attention of many of the powers that be, but have found no success. No one it seems, is interested in pursuing an alternate path. I sincerely believe that this has the potential of changing the landscape of rural India and will go a long way in improving the Food Security situation of our nation. No Capital Expenditure proposed for Farm Modernization in the Budget, a further disappointment.

Our Cities are decaying due to a step-motherly treatment

Touching on an co-related matter, for 65 years, we have been repeatedly told that releasing funds for Urban Infrastructure was 'frivolous expenditure' as India is a rural agrarian economy, and thus, a lion’s share of the past Budgets were allocated to Rural Initiatives. Consequently, due to neglect and sheer non-investment in our urban centers and poorly managed investment in our villages, we are now facing a situation of both urban decay where the worlds most polluted and grid-locked cities are Indian – on the edge of collapse, while on the other hand, the farmer is still killing himself for his inability to repay a loan of a few thousand Rupees, or curiously, abandoning his farmlands to move to decaying cities. In this connection, we see however some positive action, and investments are planned for Smart Cities and improvement of the creaking infrastructure of our major urban centers. However, far more targeted and aggressive investments are required to overcome the lag imposed on our cities for 65 years. So, yes, disappointed!

Finally, my pet peeve. No clarity on Retail Trade continues to stifle it.

Mr. Amitabh Kant, Secretary DIPP, had recently accepted that the Government may not have all the answers, especially when it comes to Sunrise Industry, and hence, it was more than willing to solicit the views of the Domain Experts in assisting in the formulation of policy. While Minister for Commerce and Industry, Ms. Nirmala Sitharaman stressed that the primary aim and immediate concern of the Government was the creation of millions of jobs for our young adults, who are just entering the Economic Contributory Stage. Both spoke during the events organized for the promotion of Start Ups in India. In the background of the above, the one Sunrise Industry that has the ability to create, and absorb millions of fresh High School (Class X and XII) graduates i.e. Modern Retail Trade, is unfortunately mired in so much confusion and politics. If it is harnessed properly, Retail is a low hanging fruit that can change the outlook of the nation while contributing immensely to job creation.

• At the outset, it is no secret that India was perceived as the ‘Most Desirable’ Retail market for investors for over a decade and a half, but is now considered as a ‘High Risk’ market.
• The policies governing Retail in India have not been enablers, perhaps due to the political sensitivity to the adverse effect unbridled Retail expansion may have on the Kirana Stores, and they have been made very complex and confusing.
• The primary problem was the classification of Retail proposed by the UPA Government, i.e. Single Brand and Multi Brand Retail.
• This is a classification that is not natural in Retail, as the Activity Chain / Processes depends on type of Merchandise, and not whether they bear a single brand name or not.
• Retail Business Models are generally not amenable to the above classification and hence the Back-End Investment mandates and Sourcing Criteria do not make fiscal sense to most Retailers.
• This has resulted in no significant investment in Retail since the policy was announced by the previous Government, when it actually has the potential to be one of the best Forex earners for the country.

The Government refuses to take the advice of Retail Experts

Despite Mr. Amitabh Kant's statement of consultative process to be followed for Start Up's, when it comes to Retail Trade, he obstinately refuses to engage with Retail Experts to help formulate enabling policy. 

To ensure that the artificial barriers to investment in Retail are dismantled and the country becomes the most desirable destination for Retail Businesses the world over, while still keeping a tight watch on the deleterious effect Retail can have on the Kirana’s, the following approach that has been endorsed by the Retailers Association of India, may be worth considering.

• The entire policy framework governing retail needs to be re-looked into, and the same aligned with the business processes of the industry.
• The new suggested classification could be ‘Food Retail’ and ‘Non-Food Retail’.
• Non Food Retail which can be anything from Car Showrooms to Apparel and Consumer Durables to Jewelry Retail should be permitted as freely as possible. 
• Whether we permit 100% or 76% or even 51% FDI it is immaterial, as most retailers will be able to find Indian partners without much problem. It is critical however, to have minimal restrictive rules and regulations governing this segment.
• Thus, without even impacting the Kirana in any manner, we can open our market to literally thousands of Retail Chains and create a large number of Entry Level Jobs.
• To ensure that investment in Food Retail like Supermarkets and Fresh Chains is done in a very planned and controlled manner, this category can have reasonable restrictions to minimize their impact on the Kiranas while at the same time, encouraging them to invest in upstream infrastructure like Grain Elevators, Cold Storages and Logistics.
• Retail creates jobs for young people with Minimal Higher Education, and Short-Term Training (could even be On-The-Job Training), hence the benefits to the economy and the politics of the issue can be had within a very short gestation period.

Thus, in addition to creating a large number of jobs, the freeing up of Retail (or simply clarifying the classification) will improve our grade in the Ease of Doing Business Rating, improve our Currency Valuation and contribute to a Feel-Good Business Climate, as investors in other more Critical Sectors will be comforted when they see Retail Brands from their own countries flourish in this market. Needless to say, the influx of Retail will also have a positive spin-off on the IT, Malls, Manufacturing, Construction, Apparel and Consumables industries, and support a vast number of indirect jobs in addition to the direct ones.

We in India deserve to have a fully enabling environment for Retail, and permit us to reap the benefits of the low entry barrier investment it can bring even while protecting our Kirana heritage and jobs. No move towards clearing the logjam of Retail. Disappointed? No, distraught, actually.

Fate of the Make in India program?

Recently, the Modi Government launched the ambitious ‘Make in India program’, where investors from the world over were requested to include India in their manufacturing plans and to invest extensively here. The aim is to convert India into a manufacturing hub for the world, very similar to China, as we offered the largest bunch of young, trained and motivated workforce's in the world. Intricately planned and amazingly thought through, details of Sectors that are desirable, the ‘Smart Cities’ that are being developed into such hubs and also the ‘Industrial Corridors’ that would work in unison have all been identified, but has any focus been put on one aspect – The Ease of doing business in India?

It is quite embarrassing that as a nation, we seem to unfailingly go after all our big FDI investors with a hunting crop! Tax notices have been served in the past on Vodafone, Nokia and BMW. Is this perhaps because our rules are so opaque, and our bureaucrats love to keep things shrouded in mystery and adhocism so that, suddenly, one fine day, they have the opportunity to use their Discretionary Powers to suddenly re-interpret the rules? Why is it not possible to publish a clear document recording all the Rules, Legal and Financial compliance's at the time of granting of the License? Will it not avoid this silly season of litigation and arbitration with Governments pulling in their ‘Sovereign’ punches – as Finland was forced to do some months ago?

Now, sadly, Nokia has announced that it will shut its Chennai facility on the 1^st of November, as it couldn't be transferred to the purchaser, Microsoft on account of pending Tax Claims by both the State and Central Governments. This move has put some 6,600 people out of work (directly) and adversely affected some 10,000 others indirectly. What will happen to Vodafone and BMW, next? With this kind of business climate and officialdom, the Make in India campaign is doomed to failure, unless the License-Permit Raj run by the bureaucracy is eliminated.

Just a couple of days after posting this article, I learn with dismay that the World Bank has demoted India a further 8 places to be 142 out of 189 (please see Economic Times link), for the period June 2013 to May 2014, which is the last year of the UPA Government. Thus, it is amply clear that all efforts of the UPA Government, if anything, did nothing to improve the business climate in India, leaving this unenviable task to the NDA Government that is now in power. The World Bank was thankfully quite candid in mentioning that this dismal performance cannot be a reflection on the performance of the new political dispensation which had been in power for a few days at the time of this evaluation.

I do hope that this will be a wakeup call to the NDA Government and they will configure all their policies in such a manner that India reaches to within the top 25 countries in year one, and higher as the years go by. For any foreign investor, who has 141 options better placed than India, it is not conceivable that he will overlook all 141 options and pick India to invest in. We have got to change the way we do business. 

Update as on 24th November 2014.

Since I wrote this article, I am thrilled to note that the Government of India in a surprising exhibition of alacrity, adopted the World Bank Report Ease of doing Business as a guidance tool, and has promised that they will configure the policies in such a manner as to be in full consonance with the requirements of Ease of doing Business and has even promised that they will try their best to ensure that India figures within the top 50 in a years' time.

Needless to say, this a sea change for an Indian Government and the openness, the speed of response and the appropriateness of the response is most heartening. 

The Make in India team have also since become quite active on Facebook and Twitter (@makeinindia) and have been collaring many followers, who, one would imagine, would encourage, motivate and guide the policy with their comments, including me.

More recently, a report titled Country Brands Index came out, something that I was personally not aware of, wherein they analyse a country's strengths in various criteria - economic, environmental and social and rate a country on how it is perceived by the rest of the world. Hence, a country that is high in the perception index, enjoys a high degree of reliability perception and hence people would be less hesitant to buy a product manufactured there. Thus, countries themselves become brands! 

I was amazed that just when India embarks on a Make in India program, a report, upon aligning with which, would ensure the success of the Make in India program, came to my notice, and I have introduced the same to the Make in India team. I do hope they will recognize the benefits and work toward a high CBI rating in 2015 and make us all proud. 

If India rates within 25 on the #EaseofdoingBusiness and within Top 20 on the #CBI2015, there will be nothing that can stop the flow of investment to us.

http://economictimes.indiatimes.com/news/economy/indicators/india-ranks-142-in-latest-ease-of-doing-business-report-world-bank/articleshow/44967304.cms

http://www.thehindu.com/business/Industry/nokia-to-shut-down-its-chennai-factory-from-nov-1/article6478317.ece

http://www.makeinindia.com/

The Agent Orange of Indian politics – Narendra Modi

The Election Map 2014.

Photo courtesy NDTV.

One has to only see the Map of the Elections 2014, to understand what a 'Saffron Wash' looks like! I have never imagined that a vast and complex country like India would suddenly all fall in line and vote for the future, placing their collective faith in one man, and one party - the Bharatiya Janata Party (BJP), but that is how it turned out to be, on that historic day, 16th May 2014.

Caste and Community Politics

For too many years, parties like the Congress, Janata Dal [Secular] (JDS), Janata Dal [United] (JDU), Samajwadi Party (SP), Bahujan Samaj Party (BSP), Rashtriya Janata Dal (RJD) and many others have been fighting their elections by appealing to voters along Caste, Community and Religious lines and tasting electoral success due to the polarization of the voter base. The first to perhaps use this as a tactic was the Congress where they used the Minority card with spectacular success, and perhaps this emboldened all the other parties to practice the politics of divide and rule, due to which large sections of the populations were kept in status-quo on development parameters so that they are encouraged to vote along caste or communal lines, i.e. primarily be 'predictable' to the Party's Election Managers. 

One believes that this approach has retained the minorities and the backwards firmly in the underdeveloped sections of our society, as their education, financial self-reliance and intellectual independence or individualist thinking were inconvenient to such political parties. It is also a personal impression that one carries, that political parties who practiced divisive politics did so only for the sole aim of capturing power, and once they were in Government, tended to just work for personal benefit and collect funds for future elections. Any genuine development that happened was in spite of the political leadership and not because of them. (Perhaps an extreme view, maybe even too cynical a stand, but one is entitled to ones opinion in a democratic polity, however cynical or dismissive it may be, as one is disappointed at the development rate of the country since independence).

We can play this game too!

The BJP, when it was formed, apparently wanted to fight elections on the laudable plank of Gandhian Economic and Nationalist principles, as they perhaps saw the rot that Indian politics had seeped into in the late ‘70’s. Thus, what was a ‘Back-to-the-Basics’ political approach in 1984 seemed to give them very poor dividend with just two seats in the Parliament, and they perhaps strategized that they could play the game too, but by reaching out to the ignored majority, as all the other parties of the day, spoke exclusively for the minorities, who were kept largely illiterate and willing to be motivated to vote en mass along religious lines as advised by the Political leadership or the Religious leadership that the politicians harvested. 

Thus, it looks like the BJP was perhaps forced to play the same game and represent the voice of the majority. On account of this strategy, the benign and affable persona that both Advani and Vajpayee embodied was studiously replaced by strident Hindu Nationalism or Hindutva, and again, by dividing the population up, they tasted fleeting electoral success. Unfortunately for them, the entire political class could now boldly wear their minority / caste appeasement politics on their sleeves as a prize with which to stop the BJP, and thus was born the 'Secular Card' in Indian politics. In actual fact, it was the Communal and Casteist Card, but as the parties practicing it could use it to beat down the majority population and seen to be speaking for the minority or oppressed voices, it achieved a smokescreen of acceptability. 

Due to the coming together of the so-called ‘Secular Forces’ to vote out the 13-day NDA 1 Government in 1996, the 13-month NDA 2 Government in 1999, and finally replace a full-term NDA 3 Government in 2005, the BJP was perhaps forced to become more stridently ‘majoritarian’ in their politics and speak for their own Vote Bank, as that was after all, the card game that all the big boys were playing. Unfortunately, it was a slippery slope, and despite providing perhaps the best six years of governance India had seen post independence, they lost power, and India was forced to endure the most corrupt and retrograde government for 10 years, virtually pushing us back into the dark ages. (Please read my other post on this subject, at: http://sharmahemanth.blogspot.com/2013/06/the-story-of-indias-politics-policy-and.html). 

Economic model of the Left Leaning

It may be prudent here to mention that the polarization was not just on account of politics and Vote Banking, but the same was seen in the economic policies of the various governments too. I may disagree very strongly with the economic policies of Nehru and the socialist slant that I believe kept India under developed and impoverished for many years, but I genuinely admire the man, as I think he did what he did, because he honestly and sincerely believed that it was good for the nation. Unfortunately, his daughter, Indira Gandhi chose to wear Nehruvian Socialism on her lapel like a badge, and brought upon this country the most impractical and undemocratic economic policies that kept the nation desperately poor until the Balance of Payments crisis in the 1990’s which forced World Bank mandated economic reforms. It seems like she did so, not because she honestly thought it was beneficial to the nation, but because, by using it, she could foist upon us a Begging Bowl Style Welfare State, where every largess is given by the hand of the Government, and the act of giving of these scraps would keep her party in power forever. Thus, in every election, she was able to flog the ‘Roti-Kapada-Makaan’ slogan, and never had to invent another memorable slogan while she led the Congress. 

Unfortunately, the only bunch of truly honest politicians (political honesty of course, not personal - as I have no knowledge of the same), the Left Parties, perhaps feeling that Indira Gandhi’s economic policies resonated with their own world view, chose to support her, and they ended up even developing close political ties as well, landing plum posts in academia, and our history books and all school textbooks were authored by left-leaning academics perpetuating a uni-polar world view. Thus, when the NDA 2 and 3 Governments sought to redefine some of India’s most ridiculous economic policies, like the rationale of a Public Sector Industry, the rest of the political spectrum stood shoulder to shoulder, shrilly denouncing their reform measures as Anti-People. This begs the question, "One wonders what was really Anti-People, the Income Tax act of the 1970’s which imposed an atrocious tax rate of 97.75%, or the NDA’s decision to have a Disinvestment Ministry"?

Agenda Changers

Thus, observing India and its politicians from independence to the 1990’s, one is left with the impression that all the political parties tried hard to locate and create a series of buttons on the people of India, that they could press when they needed and control the actions of the compartments of caste, religion and community that they had devolved the population into. This was a nice and cozy arrangement that was protected by a conspiracy of silence so that power could be won; corruption indulged in, crony capitalism practiced and generally to perpetuate the practice, that we jokingly back in school, called “Downliftment of the Uptrodden”! A pun on the Congress mantra of Upliftment of the Downtrodden. Making everyone equally poor and keeping them that way was the order of the day.

A few enlightened political practitioners, perhaps the most patriotic folk from a much sullied clan, began to see through this Divide and Rule policy that was keeping India in the dark ages, and began several movements to challenge the established order. Perhaps the most articulate and visionary person of those that wished to break the nexus is Dr. Jayaprakash Narayan, who founded the Loksatta Party, to fight elections on the basis of an Anti-Corruption plank and genuine Local Development issues. Dr. JP, who is a gentle and somewhat self effacing intellectual has unfortunately not been able to inspire a mass movement, but remains the darling of a small group of patriotic Indians. 

The national stage for a shrill and noisy Anti-Corruption plank was however taken over first by India Against Corruption (IAC), and later by the Aam Aadmi Party (AAP). While one is not very clear about their views on the issues of polarization and communalization of politics, they effectively showcased the 'Good Governance', 'Probity in Public Life' and 'Corruption-Free Politics' approaches, that seemed to deeply resonate with the mood of the people. 

I believe that even as recently as the 2013 Delhi Assembly elections, the BJP fought their campaign on traditional hindutva policies, and were perhaps shocked to see AAP picking up the second largest block of seats and preventing them from forming the Government. I wonder if this single experience was a turning point in the life of the BJP? Did it make them sit up and think? Did it perhaps give them the courage to jettison the shallow hindutva agenda, and perhaps focus on 'Good Governance', 'Overall Development for All', 'Economic Advancement' and the other enlightened policies that it now espouses? If yes, then the AAP has perhaps willingly or unwittingly bestowed upon India the best gift in politics.

Politics in a New India

After the BJP has recorded such a historic win, in which one believes would not have been possible if millions of its traditional non-followers have not positively contributed, giving them a chance to form a stable BJP Majority Government or an NDA Tsunami Government of 336 seats in Parliament (the Election Commission is yet to officially declare the results while this is being written), I believe it will be very difficult (if not virtually impossible) for any party to unseat them using a communal or divisive agenda. To get them voted out, NDA would have to perform miserably poorly on their poll promises, be more corrupt than the UPA, or the incumbent will have to promise and deliver even greater development and social advancement assurance. 

One finds it difficult to envisage a stage in future when a Deve Gowda or an I.K. Gujral can form a Government simply because they wanted to “keep communal forces at bay”! I genuinely hope that the influence wielded by Mulayam Singh Yadav, Mayawati, Lalu Prasad Yadav and other caste or communal satraps will fade away and all the people of India join together in future in demanding the highest economic and social development indices from their Government, for all of India, and stop clamoring to be declared ‘backward’ so that they can pick up the few scraps thrown into their enclosure by a welfare state.

Sadly, even as I write this, I hear on the news that there is talk among the decimated parties like the Congress, the JD(U), the RJD and others who are speaking about all 'Secular Forces' uniting to counter the 'Communal BJP'. It looks like some people will never learn, as they are Pathetic, Myopic, Political Pygmies and their small minds can think of no other counter to the development agenda that India has mandated. Please grow up! India does not care. The Youth of India does not care. The vast thinking minority population does not care. Even your own electorate will probably not care if you intend to keep them starving while the rest of the nation looks forward to the fruits of development. 

Unfortunate collateral damage of Agent Orange

While one is glad that India has spoken and spoken very clearly in favor of the Parivartan & Vikas i.e. Change & Development Agenda of Modi and rejected the divisive politics of the UPA, one has to take stock of the collateral damage too. Just like Agent Orange, the blind and ruthless instrument of the Vietnam War that destroyed all types of green cover, regardless of whether they were useful, inconsequential, or environmentally threatened, or whatever, similarly, several excellent politicians have been swept aside by the Modi Tusnami, and India and the Parliament will be poorer in their absence. Some of the people that India will no doubt miss in the Lok Sabha for their suave and articulate presence are Dr. Jayaprakash Narayan, Arun Jaitley, Jaswant Singh, Sachin Pilot, Milind Deora and Yogendra Yadav. Gentlemen, all.

Personally speaking, I will not miss the presence of Mani Shankar Aiyar, Sushil Kumar Shinde, Salman Khurshid, Kapil Sibal, Manish Tewari and Chidambaram. I believe these people were the button pushers perpetuating the old order under the dispensation of the Congress First Family. I hope they will see the folly of their ways, reform themselves and aim to serve the nation instead of a family. Each of them being brilliant in their own right, could put their vast intellect to better use.

The Election results 2014

Photo courtesy NDTV.

Vodafone case – is retrospective promulgation of a new amendment to a law fair?

I must submit upfront that I am neither an expert in taxation nor I am I fully acquainted with all the facts and figures of the case, but write this purely as an Indian layperson observer who has (extensively) been exposed to the news reports of the case and also as a concerned Professional Corporate Citizen worried about the precedent such a move will set, and the consequent adverse impact on investment into our country. I will also readily agree that the Government is empowered to collect tax on various commercial transactions and even for one minute, I have no intention to entertain the thought that somehow the government is not entitled to garnering revenue from any and every legally sanctioned means. However, all such modes of generating revenue have to fall under the ambit of due legal process, and some very basic aspects of the Rule of Law and Principles of Natural Justice have to be served, in my view.

Consider this.

When two individuals enter into a transaction that involves the transfer of ownership of a Capital Asset for a particular financial consideration, and it is established that the seller has earned a profit from this transfer or has ‘accrued Capital Gains’, then he or she should be liable for the payment of Capital Gains Tax. Perfectly legal and completely tenable, as this is clearly sanctioned by law. One assumes that it is natural for the asset that changes ownership to be located in India of course, for Indian Tax Laws to have jurisdiction. Now, in as far as I was able to ascertain, as per the existing laws, it is the seller that needs to file his returns after making a provision for the Capital Gains Tax, and the buyer has no role at all to play in this. Also, with basic research, it did not become clear as to whether it is the responsibility of the buyer of the asset to withhold the Capital Gains Tax, and hence I am inclined to accept that in any event, the seller has the sole responsibility to fulfill his obligations to society as a Corporate Citizen by honestly paying up his taxes.

Now, in this case, Vodafone was the buyer who paid enormous sums of money to acquire a so-called attractive asset that they had very high hopes about, in a country that they were sure was a democracy that had all the Pillars of Democracy well entrenched. Like any company, I’m sure they would have commissioned meticulous research to determine what the asset would cost ‘on road’ as it were, and thus, would have made pretty accurate provisions for a war-chest to fund the acquisition. Typically, they would have included all known and expected expenses including the Equity, Legal Consultancy, Speed Money (sadly a critical component when doing business in India), taxes, travel costs, etc. as per the then, known laws of the land. Now that the money has been spent, where is the justification in springing a proverbial bunny out of the hat and demanding an additional US $ 2.3 Billion?

If that were not enough, what about all the other costs?

• We see a protracted battle in the Courts costing each party several hundred Crores in litigation expenses – will the Government make good these expenses to Vodafone?
• We now find the government saying that it will amend the law and make that amendment applicable with retrospective effect, much like a sulking, petulant child that says that the last goal does not count because the goal post was not defined by the tree and the lamppost but something else altogether.
• We note with concern the shock being expressed by other Governments the world over saying that they expected better from India.
• We also see with profound sadness that all multinational companies doing a double-take on their investment plans in India due to a hostile policy and taxation climate, what with the FDI in Retail imbroglio, the cancellation of 122 Telecom Licenses and now this.  

While it is true that some of these are only notional costs, think of the cost of a negative impression the world business community will have about India. I wonder what the cost of that would work out to.

In my opinion, the whole unfortunate incident should never have taken place and surely, this is the result of some silly over-smart bureaucrat somewhere saying something like ‘oh no, we forgot to collect from the seller, so why can we not ask the buyer to pay?’ The more I look at it, the more it just looks like a foolish and an ill-considered move with its intention seemingly to have been one of just bringing into play, the Governments’ awesome nuisance value. Perhaps they expected Vodafone to buckle and settle out of Court, is the strong impression one carries. Now, instead of waking up and smelling the coffee, the Government is covering itself with more muck and ignominy by promising new laws with retrospective promulgation like as though it is a game of Cops and Robbers amongst 8-year olds. The person or the team that cooked up this tax claim on Vodafone needs to be hauled up to judicial scrutiny by the appointment on an inquiry committee and dealt with in the harshest manner possible to dissuade other Zorro’s in the department from attempting such stunts in the future. A public apology to Vodafone and the corporate world at large will not be entirely out of place, for sure.

Since it was the other party in question, Hutchison Whampoa that apparently evaded the payment of Capital Gains Tax, would it not have been more appropriate for the Tax authorities to make the demand on them instead of Vodafone? Just because Vodafone was an entity based in India now, and Hutch was not, was it justifiable to haul Vodafone over the coals? The correct approach would have been – to file a case in a competent Hong Kong Court by the Government, seeking recovery of their legitimate dues. Sure, this may have got thrown out at the first instance or may have taken forever to conclude, but at least the Government would have been hunting with the correct party of hounds, instead of simply shooting the closest fox.

Finally, touching on the aspect of the amendments to the law – the Government is again well within its right to amend any law as long as it follows due process, but again common sense dictates that all amendments would be applicable from the day they are passed by Parliament and is incorporated in the Gazette. Not one single day prior to that. Entities entering into any agreement that comes under the purview of the above amendment would then have the opportunity to make a provision for the same in their war-chest or in their list of responsibilities and hence enter into an agreement with all parameters known and defined. This is a basic given in a democracy where the Principles of Natural Justice and the Rule of Law are expected to apply. If this is not ensured by our Government, it will be no different from some despotic dictator of some tin-pot banana republic. I hope to god that we will not be disappointed.

August 6, 2021.

I’m happy to note that after losing a slew of cases in arbitration all over the world and exposing India to ridicule with sovereign assets being tagged for attachment, the government has seen the folly of its ways, and has decided to scrap the controversial law. See clip attached.