E D I T O R I A L P A G E |
Thursday, February 25, 1999 |
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weather n
spotlight today's calendar |
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No
surprise in the Survey DISTORTION
OF CONSTITUTION |
Heros
honour for Royal mutineer Shikarpur
Jootiya
Applications
invited |
No surprise in the Survey UNION Finance Minister Yashwant Sinha is a practising doom-and-gloom-sayer. Paradoxical though it may sound, he is also a wild dreamer. It shows in the Economic Survey, the pre-budget projection of the countrys health in figures, presented to Parliament on Wednesday. It coyly admits that the economy is under stress during the year, but the statistics are more forthcoming: a deep crisis is developing on all fronts barring export of computer software. The prescription is the usual set of platitudes like cutting down low priority expenditure, downsizing the government (in plain language, thinning down the workforce) and ending with a novel but daring idea: re-engineering the government. Come to think of it, this is what successive Finance Ministers have been saying, even while increasing the spending and widening the deficit. The present decade has seen a steady reduction in all types of taxes and duty and a sharp rise in the outgo like the Fifth Pay Commission bounty. Not surprisingly, the Minister frets about the unhealthy tax-GDP ratio that is, as a percentage of the gross domestic product, the tax collection is low. A quick look at the graphs and tables reveal a sickly trend. All indicators that should keep curving up are actually coming down and the negative features are growing. Industrial growth is down to 3.5 per cent from 6.7 per cent. The period covered is between April and December last year. In the remaining three months the picture is not likely to change dramatically. Savings have dipped to 23.1 per cent from 24.4 per cent and hence capital formation is lower by one half of one per cent (in terms of rupees it is a very big sum). More money is in circulation and oddly this goes hand in hand with low inflation. (Economic puritans have a theoretical question to answer here.) Agricultural production is marginally up, to 195 million tonnes from about 192 million tonnes. All these figures may be boring to a common man but they tell a disturbing story. With the government cornering a huge chunk of funds to cover its deficit this year this may go up to Rs 90,000 crore there is not much to invest in new projects and the interest rate remains very high. Demand for goods does not pick up, and the combined effect is to suppress industrial capacity and depress sales and hence profits. This situation, in turn, drives away investment and investors. It is a kind of self-sustaining downward spiral. At one place the Survey
talks of bold steps. And indeed there are several areas
which invite close attention. There is a huge leakage in
tax computation and collection. The answer does not lie
in VDIS (Voluntary Disclosure of Income Scheme) or in
kar vivadh. It is in motivating the income
tax authorities and simultaneously reining in politicians
from indulging in backseat driving. There is much to be
learnt from the way the tax men have handled the dispute
with foreign multinationals and mopped up nearly Rs 500
crore. Given a free hand and protection from political
persecution, the two semi-autonomous boards for direct
and indirect taxes can do wonders. Two, rules should be
simplified so that the more than Rs 40,000 crore of
indirect taxes locked up in litigation can be recovered.
Budget-making itself needs modernisation and it should be
easy in these days of the computer. Finally, the country
could do with a bit more reliable statistics. That may
alter the picture in more ways than jacking up the GDP
and artificially lowering the fiscal deficit. |
Unseemly behaviour FIVE senior and 10 other police officers of Himachal Pradesh stand transferred as a fallout of the shameful brawl at the Hamirpur circuit house recently in which officers of the rank of SP and DSP fought like street urchins with each other. If this action is followed by some genuine punishment, the transfers would be meaningful but if the shifting from one place to another is all that is done to them, it will amount to facile action because at least some of them have received prized postings in the process. The brawl reeks of the growing indiscipline and irresponsibility in the police ranks. Think of the image that a force presents when a DSP starts manhandling his superior! Surely, this is not the first incident of its kind but such behaviour is indeed unpardonable. Even worse is the attempt to give casteist overtones to the whole episode. In a way, the degeneration can be traced back to the peccadilloes of even more senior officers. When DGP rank officials indulge in molestations, the behaviour of their subordinates tends to be worse. That may have happened in a neighbouring State and not Himachal Pradesh but the signals that are emanated are received all over the country. Ironically, there is always an attempt to look the other way when such aberrations take place. Senior officials try to push everything under the carpet instead of taking remedial measures. Despite such real-life incidents, there are always protestations that there is a deliberate attempt to malign them. Take for instance the hue and cry raised by certain police officials of Punjab against a satirical Punjabi film for poking fun at the corrupt police officials. This sense of disgust should rather be shown towards the police officials who bring a bad name to the force. It is an established practice that those who are assigned the duty of enforcing law should be stricter in abiding by the rules than the common men. Somehow, in actual practice, quite the contrary impression has been created that the lawkeepers are above the law. Because of such degradation, they have lost the moral authority to discipline their subordinates. The rot goes right down to the lowly constable. One cause of irresponsible
behaviour is the unchecked consumption of liquor by
public servants. During his Chief Ministership, Mr Shanta
Kumar had imposed a strict ban on the serving of liquor
in circuit houses etc. The law was not enforced firmly
enough after he left. Today, it is breached with impunity
at many places. Now that the police officials
misconduct has focussed attention on the situation, it is
necessary for the government to take some resolute steps.
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DISTORTION OF CONSTITUTION THERE is a noticeable pattern in all major decisions taken by the Atal Behari Vajpayee government. First, there is a decision, without consulting the necessary parties, then strident criticism by the allies, or by the Sangh Parivar, only to be followed by the backtracking by the government itself. The government somehow survives. The declaration of Presidents rule in any state is out and out our political act. It is recognised as such even by the judiciary, which in the Bommai ruling said that the use of Article 356 could be judicially reviewed only on the limited grounds of mala fide use of power. The attack on the imposition of Presidents rule in Bihar came expectedly from the Rashtriya Janata Dal and not unexpectedly from the Leftists. But, then, the situation has been rendered worse by Mr Lal Krishna Advanis statement to the Press that the Bihar Governor was going to be replaced by an apolitical Governor. Mr Bhandari has let it be known that he has felt more hurt and humiliated by the Home Ministers statement than he ever was by the abuses heaped on him by either Mr Laloo Yadav or by his wife. However, for the record, it must be stated that the decision to replace Mr Bhandari was taken at a meeting presided over by the Prime Minister. Apparently, he and the Home Minister succumbed to the Samata Party pressure that Mr Bhandari must go. Curiously, it occurred to neither that the talk of a non-political Governor implied a condemnation not only of all that Mr Bhandari had done, including the submission of repeated reports suggesting Presidents rule in Bihar, but also of the Centres own action in sending Mr Bhandari to Bihar in the first place. (How this should have been handled is a matter of detail.) If the Leftists now say we told you so, are they wrong? However, the truth appears to be that the Samata Party wanted Mr Bhandari out because he is a strong person and a senior Parivar member who could not be manipulated easily in reshuffling the bureaucrats to its own advantage. The final decision had not been taken about Mr Bhandaris future at the time of writing, but whatever the decision, the governments problems with the Parivar are bound to increase. The present developments can hardly be considered a good augury for the Prime Ministers bus diplomacy. Only strength at home assures respect abroad. And right now this is hardly the case. (In contrast, the International Cricket Control Board President, Mr Jagmohan Dalmia, and Sachin Tendulkar tackled the ugly mood of the Calcutta spectators pretty well after the latter was declared run-out following his collision with a Pakistani player, but for which he would have been safely back to his crease. Together they took a lap of the stadium with an appeal that what has happened be treated as having happened. The show must go on.) The Samata Party has not only had its way in forcing the government to impose Presidents rule in the state but now wants full say in the appointment and transfer of officials. Of course, on caste lines. It has already accused Mr Bhandari of showing upper caste bias in the administrative reshuffle. Mr Bhandari has countered it with the observation that all he has done is to try to maintain a balance among all sections of society. Earlier, it was lopsided in favour of the backward castes. There is clear admission here of wholesale politicisation of the bureaucracy in Bihar, perhaps elsewhere too, and hence any talk of higher constitutional principles or an apolitical Governor is entirely misplaced. However, the fact remains that it is a constitutional provision Article 356 that has been brought into play and hence a discussion of the Constitution would not be out of order. There can be, and there in fact are, two points of view on the constitutionality of the imposition of Presidents rule in Bihar. But in view of the wide perception of the people that things were going from bad to worse. The only question to be considered is whether bad governance can be a ground for the takeover of the administration in a state. As is well known, when the emergency provisions were being debated in the Constituent Assembly, Dr Ambedkar had unequivocally said that lack of good governance could not be a ground for the imposition of Presidents rule in a state. Discussing the scope and effect of Article 356, the Sarkaria Commission stated that the imposition of Presidents rule brought to an end, for the time being, a government in the state responsible to the state legislature; that it was a very drastic power that, exercised correctly, may operate as a safety mechanism for the system but, abused or misused, it could destroy the constitutional equilibrium between the Union and the states. The commission noted that the factors that contributed to the breakdown of constitutional machinery in a state were diverse and imponderable, but, broadly, these could be grouped into political crisis, internal subversion, physical breakdown and refusal to follow the directive of the Union executive. Of these, internal subversion can be said to be relevant to the case in Bihar. The Sarkaria Commission argued that a corollary of Article 355, which cast a duty on the Centre to preserve the parliamentary form of government in the states, was an obligation on the part of the states not to carry on the government in a manner contrary to, or subversive of, the provisions of the Constitution. The Centre has neither released the Governors report nor the reasons for recommending to the President a proclamation under Article 356. But newspaper reports have broadly indicated the way the governments mind has worked. Mr Pramod Mahajan has told media people that, when the President returned the first recommendation for the imposition of Presidents rule in Bihar, the government kept it in the hold, and it is the same recommendation that, if sent back to the President along with further material and another from the Governor. The two massacres of the Dalits in Jehanabad provided further grist to the mill, and even the President had no problem in agreeing to the takeover of the state administration by the Centre. The question is whether Presidents rule is an answer to alleged misgovernance by an elected government in a state. Clearly, it is not. This truth does not seem
to dawn on the Vajpayee government or the parties opposed
to it either. All are talking of elections, after
dissolution of the Bihar Assembly, and all are keen on
having officials of their choice so that election results
could be manipulated in their favour. And all want a
Governor who would do their bidding or, at least, not act
in favour of any particular party or set of allies. This
is distortion of the Constitution. |
Case for abolishing income tax DELIVERING the keynote address at a seminar on Indian Economic Scenario at Thiruvananthapuram last month, Mr Subramanian Swamy called for the abolition of income tax to infuse confidence among the middle class about the ongoing economic reforms and involve it in the process of economic growth. Had the maverick politician in him got the better of the selfsame economist? Perhaps not. Quoting chapter and verse, he pleaded that income tax contributed less than 3 per cent to the national revenue, and its abolition would enable the middle class and professionals, who alone paid tax honestly, to raise the rate of savings which is the bedrock of any economy. Income tax was levied mainly on companies and rich individuals before the beginning of World War II. It was to support the war effort that millions of small income earners were brought into the wider tax net. Their number swelled from 4 million to 15 million in the UK and from 7 million to 55 million in the USA. Even after the War and its effects were over, the governments continued to justify the perpetuation of this or that kind of taxation for obvious reasons. India, cast in the colonial mould, simply followed suit. It is a fecund fact that sharp increases in income tax rates over the past 50 years have bred massive tax evasion, rampant corruption and leviathan litigation, while keeping the revenue collection stagnant at below 3 per cent of the GDP even though the national income went up eight times, the population three times and the number of income tax payers from 5 lakh to 130 lakh. It is erroneous to assume that in our country the revenue can be increased by merrily raising the tax rate and widening the tax net. Given the prevailing ethical climate, the popular propensity to cheat, the limitations of the tax enforcement machinery and the popularity of various voluntary income disclosure schemes, it is difficult to achieve a breakthrough. The tax-evasion-bred black money is either spent unproductively on conspicuous consumption or invested abroad. It has been estimated that the maximum that we can collect from individuals is 1.8 per cent of the GDP 1.5 per cent from the non-salaried and 0.3 per cent from the salaried class whatever the income tax rates. It is the non-salaried individuals who contribute the bulk of the revenue, and it is well nigh impossible to make them follow the logic of the Laffer Curve. It is interesting to note that in 1995-96, out of 71 lakh individuals who filed returns, 38 lakh paid an average of Rs 2000 each, and collectively contributed Rs 822 crore less than 0.1 per cent of the GDP. Compare and contrast this with the situation in the USA having the highest number of tax payers, contributing as much as 10 per cent of the GDP. But the contribution of its 8 crore of about 12 crore tax payers accounted for less than 0.3 per cent of the GDP! Arguably, instead of taxing the small and moderate income earning individuals, who can barely contribute 0.1 per cent of the GDP which by all accounts is a costly, cumbersome and coercive activity the tax managers would do well to focus on company taxation, besides, of course, the few highly paid individuals earning over Rs 7 lakh per annum. Is it not amazing that our corporate tax contribution to the GDP has been barely 4 per cent as against 25 per cent in Hong Kong, Singapore, Malaysia and Indonesia? Many of our top profit-making firms are zero-tax paying companies! They include SAIL, TISCO and Reliance Industries. No doubt, they might be paying taxes in other forms. This is tax-avoidance, a perfectly legal activity, as distinct from the widely practised tax evasion. Another argument against direct taxing of small income earner relates to double taxation. In any case, tax is levied on commodities and services, mainly from business establishments which in turn pass it on to the end-user, whose income is thus doubly taxed. Could expenditure tax be an alternative? Expounded by British economist Nicholas Kaldor, it was half-heartedly introduced but hastily withdrawn in the Nehru era for reasons best known to the then regime. The expenditure tax can be levied on ones annual income minus bona fide savings. This would encourage the much needed savings. Contrarily, now not only the savings but also the incomes earned on savings are subjected to income tax. An instance of multiple taxation! Is it not anti-thetical to the cannons of taxation, common sense and plain prudence? We ought to give the concept of expenditure tax a fair trial. All the same, it is
difficult to disagree with Mr Subramanian Swamys
impassioned plea for the abolition of income tax. A
reasoned debate is called for. |
Heros honour for Royal mutineer
TOMORROW will be a historic day in the life of this self-respecting Punjabi from Siar village, near Ludhiana. He would be presiding over the "induction ceremony" of INS Madan Singh, named after him in recognition of his role in Indias struggle for freedom from colonial rule. The honour has come his way 52 years late. An incredible optimist he laughs off the delayed honour and grins: "It did appear like a mirage all these years but its better late than never." Mr Madan Singh held his head high for all these 52 years despite the tag of having been dismissed from service after a Commission of Enquiry set up by the British Colonial rulers found him guilty. He was charged with leading the historic Royal Indian Naval mutiny of 1946. Although India became Independent in August 1947, no review of or rethinking about the mutineers was ever done all these years. Nobody knows what happened to hundreds of mutineers who were dismissed from service. However the two main leaders, former leading telegraphist B.C. Dutt and telegraphist Madan Singh are still around. While Mr Dutt settled in Maharashtra, Mr Madan Singh worked in several parts of the world after dismissal. But eventually he came back to settle in his own country, "as that is what I always yearned for". Here is a follow up on his life, packed with events which are gripping. Mr Madan Singh continues to assert that "The mutiny in the Navy was the immediate cause of Indias freedom. The British rulers were simply shaken. Nevertheless, the role of the mutineers has been ignored and they were denied due recognition." He vividly remembers even the minutest detail of the mutiny. "The roots of the mutiny in the Royal Indian Navy (RIN) lay in the British themselves who indulged in blatant racial discrimination over the years. The simmering discontent over ill-treatment, poor service conditions, lack of a redressal forum, humiliating of our Indian political leaders, etc pushed us to the wall and then to the mutiny. However the immediate cause was the arrest of B.C. Dutt who was put under detention. His crime was that he had painted slogans like, "Jai Hind". "After the outbreak of the mutiny, the first thing that we did was to free B.C. Dutt. Then we took possession of Bucher Island (where the entire ammunition meant for Bombay Presidency was stocked) and telephone and wireless equipment, including transmitters at Kirki near Pune. Our quick actions ensured that all naval ships were fully under our command." "Simultaneously we the Indians ratings at RIN had formed a Naval Central Strike Committee (NCSC) to coordinate and direct the activities of the various units outside the HMIS Talwar. Leading Signalman M.S. Khan and I were unanimously elected President and Vice-President, respectively. There is another crucial point to be recalled today. You see, next to the Castle Barracks there was an iron gate closer to the town hall of Bombay. It was cleverly wired to the system so that in the event of an enemy trying to capture Bombay, a press of the switch would blow up the whole of Greater Bombay. This was the scorched earth policy of the then British government. "Fortunately for us, this iron gate was heavily manned by Indians who obviously obeyed our command when General Lockheart attempted to capture it. When he tried to advance towards the gate, the NCSC ordered firing which led to many casualties among the British sailors." Sadly hundreds of mutineers were arrested and imprisoned either with the prisoners of world war or in solitary confinement as was the case with both Mr Madan Singh and Mr B.C. Dutt. The Commission of Enquiry dismissed all of them from service. The national leadership, according to the various accounts and statements, seemed to be divided on the role of the mutineers. No wonder they were forgotten for good. Mr Madan Singh had an extremely hard life after his dismissal in July 1946. "I went to my village Siar. I felt hurt when I overheard my father telling someone that I have come to see him only to take money from him. I left my village penniless and joined as a reporter with the Bombay daily, Free Press Journal. The great Sadanand was the proprietor and Natarajan was the Chief Editor at that time. Within a year I got disgusted at a majority of journalists reporting on the basis of handouts issued by the British authorities. The final blow was struck when I was an eyewitness like other journalists to the shooting of a leader of mill workers at point blank range. But my report was not carried. All papers carried the handout released by the British government with no mention at all of the killing of the leader. Crushed by agony and humiliation, I confronted Natarajan who directed me to meet Sadanand. I had always revered this illustrious old man who treated Churchill and Sardar Patel in the same way. When I barged into his room he very calmly said: "Your report was absolutely correct but I am sorry to have disappointed you. I hope you will one day understand my turmoil. My 18 ventures of newspapers have one by one been banned by the British. By keeping this one alive, even at such a cost like not using your report, we are at least able to point out some misdeeds of the British and motivate our people to eventually rise against the slavery". "I understood him fully but I still resigned because I knew that I wont be able to swallow it day in and day out. Sadanand gave me the warmest ever send off in Free Press Journal. I reached Calcutta with only Rs 6. On the third day of my stay on the streets of Calcutta I got a job on a salary of Rs 150 a month with Dalmia Jain Airways. When I raised the issue of my petty salary, they rebuked me in the most humiliating manner. I walked back like a whipped dog, swallowing my pride for I could not afford to let this job go". But Mr Madan Singh was an extraordinary worker with a brilliant brain and expertise in his line. No wonder then that by the seventh week of his job with Dalmias, the company raised his salary by five times. By 1952 he got admission into a regular course run by BOAC (British Overseas Airways Corporation), in International License in Radio Electronics nowadays known as AVIONICS. "These were the most stressful three years of my life. Minimum pass marks were 75 per cent, whereas in London University one was required to secure only 45 per cent." Mr Madan Singh not only passed out with 83 per cent, which was rare for even an Englishman, but also was the first ever Indian to make it. BOAC handpicked him and he worked in their foreign service wing. By 1990 he came back to lead a retired life in India. Rear Admiral (retd.) Satyinder Singh wrote him five letters requesting him to apply for the status of a freedom fighter. "But I wrote back that if it is such a thing which one can get for the asking, it is not worth having it." However when Beant Singh former Chief Minister met Mr Madan Singh his childhood friend he was aghast on learning the fate of mutineers. He personally approached the Ministry of Home in Delhi in this regard. "So finally I have received a letter from Commodore Dina Bandhu Jena, VSM inviting me to the Induction Ceremony on February 26, 1999 at Bombay." His face was embossed with
the serenity of the sea shore at sun set. |
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