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Blasts again in Mumbai
Govt schools in neglect |
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Killing in Kandahar
India’s N-bargain in trouble
Thank you, Gopal
The second article
in the series on Black Money takes a hard look on overloading of
trucks as a source of unaccounted income. It questions the government’s
half-hearted and ineffective efforts to collect information of secret
accounts held in foreign banks. The effort should be to reduce cash
transactions, it argues.
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Blasts again in Mumbai
The three blasts that rocked the crowded areas of Mumbai on Wednesday evening have brought people at large face to face with the reality that the comparative lull in terror activities since the 2008 terror attacks at various locations in the commercial capital is no cause for any let-up in vigil. The time chosen for the serial blasts when swarms of Mumbaikars are on their way home after work indicated that they were designed to cause maximum casualities and create heightened panic. Evidently, considerable preparation had gone into these well-coordinated attacks and there was an all-too-familiar failure of intelligence. With the Indo-Pak dialogue process having resumed recently, it is reasonable to surmise that the terror outfits in Pakistan are out to derail the peace process. Much as Home Minister Chidambaram may say about giving terrorists a bloody nose, there can be little doubt that terrorist outfits like the Lashkar-e-Toiba and the Indian Mujahideen are emboldened by the soft nature of the Indian state. The lone survivor of the 26/11 Mumbai attacks of 2008 Ajmal Kasab, though sentenced to death, could spend years in death row going by the experience of others, including Afzal Guru, who was convicted and sentenced to death for the attack on Parliament but has not been executed for years. Many terrorists have been arrayed before courts in the past only to be freed for lack of evidence. There is indeed a woeful lack of deterrent which is lowering the credibility of the Indian state to deal with such situations. It goes to Mr Chidambaram’s credit that after he took over in the wake of the 26/11 attacks of 2008, this is the first major terror incident. Intelligence has been beefed up to some extent but needs to be strengthened further, and the police reaction time on this occasion was a lot better than in the past. The perpetrators of the Wednesday blasts must be tracked down on a war footing. The law must be strengthened so that there is speedy meting out of justice and an effective deterrent is created. The terrorist menace leaves no room for complacency. The country can ill afford to be looked upon as too soft a state to be feared. |
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Govt schools in neglect
Punjab’s 5.5 per cent schools have only one teacher compared to 3.1 per cent in Haryana. The figures for Himachal Pradesh and Jammu and Kashmir are relatively higher at 9.5 per cent and 12.7 per cent, respectively, which may be because of their difficult terrain and scattered population. Himachal is way ahead of the northern states on the education front despite paucity of resources and infrastructure but the quality of education provided requires attention. Single-teacher schools mock at mass unemployment among teachers. Teachers are appointed on contract at abysmally low salaries. The absurd situation needs to change if the Right to Education is to become a reality. Much of what ails education – lack of teachers, school buildings, well-equipped laboratories, libraries, toilets, boundary walls — can be attributed to poor budgetary allocation to education at both the Central and state levels. Education, like healthcare, does not get the priority it deserves. From the tight education budget more is given to higher educational institutions than primary and secondary schools. Then there are governance issues – teacher absenteeism, high dropout rate, misuse of resources etc. Education ministers take more interest in teachers’ appointments and transfers than the condition of schools. The neglect of government schools has contributed to the rise of private, English-medium schools, where charges are higher and regulation poorer. Since the number of schools with a reputation for excellence is limited there is often a scramble for admissions and malpractices crop up. Children are made to travel long distances to reach the school of their parents’ dream. The concept of neighbourhood schools has never been pursued. Private schools started as business ventures are driving up the costs of education, making primary education unaffordable even for middle-class parents. Children from families of modest means are left at the mercy of government schools, which are usually in bad shape. The education divide is growing and will in time further widen income disparities, resulting in youth unrest and social tensions. |
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Killing in Kandahar
The killing of Afghanistan President Hamid Karzai’s half brother Ahmed Wali Karzai in Kandahar by his chief security guard shows that anyone known for his closeness to the US can be eliminated anytime despite the efforts to woo the Taliban. Wali Karzai, head of the Kandahar provincial council, was a towering figure in southern Afghanistan. President Karzai depended heavily on his brother’s advice for any step that he took, particularly for meeting the Taliban challenge. Wali Karzai’s opinion was also respected by the Americans. His US connection was the main reason why the Taliban hated him the most. He had also acquired the image of being one of the most corrupt public figures in Afghanistan, an embarrassment for President Karzai. But no one could replace him so long as he was alive because of his stature and being the head of the powerful Popalzai tribe to which the Afghanistan President also belongs. The position he held has now gone to another Karzai, Shah Wali Karzai. President Karzai is passing through a very difficult phase in his political life. He had been offering the olive branch to the Taliban for some time, yet the extremists have eliminated a prominent member of his family. Even then he has not condemned the Taliban’s dastardly act. What President Karzai said in the presence of tribal elders in Karz, his ancestral village where Wali Karzai was buried on Wednesday, was that “Even if the Taliban say that they have killed my brother, I call on them, brothers, come, make peace.” He declared that he was committed to ensuring that the peace dialogue with the Taliban remained undisturbed. The truth is that President Karzai is almost helpless. The US and its Western allies have accepted that the Taliban cannot be defeated by force, and the best way to deal with the extremists is to win them over through negotiations. Some Taliban leaders have been given feelers to join the Karzai government and leave the path of violence. But, perhaps, they want more concessions. The assassination of Wali Karzai seems to be aimed at conveying this message forcefully. |
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I think I’ve discovered the secret of life — you just hang around until you get used to it. — Charles Schulz |
India’s N-bargain in trouble
A
few days back at its 2011 plenary meeting in the Netherlands, the 46-nation nuclear cartel, the Nuclear Suppliers Group (NSG), came up with new guidelines regarding the tightening of exports of enrichment and reprocessing (ENR) technologies. Though the exact formulation of the new guidelines have not been made public, they seem to underscore that the transfer of sensitive ENR technologies will exclude nations which are not signatories to the NPT and do not have full scope safeguards. This has led to an intense debate in India as it seems to go against the spirit of the NSG exemption granted to New Delhi in 2008. In an unprecedented move then, the NSG gave a crucial waiver to India enabling it to carry out nuclear commerce and ended 34 years of the country’s isolation from international mainstream in the wake of the 1974 nuclear tests. This was a major step in the implementation of the US-India nuclear accord and since then New Delhi has been working towards establishing a mutually beneficial partnership with friendly countries in an area which is important for both global energy security and climate change. Describing it as a “historic deal,” Prime Minister Manmohan Singh had stated that “it is a recognition of India’s impeccable non-proliferation credentials and its status as a state with advanced nuclear technology.” This move is being viewed as directed against India, shutting the doors on commerce related to enrichment and reprocessing technologies. Not surprisingly, senior Indian officials had already expressed their concerns regarding the new ENR rules suggesting that they would make the 2008 exemption to India rather meaningless. There is a growing disquiet in India. Some of it is rooted in genuine apprehensions about India’s ability to take part in global nuclear commerce in the future, but a lot of it is ideological. Every setback on the nuclear deal front is viewed as a triumph by those who all along have been against the deal on ideological grounds. The CPM has accused the Prime Minister and the government of “misleading” the people and Parliament even as the anti-American lobby is back with a bang underscoring US perfidious behaviour in trying to scuttle Indian nuclear ambitions. The US State Department has tried to allay growing concerns in New Delhi by suggesting that “nothing about the new ENR transfer restrictions agreed to by NSG members should be construed as detracting from the unique impact and importance of the US-India agreement or our commitment to full civil nuclear cooperation.” It argues that “the NSG’s NPT references, including those in the ENR guidelines, in no way detract from the exception granted to India by NSG members in 2008 and in no way reflect upon India’s non-proliferation record.” But this is not being viewed as enough, especially as under the proposals that were mooted under the Bush Administration the exports of ENR technologies would have been banned for those nations that did not have them which would have made India eligible for their transfers, given India’s indigenous capabilities in the field. India enjoys a unique status in the global nuclear hierarchy and it was always going to be a difficult exercise in bringing India into the nuclear mainstream. It was the US that expended precious diplomatic capital in bringing the naysayers around when the original exemption was granted to India in 2008. Without the diplomatic heft of Washington DC, New Delhi would not have anything even with tacit support and good intentions of Moscow and Paris. But the Obama administration’s ideological rigidity on non-proliferation has led to the danger of destroying the hard won gains from the nuclear rapprochement between India and the US. The Obama administration’s support for the new ENR guidelines also stems from its ideological commitment to the extant nuclear non-proliferation regime. Successive US administrations have viewed proliferations on WMDs as the biggest threat to the American and global security, but unlike its predecessor the present dispensation in Washington DC believes that the regime framework needs to be strengthened in order to counter the proliferation threat. New Delhi is not blameless either. India has been signalling that it doesn’t really need Washington DC to operationalise the nuclear deal and garner its benefits. This has been much applauded by those who want a more independent (read anti-US) foreign policy. More applause followed when Indian Parliament passed a nuclear liability law that makes it virtually impossible for US companies to operate in the Indian market. And now when the US is refusing to put its weight behind the NSG deliberations in favour of India, there is much heartburn about American duplicity. Mired in domestic problems, the Indian government lost crucial time over the last three years when it could have settled this issue with some finality. Now, the never-ending chaos surrounding the UPA-II is raising serious doubts about the ability of this government to take important and decisive steps in the realm of foreign policy. With two non-serious governments in New Delhi and Washington DC, is it any wonder that the gains of the landmark treaty are likely to be frittered away? The Indian government has now sought reassurances from its nuclear partners, including the US, France and Russia, that they would stand by their earlier commitments and they have reiterated their adherence to understandings with India. Nuclear commerce is not a one-way street. India remains a huge market and it should leverage its assets accordingly. While the new ENR guidelines are a setback, ground realities can be altered by astute diplomacy. After all, NSG guidelines are voluntary, so that its member-states can have the flexibility necessary to deal with the issues related to nuclear commerce. At a time when the US is working to seek India’s membership in the NSG, it is imperative that Washington DC and New Delhi work together to put the basic bargain of the Iandmark US-India civilian nuclear energy cooperation pact back in
place. The writer, author of “The US-India Nuclear Pact: Policy, Process, and Great Power Politics (Oxford University Press), teaches at King’s College, London. |
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Thank you, Gopal
Gopal’s flight has got delayed and he will now leave after having dinner at my home. Would you like to consult him?” asked a lawyer friend over the telephone. He was referring to Gopal Subramanium, then a young and brilliant lawyer at the Supreme Court. Subramanium had flown to the state capital to appear in a case before the High Court and was to have flown back to Delhi the same afternoon. The lawyer friend knew of my on-going battle of attrition with the state legislature and the breach of privilege notice it had slapped on the Editor, printer and Publisher. The notice, for good measure, had been sent to the Chairman and another director of the company as well. Upset at the legislature’s demand that the company chairman appear before the Privileges Committee, the company’s legal cell was insisting that the Resident Editor should tender an immediate apology and close the chapter, a move that yours truly was resisting to the best of his ability. The issue involved the authority of legislative committees. Could a House Committee, set up to inquire into ‘X’, exceed its brief and look into ‘Y’ was the question. Could a committee, asked to inquiry into an alleged purchase scandal in the state electricity board, plead that it had neither any evidence nor the technical expertise to inquire into the allegation? And yet, could it go on to say that it found ‘centralisation of authority’ in the chairman and recommend that he be sacked? It appeared such a brazen misuse of legislative authority that the newspaper ran a campaign against it, exposing the committee to ridicule. Stung, the legislature hit back with a summons to the Privileges Committee, a warning and reminders every second day. The move was to intimidate the newspaper into silence. It was in this backdrop that Gopal Subramanium had appeared in the state capital and the lawyer friend, now a High Court judge, made the friendly call with the offer to introduce me to Mr Subramanium. Needless to say, I clutched at the straw and rushed to consult him. It took little time to explain the case as Mr Subramanium patiently listened. He looked grave, even grim, and I had the sinking feeling that he was not really amused at the diversion. Soon I exhausted my arguments and sat back to hear what he had to say. When he spoke, he was brief and businesslike. The points which have been raised, he declared, were fundamental questions and he would be delighted to take up the case, right up to the Supreme Court. You can also tell your management that I will not charge any fee, he added with the slightest of smile hovering on his lips. Two days later I was in Delhi, explaining my conduct to the legal cell. They were exasperated at my refusal to tender an apology and informed regretfully that the Chairman would have to be told of my abominable conduct. Their pitying look said it all. I sat there alone, brooding darkly about how to draft my resignation, as the law officers went to the Chairman’s office to brief him. I was summoned after half an hour and asked if I had to say anything for myself. I have reasons to believe that it was Mr Subramanium’s offer that saved the day and my job. Now that Gopal Subramanium, the Solicitor General of India, has put in his papers, I remembered that I never went back to thank him. It’s never too late, I guess. Thank you, Gopal, for standing by an unknown
Indian. |
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The second article
in the series on Black Money takes a hard look on overloading of
trucks as a source of unaccounted income. It questions the government’s
half-hearted and ineffective efforts to collect information of secret
accounts held in foreign banks. The effort should be to reduce cash
transactions, it argues.
Black money is that part of the GDP which is beyond the accounted stream of the economy. It may have grown out or converted from offences like drug, arms trade and smuggling, terrorism, kickbacks in various public or private sector deals, hawala transactions, invoice manipulation or simply tax evasion. Whatever the origin, the common denominator is the non-payment of taxes.' The quantum of black money has been under discussion ever since Kaldor, a distinguished economist, assessed it in the mid-fifties at 5 per cent of the GDP, though now every expert puts it at 50 per cent or above. I have analysed the creation and use of black money in truck operations, beedi-making, real estate and Delhi marriages. Mining, manufacturing and professionals like doctors, advocates, architects etc are great black money spinners. In 2007 Transparency International studies trucking operations in India and concluded that a truck travelled about 1,00,000 km a year and had to shell out 70 paise per km or Rs. 79,220 as bribe to various departments during an year with a major portion going for overloading. The study arrived at a total figure of Rs.22,048.20 crore of bribe money. At the rate of 70 paise per kilometre, trucks all over the country cover 31,497 crore km to pay Rs. 22,048 crores as bribe. According to this study, 100-150 per cent overloading is the rule. A truck with nine tonnes capacity carries a load of 18 to 22.5 tonnes, thereby cheating the exchequer in two ways. First, the fee paid for the permit is in proportion to the authorised capacity of the vehicle and second that all this tonnage is hauled up unrecorded and the entire income from these operations turns black on which neither the service tax nor the income tax is paid. Actual and recorded GDP In 2006-07 the minimum GDP of Delhi must have been Rs. 1,93,000 crore in place of the official figure of Rs. 77,000 crore. The remaining Rs. 1.16 lakh crore remained black, causing a tax loss of at least Rs. 50,000 crore. That shows the actual GDP of the country may be double the recorded one. No wonder that the price of land in Delhi in certain areas is as high as Rs. 11 lakh per square yard against the official circle rate of Rs. 86,000 for a sq. metre or Rs. 75,000 per sq. yard. Thus, every acre sold in the posh areas involves a black component of Rs. 500 crore. With varying rates, that is the story all over the country but things are much more serious when we come to the metros. In OECD countries place 36 per cent of GDP is collected as taxes. We collect only about 14 per cent. The generation of black money can stop if the whole economy gets recorded and is subjected to taxation. Black money emerges as too big a national problem. People should not allow the issue to be dragged into political controversy and be killed though no party can take a public stance that black money stashed abroad should not be brought back. All political parties are responsible for it. Black money abroad A part of hush money flows abroad and is parked mostly in tax havens that have no tax or very low tax and are armed with secrecy laws. This money could be deposited in banks, invested in real estate, jewellery, shares etc. Jewellery can then be brought to India on return from a foreign visit. The dentention of actors carrying unaccounted jewellery is becoming frequent. The issue of bringing back black money came into focus in 2009 when a Swiss bank director disclosed the figure of Indians in private Swiss banks as $1,456 billion. Recession compelled developed nations to get back deposits of their citizens. Germany got lists of accounts through an employee of LGT and a number of them like the US, Finland, Norway, Sweden, Canada, Italy, U.K and Ireland, whose nationals were also on the list, collected information about their citizens and seized their money. The Indian government's efforts to obtain the names of Indians on the list have been half-hearted. Even the Hassan Ali case worth $8.1 billion has not been followed with any seriousness for years. Now the Supreme Court has constituted a Special Investigating Team under two retired judges to look into the whole gamut of black money. Even if our government gets serious, we may not achieve much as not only political will is lacking and enforcement is weak, but our laws are also weak. We need stringent laws that shift the burden of proof on the defaulter. These laws need to be implemented with equal strictness for everybody and that requires functional freedom from the executive (both political and administrative) for investigating/enforcement agencies and in particular the CBI. Tax evasion should be made a criminal offence. The violations of foreign exchange need to be brought under the category of crime so that the money laundering Act could cover it. Get tough with tax havens Treaties should be renegotiated and concluded with the countries fight the black money menace as well as the countries housing or acting as tax havens. India should boycott in all political and economic fields the tax havens which refuse to cooperate. Like France, close operations in their country and also their business establishments in the jurisdictions of the non-cooperating tax havens. India should ban operations by any Indian or foreign firm that has an office in any of the tax havens. Mauritius falls in this category. The tax havens will not be cowed easily. Even the US had threatened to close all 381 branches of Swiss banks located on its territory. This scared the Swiss banks into submission. Secondly, America does not suffer from internal contradictions as our government faces here. Our salvation lies in building nationwide pressure on the government. Manipulation in foreign exchange has ceased to be a criminal offence after FERA was replaced by FEMA. So carting money abroad that is not linked to any substantive crime by itself is not a criminal offence in India. Then how can we even draft an application for getting our money back? Still to befool the public, our government asked the Swiss bank authorities for the names of all those Indians who are keeping secret accounts with them. On August 22, 2010, we received a big rebuff. The Swiss authorities not only chided us but also upheld the sanctity of the age-old secrecy provisions, making us stand in the dock for witch-hunting and fishing expeditions. We have made our fight for bringing black money impossible and weaker by weakening the law in India itself. Till such time we strengthen our laws, we should not pin any hopes of any help or understanding from the world community. Yet, the government applied only to counter pressure from the Opposition. Both have deliberately befooled the people. However, this befooling game has served a very useful purpose as people have been educated in the process. We need not cow down but fight it out breaking even international laws for obtaining the information. Germany motivated an LGT employee to spill the beans. Our missions abroad could also organise some such activity. But our government would not permit that. The only alternative left with the people is to hack the accounts in tax havens and put them on the web for all to see. Once secrecy is broken no one will keep his money there. This will compel the government to act. All the money along with penalty be recovered from the depositor. The writer is a retired DGP of Haryana and former Joint Director of the CBI. He is the author of a book titled: "Financial Terrorism: Black Money and the Indian Elite" Pay Through Banks n
Transactions in cash should be made difficult and the use of bank money or plastic money be encouraged. Let there be a limit that no transaction beyond Rs. 1,000 (though ideally 500) would be made in cash. n
Drive the surplus cash comprising bigger notes out of the market. This will compel people to use banks. The black economy will shrink; tax collection will look up; the medium of storage of black money will disappear; the serious problem of counterfeit currency will be automatically solved and with no black money to be paid, kidnappings, loot by domestic servants in particular etc and even dowry will disappear. n
Make all government payments by cheque or credit amounts in the bank accounts. n
Make the holding of 'benami' assets difficult. Introduce a National Property Register that should record all assets of an individual on the basis of a unique ID to be allotted on fingerprint classification or any other unique identity code. n
Make tax evasion a cognizable crime with a jail term as punishment. It could be linked to the amount of tax evaded. n
For regulating the private sector, make auditors independent of the person or the firm audited so that they conduct meaningful true audit and expose rather than conceal wrong actions. US President Theodore Roosevelt, referring to the role of auditing, onbserved: "Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people." In India, the auditor is employed by the person who is to be audited. No wonder, he is a conspirator in the generation of black money. |
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