O P I N I O N S

EDITORIALS

Striking at VAT
Stick to the deadline
MONDAY’S countrywide strike against value added tax (VAT) cannot be justified. However, traders who manage to evade taxes in the existing set-up are upset as the new tax plugs all possible loopholes. Tax dodging will become difficult, if not impossible, when VAT comes into force on April 1.

Centre-state relations
Time to recognise new realities
THE Union Government’s decision to set up a commission for taking a fresh look at Centre-state relations is in recognition of a long-felt need. The decision has been taken in conditions vastly different from the one that prevailed when the Sarkaria Commission was appointed.

• Thought for the day

ARTICLE

J and K accession-I
The decision to join India was final
by Justice A.S. Anand (retd)
ON August 15, 1947, India became independent. In accordance with the Cabinet Mission plan of May 1946 following the creation of the dominions of India and Pakistan, Kashmir bordering on both India and Pakistan had, like any other native State, three alternatives, viz., to assert complete independence, to accede to Pakistan or to accede to India. Power to take the decision vested exclusively in the ruler, according to the British Government’s declared policy.

MIDDLE

Together, but not there
by Ramesh Luthra
Everyone at home. Still a lonely evening. It had rained heavily during the day. Fierce sleet was lashing the city now. We had made the bedrooms cosy with the blowers whirring endlessly. Despite this cosiness I felt an unknown ennui enveloping me. Something was missing. Perhaps warmth was conspicuous by its absence. Shushant was busy with computer, while Ritu had been glued to the TV since afternoon.

OPED

Dawood shifts to retail and tourism
The gang owns top gutkha brands: police
by Shiv Kumar
Far from the probing eyes of the media and the law enforcement authorities, the Dawood Ibrahim gang has been gradually moving into legitimate businesses in India and abroad. Investments in film distribution, real estate and hospitality have given way to those in retail, tourism and other businesses that promise high returns, according to police sources.

Delhi Durbar
Pak Governor to see Mohali match
An Indo-Pak cricket series always generates excitement in both countries. This is what happened when External Affairs Minister K. Natwar Singh visited Pakistan last week. Pakistan Punjab province’s Governor, Lt-Gen Khalid Maqbool, conveyed his wish to travel to Chandigarh for the Indo-Pak cricket match at Mohali.

• Rahul turns vocal

• Bhajan Lal is the issue

• Preparing for competition

REFLECTIONS

EDITORIALS

Striking at VAT
Stick to the deadline

MONDAY’S countrywide strike against value added tax (VAT) cannot be justified. However, traders who manage to evade taxes in the existing set-up are upset as the new tax plugs all possible loopholes. Tax dodging will become difficult, if not impossible, when VAT comes into force on April 1. Some of those who took part in the agitation might have been misguided by the misinformation campaign orchestrated by the vested interests. They are scaring consumers by claiming that VAT would push up prices. Some others may not be fully convinced of the benefits of VAT. And still others might have joined the strike to avoid a confrontation.

With the deadline for the implementation of VAT fast approaching, confusion still persists about the new tax. State governments have not done enough to clear the misgivings. Some, ruled by politicians open to manipulation by traders’ lobbies, have refused to implement it from April 1. Uttar Pradesh is prominent among them. There are reports that Finance Minister P. Chidambaram may again be forced to defer the April 1 deadline. This will send a wrong signal. India is already late in implementing VAT. Starting with Brazil in the 1960s, VAT is now in force in some 130 countries, including China and Sri Lanka. The Centre should reward the states implementing VAT and penalise the rest.

The new tax is in the interest of the traders as the overall tax burden on them will fall. There will be no double taxation — first on the inputs and then on the final product — as now. VAT will provide a set-off for the input tax as well as for the tax paid on previous purchases allowing a reasonable profit margin. The existing levies like the turnover tax, the surcharge on sales tax and additional surcharge will stand abolished. The agitated traders should, instead, demand the axing of all local taxes. Haryana, the first to adopt VAT, is continuing with the Local Area Development Tax. VAT may not shrink the states’ revenue as Haryana’s experience shows. In any case, the Centre has promised to make good the loss, if any, suffered initially. So there should be no grouse on VAT.

Centre-state relations
Time to recognise new realities

THE Union Government’s decision to set up a commission for taking a fresh look at Centre-state relations is in recognition of a long-felt need. The decision has been taken in conditions vastly different from the one that prevailed when the Sarkaria Commission was appointed. A number of recommendations of the Sarkaria Commission — to refine norms and smoothen functional ties between the Union and the states — have been implemented. The more contentious ones that have not found favour until now are unlikely to be of much relevance unless changes in the situation over the years are taken into account; and this by itself may not be adequate given the demands that have arisen since the Sarkaria Commission concluded its work.

The purpose should be to advance and actualise the federal principle that has been severely tested by partisan politics and Centre-state power play. One recent illustration was the dispute over the appropriate authority for distribution of Central assistance to the tsunami-affected in Tamil Nadu. In that sense, circumstances have thrown up the core issues that should constitute the terms of reference. Union Home Minister Shivraj Patil was only acknowledging these when he identified three of the items on the agenda: disaster relief, internal security and administrative reform. The tsunami has given rise to urgent issues of resource mobilisation and management that need to be formalised as norm and procedure; terrorism, militancy and efforts to mainstream extremist forces call for a unified vision and mission objective without transgressing the states’ right to negotiate; and, thirdly, governance based on accountability and transparency demand a new culture of working between the Centre and the states.

The states today have more real autonomy, partly because of successive coalitions at the Centre where regional parties enjoyed unprecedented leverage; but largely because of economic reforms that have enabled states to attract big investments. Now, it is a question of incorporating in an ordered scheme the devolution that has willy-nilly come about over the last 16 years, especially after the demise of one-party rule at the Centre.

The Grim Reaper
Aggressive steps needed to tackle drug menace

THE dramatic escape and arrest of a notorious international drug trafficker from the custody of the Narcotics Control Bureau at Mohali highlight the fact that the region is a focus of drug peddling. It is also a pointer to the lack of diligence on the part of the official agencies in tackling this menace. Lior Avi Ben Moyal and his accomplices had been caught with 155 kg of charas by the bureau, only recently. This was a record haul, and it is now obvious that Punjab, Himachal Pradesh and Chandigarh have emerged as major destinations for drug traffickers. In Taran Taran alone, the police has identified 1,000 chronic addicts, one third of them policemen. A survey in Ludhiana showed that 67 per cent boys and 52 per cent girls took drugs. Many families in Majha and Doaba have at least one addict, sometimes more than one.

It is obvious that when there is demand, suppliers will make hay. The quantities of seizures in the area have been increasing. Recently, the police burnt drugs worth Rs 2.5 crore near Ropar, but that is just a tip of the iceberg. It was thought that after the increased surveillance on the border with Pakistan, a major pipeline for illegal drugs would be shut. Instead, new supply routes have been created. Since men are suspect, increasingly, women are being used as couriers by the drug mafia.

Enforcement is generally considered the most visible way of combating the drug menace, but a more holistic approach is necessary. Spreading awareness through the media, counselling and setting up of de-addiction camps are just a few of the ways that can make a difference. While various NGOs have had notable success in such endeavours, the government has been focussing on nabbing drug traffickers. Even within the narrow confines of this focus, it has been unsuccessful, as the latest incident involving an Israeli shows.

Thought for the day

Our senses show us the mortal world. Love helps to make it immortal.
— The Upanishads

ARTICLE

J and K accession-I
The decision to join India was final
by Justice A.S. Anand (retd)

ON August 15, 1947, India became independent. In accordance with the Cabinet Mission plan of May 1946 following the creation of the dominions of India and Pakistan, Kashmir bordering on both India and Pakistan had, like any other native State, three alternatives, viz., to assert complete independence, to accede to Pakistan or to accede to India. Power to take the decision vested exclusively in the ruler, according to the British Government’s declared policy.

On that fateful day, most of the leaders of the National Conference and the Muslim Conference were in prison because of the “Quit Kashmir Movement” which had started in 1938. In the absence of British help which he was hitherto getting, the Maharaja found himself in a tight corner.

“He disliked the idea of becoming a part of India, which was being democratised or of Pakistan which was a Muslim State. He thought of independence”. (Brown, W.N., The United States and India and Pakistan, Cambridge 1953, p. 162). He, therefore, offered to sign a standstill agreement with both India and Pakistan aimed at continuing the existing relationship pending his final decision.

No standstill agreement came to be concluded between Kashmir and India though the Foreign Secretary to the Government of Pakistan on August 15, 1947, indicated to the Maharaja that the Government of Pakistan was agreeable to have a standstill agreement with the Government of Jammu and Kashmir.

In the second week of August, however, there occurred a Poonch revolt against the authority of the Maharaja. The State Government found that the revolt in Poonch was due to infiltration from Pakistan but the charge was refuted by the Pakistan Government. Rather, the Pakistan Government charged the Government of Jammu and Kashmir with attacking Muslim villages in the State.

At the same time there started an economic blockade from Pakistan. The Government of Pakistan did not unequivocally deny the charge of economic blockade but pleaded “special circumstances” and difficulties in sending supplies to the State due to reluctance of the drivers of lorries to carry the supplies between Rawalpindi and Kohala.

While the Pakistan Government was pleading “special circumstances”, Dawn, the Muslim League’s official organ, wrote on August 24, 1947: “The time has come to tell the Maharaja of Kashmir that he must make his choice and choose Pakistan”. Should Kashmir fail to join Pakistan, “the gravest possible trouble would inevitably ensue”.

This threat alarmed the Maharaja. Looking to the upsurge, Sheikh Abdullah was released from jail on September 29. On October 20, a large column of several thousand tribesmen armed with “brenguns, machineguns, mortars and flame throwers” attacked the frontiers of the State. “Srinagar trembled before the danger of the tribesmen’s invasion.” It was alleged that they were being aided by Pakistan.

The indecision of Maharaja Hari Singh gave place to deep-seated alarm and to a genuine concern for his personal safety. On October 25, the Maharaja appointed Sheikh Abdullah as the emergency administrator. The raiders were fast approaching Srinagar, destroying and looting whatever came their way. The State was in imminent peril.

Sheikh Abdullah advised the Maharaja that if the State was to be saved, he must accede to India and ask for immediate military help. This advice paved the way for accession of Jammu and Kashmir to India. The Maharaja also found no other alternative and he addressed a letter to Lord Mountbatten, the Governor-General of India.

Attached to the letter was an Instrument of Accession duly signed by the ruler. The operative part of the same read:

“Whereas the Indian Independence Act, 1947, provides that as from the fifteenth day of August, 1947, there shall be set up an independent domination known as India, and that the Government of India Act, 1935, shall with such omissions, additions, adaptations and modifications as the Governor-General may by order specify be applicable to the dominion of India;

And whereas the Governor of India Act, 1935, as adopted by the Governor-General, provides that an Indian state may accede to the Dominion of India by an Instrument of Accession executed by the ruler thereof;

Now therefore I Shriman Indar Mahander Rajrajeshwar Maharajadhiraj Shri Hari Singh Ji Jammu Kashmir Naresh Tatha Tibet Adi Deshadhipathi Ruler of Jammu and Kashmir in the exercise of my sovereignty in and over my said State do hereby execute this my Instrument of Accession…”

Lord Mountbatten indicated his acceptance in the following words:

“I do hereby accept this Instrument of Accession. Dated this twenty-seventh day of October Ninteen Hundred and Forty-Seven.”

This Instrument of Accession was in no way different from that executed by some 500 other States. It was unconditional, voluntary and absolute. It was not subject to any exceptions. It bound the State of Jammu and Kashmir and India together legally and constitutionally. The execution of the Instrument of Accession by the Maharaja and its acceptance by the Governor-General finally settled the issue of accession of the State of Jammu and Kashmir.

After accepting the Instrument of Accession, Lord Mountbatten wrote a personal DO letter to Maharaja Hari Singh in reply to his letter, which had accompanied the Instrument of Accession but was not a part of the Instrument of Accession. In his letter Lord Mountbatten wrote:

“… my Government have decided to accept the accession of Kashmir State to the dominion of India. In consistence with their policy that in the case of any State where the issue of accession has been the subject of dispute, the question of accession should be decided in accordance with the wishes of the people of the State, it is my Government’s wish that, as soon as law and order have been restored in Kashmir and its soil cleared of the invader, the question of State’s accession should be settled by a reference to the people”.

This statement has figured as a controversial feature of Kashmir’s accession to India. Critics of the accession have steadfastly maintained that this stipulation renders the accession conditional and that the question of State’s accession has to be settled by a reference to the people of the State. That, however, is not so. The wish was at the most a pious hope.

It did not render the accession conditional. The only documents relevant to the accession were the Instrument of Accession and the Indian Independence Act and both the constitutional documents did not contemplate any conditions and, therefore, there was no question of the accession being conditional.

Mr M.C. Mahajan (Accession of Kashmir to India: The inside story, p. 19-21) rightly opined that the “finality which is statutory cannot be made contingent on conditions imposed outside the powers of the statue. Any rider which militates against the finality is clearly ultra vires and has to be rejected” Ruler of Jammu and Kashmir never accepted the view of Lord Mountbatten. That ‘wish’, therefore, had no legal effect. Pakistan, however, to suit itself, refused to recognise the accession.

Moreover, it cannot be denied that the Maharaja of Kashmir offered to accede to the Indian dominion after the assaults and raids had started on the State from across the border.

When at his meeting with Lord Mountbatten on November 1, 1947, Mr Jinnah claimed that the accession of Kashmir to India was based on violence, Lord Mountbatten replied: “The accession had indeed been brought about by violence, but the violence came from tribesmen, for whom Pakistan, and not India was responsible.”

(To be concluded)

The writer, a former Chief Justice of India, is the author of the book “The Constitution of Jammu and Kashmir —Its Development and Comments”

MIDDLE

Together, but not there
by Ramesh Luthra

Everyone at home. Still a lonely evening. It had rained heavily during the day. Fierce sleet was lashing the city now.

We had made the bedrooms cosy with the blowers whirring endlessly. Despite this cosiness, I felt an unknown ennui enveloping me. Something was missing. Perhaps warmth was conspicuous by its absence. Shushant was busy with computer, while Ritu had been glued to the TV since afternoon.

What to say of my hubby! He was absolutely engrossed in writing his latest novel. Quite oblivious of his surroundings. I quietly put his coffee on the writing table trying not to disturb his line of thoughts. He did not even glance at me. Anyhow, I sat sipping coffee in bed.

Unknowingly, a vague sense of loneliness gripped me. The whole family is around but not a word escapes anyone’s lips. Even the tearing pranks between brother and sister had disappeared. “Remote as plants...,” Auden had written about the patients in the Surgical Ward. Has it become true of the healthy ones as well? A chill of fear went down my spine.

Involuntarily, I went down the memory lane. I travelled to the good old days when we looked forward to “bare din ki chhutian”, the winter holidays. It was time to visit our grandparents in the native village (now in Pakistan) and meet our cousins. It was the time to do “moj masti” in the fields and watch men making jaggery. A real pleasure to taste it fresh and hot. My uncle would get it enriched with plenty of dry fruit. Chocolates and sweets stand nowhere before its flavour and taste.

Our granny would play a perfect host despite her old age. She would cook sumptuous “sarson ka saag”. Very vividly do I remember she would place a blob of white home-made butter on the “saag”. What to say of “makki ki roti”! Perhaps items cooked on the traditional ‘chullah’ are blessed with a taste only manna is supposed to have.

Evenings spent over there form an integral part of the treasure trove of my memory. Glowing and warm hearth from evening onwards would be a special attraction for us. Each one tried to occupy the seat closest to the fire. The warmth of fire was equally matched with the warmth of affection showered on us. Gossip sessions would make the evenings warmer. Listening to grandma’s with rapt attention, exchanging “chutkalas” and asking riddles and vying with one another to answer first. All this was enriched with basketfuls of almonds, walnuts, pistachios, kismish et al placed before us.

Much to elders’ amusement, we would fill in our pockets with the delicious stuff and munch and munch till late at night. Grandpa with his toothless jaw would relish “kaagzi badams” and pistachio. We would love watching his strenuous munching. Very often granny would brighten the evenings with rice cooked in sugarcane juice with a rich helping of dry coconut and dry fruit. A peculiar aroma of the delicacies cooked like that still lingers in my mouth.

Those good old days have become a thing of the past to be related by the elders in the family. Time, cruel as it is, has snatched away these fireside treats along with their warmth and glow. Things have undergone a transformation. Craze for pizzas and hamburgers has replaced the delicious things prepared by the grannies. They too have gone career oriented and have hardly any time for not-to-be-forgotten fireside treats that filled our lives with the warmth of affection.

And there is the small screen with its non-ending serials that have robbed us of gossiping and opening our hearts out. Changing channels and living in cocoons of our own—cold and freezing — is what life is reduced to.

The warmth of fireside treats have given place to the easy culture of watching “Boogie Woogie” and filling our bellies with pouchs of chips and French fries the sizes of which are getting larger with each passing day. Wish something positive could be done to restore filial bonding of good old days in our lives.

OPED

Dawood shifts to retail and tourism
The gang owns top gutkha brands: police
by Shiv Kumar

Dawood Ibrahim, who hires men with no police records to run new business ventures as his illegal activities come under pressure following the US war on terrorism

Far from the probing eyes of the media and the law enforcement authorities, the Dawood Ibrahim gang has been gradually moving into legitimate businesses in India and abroad. Investments in film distribution, real estate and hospitality have given way to those in retail, tourism and other businesses that promise high returns, according to police sources.

With the Indian government turning the heat on the Dawood Ibrahim gang in the early 1990s, many gang members fled to the Gulf and far eastern countries where they have set up legitimate businesses.

Though originally believed to be mere fronts for their shadier businesses, the legitimate operations have turned profitable, police sources feel.

Ibrahim and his brothers along with associate Chhota Shakeel own hotels and shopping malls in the UAE, Thailand, Nepal, Hong Kong and Singapore. Apart from money changing and hawala rackets for black money holders from the sub-continent, these places also offer a safe refuge for gang members on the run.

“The D-company is always looking out for businesses that offer a high returns,” says a police officer about the gang’s attempts to enter the gutkha trade. Apart from funding big operators in business, the Dawood gang also provides logistics support for them.

With the gang’s blessings, small gutkha makers source illegally felled timber from the forests near Mumbai to get tobacco, the main raw material for gutkha, according to Forest Department officials here. The gang also uses the gutkha distribution network to peddle cigarettes smuggled in via north-eastern states.

Since much of the business is cash-based and unaccounted for, the gang shifts it out of the country through the hawala route. “There is a lot of unaccounted money in the gutkha business and dealerships are auctioned to the highest bidder,” says a source. However, bulk of the payments are made in cash and soaked up by the parallel economy.

Trade reports say margins in the gutkha business are high. The manufacturer reportedly earns as much as 30 paise on a one-rupee packet of gutkha after deducting raw material, manufacturing, packaging and distribution costs.

Not surprisingly, Dawood Ibrahim decided to move into the business. The police suspects that a number of gutkha brands in the country are owned by the gangster under different names. However, Ibrahim’s attempts to create a gutkha market in neighbouring Pakistan for his brother Anees blew the lid on the shadier aspects of the business.

Dawood’s break in the business came a few years ago when Rasiklal Dhariwal and Jagdish Joshi owners of Manikchand and Goa Gutkha, respectively, approached the gangster to solve a business dispute.

As per the FIR, Joshi was an employee of Dhariwal and helped him launch the Manikchand brand nearly 15 years ago. In the late 1990s, Joshi decided to branch out on his own with Goa Gutkha even while he continued to be in Dhariwal’s employ.

Joshi was subsequently unmasked by his employer and sacked. Rather than go away quietly, Joshi demanded Rs 40 crore by way of compensation. With both sides unable to reach a dispute, Dhariwal and Joshi approached Ibrahim in Karachi to broker peace, according to the police.

The gangster, in turn, forced a settlement between the two businessmen in return for technology and capital to set up his own gutkha business in Pakistan, the police says.

The scandal was exposed when two Mumbai businessmen — Jamruddin `Kalia’ Ansari, alias Jumbo, and his associate Rajesh Panchariya — were caught trying to ship gutkha manufacturing and packing equipment to Dawood in Karachi. The shipment was to go via Dubai.

In the case papers forwarded to the CBI, the two businessmen are said to have confessed to past links with the underworld and named several of their associates in different fields.

Dhariwal and Joshi are out of the country and an Interpol red-corner notice has been put out against them. Dhariwal, however, called up newspapers to say that he would return home in April since he is required to stay abroad in order to maintain his NRI status. No word is available from Joshi as yet.

Dawood Ibrahim has used a similar modus operandi to set up a number of businesess in India and abroad. The gang built two big shopping centres, Sara and Sahara, right outside the Mumbai Police Commissioner’s office illegally on government land. The gang is also said to be interested in setting up shopping malls by arm-twisting builders and developers.

A number of sari manufacturers from Gujarat have similarly been roped in to supply stock for the gang’s outlets in the West Asia, sources say.

The gang burnt its fingers in the airline business and is believed to have exited the sector after the murder of a controversial airline owner in the 1990s, the police says.

However, with its illegal business under pressure following the war on terrorism by the US, the underworld is forced to get into legitimate businesses, say observers. Members of the gang with no police record against them run these ventures. Many of them are well-educated and hold professional qualifications.

Delhi Durbar
Pak Governor to see Mohali match

An Indo-Pak cricket series always generates excitement in both countries. This is what happened when External Affairs Minister K. Natwar Singh visited Pakistan last week. Pakistan Punjab province’s Governor, Lt-Gen Khalid Maqbool, conveyed his wish to travel to Chandigarh for the Indo-Pak cricket match at Mohali. The Indian side was quick to assure him that they would be privileged to have him among the spectators and that all arrangements would be made to enable Gen Maqbool and his entourage to witness the Mohali match. Cricket diplomacy is not a new phenomenon in the two countries.

The late Zia-ul-Haq had made a special trip to Jaipur in the nineties to watch the two teams play. This was at a time when the Indo-Pak ties were not at their best but Gen Zia’s masterstroke did help bring about a thaw in their relations.

Rahul turns vocal

Rahul Gandhi surprised participants at the recent “chintan shivir” held at Chitrakoot where he politely, but firmly, took on the critics of liberalisation, saying their assumptions were flawed.

The Congress heir apparent made his presence felt last week again at the Civil Aviation Ministry’s consultative committee held in Mumbai. Insiders say Rahul did not hesitate to voice his reservation about Air India’s proposal to introduce a low-cost no-frills air service called Air India Express.

Rahul was not impressed with this proposal and said so without any hesitation. Stating that the new low-cost budget airline could well eat into the profits of the mother airline, he cautioned that Air India Express may “cannibalise” Air India.

Bhajan Lal is the issue

PCC chief Bhajan Lal’s detractors maintain that Prime Minister Manmohan Singh’s promise at an election rally in Haryana to provide a “corruption-free” government clearly implies that he is out of the race for Chief Ministership. Bhajan Lal’s supporters, on the other hand, are equally quick to point out that the Haryana strongman’s claim can hardly be overlooked given his experience and the fact that he is likely to enjoy the largest support among the elected legislators.

Preparing for competition

Competition from private players on international air routes has forced Air India’s bosses to look at ways of meeting this threat. This has prompted the 73-year-old international carrier to send its ageing employees back to the classroom so that they can relearn the skills of dealing with customers.

Employees from various departments, from the booking office, check-in counters to cabin crew and pilots who have a direct interface with customers are being handpicked for this training.

It is only to be hoped that Air India employees would shed their old habits.

Contributed by Rajeev Sharma, Gaurav Chaudhary, Girja Shankar Kaura and S. Satyanarayanan

REFLECTIONS

— The Buddha