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Battling inflation Finding home for a child |
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Modifications in tax policy
From Kullu to Peak national park
The military seems lost in transition Karachi, urbanisation and the migrant labourer
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Battling inflation TO contain the rising prices of onions, potatoes and other food items a Centre-state meeting on Friday agreed on a number of steps. The Centre plans to set up a price stabilisation fund to help states buy fruits and vegetables to meet shortages. Onion and potato have been brought under the Essential Commodities Act, which is to be amended to make hoarding a non-bailable offence. The states have been told to amend their Agricultural Produce Market Committee (APMC) Acts so that farmers are free to sell fruits and vegetables outside the designated mandis. Besides, the deputy commissioners/collectors will be directed to monitor food supplies and prices at the district level. These are steps in the right direction and may lead to positive results if states cooperate. Price rise is usually seen as a Central problem and states, especially those ruled by opposition parties, watch quietly as the Union Government gets the blame. Needless politics is played over this emotive issue, which was one of the reasons for the UPA's loss of power. The Modi government has contributed to price rise by raising railway freight rates and continuing the UPA policy of incremental diesel price hikes, raising the cost of transportation in the economy. This has been done at a time when El Nino is expected to hurt agricultural production, push up the consumer price index and, as a result, delay RBI rate cuts. The BJP is opposed to the UPA's welfare schemes, which have helped the poor cope with price rise to some extent. A Central note circulated at Friday's meeting blamed MNREGA, among other things, for price rise. This was a political blunder the Congress fully exploited. The country needs to invest more to raise farm production and productivity, and build infrastructure for better post-harvest management. A lot of food goes waste due to unscientific storage. There are not enough silos and cold storages. Taxes, manual handling and pilferage raise the costs. Either the Centre and states should spend more on agricultural projects or encourage private investment. The BJP opposition to FDI in retail, therefore, requires a second look.
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Finding home for a child IN a major policy shift, the Ministry of Women and Child Development has mooted a new adoption law which will treat NRI parents as Indians, making them eligible for in-country adoptions. By scraping the existing rule of 80:20 ratio for domestic adoption and inter-country adoption (ICA), the proposed changes, part of the new Juvenile Justice Act, will also help foreigners adopt a child from India. Over 12 million orphaned children in the country are waiting to find a home — anywhere in the world. Since the arrest of five kidnappers in Chennai, who sold over 350 children to an adoption agency in 2005, which led to the unearthing of a well-knit adoption racket, the need for restructuring of the ICA processes had been felt strongly. There is no legislation that covers the ICA in India, the process is carried by a set of rules laid down by the Supreme Court in a series of judgments. The Central Adoption Resource Agency (CARA) implements and monitors ICAs. Over the years, in the zeal to protect a child's rights, the laws were made too stringent, driving foreigners keen on adopting Indian children to turn to unscrupulous agencies. As a result, children available for adoption through proper channels could not find a home and genuine parents willing to adopt a child were discouraged by the clearances required from a number of agencies. In the light of this, the linking of 400 children's homes to Specialised Adoptive Agencies, under the proposed policy, will speed up the process of adoption. The demand for children has increased in developed countries owing to a decline in fertility, greater availability of contraceptives, higher participation of women in the workforce and late marriages. The supply rises in the developing countries owing to an increasing number of orphaned and abandoned children because of poor socio-economic conditions. Over the past three decades, 2,65,677 babies have been placed for ICAs, mostly from developing countries. India has had a small share in this.
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If you steal from one author it's plagiarism; if you steal from many it's research. — Wilson Mizner, American playwright
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The better and the good in sanitation IN the Punjab Government's review of the proceedings of the Sanitary Conference of 1913 there is one remarkable sentence to which we desire to call especial attention. "It must be recognised," says His Honour, "that we cannot hope to remedy all that is insanitary in a village, and though two improvements are better than one, His Honour would not always let the better stand in the way of the good. A village which is urgently in need of a pure water supply need not be condemned to remain without it because another village wants its streets paved and its depressions filled." We entirely agree with the principle so forcibly enunciated by His Honour, and we fervently hope that His Honour would be pleased to extend it to the sister department of education. During the last quinquennium the education department has been urging the fallacious theory of quality before quantity. SIR Harry Johnston's letter to the Times on the subject of Indian emigration is intended to show that Indians need not and should not emigrate to outside countries. He would have been glad if South Africa had been set apart for Indian emigration but he says that Indians being admitted to British East Africa they "had developed a great capacity for political intrigue and secret societies and had made themselves very objectionable in other ways." This is an altogether new and mysterious accusation against Indians as a nation. Nobody else has said anything of this before, so far as we know, and we must therefore ask Sir Harry for facts. But even supposing that certain individuals had offended the authorities, what justification is there for condemning the whole Indian nation?
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Modifications in tax policy The main hurdle in the implementation of the GST is its proposed separate tax structures for the Centre and the states. The rates of the GST on different commodities should be so designed that interests of the states are fully protected as nearly 90 per cent of the states' tax revenue comes from indirect taxes. In the past also the smooth transition from sales tax to VAT became possible due to the fact that the states' concerns were duly addressed. Further, while devising modifications in tax policy the Union Finance Minister must take into account the adverse effects on the states' finances, if any. In the past the Central government had inadvertently encroached upon the states' sphere of taxation. This has adversely affected the finances of the states. For the smooth functioning of Centre-state financial relations, the principle of financial autonomy should be respected. There should be a statutory provision for the states to have an access to adequate resources so as to perform the welfare and developmental functions assigned to them. This can be better understood by Mr. Arun Jaitley, who has fought the Lok Sabha election from Punjab (Amritsar), the state which has been clamouring for more fiscal space for the states. In fact, the most crucial issues before the new government, viz. controlling food inflation, creating employment opportunities by promoting infrastructure investment and education etc presume the active involvement of states. To reassure the states the Centre should immediately convene a meeting of the Inter-State Council. Ever since it was constituted in 1990 only 10 meetings have been held, the last being on December 9,2006. The UPA perhaps was afraid of the states' attitude as in the two meetings held during its regime only peripheral issues like disaster management and good governance were taken up. At the last meeting the chief ministers were simply briefed that of the 247 recommendations of the Sarkaria Commission on Centre-state relations, 180 have been implemented. Ever since the Sarkaria Commission was constituted in 1983, many developments on the economic front, notably the adoption of globalisation, privatisation and liberalisation of the Indian economy, have taken place. While these developments have opened new sources of revenue for the Centre, the expenditure obligations of the states have increased manifold. Further, while devising a fresh tax policy the new government must recognise that in a developing economy like India new avenues of income and employment are bound to come up. Even the nature of production and transactions will undergo profound changes. For example, we now have share/equity markets, forward trading in commodities, exponential growth in the service sector, pecuniary benefits to the employees by MNCs, and so on. These growing sources of income have great tax potential and, therefore, have to be tapped. That is why we have the STT (Security Transaction Tax), the CTT(Commodity Transaction Tax), the FBT (Fringe Benefits Tax), etc. apart from traditional time-tested taxes like income tax, corporation tax, etc. The most important feature of the Central tax structure is the predominance of direct taxes, viz, income tax , wealth tax, capital gains tax, corporation tax, MAT (minimum alternate tax) etc. which have no adverse bearing on the poor as their burden falls mostly on the well-to-do . It is a happy augury that the proportion of direct taxes in total tax receipts of the Centre has increased in the post-reform period from just 20 per cent to 55 per cent in 2013-14. Of course, there is still a large scope to tax the super- rich sections of society. At present there are three income tax brackets — 10 per cent, 20 per cent and 30 per cent. The super- rich can be charged a higher tax rate say 35 per cent or else can be asked to pay 10 per cent surcharge. Then in view of the ever-increasing number of billionaires, estate duty, which was abolished in 1985, can be re-imposed. Under the existing provisions 100 per cent proceeds from the estate duty are to be transferred to states. For promoting savings and investment, there is an urgent need to increase the savings limit from the present Rs. 1 lakh to Rs 2 lakh. Yet equity considerations demand that the rate of interest on tax-saving instruments be lowered as persons in higher income brackets are doubly benefited. They not only reduce their tax burden but also receive the interest income. A reduction in interest rate on tax-saving instruments will help the government rein in both revenue deficit and fiscal deficit. This will also set the ball rolling in the direction of reducing the market interest rate since the government interest rate usually acts as the threshold. This move will also benefit the states as the entire proceeds from such savings go to the states. The 14th Finance Commission under Dr Y.V. Reddy will soon submit its report regarding the sharing of taxes and grants for the next five years i.e., 2015-2020. But its implementation will be left in the hands of the Centre as the Finance Commission office will soon be disbanded. Mr Jaitley should initiate moves to make the office of the Finance Commission permanent so as to enable it to oversee the implementation of its report and address the states' concerns, if any. In fact, for the smooth functioning of Centre-state financial relations and for motivating the states to actively participate in development, some institutional arrangements need to be made permanent. The writer is a former Professor and UGC Emeritus
Fellow, Department of Economics, Punjabi University, Patiala
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From Kullu to Peak national park Our son introduced us to the Scottish driver, Glenn. He was a bit short-statured but stocky and had a warm demeanour. Soon we left for Manchester, a two hours' drive from where our flight was booked for Houston. Once out of the city limit, we were in the midst of a picturesque landscape of its own kind. An expanse of rolling hills, thickets, moors, pastures with flocks of sheep and pretty hamlets of old-world charm. Sensing our inquisitiveness in the scenic landscape around, Glenn opened his mouth for the first time since our departure: "Now we are driving through Peak district, one of the most visited national parks of the UK". I had already read in some tourism-related brochures that no less a person than William Wordswoth was a frequent visitor to Peak district and penned down several of his poems, including a sonnet on Chatsworth. For a few moments, for contrast, this national park of the UK made me think of the Great Himalayan National Park back home in my own home district of Kullu in Himachal Pradesh. In the midst of dwarfish hills of mostly rounded tops hardly going above 1500 feet and extensively covered by footfalls all over, I missed the awesome snow-clad virgin peaks, as high as over 18,000 feet, and gushing Himalayan torrents…. Only if William Wordswoth had as well visited the exceptional natural beauty of Kullu district! Half-way through the journey, Glenn stopped his vehicle at a small village, but why? "Now we are at Castleton village, a favourite haunt for tourists, named so after an old castle", he made us look at it a little higher up on a hill top. He probably thought in case we desired to climb up. No way. Yet another attraction: “This area is also famous for a mine of Blue John jewel stone; it’s on sale right at the village jewellery shops”. Blue John? Here Glenn seemed to have got the better of me in geology even when I was a qualified geologist myself. Only after I cursorily looked up one of the Blue John souvenir shops across the road, I realised that the term Blue John was a colloquial name for semi-precious fluorite mineral. Hardly had we left Castleton, Glenn had yet another bit of information up his sleeve to enlighten us. “Now right ahead of us, we will drive through limestone rocks which are quarried for cement manufacture”, he pointed to the rocky cliffs at some distance. “These rocks also have huge caverns with fabulous stalactites, besides old mines of lead…” Rocks, stones, minerals, mines and all — was he taking us for some college students out on a geological excursion? When we were nearing our destination, I put him a personal question even when I was told that the Brits are known for guarding their privacy: “How big is your family”? Far from showing any sign of offence, he happily opened out on a monologue: “Two of us, myself and my wife, based at Sheffield…. have one daughter, married off…We are soon going to have a granddaughter. We are a happy family…. For leisure we generally go out picnicking and are regular on pubs in the evening… And yes, I also take time off for playing golf in one of the clubs”. His words left me gaping in the mouth. After having compared the Peak district national park of the UK with the Great Himalayan National Park of India, I set about musing on a comparison in my mind between Glenn and Kashi Ram, a taxi driver back home in my
neighbourhood.
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The military seems lost in transition Can constitutional legitimacy flow from the barrel of a gun … If reliance on coercive force in gaining power is legitimised or condoned, there can be no rational basis for decrying the assault on the writ of the state by any band of marauders, robbers, adventurers and zealots of varying extremes in the political spectrum.” — Justice Jawwad S. Khawaja
JOHN Mortimer’s fictional character, Rumpole (of the Bailey), always introduces his wife not by her name but as “she who must be obeyed”. If Rumpole was a citizen of Pakistan, he would certainly adapt the same description to portray the Pakistani military establishment, ie “they who must be obeyed” or maybe, “they who must be feared”. These notions of “obedience” and “fear” attached to the military establishment may be critical to the functioning of any modern army but in view of the political role of the Pakistani military establishment, they are obstacles to the possible dual transition taking place in Pakistan. The military is adapting to changes, but only in order to remain the same. The first transition concerns a modern army operating under, and in accordance with, a modern constitutional state; the second pertains to a post-Zia Pakistan with the state neither using nor protecting nor promoting nor tolerating religion-based militant groups. The first will ensure that Pakistan is a normal, modern constitutional state and the second that it is becoming a part of the world community. In view of the military establishment’s history of unconstitutional interventions and linkages with religion-based militant groups, the key to these transitions is a Pakistan, which is neither monopolised nor controlled by the Pakistani military establishment. We can examine five key aspects of this transition. Foundational realities: Why do serving and retired generals rush to the hospital, when summoned by the courts? In the existential world of the military establishment, the primary source of power and legitimisation is the military institution itself, ie military discipline and rules. All other sources, including the Constitution and law, are secondary. This is their belief, their institutional DNA. It is precisely for this reason that every military coup, or intervention, is based on the false choice between saving the state (as defined by them) and saving the Constitution. Therefore, the Constitution, independent courts and civilian oversight undermine this existential military world leading to taboo questions being raised regarding the personal and institutional accountability of military personnel and their institutions. It is not surprising that there is a connection between military personnel being admitted to hospital and the institution being subjected to the Constitution and the law. Military coups: Military coups are bad not only because they are unconstitutional. They are bad because they have not worked in Pakistan as they have failed to provide political stability, a government representative of multiple communities and groups. They are completely unaccountable and have a force-based governing model. In short, they are a failed model of authoritarian governance in Pakistan. Moreover, like empires, military authoritarian models are no longer in fashion in this post-modern world. Anyone tempted by the recent events in Egypt and Thailand, should remember the institutional and public mobilisation in Pakistan during the 2007-2009 period and the enduring consensus among the main political parties against military rule. Like the Soviet coup of 1991, any future Pakistani coup will face resistance from the judiciary, political parties and civil society. Politics by other means: Using Article 58 (2) (b) to dismiss political governments during the 1990s, not having martial law administrators but merely a “chief executive” model of military governance in 1999 and a mere 42-day military rule in November-December 2007 show that the military establishment is acting on Tomasi’s advice that “everything needs to change, so everything can stay the same”. Moreover, recent events involving their alleged use of an intra-media commercial conflict to impose media restrictions or the alleged campaign against the Supreme Court by targeting a sitting Supreme Court judge known for his integrity and his past record against military excesses eg the initiation of the Musharraf trial, missing persons’ cases, audit of intelligence agencies, show that the military is adapting to changes but in order to remain the same. The new legitimisation: The paradox is that the military establishment’s role in the fight against Islamist militants is critical but dealing with this existential threat would also involve the massive transfer of power in areas of internal and external security policy to the military establishment. The “war against terror”, the “fight against the Baloch insurgency” and their role in fighting against various organised violent crimes in Karachi and in other parts of the country, seem to provide a basis for the legitimisation of their dominant political role. Moreover, the present phase of the “war against terror” in Fata may provide a long-term basis of a new legitimisation for them, which will involve tremendous power with little accountability. Institutional vacuum: The Ministry of Defence is purportedly a department of the government, theoretically controlled by the defence minister and located outside Islamabad — being the main bridge between the civilian institutions and the military. But no one, (including the civilian government and institutions such as the judiciary, GHQ and intelligence agencies), takes the ministry seriously. Therefore, the critical problem seems to be that there is no permanent institutional structure between the civilian government on the one hand, and GHQ and the intelligence agencies on the other, which allows for an institutional dialogue. The latter would include the articulation of both grievances and perceived institutional interests. Such an institutional vacuum does not allow for a timely, and constant, institutional dialogue, which leads to unnecessary conflicts. The military establishment seems to be lost in transition. The failure to achieve this transition may lead not to the break-up of Pakistan but to a country which is medieval in its outlook, engrossed in perpetual domestic violent conflicts and a constant migraine for the world. Not a nice place to live even for our brave soldiers. The writer was formerly consultant to the office of the attorney general of Pakistan. By arrangement with the Dawn
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Karachi, urbanisation and the migrant labourer “Cities, like dreams, are made of desires and fears, even if the thread of their discourse is secret, their rules are absurd, their perspective deceitful, and everything conceals something else.” — Italo Calvino CONCEALED within a leafy neighbourhood, crushed between 1,000 to 2,000 square-yard bungalows, in Jamshed Town, Karachi, invisible to the world of comfortable living, exists an enclave of narrow alleys, haphazard and shabbily constructed one or two-room dwellings of the city’s migrant workers. Called Bano Colony, this surreal settlement, with upper storeys jutting out here and there, reminds one of the narrow labyrinthine alleys in Shagai, one of the katchi abaadis in Mingora, Swat. Inhabited exclusively by Pakhtuns, this enclave has two entry points: the east side leads to male-only living; the west end opens to family quarters. On entering the male-only section, for a second you feel you are stepping into the ruins of a demolished structure. Here the rent of one small, windowless room, shared by six (or more) males — minor, young, old — along with a communal kitchen, is Rs 6,000 per month. The family quarters’ rent varies from Rs 6,000 to Rs 8,000, often housing two families. The settlement has legal electricity and gas connections. Most of the children walk to the government school located in the adjoining neighbourhood. Fewer children, I am told, attend the madressah whose high walls enclose the west side of the settlement. This is one of the hundreds of big and small settlements dispersed all over Karachi, inhabited by migrant workers who come to the city from higher grounds, from the plains, from the arid zones, from the hinterland of the country. Dreaming of a decent life for themselves and for their children, they enter the world of precarious work and live on the margins, except the margins are in the very heart of the city. They are the city’s drivers, loaders, car cleaners, chowkidars, shop assistants, naan-makers, domestic servants, tea-boys and fruit vendors. The bulk of unskilled, low-wage, semi-permanent migrant workforce lives on the vagaries of the labour market. Deprived of citizens’ entitlements, stigmatised and stereotyped, shunned by trade unions, migrant workers suffer from social exclusion and are a part of informal labour that exists outside the ambit of the legal framework. Though Pakistan is urbanising as a country, urbanisation in Sindh is the fastest and stands out in marked contrast to the other provinces. According to the 2012-13 Labour Force Survey, Sindh has a 12.23 million labour force, of which the urban workforce is 5.86m or 47.91per cent, in contrast to the 33.37 per cent urban work force in Punjab, 23per cent in Balochistan and 19.22 pc in Khyber Pakhtunkhwa. A population census is awaited since 1998 to determine the extent and scope of internal migration. Several studies conclude that rural to urban migration is due to extreme poverty and low human development indicators in the rural districts. Pushed out of their ancestral towns by poverty, the city attracts the labourers as they can eke out an income enough for survival after remitting the major amount to their families. Internal migration is a low-priority area for policymakers, researchers and civil society all over the world although it is four times greater than international migration. In Pakistan, internal migration does not come anywhere on the radar of policymakers. Internal migration is not mentioned in the Labour Policy 2010. There is no law protecting the rights of internal migrant workers in Pakistan. The state has never come up with specific schemes to integrate multi-ethnic migrant workers in the cities. Internal migration — integral to urbanisation and development — has been a missing element in urban policies. Among South Asian countries, India has the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act 1979, aiming to protect the rights of internal migrants. The law lists the migrant workers’ right to equal wages, right to return home periodically without losing wages, and the right to medical care and housing at the employment site. Though the law is not implemented, it does set the standards for just work conditions for migrant labour. Also, India has a number of NGOs working for internal migrants. Aajeevika Bureau, Udaipur, provides services to seasonal migrant workers. The Prayas Centre for Labour Research and Action, Chittorgarh, helps migrant workers unionise. Labournet, Bangalore, facilitates the registration, training and placement of migrant workers. Rationing Kruti Samiti, a network of NGOs in Mumbai, enables migrant workers to access subsidised rations. It is time the state in Pakistan responded to the challenge. Universal registration of all workers is the only way to realise the rights of workers. Universal registration of workers, enabling them to access social security benefits, is a doable option in terms of logistics as this registration can be linked with computerised identity cards, establishing the individual’s identity as a worker. None of the South-Asian countries, including India, has been able to come up with a national registration system as yet. The concept behind the registration system should move beyond national security and population enumeration: it needs to be extended and linked up with rights-based entitlements for wider benefits for the citizens. The writer is associated with Pakistan Institute of Labour Education and Research.
By arrangement with the Dawn Dynamics of internal migration
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THE most challenging task before the new Finance Minister as also the Prime Minister is to evolve a consensus on implementing the GST (goods and service tax), which would dismantle inter-state barriers for promoting internal trade and commerce. In the post-reform period the GST has become crucial to reap the full benefits of globalisation of the Indian economy. This tax will avoid the cascading effect of commodity taxation, i.e. tax on tax, which is the biggest shortcoming of the current framework of indirect taxes. 
THE taxi driver didn't let us wait. He was there at the door at 6 pm, on dot. It was going to be about three months since I, along with my wife, had been staying with my elder son at Sheffield in the UK and now were bound for Houston in the USA to join our younger son for a month or so before returning to India. 