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Posted on 19 August, 2018, No Comments Comments admin
The Central Statistical Organisation office has been working on the back-series of GDP numbers from 1993-94 to 2011-12. The numbers which have been put out on the website, I understand, are yet to be approved by the Advisory Committee on National Accounts Statistics. Once that is done, they could be treated as officially approved.
The analysis of the numbers put up (a tentative view of one expert group) indicates that the GDP at market prices and GDP at factor cost in the back-casted series is systematically lower than the Old Series from 1994-95 till 2002-03. However, it is higher from 2003-04 till 2011-12. The new series figures are already available after this period. This dichotomy could happen because of the formula used and I am sure the experts looking into the subject would scrutinise this.
What do the numbers indicate?
2003-04 witnessed the boom period for the global economy. The result was that global growth picked up. Most economies were doing well and all emerging economies started showing a high growth rate.
This period continued till 2008 when the global crisis started. For India to grow at a high rate during 2003-08 was quite obvious. The NDA Government led by Shri Atal Bihari Vajpayee went out of office in 2004 leaving behind an 8% plus growth rate. Additionally, in 2004, the Government had the benefit of a continuous incremental reforms from 1991 to 2004. The global tailwinds strongly supported growth. Since demand was high, exports were growing, and, therefore, for an emerging economy like India it was a great opportunity. There were no significant domestic reforms carried out during this period. However, when this honeymoon ended, growth started slipping down and to ensure that growth is maintained, two significant steps were taken. Firstly, fiscal discipline was compromised and the banking system was advised to go in for reckless lending notwithstanding the fact that it would eventually put the banks at a risk. And yet when the UPA moved out of power in 2014, the last three year record, even in terms of growth, was less than modest.
Macro stability during the UPA
Current Account Balance
The policies of the UPA to promote growth led to macro instability thus producing a poor quality of growth. This is evident from the following:
- The Current Account Balance was positive under NDA 1, went back to negative under UPA 1 and went all-time highs under UPA 2. (RBI data, % GDP)
1999-2004 : +0.5%
2004-09 : -1.2%
2009-14 : -3.3%
2014 to now : -1.2%.
Thus it is evident from the above that Vajpayee Government went out of office leaving a positive Current Account Balance contrary to what the UPA did.
Inflation
The average CPI inflation figures read as following:
- Inflation spiked to double digits and has been controlled
Average CPI inflation (using World Bank series for consistency over time)
1999-2004 : 4.1%
2004-09 : 5.8%
2009-14 : 10.4%
2014 to now : 4.7%.
Bank credit
The growth of the bank credit figures rate as under:
| Year | Credit Growth |
| 1999-00 | 18.2% |
| 2000-01 | 17.3% |
| 2001-02 | 15.3% |
| 2002-03 | 23.7% |
| 2003-04 | 15.3% |
| 2004-05 | 30.9% |
| 2005-06 | 37.0% |
| 2006-07 | 28.1% |
| 2007-08 | 22.3% |
| 2008-09 | 17.5% |
| 2009-10 | 16.9% |
| 2010-11 | 21.5% |
| 2011-12 | 17.0% |
| 2012-13 | 14.1% |
| 2013-14 | 13.9% |
| 2014-15 | 9.0% |
| 2015-16 | 10.9% |
| 2016-17 | 8.2% |
| 2017-18 | 10.0% |
Source – RBI
The above figures led to the year to year growth in bank credit of all scheduled banks. One of the primary functions of the banks is to support growth. They lend for industry, for new enterprises, for agriculture and keep the economic cycle going. A healthy banking system is hallmark of any fast growing economy. It would thus be seen that the lending during UPA-1 and certain period of UPA-2 was excessively high. Many of these loans have been given as a part of the reckless lending policy without assessing the bankability of the projects. Unnecessary surplus capacities were created, many of which are still lying unused. A huge burden was cast on the banks since unviable projects were not able to pay the banks back leading to very high NPAs. By a process of restructuring the NPA, the UPA tried to evergreen the loans and the real health of the banks was swept under the carpet. It is thus clear that banks became weaker and subsequent to 2012-13, their ability to lend itself declined. It is only post 2014 that the truth relating to the health of the banks has been brought out and a process of recovery by various methodologies, including IBC, has started.
Fiscal deficit
The overall fiscal deficit since 1999-2000 has been the following:
| Year | Fiscal Deficit
(% of GDP) |
| 1999-00 | 5.2% |
| 2000-01 | 5.5% |
| 2001-02 | 6.0% |
| 2002-03 | 5.7% |
| 2003-04 | 4.3% |
| 2004-05 | 3.9% |
| 2005-06 | 4.0% |
| 2006-07 | 3.3% |
| 2007-08 | 2.5% |
| 2008-09 | 6.0% |
| 2009-10 | 6.5% |
| 2010-11 | 4.8% |
| 2011-12 | 5.9% |
| 2012-13 | 4.9% |
| 2013-14 | 4.5% |
| 2014-15 | 4.1% |
| 2015-16 | 3.9% |
| 2016-17 | 3.5% |
| 2017-18 | 3.5% |
Economies should not spend recklessly beyond their means. If they do that, they leave the future generation in debt. In future years instead of spending for growth, the economy would only be servicing the old debt. It would be noticed that from the period 2008 onwards, when the global boom ended, UPA seriously compromised the fiscal discipline and increased the spending much more than the revenue.
From the above it is clear that the growth during UPA-1 was during the period of the global boom. It inherited an 8% plus growing economy from the NDA. The global tailwinds supported India. Emerging markets were all growing at a higher rates and when the challenge emerged, it compromised on all macro fundamentals. It compromised on the fiscal deficit and the Current Account Deficit, it allowed inflation to spiral out of control and more so to create an illusory growth, it compromised India’s banking system through reckless lending.
The above detailed data from 1999 till today is necessary and relevant in order to cumulatively analyse the expenditure and quality of economic growth during the periods 1999-2017.
Performance of emerging markets
It is also necessary to analyse how the emerging markets have performed during this period. It is relevant because a country’s growth has to be analysed also in terms of the global situation and the global economic environment.
Average growth during 2004-08
India : 8%
China : 11.6%
Emerging markets : 7.5%
(Including India and China)
Average growth during 2009-2013
India : 7.4%
China : 9%
Emerging markets : 5.4%
Average growth during 2004-2014
India : 7.7%
China : 10.3%
Emerging markets : 6.4%
Average growth during 2014-2017
India : 7.4%
China : 6.9%
Emerging markets : 4.5%
It would thus be seen that in the global context all economies were growing during the boom years, which was not peculiar only to India. It slowed down after the boom years and thereafter. However, post 2014, when the global economy was in slowdown mode, it was India and India alone which has been the fastest growing economy in the world for the last four years and has consistently overtaken China in the growth rate.
Posted on 17 August, 2018, No Comments Comments admin
Atalji’s demise is referred to by many as end of an era. I, however, consider it as a continuation of the era of which he was one who laid the foundation.
The political and ideological journey
His political journey shaped his ideology. His convictions were shaped by his deep commitment to the nation from the student days association with the Quit India Movement to his joining the Rashtriya Swayamsevak Sangh and then being associated with Dr. Syama Prasad Mookerjee as one of the founders of the Bharatiya Jan Sangh. During his early days in the Jan Sangh, he was associated with the ‘Kashmir Satyagraha’ which wanted to lift several restrictions on Indian citizens in relation to the State. He was, alongwith Dr. Mookerjee, a strong opponent of the Liaquat-Nehru Pact. Once in Parliament from 1957 his speeches as a young parliamentarian on the Tibet crisis and the 1962 war debacle left their impact on all. At a young age, he became a principal face of the Jan Sangh. He travelled across the country and was being hailed as a charismatic orator. He once told us that till the mid-1980s most of his travel was either by trains or by roads. At times even by busses. During his tours he mostly stayed at the homes of political workers. This was when a young party was being built up.
Disillusionment with the Congress had started after the 1962 China war debacle. It was at this stage that Dr. Lohia pioneered the idea of ‘Congress Hatao Desh Bachao’ and seat coordination in critical bye-elections between Dr. Lohia, Pt. Deen Dayal Upadhyaya and Acharya Kripalani had begun. Deen Dayalji, alongwith his political team, mostly young leaders in their 30s, was busy creating an organisational structure of the party. It bore results in 1967 when the Jan Sangh emerged with a large contingent of MPs in Parliament, got the absolute majority in National Capital Territory of Delhi and made a sizeable presence in Uttar Pradesh, Bihar, Madhya Pradesh, Rajasthan and Punjab. After Deen Dayalji’s sudden demise, the mantle of Jan Sangh leadership fell on Atalji. Not compromising with Party’s core beliefs, he started coordinating with other political parties and became a nationally respected and acceptable face of the Jan Sangh. He had an ability to rise above partisan interests which he displayed by strongly standing behind the Government during the 1971 war. In 1974, the movement led by Shri Jayaprakash Narayan witnessed the Jan Sangh under Atalji plunge into it and give it a core strength. The battle against the Emergency and for restoration of democracy was fought by Jan Sangh under his leadership. After a brief experience in the Janata Government, the Jan Sangh was back to square one. The merger of the Jan Sangh and other political parties in the Janata Party had failed. It was a short lived experiment. Thus in 1980 he revived the BJP. The inaugural session of the BJP witnessed an aspirational cadre with a self-belief chanting ‘Pradhan Mantri Ki Agli Bari – Atal Bihari, Atal Bihari’.
When the BJP was formed, it suffered initial isolation. Its parliamentary presence was minimal. It faced its lowest ebb in 1984. Notwithstanding this adversity, the duo of Atalji and Shri L.K. Advaniji held on to their political space and remained determined to expand the BJP. From 89 Lok Sabha seats in 1989 to 121 seats in 1991, to 166 seats in 1996 and finally 183 seats in 1998. The isolated BJP had now become the center-stage party of Indian politics. Atalji led the party to great victories in 1998 and 1999 and had a successful tenure as a Prime Minister. India has now witnessed the demolition of a single party domination in the electoral space. The BJP had expanded its geographical and social base.
Atalji’s political style
The essential aspect of his political journey, true to his name ‘Atal’ was determination. In the world’s largest democracy only the Congress Party dominated in the first few decades. Atalji created an alternative, which in the last two decades became larger and bigger than the Congress. Alongwith Advaniji, he created a second line leaders both in the Center and the States. He was always open to ideas; always gave priority to national interest; was always at ease in dealing with both friends and opponents and never allowed himself to get into any petty controversy. He had no personal enemies since he spoke mostly on issues rather than individuals. He was a wordsmith. He could use the facility of language to get out of any challenging situation. What he will be remembered for most will be is oration both in Parliament and outside. In Parliament, he was heard in pin drop silence. In his public meetings audiences waited for hours before he could arrive. His oration was always blended with humour. His ability for an instant response was unmatched. His choice of words, his turn of phrases, the poetry that he injected in his expression, gave him the ability to even explain the most complicated issue in a simple language.
His Prime Ministerial tenure
Besides the BJP, his coalition at different points of time had the Akali Dal, Shiv Sena, National Conference, Janata Dal (U), Trinamool Congress, BJD, TDP, DMK, AIADMK, besides individuals like Shri K.C. Pant and Shri Ramakrishna Hegde.
The Nuclear Test in 1998 was a defining moment of his Government. He went out of the way to work for peace with Pakistan. But when the need arose, he inflicted a severe blow to it in Kargil. Both Pokhran and Kargil were his high points. On the economic front, he was a liberaliser. National Highway, rural roads, better infrastructure, a new telecom policy which was pragmatic, a new electricity law are evidence of this. In any intra-Governmental debate, his nod inevitably was for the liberal economic view. He corrected the foreign policy imbalance in the changed global environment.
Several personal traits
As a Prime Minister, he was never harsh on either the bureaucrats or his Ministers. In a polite but firm language he could convey more to his subordinates than what he desired. The Cabinet Meetings that he presided lasted for hours. He allowed a discussion on almost every subject and eventually reconciled the conflicting viewpoints depending on their merits. He loved food. Ministers in his Government still occasionally speak about the quality of snacks which was served in his Cabinet Meetings. He even loved to experiment foods when he travelled internationally. In India, he had his own favourite places in various cities and occasionally when he got out of the trains in the morning, he would have breakfast on one of them before reaching home.
The poet in him also created a dreamer. He dreamt of his own vision. Many of those were born out of his idealism. In fact, several lines of different poems that he wrote reflected his own mood.
During the Emergency, he had a serious problem with his back. He was brought to the All India Institute of Medical Sciences while in detention for treatment. His orthopaedic doctor asked him he should have always sat straight, how can the pain occur? “Kya Aap Jhuk Gaye The?”, to which the man in pain not losing his sense of humour replied in the context of the Emergency:
“झुकना तो सीखा नहीं डॉक्टर साहब । यूँ कहिये मुड गए होंगे”
This made him pen down on his hospital bed his famous lines against the Emergency:
“टूट सकते हैं मगर हम झुक नहीं सकते”
This poem became one of the most distributed pamphlets during the Emergency.
Atalji was a democrat. His political style was liberal. He accepted criticism. He was a product of parliamentary democracy and, therefore, valued consensus. He bore no malice. He communicated even with those who disagreed. Whether in opposition or the Government, his attitude never changed. He was an iconic communicator unparalleled in recent history. All this added to his charisma. His greatest asset was his credibility where he was never in any controversy. Yet in an era dominated by the Nehruvian Congress, he created a political party which was an ideological alternative to the Congress which disagreed on various issues with the Congress, which took the Congress head on, struggled for almost five decades and in the last two decades not only became an alternative to Congress but overtook it. Atalji ran a marathon. He was a patient runner. But for him, Advaniji and their other colleagues, Indian democracy would have looked different – dominated by one party, one family with a lot of scattered smaller parties. That did not happen. Atalji and his colleagues made the difference. Atalji has left the world. But the era of which he laid the foundation will prosper even more. That is the Vajpayee legacy.
Posted on 08 August, 2018, No Comments Comments admin
I have seen today another attempt at maligning the Government by spreading falsehood and paddling fabricated facts regarding the 2016 Inter-Governmental Agreement for the procurement of Rafale fighter aircraft. It is even more reprehensible that this fresh attempt to tarnish the image of the Government should come less than two weeks after the miserable failure of a similar effort in the Parliament.
There is not a grain of truth in the wild allegations repeated today nor anything substantiating in the purported facts and voluminous documents marshalled to corroborate the baseless accusations.
The unsubstantiated allegations against the Government constitute nothing but reprocessed lies by forces increasingly desperate to prove their relevance. The Government had already responded effectively to each and every distortion and misinformation on the issue.
Meanwhile, those raising alarm about the alleged danger to national security ought to realise their responsibility and refrain from politicising for narrow individual ends those very matters pertaining to defence of the nation that were consistently ignored by them and by those with whom they sympathise.
Posted on 01 August, 2018, No Comments Comments admin
Territory and citizens are the two most important aspects of a sovereign State. The principal duty of any Government is to defend the borders of the country, prevent any trespass and make the life of its citizens safe and secure. Independent India has faced a major challenge to protect its sovereignty in Jammu and Kashmir. At the time of Independence and partition of India, Assam was also a sore issue for Pakistan. They resented the fact that like Kashmir, Assam became a part of Independent India. Zulfikar Ali Bhutto, in his book ‘Myth of Independence’ wrote:
“It would be wrong that Kashmir is the only issue that divides India and Pakistan, though undoubtedly the most significant. One at least is nearly as important as the Kashmir dispute, is that of Assam and some districts of India adjoining the East Pakistan. To these Pakistan has very good claims.”
Similarly, in the pre-1971 era, till he became more favourably inclined to India, Sheikh Mujibur Rahman, the then East Pakistan leader, in his book ‘Eastern Pakistan, its Population and Economics’ had observed:
“Because Eastern Pakistan must have sufficient land for its expansion and because Assam has abundant forest and mineral resources, coal, petroleum etc., Eastern Pakistan must include Assam to be financially and economically strong.”
Ever since Independence, we had a significant influx of illegal migrants from East Pakistan. Because of ethnic and linguistic similarity and religious commonality, it was possible for these people together to avoid detection and find a shelter in Assam.
Who are citizens of India?
The citizenship of India is recognized from Articles 5 to 11 of the Constitution of India. No citizenship can be granted in violation of these provisions. The law relating to citizenship which regulates the grant of citizenship by birth, by registration, descent and naturalisation. Section 6(A) deals with the special provisions of citizenship covered by 1985 Assam Accord.
Consequences of illegal migration
Twenty-one years ago, on May 6, 1997, the then Home Minister Shri Indrajit Gupta, told Parliament that there were over 10 million illegal immigrants residing in India, of which 5.4 million were in West Bengal and 4 million in Assam. Needless to say that this figure has increased ever since. The consequence of this was analysed by the Hon’ble Supreme Court in a case filed by the present Chief Minister of Assam, Sarbananda Sonowal vs UOI (2005), where the court held:
‘The dangerous consequences of large scale illegal migration from Bangladesh, both for the people of Assam and more for the Nation as a whole, need to be emphatically stressed. No misconceived and mistaken notions of secularism should be allowed to come in the way of doing so. As a result of population movement from Bangladesh, the spectre looms large of the indigenous people of Assam being reduced to a minority in their home State. Their cultural survival will be in jeopardy, their political control will be weakened and their employment opportunities will be undermined. The silent and invidious demographic invasion of Assam may result in the loss of geostrategically vital districts of lower Assam. The influx of these illegal migrants is turning these districts into a Muslim majority region. It will then be a matter of time when a demand for their merger with Bangladesh may be made. The rapid growth of international Islamic fundamentalism may provide for driving force for this demand. In this context, it is pertinent that Bangladesh has long discarded secularism and has chosen to become an Islamic State. Loss of lower Assam will severe the entire land mass of North-East, from the rest of India and the rich natural resources of that region will be lost to the Nation.”
Nobody could have put it better.
The two accords by Mrs. Indira Gandhi and Mr. Rajiv Gandhi
Subsequent to the creation of Bangladesh in 1971, the Indian and the Bangladeshi Prime Ministers entered into an arrangement in February, 1972. The Government of India, on 30th September, 1972, set out a circular that those Bangladeshi nationals who had come to India before 25th March, 1971 were to be detected but those who entered India in or after the said date were to be repatriated. This is what Mrs. Indira Gandhi’s commitment to India and the people of this nation was.
Under the Assam Accord signed on 15th August, 1984, the Rajeev Gandhi Government committed to three categories. Those who came prior to 1.1.1966 will continue to be on India’s electoral rolls and they would be regularised. Foreigners who came to Assam after 1.1.1966 but before 24.3.1971 would be dealt with under the provisions of the Foreigners Act and Foreigners Tribunal Order 1964. If detected, their name would be deleted from the electoral rolls and they would have to register themselves as foreigners. Those who came on or after 25.3.1971 were to be detected, deleted and expelled in accordance with law. “Immediate and practical steps should be taken to expel such foreigners”.
Thus historically, both Mrs. Indira Gandhi and Mr. Rajeev Gandhi, through the Congress Government that they headed, committed to this nation that post 25th March, 1971 migrants would be detected, identified and deported.
Under the Foreigners Act, the onus of proof lies on the persons claiming to be a citizen. It would otherwise be impossible for the State to establish when the person surreptitiously entered the Indian territory. However, the Congress Government legislated the IMDT Act which remained silent on the issue of burden of proof. This virtually made detection, deletion and deportation impossible. The Supreme Court, on 12th July, 2005 struck down the IMDT Act and unconstitutional and, therefore, decided that the detection would be under the Foreigners Act and the rules made thereunder. It is, thereafter, that tribunals for preparing the register of members have been functioning in the districts of Assam.
West Bengal is not far behind
To put it in the words of the Trinamool Congress leader and the West Bengal Chief Minister, Mamata Banerjee has stated in the Lok Sabha on 4.8..2005:
“The infiltration in Bengal has become a disaster now. You can see the Bangladeshi as well as the Indian names in the list. I have both the Bangladeshi and the Indian voters list. This is a very serious matter. I would like to know when would it be discussed in the House?”
India’s sovereignty is paying a heavy price because of the quality of its political discourse. Though Mrs. Indira Gandhi and Mr. Rajiv Gandhi took a particular position in 1972 and 1985 for the deletion and deportation of foreigners, Rahul Gandhi takes a contrarian position and his party turns turtle. Similarly, the BJP ally of 2005, Ms. Mamata Banerjee, took a particular position. As a federal front leader, she now talks to the contrary. Can India’s sovereignty be decided by such fickle minds and fragile hands?
The result of this has been that in the 50 years between 1961 and 2011, the majority community in Assam has grown 2.4 times; the minority has grown 3.9 times. This has caused a major demographic impact.
Difference between a citizen, refugee and an illegal migrant
There is a fundamental difference between a citizen and a refugee. Citizenship is regulated by the Constitution. Those who are compelled on account of certain circumstances to leave their country and take refuge in another country for fear of persecution, are refugees. The receiving nation can, on humanitarian ground, be considerate to these refugees in terms of providing them the basics of life. Refugees are not conferred citizenship. The refugees don’t become a voter. Some pre-1971 migrants may have moved for reasons of persecution, the same is not true of all post 1971 migrants who have illegally entered India. There is a third category who are neither citizens nor refugees, who come for reasons of economic opportunities. These are illegal migrants. Their entry is silent invasion in the country to which they move. One of the world’s most celebrated liberal judges, Lord Denning, in his book ‘The Due Process of Law’ has written as introduction to part 5 ‘Entrances and Exits’ where the opening paragraph reads:
“In recent times England has been invaded not by enemies nor by friends but by those who see England as haven. In their own countries, there is poverty, disease and no homes. In England there is social security, a national health service and guaranteed housing. All to be had for the asking without payment and without working for it. Once here, each seeks to bring his relative to join him: so they multiply exceedingly.”
Ironically even Lord Denning calls it an invasion. It must be remembered that citizenship does not accrue by illegal migration. It comes under the conditions prescribed in the Constitution and the Citizenship Act.
Difference between fundamental rights under Article 19 and 21
A desperate argument has been given that this is a human rights cause. A refugee on account of persecution may have a humanitarian consideration. Illegal migration does not have it. There is not fundamental right to any person to do so. The wise men who framed India’s Constitution made a clear distinction in the phraseology of Article 19 which guarantees the right to move freely throughout the territory of India and to reside and settle in any part of territory of India. It is a right available only to a citizen. However, the right to life and liberty and a protection against its deprivation under Article 21 is available to any person – citizen and non-citizen alike. A right of a citizen or a non-citizen to life and liberty can be taken away only by due process of law. That is a right available to him under India’s constitution. That is his human right. But the framers of the Constitution did not confer on a non-citizen the right to move throughout the territory of India or to reside or settle in any part or territory in India. While the constitution framers make Article 19 applicable to a ‘’citizen’ only, the rights under Article 21 were made available to a ‘person’. There is a method in this distinction.
I reiterate what I have stated earlier. The Congress was the mainstream party on Indian politics. It has increasingly started taking fringe position. Siding with the ‘Tukde Tukde’ gang was one such illustration. It is now compromising the sovereignty of India. Leaders like Rahul Gandhi and Mamata Banerjee must realise that India’s sovereignty is not a play thing. Sovereignty and citizenship are the soul of India. Imported vote banks are not.
Posted on 27 July, 2018, No Comments Comments admin
The last week witnessed two significant economic reforms:
The GST rate reduction
In the pre-GST regime, India had a complicated, inefficient, multiple Indirect tax system where each assessee could be levied upto 17 different taxes. The GST consolidated them to one tax. Since the passing of GST Constitutional Amendment Bill, there have been twenty eight meetings of the GST Council which has reviewed the GST tariffs on a continuous basis. Obviously, the tariff rationalisation depends on the expansion of the revenue base. The first one year has witnessed an encouraging trend in this direction.
The pre-GST tariff was a Congress Party legacy. The standard rate for central excise plus VAT plus CST was 12% + 14% + 2%. To this, if the cascading effect of tax on tax was added, the eventual tax payable on a commodity was 31 percent. Items of household use from mineral water, hair oil, toothpaste, soap, dairy, to construction material and white goods were all taxed at 31 percent. The total number of goods falling in this category was 235. This 31 percent tax was Congress Party’s gift imposed on India. This tax was the ’Congress Legacy Tax’.
The day GST was implemented, several items which were proposed to be put in the 28 percent category (where the 31 percent items were adjusted) were brought down to 18 percent. On 10th November, 2017, within four and half months of GST implementation, 177 items and on 21st July, 2018, another fifteen items were brought down. Even in other GST meetings on individual basis, several items were considered and brought down. Today, the 28 percent category is being phased out. Bulk of these items remaining in this category are only luxury items or sin goods. The other items outside the luxury–sin goods category are cement, air-conditioners, large screen televisions and a handful of others. Hopefully, with further expansion of revenues, these few items may also witness a change of category. Thus within a record period of thirteen months, the GST Council has almost phased out the 28 percent category. It is only a matter of time that the final obituary of the ‘Congress Legacy Tax’ is written. Only the luxury-sin tax would remain.
If the entire category of all the slabs is taken, the past one year has seen reduction of tax in 384 commodities with no increase on a single product. India has never witnessed such mass tax reduction since Independence. Lesser rates and higher collection is the result.
Similarly in the services category, which has now become a part of the GST, on four different occasions 68 different categories of services have witnessed their rates reduced. The net revenue loss which Government have suffered on account of the reduction of tax on goods and services is about Rs.70,000 crores. Since State Governments have been guaranteed a 14 percent increase over their pre-GST revenues for the first five years, this burden has entirely been borne from the share of the Central Government. This tax reduction has reduced the cost to the consumers, increased his purchasing capacity and added to the increased consumption in the economy. All household items stand reduced from 28 percent to 18 percent and 12 percent. All items of construction except cement stands reduced. Most white goods stand reduced. There is no better opportunity for consumers to make purchases than in the environment which the GST has created. It is an opportunity to celebrate the biggest tax reform since Independence, which has replaced ‘Congress Legacy Tax’ with a ‘good and simple tax.’
The passage of the Prevention of Corruption (Amendment) Bill, 2013
The present Prevention of Corruption Act, 1988 was legislated in the pre-liberalisation regime. It had not visualised the changes in the economy, when higher participation of the private sector would take place. It had also not anticipated the kind of risk that it could put honest decision makers to. I had, for a long time, been advocating the change in this legislation. In the past one week, both the Houses of Parliament have approved this Bill. Both the Standing Committee of Parliament and, thereafter, the Select Committee of the Rajya Sabha had approved this Bill. The Bill has two significant features.
The Bill seeks to punish both – the bribe giver and bribe taker. It provides protection if the briber assists the investigative agency. Even non-monetary gratification has been included within the ambit of the Bill. Promoters of companies which hide behind the corporate veil to avoid the consequences of this Act, have been made more accountable. Since the company cannot be sent to jail, the individual in the management responsible for the corruption will be held liable.
The bill has also corrected a fundamental flaw in the Act. The wide definition of corruption, which is referred to as ‘criminal misconduct’ in the original Act had a potential for including in its ambit, not merely dishonest decisions taken with a dishonest intention but as the history of its functioning shows, could also include honest decision taken by honest individuals which subsequently turn out to be erroneous. Thus a loan given by an honest bank management in accordance with the rules, would get subsequently questioned if the recipient of the loan defaulted and the entire process of the banker-lender relationship was referred to an investigative agency. The somewhat loose language of the Act enabled investigating agencies to shed apart their professionalism and followed the investigators golden rule ‘when in doubt, file a chargesheet’. The result was many honest persons were harassed and eventually never convicted. Reputations were ruined and a fear amongst decision makers was created. This witnessed a tendency where civil servants would postpone decision making to their successor rather than take the risk upon themselves. The new Bill, besides correcting the somewhat loose language, now requires the element of mens rea i.e. the dishonest intention to be proved for an offence of criminal conduct to be made out. This will ensure that bonafide actions of public servants are not called into question.
The period of trial for corruption is now required to be completed within two years. The Prevention of Corruption Act merely provided for sanction for serving civil servants and not retired civil servants. On the contrary, Indian Penal Code required a sanction for those who are or have been public servants. The two Acts have now been brought at par. The scare created amongst the civil servants, bankers, heads of public sector undertakings and other decision makers, who have seen in the last few years professional investigation graduating into investigating adventurism, have a reason to be relieved. The only group which is unhappy is some NGO’s who are not aware of the needs of governance, quick decision making and growth. For these groups ‘chaos’ and ‘decision making paralysis’ is better than stability and growth. I do hope that the investigators also realise that it is only professionalism and fairness which will ensure a higher rate of conviction. Punishing the corrupt has to be judiciously balanced with non-harassment of the honest.
Posted on 24 July, 2018, No Comments Comments admin
Congress Party’s history of creating fake issues
In 1989, there was an outrage in the whole country against the Congress Party and its leadership on the Bofors issue. The Congress Party’s strategists invented a counter strategy of diversion by creating a fake issue. A bank account in St. Kitts was created in the name of Shri V.P. Singh’s son so that the Congress could now have a face saving argument – if we are corrupt, so are you. In 1999, when the NDA led by Shri Atal Bihari Vajpayee, in the backdrop of the Kargil conflict, was likely to sweep the poll, and the Congress Party was faced with a massive defeat, it manufactured an issue of sugar export to Pakistan. Some two dozen press conferences on the issue were organised to question the Government’s commitment to nationalism. The truth of the allegation was that a mid-level unknown Chandni Chowk trader had been exporting an OGL item -sugar to Pakistan. Needless to say that the Congress lost the election badly. Falsehood fell apart.
The Congress party and the present political situation
- The Congress Party realises that there a danger of the next election becoming a referendum on Prime Minister Narendra Modi’s performance. The popularity gap between the Prime Minister and his competitors is very wide.
- The Congress Party is either non-existent or a poor third or fourth in States like Uttar Pradesh, Bihar, West Bengal, Tripura, parts of North-East, Odisha, Andhra Pradesh, Telangana, Delhi and Tamil Nadu. These States account for 50% of the Lok Sabha seats. Of the balance seats, if it enters into some form of alliance, it may have to concede seats in several States to its allies. It is, therefore, faced with the prospect of effectively contesting only about 225 seats where it will face a direct clash with the BJP.
- If the first part of the Congress Mukt Bharat was scripted by the BJP, the federal front is more than eager to script the part-2 of the same. Its message to the Congress is clear – ‘you will have to support us; the other way is not possible.’ For the Congress the best case scenario is to become a tail-ender of the federal front and concede to it a large political space.
- Many in the Congress realise that 2019 is not their election. They should try and improve but concentrate as a priority on 2024. However, mid-level leaders of the Congress in the age group of 65 to 74 are unwilling to wait for 2024. They know that 2019 is their last chance and they will probably be time-barred by 2024. They are quite willing for a tail-ender’s role.
- Its attack on the economy are failing since India, under the Modi regime, continues to be the fastest growing major economy in the world. The Congress Party’s strategy of consolidating arithmetic against Prime Minister Modi’s chemistry is a double edged weapon for the Congress. It can push the Congress to the margins with the federal front occupying the opposition’s space.
The Congress strategy
- What does the party do if its leader has inherent and inbuilt limitations? It had been stigmatised by corruption and in contra-distinction Prime Minister Modi has led a scam free Government. Its strategy, therefore, is one of distortion. If you have no issue, manufacture one. Hence the Rafale’s fake controversy.
- The Congress’s strategy is, therefore, two-fold. It has manufactured the issue of the Rafale deal. The issue is failing to cut much ice. It’s a Government to Government agreement with no private group involved. It involves national security and it is the armed forces which have preferred this aircraft for its improved combat ability. The UPA Ministers also never disclosed the cost breakup of the weaponry because that is not in larger national interest. The supplier/ OEM manufacturers of defence equipment appoint their own offset manufacturers. The Government has nothing to do with it. The truth always holds together. It is falsehood that falls apart. So when Rahul Gandhi’s statement that President Macron told him that there is no secrecy pact got smashed into pieces, the next day the Congress Party shifted the Rafale issue to other extraneous grounds.
- The second strategy of the Congress Party is directed against the federal front. By attacking the BJP on certain issues, it is engaged in an implied battle with the federal front in order to reclaim the minority vote. Comparison of Hindus with ‘Taliban’ and phrases such as ‘Hindu Pakistan’ are intended to help it against the federal front to reclaim the minority vote. This strategy also is likely to backfire. As equal participants in the Indian electoral process, the minorities have a constitutional right of a vote. But so does the majority. By redefining secularism as a euphemism for majority bashing, the Congress Party is antagonising the majority against itself. This will always happen in an election where you have an inadequate leader and no real issue.
Posted on 21 July, 2018, No Comments Comments admin
A Vote of No Confidence against the Government is a serious business. It is not an occasion for frivolity. The lead participants in the debate are normally senior political leaders. They are expected to raise the level of political discourse. If a participant happens to be a President of a national political party nourishing Prime Ministerial aspirations, every word he speaks should be precious. His facts should convey credibility. Facts are always sacrosanct. None should ever trivialise the debate. Those who desire to be Prime Minister never blend ignorance, falsehood and acrobatics.
Regrettably, the President of the Congress Party missed a great opportunity. If this was his best argument for 2019, God help his party. His lack of understanding is not only confined to basic issues but also to the niceties of protocol. One should never misquote a conversation with a Head of Government or a Head of State. You do it once, serious people will be reluctant to speak to you or speak in your presence. Rahul Gandhi, by concocting a conversation with President Macron, has lowered his own credibility and seriously hurt the image of an Indian politician before the world at large. Not to be aware of the fact that UPA Government Minister had signed the secrecy pact is not understandable. He now seeks to embarrass Dr. Manmohan Singh by implicitly insinuating that Dr. Singh was a witness to the conversation being wholly unaware that his own Government had entered into the secrecy pact. Rahul has repeatedly shown that he is ignorant of facts. But to insist on disclosure of financial details, which indirectly involves the disclosures of the strategic equipment on the aircraft, is to hurt national interest. Cost gives away a clue to the weaponry in the aircraft.
Is he unaware of the fact that the UPA proposed GST amendment to the Constitution never included petroleum products as part of the GST? It is only the NDA which brought it within the GST with tax to be levied once agreed by the GST Council. He seems unaware of public issues when he equates declaration of accounts as NPA as a loan waiver. There is no Minister who either desires to change or is constitutionally entitled to change the Constitution of India. The last Indian politician who wanted the power to change the Constitution was Rahul’s grandmother and she too failed.
Hallucinations can give momentary pleasure to a person. Therefore, to hallucinate after an embarrassing performance that he has won future election or to hallucinate that he is the reincarnation of Mark Antony being complemented by friends and foes alike, may give him self-satisfaction but for serious observers it is more than just self-praise – in fact a serious problem. Even in dynasties many successors remind you of the virtues of their predecessors. Yesterday I reread two of Panditji’s legendary speeches – ‘Tryst with Destiny’ and ‘Light has gone out of Lives’.
Posted on 16 July, 2018, No Comments Comments admin
The country has been watching with keen interest the developments in Karnataka in the past two months. It is a repeat of what the Congress did to Chaudhary Charan Singh, Shri Chandrasekhar, Shri H.D. Deve Gowda and Shri I.K. Gujral? It is the obvious consequence of a non-ideological opportunistic alliance with no positive agenda. The basis of the negative agenda is ‘Keep Modi Out’.
I had, on the 26th May, 2018, written about the aspiration of some opposition leaders to form a ‘fictional alternative’. I had, in that article, concluded as under:
“The last few days have witnessed a discussion about a “fictional alternative”. A group of disparate political parties are promising to come together. Some of their leaders are temperamental, the others occasionally change ideological positions. With many of them, such as TMC, DMK, TDP, BSP and the JD(S), the BJP has had an opportunity to share power. They frequently change political positions. They have supported the BJP claiming that it is in larger national interest and then turned turtle and oppose it in the name of secularism. These are ideologically flexible political groups. Stable politics is far from their political track record. Some amongst this disparate group have an extremely dubious track record of governance. Some leaders are maverick and others include those who are either convicted or charged with serious allegations of corruption. There are many whose political support base is confined to either a few districts or to a particular caste. To rule a large country like India through coalitions is possible but the nucleus of a coalition has to be stable. It must have a large size, an ideologically defined position and a vested interest in honest governance. A federal front is a failed idea. It was experimented under Shri Charan Singh, Shri Chandrasekhar and by the United Front Government between 1996-98. Such a front with its contradictions, sooner or later, loses its balance and equilibrium. Remembering 1996-98, as perhaps one of the worst period of governance, the aspirational India which today occupies the high table in the world shall never accept an idea which has repeatedly failed. History teaches us this lesson. Aspirational societies with vibrant democracies do not invite anarchy. A strong nation and the requirements of good governance abhor anarchy. The political agenda for the debate this year appropriately will be Prime Minister “Modi versus an anarchist combination”. The 2014 election conclusively established that in the New India, chemistry will score over arithmetic when it comes to deciding the country’s destiny.
The teary-eyed Kumaraswamy
In the past few days we witnessed the Chief Minister of Karnataka, Shri H.D. Kumaraswamy, baring his emotions with tears, wetting his eyes and declining to accept bouquets and garlands. He was candid enough to publicly state “I am swallowing my pain just nothing more than poison without sharing it……….I am not happy with the situation for the last one month. Nobody knows the jugglery……..If I wish, within two hours, I can step down from the office……..” Listening to these statements of an Honourable Chief Minister, my memory took me back to the dialogues of the tragedy era of Hindi cinema. If this is the consequence of a two party coalition, what is it that a disparate group of parties with no ideological similarity offer to India? India is today passing through a phase where a great opportunity awaits it. We need, for the next one decade and more, a high trajectory growth. We are faced with the global challenge of terrorism and the current economic challenges thrown up by rising crude oil prices and the trade war. To confront these challenges, India needs a strong and cohesive Government. More so, it means a decisive political leadership. It needs a Government which is able to resist unfair pressures of either allies or regions. It is the high growth rate, investment into rural India and the social sectors, credibility and strength of the Indian economy which will help us to be domestically strong to meet these challenges. If fighting terror has to be compromised because of vote bank pressures of allies, then such a Government would be a liability and curse on the nation. Can a leadership unsure of itself meet the challenge of eliminating poverty and transforming the world’s fastest growing economy into a developed nation?
Coalition and a weak leader
Such non-ideological opportunistic coalitions always get trapped within their own contradictions. Their only object is survival and not service of the nation. Their longevity is a suspect. If the Prime Minister of such a coalition has to weep before the cameras with an only wish of how to exit from office, it will be a scenario worse than the policy paralysis of UPA II. The Congress firmly believes that only members of one family can rule India. If anybody else gets a chance, he should be pushed to the desperation of throwing his hands up and weeping publicly.
Prime Minister Narendra Modi has clearly demonstrated the advantages of a decisive leadership. India’s Prime Minister and his Government has to overcome the challenges that India faces today. He cannot be seen like the Chief Minister of Karnataka as a tragedy king. If such a coalition is a cup of poison, why even dream of inflicting it on the nation? The leader of the world’s fastest growing economy cannot be a ‘Bechara’.
Posted on 13 July, 2018, No Comments Comments admin
The recently released World Bank data reveals that India has now become the sixth largest economy relegating France to the seventh position. Obviously, on account of disparity in the size of the population, there would be a very significant difference in the per capita of the two countries. If we keep growing at the rate which is being projected, it is likely that next year we will be the fifth largest economy ahead of Great Britain. This is in consonance with the rest of the narrative. Being the fastest growing economy for the last four years, we can look at the next decade as one of economic expansion. We have already seen a significant move up in India’s ranking in the ease of doing business and as a preferred investment destination. Today we stand to be tested in the midst of a global challenge thrown up on account of the international crude oil prices and the trade war.
Obviously, we have started witnessing many of the advantages of a fast growing economy. More consumption, more production, more industries, expanding service sector, greater urbanisation, many more jobs, more economic activity and certainly more revenue. However, ever since Prime Minister Narendra Modi took over, the Government’s own yardstick for performance has become stiffer. How quickly are we able to deplete poverty levels of a section of our people poses a major challenge? How are we able to translate the advantages of this faster growth to rural India which has always been less advantaged? How are we able to bring a significant section of our people into the neo-middle class so that their aspirations can also be met with?
The Government’s approach
The Government’s approach in this regard is one of clarity. We will not follow the model of 1970s & 1980s of the Congress Party. That model essentially involved populist slogans rather than sound policy and actual expenditure for the welfare of the poor. The 1971 ‘Garibi Hatao’ model was one of redistribution of poverty rather than the generation of wealth and resources. The result of this misguided approach was that the lives of the poor did not move up significantly. On the contrary, the present Prime Minister is a man of many words and many more actions. He announces stiff targets and programmes which at first sight appear to be difficult, if not impossible. He follows it up with the actual implementation and delivers the promise. It is, therefore, important to analyse the actual delivery in rural India.
The Government’s specific programmes
In the current year, the total amount to be spent for livelihood and infrastructure in rural areas, both from the Budget, extra-Budget and non-budgetary resources, is Rs.14.34 lakh crores. The social sector expenditure which also benefits the rural areas is in addition to this. Agricultural credit to be disbursed is Rs.11 lakh crores. The Kisan Credit Cards have been extended to fisheries and animal husbandry farms. For fourteen agricultural crops, in what appeared impossible, the farmers will get an MSP for Kharif crops at 150% of the cost of production.
To double the farmers’ income and dairy infrastructure development funds with an outlay of Rs.10881 crores has been approved. For rural housing, the Awas Yojana has a total outlay of Rs.81975 crores. The sanction of Rs.9,000 crores has already taken place. The micro irrigation fund with a corpus of Rs.5,000 crores has been created. A long term irrigation fund with an initial corpus of Rs.20,000 crores has been created. Cumulative loans sanctioned under this have already touched Rs.57487 crores. Similarly, the fisheries and aqua infrastructure development funds have been created. For rural infrastructure development fund, the allocation is of Rs.28,000 crores. There is an animal husbandry development infrastructure fund of the size of Rs.5020 crores. There have been large sanctions for research and education, Pradhan Mantri Fasal Bima Yojana, the interest subsidy for the short term credit to be given to the farmers. The market intervention and the price support schemes have an additional provisioning.
The effect
This year alone this investment will provide to rural India, 321 crore person days of employment, 3.17 lakh kilometres of rural roads, 51 lakh rural homes, 1.88 crore toilets, 1.75 crore of new electricity connected households. The unprecedented resources sanctioned to rural India are intended to bring a fundamental change in the quality of life in rural India. Each village will be connected with a pucca road. Target for pucca housing, each house to have electricity, each house to have a toilet, every poor family to have a gas connection. Every farmer to extend his activities from agriculture to dairy, animal husbandry, fisheries, to get the benefit of farm insurance, to get a much higher MSP and under each of the above mentioned programmes, to be a part of the intended success stories. The amount being spent on MNREGA is much higher than what was spent by the UPA.
The other social welfare programmes
The other social welfare programmes of the Government are intended to benefit the weaker sections and those living in the rural areas are the prime target of these benefits. The success of the Jan Dhan programme has connected each home to the banks. It has facilitated the delivery of credit to the weakest. The low cost insurance policies and the attractive Atal Pension Yojana has immensely benefitted these sections. The Mudra loans, 74% of which has been granted to the women entrepreneurs has certainly benefitted while providing a supplemental income to those families with a modest income. Once the ambitious ‘Ayushman Bharat’ is implemented, hospitalisation for those 40% at the bottom of the ladder will be possible where the expenditure is upto Rs.5 lakhs a year for each year per family. The total amount sanctioned this year for the implementation of the low cost food under the Right to Food programme is Rs.1,60,000 crores.
What does this cumulatively work out?
What does the entire investment being made for conferment of benefits to rural India, to India’s farmers and to other deprived sections of the society, mean in the long run to our people? We will witness increased incomes, increased social security, an improved quality of life, higher income from agriculture and better healthcare. Already investment in these areas is incurring a higher rural consumption. The construction sector is growing by 11% because those with higher incomes in rural areas are improving upon their housing. Cement and steel sales have increased. All the auto companies, particularly those whose target sales are in rural areas, have witnessed a much greater purchasing power in rural India which is leading to a significant improvement in their sales.
India’s growth story at a fast pace is likely to continue as per assessment of all credible agencies. Obviously, a high trajectory growth leads to a higher revenue. Prime Minister Narendra Modi has shaken the traditional thinking process and ensured that rural India and the less privileged get the first right of resources. If this and increased expenditure continues for the next decade, the impact on India’s rural poor would be very significant. This benefits all – irrespective of religion, caste or community. The Congress provided India’s poor with slogan. Prime Minister Modi has given them resources. This will ensure faster growth and lead to a faster depletion in the poverty.
Posted on 06 July, 2018, No Comments Comments admin
Today the nation remembers Dr. Syama Prasad Mookerjee – an eminent Parliamentarian, a statesman and the Founder President of the Jan Sangh. Dr. Mookerjee formed the Jan Sangh when Congress was the dominant political party. He formed the Jan Sangh as an alternative ideological pole. Today the BJP has replaced the Congress as the key ideological pole in Indian politics. Today, as we pay homage to Dr. Mookerjee, I recall a forgotten chapter where Dr. Mookerjee’s advocacy of ‘Akhand Bharat’ led Pt. Nehru to amend the Constitution restricting Dr. Mookerjee’s free speech.
Free Speech & the Constitution
The Constitution guarantees to all citizens the Right to Freedom of Speech and Expression under Article 19(1)(a). Under Article 19(2), the State can make laws restricting the exercise of this right subject to certain conditions. The conditions on which this right could be restricted were very minimal as drafted by the Constituent Assembly. However, the first amendment to the Constitution in 1951 and the Sixteenth amendment in 1963 imposed further conditions on the Right to Free Speech. Whereas restrictions in the interest of sovereignty and integrity of India, public order or to prevent the incitement of an offence are understandable, the one raises several questions relates to a restriction which can be imposed in the interest of “friendly relations with foreign states”.
This restriction did not exist in the original Constitution as adopted in 1950. This was introduced by the first Amendment to the Constitution in 1951 and approved by the Parliament which as a central assembly was duplicating earlier as a Constituent Assembly. Needless to mention that this was prior to the election of India’s first elected Parliament in 1952.
The circumstances which led to this amendment have been discussed in detail in a book “Republic of Rhetoric – Free Speech and the Constitution of India” authored by Abhinav Chandrachud. The book traces the history of the entire debate on free speech from the Constituent Assembly till the publication of the book in 2017. It is a legal literature which lawyers and lawmakers need to read. After reading the relevant chapter of this book, I went through the entire Parliament debate and the Select Committee recommendations in 1951 which prompted this amendment.
Why This Amendment
The restriction is very broadly worded. It empowers the State to prohibit free speech if it adversely impacts “friendly relations with foreign states”. The State can even make the exercise of speech in this regard as a penal offence. The same would be constitutionally justifiable. The world is consistently changing and so are the global alignments. Erstwhile opponents become allies or vice versa. Relations between foreign States can be based amongst others on historical and cultural factors, geographical proximity, security considerations or even trade relations. There are several other considerations which can impact our relations with foreign States. A debate in any liberal democracy on the policy that the Government of the day follows would be perfectly permissible. Governments can be cautioned or appreciated for the course that they follow. They can even be criticized. In the absence of debate and even criticism, there would be only one opinion expressed which is detrimental to a democracy. Why then was this provision introduced?
The partition of India led to a huge exodus of population from India to Pakistan and vice versa. After the first few months, the tense situation started calming down. But in 1949-50, where on the one hand the raiders had invaded the State of Jammu and Kashmir, on the other hand there were many communal riots in East Pakistan which led to Hindu refugees migrating from East Pakistan into West Bengal.
Prime Minister Pt. Nehru and the Pakistan Prime Minister Liaquat Ali Khan signed an agreement which is popularly known as “Nehru Liaquat Pact” or the “Delhi Pact”. Ostensibly it was aimed at confidence building measure, securing peace so that the minorities in both the countries are protected. East Pakistan had a 30% Hindu population which was rapidly decreasing. There were many in India who were opposed to the very idea of partition. Amongst the leading opponents undoubtedly was Dr. Syama Prasad Mookerjee. He was one of the key advocates of a united India which he referred to as “Akhand Bharat”. Two days before the “Nehru-Liaquat Pact” was to be signed in April, 1950, Dr. Mookerjee, who was Industry Minister in the First Cabinet as a Hindu Mahasabha representative, resigned from the Cabinet in protest and took strong public position against the “Nehru-Liaquat Pact”. He spoke extensively in Parliament and outside opposing the pact and advocating his philosophy in brief of “Akhand Bharat”. Pt. Nehru over-reacted to Dr. Mookerjee’s criticism. He interpreted the very idea of “Akhand Bharat” i.e. united India as an invitation to conflict since the country could not be reunited other than by war. He, therefore, advised Sardar Patel to consider what action would be taken. After consultation with Constitutional experts, Sardar Patel’s opinion was that he could not prevent Dr. Mookerjee from propagating his idea of “Akhand Bharat” under the Constitution and if the Prime Minister wanted him to stop this, the Constitution needed to be amended. Dr. Mookerjee, on the contrary, claimed that Pakistan wanted a war and was already at war with us having captured a part of our legitimate territory of Jammu and Kashmir and, therefore, to suggest that his speeches on “Akhand Bharat” would lead to a war was not acceptable.
The Parliament Proceedings
The Bill to amend the Constitution which, amongst others, contained the restriction relating to “friendly relations with foreign states” was introduced in Parliament. There were some amendments which had been necessitated because of the judgement of the Supreme Court quashing the ban on certain publications. The Bill was referred to the Select Committee of Parliament. Those days Ministers’ could also be a Member of the Select Committee. The Prime Minister himself became a Member of the Select Committee. The Select Committee submitted a report within a week alongwith a note of dissent. The report of the Select Committee was debated in the Lok Sabha on 29th May, 1951.
Several senior members such as H.V. Kamath, Acharya Kripalani, Dr. Mookerjee and Naziruddin Ahmad, amongst others, questioned the need for this amendment. They argued that such a provision does not exist in any Constitution in the world. It was too widely worded and could even prevent a legitimate debate of foreign policy issues. It was argued that the Constitution had been in force for only sixteen months and it may not be prudent to bring a hurried Constitution amendment. But Pt. Nehru was determined to go ahead. His principal response was if you criticize a Head of a State or a foreign State, that country may launch a war against us. This would adversely impact India’s sovereignty. He argued that “we cannot imperil the sovereignty of the whole nation in the name of some fancied freedom which puts an end to all freedoms”. Dr. Mookerjee argued that such widely worded amendment could prevent a legitimate debate on issues pending with Pakistan, not merely on the treatment of minorities or what was happening in Jammu and Kashmir, it would also prevent us from commenting on issues relating to evacuee property etc. The Bill was eventually passed and it became a part of the Indian Constitution.
The Paradox
Was this intolerance against Dr. Mookerjee and his philosophy which triggered this Constitution amendment? The answer is obvious. Panditji and Dr. Mookerjee were ideological opponents. Panditji had once commented that he would crush the Jan Sangh, Dr. Mookerjee had retorted that he would crush the crushing mentality. Their views on Jammu and Kashmir were diametrically opposite. History and subsequent developments have vindicated Dr. Mookerjee’s position on Jammu and Kashmir.
Since this provision was not a part of the original Constitution and has come by way of an amendment it could be put to a challenge. I do seriously believe that it could be vulnerable to a challenge based on the basic structure theory. Unquestionably free speech is a part of basic structure of the Constitution and if an amendment dilutes it through an unreasonable restriction, it will be liable for challenge on the ground of violation of the basic structure.
But the major paradox today is that the essence of this amendment was that a mere speech advocating “Akhand Bharat” or of united India is a threat to the country, it can be an incitement to a war and, therefore, any talk of the same could be prohibited. It could even be made a penal offence. The paradox in our jurisprudential evolution is that we have applied a different yardstick to those who want to dismember India and commit an offence of sedition. This debate recently came into forefront during the “Tukde Tukde” agitation at the Jawaharlal Nehru University. The 1962 judgement of the Supreme Court in Kedarnath Singh’s case was repeatedly cited. The Supreme Court held while disagreeing with an earlier privy council’s decision on Article 124 (A) with regard to promoting dissatisfaction against the Government established by the law was to be followed, the same would be inconsistent with Article 19(2). The court interpreted Article 124(A) of the IPC to mean that utterances would be punishable under section only if it intended to incite violence or had a reasonable tendency to create disorder or disturbance to public order by resorting to violence. A speech per se advocating disintegration would not be sedition unless the element of violence was apparent.
Where it would stand today?
In the past 70 years, this country has witnessed a change in the situation where Pt. Nehru amended the Constitution so that a demand for “Akhand Bharat” could incite a war and therefore should be prohibited. On the contrary, we all were told that to advocate a breakup of the country without inciting violence is legitimate free speech.