Saturday, February 15, 2020
Sunday, February 9, 2020
CAA, NPR & NRC : The Background
The citizen Amendment Act is much awaited law which was expected immediately after Nehru Liaquat agreement in 1950.However, due to political appeasement of the Congress starting from Nehru, the law could not be prepared. The need of such law was felt on the backdrop of communal violence after partition of India which resulted into genocide of more than one million non-Muslims community in east and west Pakistan while they were returning to India. Many independent historians had written that trains coming from Pakistan to India were flooded with dead bodies of Hindus and other non-Muslim communities. The partition of India was based on the two Nation theory, one for Hindus and other for Muslims. Jinnah took the Pakistan for Muslims and chosen the area where Muslim population was much in concentration at two places one was known as East Pakistan and the other was known as West Pakistan. The population of both communities were to be exchanged to the respective Nation. While Pakistan at both places pressurized Migration of Hindus and Non-Muslims from East and West Pakistan, Jawaharlal Nehru appealed that Muslims who want to live in India can live safely and there will not be any injustice to them ang Government will provide safety and security. While the Congress took a lot of initiative to make the Muslims happy in India, the treatment to Hindus in Pakistan was beyond the imagination and was worse than Hell. Following the largest genocide of Hindus on the planet in Pakistan by Muslims to finish the Hindus and to capture their properties and women. A meeting between the prime ministers of both the countries happened and an agreement was done which is known as Nehru and Liaquat Agreement. The agreement says that both countries will protect the interest of minorities in their countries and ensure their safety and security. Things in Pakistan did not change. Pakistan kept pressure on non-Muslims to either leave or convert to Islam. Pak allowed adult Hindus migrating from Pakistan to India to take with them only rupees 150 leaving all the assets and belongings in Pakistan . While in India Congress tried its best to appease the Muslims in whatever ways possible, the lives of Hindus in Pakistan worsened. While crossing the Pakistan borders to reach in India many Hindus were killed, a few of them survived and reached India in order to save their lives. The then government of Congress led by Mr. Jawaharlal Nehru gave assurance that citizenship Act will be suitably amended to grant the citizens to all such people who are religiously persecuted in Pakistan and Afghanistan which was not done by any of the subsequent governments.
The inhuman conditions of Refugees
The life of these migrants Hindus and other minority communities from the neighboring countries (Pakistan, Bangladesh and Afghanistan) which were turned into Islamic countries, are miserable and inhuman in India also, for decades. Can anyone think that they are from India (undivided India ) and they are living miserable life in India? What is their fault ? Is this punishment of partition of India ? Why will they alone face the sin of the partition for which Jinnah and Nehru was responsible? They have the status of Refugees. They do not have Ration Cards, education to children, own house, no benefit of Governments schemes and no regular employment. They are not having voting rights, rights of education and proper employment and their life in India is also not befitting and comparable with ordinary Indian Citizen or even normal human being.
All the governments and all the prominent leaders after independence, expressed concerns and promised to grant them citizenship. However, no Government could dare to enact the law in India in this regard. It is only Modi who made it possible. Modi Hai to mumkin hai (मोदी है तो मुमकिन है). They introduced the CAB in parliament and ensured that it is passed despite the fact that the BJP does not enjoy majority in Rajya Sabha. The Citizens Amendment Bill (CAB) is now Law “The Citizen Amendment Act 2019 (CAA)”.
What is CAA ?
Before discussing further, we need to understand the CAA.
The Citizenship Amendment Act, 2019 (CAA) was passed by the Parliament of India on 11 December 2019. It amended the Citizenship Act of 1955 by providing a path to Indian citizenship for Hindu, Sikh, Buddhist, Jain, Parsi, and Christian religious minorities who migrated from Pakistan, Bangladesh and Afghanistan. By amending the principal act i.e. Citizenship Act, 1955, a proviso has been inserted in section 2, in sub-section (1), in clause (b), that provides as such-”Provided that any person belonging to Hindu, Sikh, Buddhist, Jain, Parsi or Christian community from Afghanistan, Bangladesh or Pakistan, who entered into India on or before the 31st day of December, 2014 and who has been exempted by the Central Government by or under clause (c) of sub-section (2) of section 3 of the Passport (Entry into India) Act, 1920 or from the application of the provisions of the Foreigners Act, 1946 or any rule or order made there under, shall not be treated as illegal migrant for the purposes of this Act.”
Under the 2019 amendment, migrants who had entered India by 31 December 2014, and had suffered “religious persecution or fear of religious persecution” in their country of origin were made eligible for citizenship. Most surprisingly such “religious persecution or fear of religious persecution ” has not been inscribed in the present amended Act, though the Government of India by means of executing rules and orders under Passport (Entry into India) rules, 1950 and Foreigners Order, 1948 respectively initiated the process of giving a particular privilege to those people four years before, who belong to those religion and countries, that have been mentioned in the above stated section 2(1)(b) of the Citizenship Act 1955. The Government of India has amended the Passport (Entry into India) Rules, 1950 and the Foreigners’ Order 1948 through a notification on September 7, 2015 by exempting persons belonging to minority community in Bangladesh ,Pakistan or Afghanistan who have been compelled to seek shelter in India due to religious persecution or fear of religious persecution and entered into India on or before December 31, 2014.
What is NRC?
The National Register of Citizens (NRC) is a register maintained by the Government of India containing names & certain relevant information for identification of Indian citizens. The NRC is an exercise that requires individuals in India to prove they are citizens of India. Thus, it will help the Government to identify non-citizens especially illegal immigrants in order to push them out of country.
The NRC was initially, specifically made for Assam state. The NRC results in Assam, however, were not satisfactory and therefore the Government has decided to relook into the process.
What are the reasons for opposing Citizen Amendment Act (CAA)?
o The strong opposition of CAA came from Muslims in India who are privileged citizen in India more than the Hindus supported by opposition parties who are exploiting their votes in bulk after independence.
o These political parties, many of whom exist because of the votes of minorities, do not want to let this vote Bank go out of their hands.
o In fact, if Muslims are included in CAA, all illegal immigrants from Bangladesh, Pakistan and Afghanistan and Rohingyas from Myanmar will become citizens of this country and will become the solid Vote Bank of these political parties. That is why these political parties are protesting more than the Muslims and investing heavily at the cost of law and order and even division of the society.
o Do the Muslims and all those who oppose CAA, expect these Non- Muslims / Minority communities to convert to Islam in their Islamic countries which are meant for Muslims only ?
o Should they (Non-Muslims of Pakistan, Bangladesh, and Afghanistan) face persecution and die in their Islamic Countries?
o Do they ( Muslims and all those who oppose CAA) expect further appeasement of Indian Muslims to allow all illegal Muslims immigrants from these countries who have infiltrated in India for better life owing to better social & economic conditions and employment opportunities in India as compared to these Islamic countries? A rational distinction need be made between Hindus and Sikhs and other minorities seeking their future in India, because they have nowhere else to go, and Muslims from Islamic countries who do have alternative options. Muslim illegal immigrants are serious threat to demography of India which is going in favor of Muslims in India as compared to neighboring countries which ultimately turned to Islamic countries under the pressure of Muslim fundamentalists.
The Positive Impacts CAA and NRC
Those who are analyzing, discussing, dissecting and speaking about CAA (Citizenship Amendment Act) are not correctly spelling out the highlight the overwhelming benefits of CAA. A few could be as under -
o The Citizenship Amendment Act (CAA) has been duly passed by the Parliament after a thorough debate in both Houses. It is the product of a fully democratic exercise.
o The refugees of minority communities of Pakistan, Bangladesh and Afghanistan who were religiously persecuted in their countries and who have crossed over to India before 31st December 2014 to save their lives will get the citizenship in fast track mode.
o The population of India will have now only citizens and non-citizens.
o Non-Citizens too will be divisible into legal immigrants and illegal immigrants.
o The illegal immigrants will be easily identified and pushed out of country.
o The people who will get the citizenship will benefit the Society in general and country in particular. They will be loyal to this country where they got the shelter that is their own.
o It will give the message to all the illegal immigrants that India is not ready to accommodate them anymore and since they are unwanted, they should leave the country or face the legal consequences.
- o The most important thing is that the CAA will fast-tracking the acquisition of Indian citizenship by Hindus and Sikhs and others, regulating their status in India and extending all the benefits of citizenship to them.
- o Illegal Muslim migrants will be easily identified and send back to their country of origin without fear of religious discrimination and physical insecurity, or some other interim solution can be found, once they are properly identified.
- o The CAA gives immunity to refugees from persecution for being an illegal migrant and gives fast track citizenship .
- o The test for granting citizenship is very simple based on three conditions,
o Firstly, that refugee must be from Pakistan, Afghanistan or Bangladesh.
o Secondly, refugee must be one of the from six religious’ communities — Hindus, Sikhs, Christians, Buddhists, Jains, Parsis.
o thirdly refugee should have crossed over to India before December 31, 2014.
o The CAA will protect only those who are already in India.
o The patriot Indian can now see distinctly as to who are working for India to survive and live long as it is and who are working for appeasement not bothering that the change in the demography of India will create turmoil in the country and will lead for conversion into an Islamic country like Iran, Iraq, Afghanistan, Pakistan, Bangladesh and many if African continent. It may not be taken out of context that lives of even Muslims are miserable in these Islamic countries because of fundamentalism and that is why they are fleeing for better life in India.
- o At the national level CAA and other related matters has given a lease of life to the opposition parties. After Modi became PM, the opposition parties became almost irrelevant and insignificant.
- o It has created awareness and a thrilling academic atmosphere in the country. people have started reading the Constitution of India, and relevant provisions and Act.
- o The overall impact of CAA is very good keeping in view it’s academic discussions. Almost all the Indians are now curious to know the effect, the provisions of constitution and of course the Vote Bank Politics.
- o The sale of the copies of the amended Citizenship Act 1955 (bare act), the Foreigners Act,1946, the Constitution of India has touched all-time high. The search of related content on the net is at its peak.
- o Many people have started reading constitution and hoisting the flag.
- o Many protesters have started reciting national Anthem during protests.
- o Many schools / offices have started reading preamble of constitution.
- o Those who never bothered about the constitution and /or flouted the constitution are protesting to save the constitution.
- o The importance of the National Register of Citizens (NRC) is integral for India. It provides a clear-cut demarcation of who qualifies to be an Indian citizen from other nationals who have been illegally living in India. The role of the NRC has proven to be very helpful in several instances. In the State of Assam where a large number of illegal immigrants from Bangladesh are known to inhabit, it is with the aid of the NRC that their inhabitation will have to be forfeited. Therefore, all the states in India employ the use of an NRC which gets updated in every ten years.
o With our evidently growing economy, it is important to have a clear picture of the exact number of citizens and foreign nationals living in the country and whether this inhabitation is legal or illegal. This also comes into play when we talk about exercising other rights awarded to Indian citizens. With an avid population, if one is to ensure a rapid growth, we need to eliminate the chances of any such rights getting exploited. These are scenarios where the NRC deems to be of critical importance to safeguard growth and development.
o Established democracies have a detailed database of citizens, with citizenship verification through several means, including national identity cards. This is a vital aspect of sovereignty, national security and governance. Why does the move to establish an NRC abridge India’s democracy in particular? With our porous borders, terrorism concerns and the reality of illegal migration, India desperately needs a National Register for Citizens.
o The irony is that with similar social conditions — the absence of birth certificates, poverty and illiteracy — Bangladesh, Pakistan and Nepal have citizenship rolls. If they can find out the ways, we too can find out the ways.
o Over the course of the last decade, there has been a rampant inflow of Rohingya Muslims with an estimated forty thousand residing illegally. There have been plans for their deportation as there have been instances of militant attacks on the border by the group individuals. These groups are also known to have links with Pakistan based terror groups. The inhabitation of this sect can thus pose a serious threat to national security which has already been seen in instances like the border attacks.
Negative Impact of CAA and NRC
o Because of protests, the Nationwide NRC may not be approved in the Rajya Sabha with even BJP allies JD(U) and the Akalis opposing it on account of political turmoil.
o The NRC is designed to weaponize the CAA. Without the NRC, the CAA will not have desired impact which is under fire by a section of society.
o The Opposition parties ignoring national interest, has started playing the dangerous game of mobilizing Muslims to stage street protests with violence to capitalize on and deepen the existing perception that the Modi-led BJP government is anti-Muslim. This is nothing but to gain the lost political ground.
o The violent protests are disturbing the peace and harmony of the country. The violent protest across some state has damaged huge properties of Central and state Governments , which is a national loss.
o Owing to Vote Bank politics through Muslim Appeasement, many State Governments belonging to opposition parties have passed a resolution against CAA which is giving wrong signals to the world at large about the unity and integrity of India.
o Many State Government have declared that they will not implement the CAA, knowing fully well that the citizenship is a union issue and states has nothing to do with it. The citizenship is granted by Central Government and States have no role to play. As per the provisions of constitution the State Governments can not say no to any law passed by the parliament. The message though politically motivated is giving wrong signals to the whole world.
o The ‘secular’ argument has been carried to an absurd length in demanding that even persecuted Muslims in Islamic countries such as Shias, Ahmadis and Rohingyas should be included for Indian citizenship. If that is done the very purpose of the CAA and NRC will be lost and India may not remain secular for more than 20 – 25 years and will convert to an Islamic country. May be, before that civil war erupts or Islamic terror war groups like ISIS , Taliban etc. are developed to finish the non-Islamic or force them to convert to Islam in order to establish an Islamic Rule. The so-called secular will then be first to flee out of country.
o Fundamentalists in India are demanding even to include Yazidis and other victims of the Islamic State, the victims of Boko Haram from North Africa to prove our secular credentials?
o The protesters and opposition parties are demanding to include Shias & Ahmadis of Pakistan and Rohingyas of Myanmar who have known terror link, and which are serious threat to country’s security and demography .
o Opposition parties because of vote Bank politics, support to grant citizenship to the several million Bangladeshi Muslims who have entered India illegally.
o Those protesting the CAA in the name of secularism and democracy do not want Hindus, Sikhs and others to benefit from CAA, even if for one time unless the Muslims are also accommodated. The demand is not logical as the Muslims cannot be persecuted in Islamic countries. If the Muslims are accommodated in CAA the demography of country will change as there are more than 2 Crores illegal Muslims from Pakistan and Bangladesh many of them have terrorist links. All of them are drain to Indian resources creating the problems of employment, infrastructure, law & order and security.
o The demography of India will tilt towards Muslims who will try to convert the Hindustan into an Islamic country as happened in case of Iran, Iraq, Afghanistan, Pakistan, Bangladesh and many African countries. Recently German Chancellor has expressed concerns over possible threat to Germany for being converted to Islamic country in few years from now.
o The NRC will be an enormous exercise given the size of our population and other complexities. This was evident in Assam, where even genuine Indian citizens got excluded and many illegal migrants allegedly, got included. Before the government embarks on this exercise, it also needs to put in place a policy on stateless people. India does not have one yet and keeping illegal migrants in detention centres is something the country can ill afford.
o The opposition political parties do not understand that this is important to keep within the lines of the law when it comes to illegal immigration and national interest.
o The unwanted protest and support by opposition political parties have encouraged Rohingya Muslims illegal infiltration into India. Keeping national peace and safety in concern it is best that any such form of illegal infiltrations is stopped forthwith, and strict laws should be framed in this regard.
- Shive Mishra
Thursday, December 12, 2019
The Government of India is exploring to switch over to a new and progressive methodology to calculate Gross Domestic Product (GDP). The new methodology may be chain base system in place of existing fixed base system.
THE FIX BASE SYSTEM
This method is in vogue in India. In this method weight assignment to various economic activities and goods remain fix for specific period which can range from 5 to 10 years or a period as decided by the government. This helps comparing the trend of growth over 5 -10 years on the same parameters with the same weight assigned.
THE CHAIN BASE SYSTEM
In this system the weight assigned index keeps on changing and changes are incorporated annually. Thus the structural changes of the economy are adjusted quickly. Also the activities are updated and captured annually. This method appears more correct as the economic activities are updated and captured every year based on the current prices.
In many foreign countries chain base system is being used. US shifted to the chain base weighted index in 1996 and many EU countries have also moved to this system. If India moves on to this system, it will be easy and realistic to compare the economic indicators with these countries.
THE CHALLENGES IN INDIA
Moving from existing fixed base to chain base system in India is challenging because of delayed availability of data which normally comes with the lag of 2 years. However, with the speed of digitisation and automation is taking place in India, switching to chain base system is not very difficult.
The indicators computed under chain weighted index system are closer to nominal number which being calculated on current prices, are more realistic as compared to real number which are inflation adjusted.
KNOW THE GROSS DOMESTIC PRODUCT (GDP)
Now days GDP numbers are in discussions because of economic slowdown and therefor you must know broadly what the GDP is?
“The GDP of a country is sum total of values of goods and services produced in any given year”. The formulae is
GDP = Private consumption + Gross investment + Government spending + (Export – Import)
In India the GDP is calculated by Central Statistical Office (CSO) by 2 methods -
1. At factor cost basis
Under this category economic activities RSS at factor cost basis and performance of eight different industries are assessed which are
I. agriculture forestry and fisheries
II. Mining and quarrying
IV. Electricity gas and water supply
VI. Trade, Hotels, transport and communication
VII. Financing, Insurance real estate and business services
VIII. Community personal and social services
2. At Expenditure at market price basis
The economic activities assessed at market prices which indicates how different areas of the economy such as trade, investment, personal consumption are doing.
Nominal GDP - it is calculated on current market prices
Real GDP - it is calculated adjusting inflation
- Shive Mishra
Monday, December 9, 2019
The government recently announced tax rate cut for corporates across the board. This has been done in the backdrop of slowdown in the economy to support the corporates and to attract new investments which are moving towards other emerging economy like Vietnam. This cut is historical in last 28 years. The measure is in line with the recommendations of the much-awaited Direct Tax Code (DTC) report that was submitted to the Finance Ministry in August 2019. The report has not been made public yet.
(The Direct Tax Code aims to consolidate and amend the law relating to all direct taxes, namely, income-tax, dividend distribution tax, fringe benefit tax and wealth-tax to establish an economically efficient, effective and equitable direct tax system which will facilitate voluntary compliance and help increase the tax-GDP ratio. Another objective is to reduce the scope for disputes and minimize litigation. All the direct taxes have been brought under a single Code and compliance procedures unified.)
After slash in corporate tax there was hope that individual tax rate will also be reduced to increase the consumption. Arvind Panagariya former NITI Ayog Chairman said that there is a strong case for a similar reform in income tax also. As per reliable sources, the DTC report has also recommended the lowering of tax rates for individual tax payers. After corporate tax now it the turn of individual taxes. Finance Minister Nirmala Sitharaman talking on the Indian economy, said that the government is working on more steps, including rationalisation of personal income tax rates, to revive the sagging economy. This may however now be taken care of in the coming budget.
Income tax slabs need to be rationalised
The DTC has suggested the rationalisation of slabs with a rate of 5 per cent for incomes of Rs 2.5 lakh to Rs 5 lakh, 10 per cent for those earning Rs 5 lakh to Rs 10 lakh, 20 per cent for Rs 10 lakh to Rs 20 lakh, 30 per cent from Rs 20 lakh to Rs 2 crore and 35 per cent for those with incomes above Rs 2 crore. If this is done this would create surplus in the hands of tax payers and help in boosting consumption and increasing household savings in different financial investments and Government scheme. Another possibility is to sub-categorise two income groups, to slice the 30% income tax slab.
Similarly, for deductions, the exemption limit can easily be raised up to Rs 4 lakh or Rs 4.5 lakh say, with higher limits on PPF, LIC, NSC under Section 80(c)) primarily to boost financial savings for households, which have otherwise been declining over the last few years. Low household savings with the financial sector adversely affects the financial institution’s ability to exercise better credit creation powers and boost investment sourced from domestic means.
Also, looking at the rise in personal cost of living a higher exemption limit may help boost long term savings towards retirement or increase investments in private pension funds. The slab rates proposed above would rationalise the present ones and do away with surcharges. A rationalisation of the slabs, especially for taxpayers earning below Rs 50 lakh would lower their overall tax incidence to around 25 per cent, like that of corporates. This would leave more funds for households to spend and save.
The Government should also provide special exemption / relief to senior citizen and very senior citizens to enable them to spend more on the health care and increased medical requirement.
House hold savings need to be encouraged
For a long government has not increased the limit for savings or exemption of investment to save the Income tax. The existing limit of rupees 1.5 lacs includes contribution to pf investment in PPF entry requirement towards housing loan etc. This limit is inadequate keeping in view quantum of housing loan and repayment. The government should therefore, consider the introduction of saving schemes with attractive interest rates and channelize such mobilised funds for investment in specific sectors. A deduction can be introduced for investment in long-term infrastructure bonds like those issued earlier under section 80CCF. Inclusion of debt mutual funds would boost investments in government the above measures would help channelize a portion of the tax savings back into the economy.
Participation in equity market to be made attractive
A comprehensive review of the long-term capital gains is required. There are different periods of holding of different types of asset for qualification as a long-term asset. Property is only required to be held for two years to qualify as a long-term asset and to avail the benefits of capital gains exemption. Equity shares must be held for one year.
Processing of income tax returns and assessment
In recent years there visible improvements in Income Tax Department in processing of income tax return which has become fast and corruption free to a large extent owing to centralised processing system. There is further, scope of improvement in processing time and in making refunds. The simplification of income tax return formats has also helped individuals to file their return in their own. The government has initiated steps towards faceless e-assessment. The government has launched the e-assessment scheme on September 12, 2019 to put in place a structure to facilitate e-assessment proceedings. A ‘National e-assessment centre’ would be set up in Delhi to conduct e-assessment proceedings in a centralised manner. All notices would be issued, and information requests made by the ‘National e-assessment centre. The scheme is a major step in improving the image and relations between the taxpayer and the income tax department. A technology-driven approach would facilitate compliance, tax collections and curb high-pitched assessments.
Dividend taxation to revamped
There huge anomaly in the present system of dividend income. The present income tax law imposes a dividend distribution tax (DDT) at the corporate level. The dividends in the hands of the investors in excess of Rs 10 Lakh are taxed at 10 per cent in the hands of the share holders. Additionally, the profits of the corporates, out of which the dividends are paid are subject to a corporate tax consequently dividends are taxed thrice.
While Government should expand the base of tax payers, the tax should be progressive, contributory and bearable.
- Shive Mishra