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Thursday, June 17, 2010

DTC will not impact foreign investor fund inflows! DIRECT TAX Code to Push Economic Ethnic Cleansing and Impact on the Masses is DESTRUCTIVE Contrary to the Media Hype of Relief!

DTC will not impact foreign investor fund inflows! DIRECT TAX Code to Push Economic Ethnic Cleansing and Impact on the Masses is DESTRUCTIVE Contrary to the Media Hype of Relief!

India may spend $ 80 bn in 5 yrs on defence acquisitions!

Anderson was assured 'safe passage' by Govt: Rasgotra


Indian Holocaust My Fathers Life and Time- Three Hundred Ninety SIX

Palash Biswas

http://indianholocaustmyfatherslifeandtime.blogspot.com/


DIRECT TAX Code to Push Economic Ethnic Cleansing and Impact on the Masses is DESTRUCTIVE Contrary to the Media Hype of Relief!

India may spend $ 80 bn in 5 yrs on defence acquisitions!

India is estimated to spend about $ 80 billion in the next five years on defence acquisitions, making it one of the most attractive markets for global defence firms, an industry study has said.

The CII-Deloitte report on 'Prospects for Global Defence Industry in Indian Defence Market' said the defence capital expenditure budget was expected to achieve a Compound Annual Growth Rate (CAGR) of 10 per cent from 2011 to 2015.

Total indigenous production between 2011 and 2015 would need to expand from about $ 30 billion to more than $ 70 billion in the span of five years to be able to achieve 70 per cent indigenisation by 2015, the report, released during the Eurosatory-2010 defence exhibition in Paris, said.

It noted that the defence industry would need to expand by an average of 30 per cent a year over the next 5 years.

The report, released by Defence Production Secretary R K Singh, provides information to global investor firms to understand the Indian defence requirements and domestic industry capabilities and opportunities in four key domains -- maritime, land, aerospace and electronics.

Singh, in his address, said the 'Buy and Make (Indian)' category in the Defence Procurement Policy of 2009 was an opportunity for foreign players to partner with the Indian Defence industry.

He further said the new category would enhance the formation of joint ventures and technology partnership between the Indian and foreign defence industry.

Responding to a query, Singh clarified that the defence Ministry was in favour of continuing with the Foreign Direct Investment (FDI) limit of 26 per cent.

"Over the past decade, the Indian Ministry of Defence has put into motion plans for an unprecedented modernisation program of its defence capabilities.

"In this context, India has embarked on a major defence acquisition program, aimed at increasing the size, capability and self-reliance of its armed forces," it said.

The report said the aerospace and defence sector was growing at an unprecedented rate and emerging as a key participant in the Asia Pacific region. It also provided an indicative list of the Indian defence acquisition plans.

In the 2010-11 budget, the government had earmarked $ 32.03 billion (Rs 1,47,344 crore) for defence.

"More than $ 42 billion in total defence expenditure is targeted by 2015, of which approximately $ 19.20 billion would be expected to be spent on capital equipment for the armed forces," the report said.

DTC will not impact foreign investor fund inflows!Which is the Spine of Indian Economy governed by FDI, FII and Borrowing in Absence of Fiscal Policy as Taxation Reloaded once again against the Majority masses with Rothschild`s Surgical Precision!Media Edits and debate just focus on Foreign capital Inflow to continue and even justifies Waren Anderson, SEZ Drive, Deportation, Marketing Survey oriented Census denying Headcount OBC, Unique Identity Number Project for Realty Boom, Inflated Fundamentals Satyam Asatyam,Corporate Manipulations as AMBINIESdead to get Sectorwise supremacy in key sectors including Oil, Gas, Telecome, Pharma, Power and Infrstructure, Disinvestment of Profitable PSUs, Contract Farming and Retail Rural Marketing, Modified genetic food, Corporate War against Aboriginal Indigenous Humanscpae, Knowledge Economy, Health Tour, sex Tourism, Price rise and Inflation, Food Insecurity and Destruction of Ruaral Agrarian Landscape and SELL OFF the nation and Nature!

As Economic Times reports:

Foreign portfolio investors will not be materially impacted by the proposed changes in the new tax code, as long as these funds are able to claim tax credit in their home jurisdictions, say experts.

Another factor likely to mitigate the impact of the new tax rule is that India remains one of the fastest growing economies globally, and is likely to attract a sizeable chunk of the flows coming out of other troubled markets.

The proposed rule seeks to tax foreign portfolio investors' revenues from equity investments in India under capital gains tax, instead of under business income.

Business income is income that arises from the regular operations of a company, and hence are taxed at a lower rate. Capital gains are those that arise out of the sale of assets such as land, gold or in the case of FIIs-equity holdings, and hence attract a higher tax.

"The rule is likely to impact very few foreign funds," says Sukumar Rajah, MD & CIO-Asian Equities, Franklin Templeton Investments.

Suresh Swamy, ED, Financial Services, PriceWaterhouseCoopers (PwC) has similar views. "As of today, there is only a small universe of FIIs which claim their income to be business income. Most of them adopt a capital gains stand. FIIs/sub-accounts were entitled to claim treaty benefits only if they satisfied certain conditions. Not all of them satisfied those conditions," he says.

Mauritius-based institutions continue to be taxed under Mauritius laws, which exempt them from capital gains tax. India has a taxation treaty with Mauritius which is used to save on tax by foreign funds.

"For those who come in from a treaty jurisdiction, there would be little or no impact at all. But those who were from non-treaty jurisdictions and were relying on this being categorised as business income, could be impacted," says Siddharth Shah, head-funds practice, Nishith Desai Associates.

"It's ironical in some sense that such change combined with higher tax rate on capital gains may actually investors push to look at investing through treaty jurisdictions with capital gains benefits," he says.

He, however, cautions investors that one needs to watch out for GAAR provisions and applicability of the same to structures. "While the draft has removed the treaty override provisions proposed under the old draft, one will get a clear picture only when detailed GAAR rules are announced," he told ET.

Shefali Goradia, partner, BMR Advisors, believes it is aspirational for the government to curb treaty shopping by invoking GAAR. "Most other countries have not succeeded in doing this. If the tax officers challenge the Mauritius treaty due to lack of substance, this can be challenged before the courts," she adds.

Punit Shah, ED-tax & regulatory services (financial services) KPMG says that the certainty of availability of the capital gains tax exemption under Mauritius tax treaty is crucial for foreign investors.

"Even though, the discussion paper provides for beneficial provisions of the treaty to prevail, it is subject to passing anti-abuse provision tests, the application of which itself is not objectively provided for. This brings uncertainty and subjectivity in applying the beneficial tax treaty provisions," he said.
http://economictimes.indiatimes.com/markets/analysis/DTC-will-not-impact-foreign-investor-fund-inflows/articleshow/6056714.cms

Indian Media is concerned of Foreign Capital Inflow and SEZ Drive and NEVR do expose the Social realism of exclusion and Ethnic Cleansing, Hegemony and supremacy of Market Dominating Brahamins! It supports Military Option with Zero Intolerance and Justifies strategic realliance led by United States of America and Israel!It is eager for NRI Government and pose shameless, striped NAKED on Play Boy Cover to plead to PUSH Economic Reforms at all cost even if the Majority Masses is predestined of EXTINCTION as it proved in bhopal Gas Tragedy case. Media has nothing against Defence Budget and Oil Economy, Ethnonationalism, Communalism and tries its best to dilute PUBLIC Opnion and Resistance, Mass Movement, Awareness, Empowerment, Inclusion! It defends the interests of MNCs, LPG Mafia and Extraconstitutional India Incs having the Last Laugh in Governance, Legislation and Policy making Killing Indian Republic, democracy, Constitution and Parliament. It also suports Nuclear, Biological and Chemical warfare. Thus, media is committed to SEZ Future of India to disintegrate the Nation in Foreign Territorries. Hence, the Media Concern is expressed to underplay the disastrous Impact on the Common Masses and it says,Fate of 469 approved Special Economic Zones, which are yet to become operational, hangs in balance with the proposed Direct Tax Code denying tax exemptions to new units in the SEZs.

The introduction of the Direct Taxes Code (DTC), which will replace the 50-year-old Income Tax Act, will make Foreign Institutional Investors (FIIs) liable to pay capital gains tax on their income from securities trade.

"All the FIIs will be subject to the capital gains tax after implementation of the Direct Taxes Code," said a Finance Ministry official today.

The proposal was included in the revised draft on DTC to plug the loophole whereby some FIIs report their capital gains as business income and claim total exemption in the absence of a permanent establishment in India. This has resulted in lots of litigation.

However, most FIIs report their income from such investments as capital gains.

Those showing their gains from investment in securities as business income also escape tax since it comes under the purview of the Double Taxation Avoidance Agreement (DTAA) that India has with other countries.

"It is, therefore, proposed that the income arising on purchase and sale of securities by FIIs shall be deemed to be income chargeable under the head capital gains," said the revised DTC draft.

To plug the loopholes in the double tax avoidance pacts, the government had proposed that domestic laws will override the bilateral tax agreements in the first draft itself.

It has diluted this proposal in the revised draft of the DTC.

The revised draft imposes three conditions when domestic laws will override tax pacts. One of them is when the government decides to impose branch profit tax.
How revised DTC will impact the common man
Comment     Mail to friend

By Vineet Agarwal

The government has released the keenly-awaited revised discussion paper on the Direct Taxes Code (DTC).

The first draft code released in August 2009 was open for public comments, on which the government received valuable inputs from a large number of organisations and individuals.

Responding to the voice raised by the common man and various trade bodies, the finance ministry has axed many proposals of the DTC which would have pinched a common man's pocket.

Some of the major changes suggested in the revised discussion paper which have a direct impact on the tax outflow of the individual taxpayers are:

Also Read: Decoding Direct Tax Code | DTC: Implications for housing, equities I Experts' take on impact of taxing capital gains | Impact of revised DTC on your salary components I Experts' take on Direct Tax Code

http://economictimes.indiatimes.com/quickiearticleshow/6058103.cms

According to the revised DTC draft, the tax exemptions for the SEZs have been provided only for the existing units. "...profit-linked deductions of units already operating in SEZs for the unexpired period (of 15 years) will be incorporated," the new draft said.

This provision would mean end of new investment by promoters, who have received formal approvals from the Commerce Ministry after acquiring land for their projects, Director General of the Export Promotion Council for EoUs and SEZs (EPCES) L B Singhal said.

"It really amounts to closing down a scheme, which has given exports of Rs 2,20,000 crore, investment of Rs 1,50,000 crore and employment of 500,000," Singhal said.

He said anxious investors have been calling him for the last two days, stating they had planned investment based on the promises of Parliament since the tax sops provided in the SEZ Act had the legislative approval.

"This morning I got a call from Sri Lanka-based Brandix Apparels, the promoter of a textile SEZ in Andhra Pradesh. He has told me that the investments were pumped in based on the promises given by Parliament," Singhal said.

The uncertainty will affect even the operational SEZs because not all of them have been occupied by units.

At present, SEZ units get 100 per cent income tax exemption on export income for the first five years, 50 per cent for the next five years. They also get exemption on 50 per cent of the ploughed back export profit for the next five years after the first 10 years.

"SEZ policy was made to promote exports in the country... but withdrawal of tax benefits, supposed in draft DTC, will affect the export growth as well as development of self-sustainable industrial clusters," Vice President of Raheja Developers Ltd Manoj Goyal said.

After enactment of a standalone law in 2005, which came into operation in 2006, the Commerce Ministry has given approval to about 580 SEZs of which 111 are operational.


A government proposal to do away with the distinction between short-term and long-term investment for levying Capital Gains tax on securities trading may cause volatility in the market, as investors may not hold stocks for long, analysts said.

"It is a big setback for diversion of savings to capital markets as investors will shy away from keeping investments for long term period. This will also increase volatility," CNI Research CMD Kishor P Ostwal said.

However, investors may not complain about another proposal in the revised draft of Direct Taxes Code to tax FII income from securities as Capital Gains tax, apparently to check the tendency of some of them to evade taxes, they added.

The DTC draft proposes to impose tax on gains in securities trading irrespective of the fact whether securities is held for short-term or the long-term. Currently, the government does not impose tax on gains made from securities held for more than a year, but levies 15 per cent tax on gains made from stocks sold before one year.

On the proposal of imposing tax on FIIs for gains in securities market as Capital Gains, HDFC Securities head for private broking and wealth management Vinod Sharma said, "This will not adversely impact foreign investment."

Foreign investors in general will not have to subject their income to domestic tax if they have rooted their investments through some tax havens, so it is good for the market, good for the foreign institutional investors, Ostwal added.

Anderson was assured 'safe passage' by Govt: Rasgotra

Union Carbide Chief Warren Anderson had been assured a "safe passage" before he came to India in the aftermath of the deadly 1984 gas leakage incident, the then Foreign Secretary M K Rasgotra disclosed here on Thursday.

Anderson had requested a "safe passage" through the US Embassy, Rasgotra told in an interview to a news channel.

According to the channel, Rasgotra said the then Prime Minister late Rajiv Gandhi was subsequently told about granting Anderson a safe passage, to which he did not object.

"He (Gordon Streeb, the then deputy chief of the US mission here) said Anderson wanted to come here. There was a tragic situation and he wanted to see things himself, wanted to offer his condolences but he would come only if granted safe passage," Rasgotra said.

"I said, I cannot assure of safe passage. I would have to consult concerned authorities and I will get back to you.....I got in touch with the Home Ministry and I got in touch with the Cabinet Secretary. I told them what Streeb had asked for and I waited for the instructions," the former diplomat said.

Rasgotra also maintained that he got the instructions the "same day".

Terming the request for safe passage by Anderson as "understandable", Rasgotra also described his arrest as "wrong."

"It was quite understandable request. This man wanted to come, express his condolences and sorrow. I thought it was quite understandable and if he wanted to come, we should let him come.......He was given safe passage and the arrest was wrong. And the authorities, I think, realised that was a bad thing to do and they released him," he said.

Asked if the then chief minister of Madhya Pradesh Arjun Singh was unaware of the safe passage which resulted in Anderson's brief arrest in Bhopal, Rasgotra said "Did Arjun Singh really arrest him or the administrative authorities or police arrested. I cannot say."


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http://www.expressindia.com/latest-news/Anderson-was-assured-safe-passage-by-Govt-Rasgotra/635147/

All gratuity received is not tax exempt despite hike in limits

17 Jun 2010, 0140 hrs IST,Vikas Vasal,
Our expert offers tips on various tax-related issues in this weekly column.

Recent enhancement in limits of gratuity payment has generally been cheered by employees although some worry that these limits for non-government employees are applicable prospectively and not retrospectively.

A lot of queries have been received as to the taxability or otherwise of the gratuity received by different category of employees.

In this context, it is important to note that all gratuity received by an employee is not exempt from tax per se, except up to limits specified under the provisions of the Income-Tax Act, 1961. Therefore, it is important to take a note of the relevant tax provisions in this regard.

Government employees

The government had earlier enhanced the limits up to which gratuity could be received by the employees covered under the government pension/gratuity scheme, in line with the recommendations of the Sixth Pay Commission.

As per the provisions of the I-T Act, 1961, any death-cum-retirement gratuity received under the Pension Rules/Scheme of the Central government or state government or Regulations applicable to the members of defence services, is not taxable.

Gratuity received under the Gratuity Act

In respect of employees receiving gratuity under the payment of the Gratuity Act, 1972, any gratuity received to the extent that it does not exceed an amount calculated in accordance with the provisions of the Gratuity Act, is not taxable. Recently, the government had enhanced the limit for payment of gratuity under the Gratuity Act from Rs 3.5 lakh to Rs 10 lakh. The exemption limits in this case would apply accordingly.

Other employees

In respect of employees receiving gratuity other than under the government pension/gratuity scheme and also other than under the Payment of the Gratuity Act, the computation mechanism in respect of exemption limits has been specified under the I-T Act.

It is pertinent to note that recently the Central Board of Direct Taxes (CBDT) has issued a notification enhancing the overall tax exemption limit to Rs 10 lakh. Though this is a welcome step, in case of other employees, the following points merit attention while claiming exemption:

The gratuity received by an employee is not taxable if it is received on his retirement, his becoming incapacitated prior to such retirement, termination of employment or if such gratuity is received by his widow, children or dependants on his death.

Further, such gratuity does not exceed one-half month's salary for each year of completed service, calculated on the basis of the average salary for 10 months immediately preceding the month in which such retirement/death etc takes place, subject to the limits prescribed by the Central government.

Salary for this purpose includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites. Also, as per some judicial precedents, completed service would mean a total period of service whether under one employer or more.

In case, any such gratuities are received by an employee from more than one employer in the same financial year, the aggregate amount so exempt shall not exceed the overall exemption limit. Similarly, where any such gratuities was or were received in one or more financial years, then the exempt amount claimed earlier has to be taken into account while computing the exemption at present.

Caution point

In the case of employees receiving gratuity (other than under the government scheme or under the Payment of Gratuity Act), the limits have been increased to Rs 10 lakh from the erstwhile limit of Rs 3.5 lakh.

This enhanced limit is applicable to employees who retire, become incapacitated before retirement, expire or whose services are terminated on or after 24th May 2010. Therefore, gratuity in respect of earlier period would continue to be governed by the erstwhile tax exemption limits.

(Vikas Vasal, Executive Director, KPMG)
http://economictimes.indiatimes.com/personal-finance/tax-savers/tax-news/All-gratuity-received-is-not-tax-exempt-despite-hike-in-limits/articleshow/6056729.cms


Impact of revised Direct Tax Code on your salary & budget
Comment     Mail to friend

At first sight the revised proposals under DTC give an impression that exemptions are back where they were. But a closer look at the details reveals that there is a twist in the tale. While it has brought cheer to investors, but financial advisors say other proposals in the revised Direct Tax Code (DTC) could pose some serious problems.

The DTC draft notes ''approved pure life insurance products and annuity schemes will also be subject to EEE (exempt, exempt, exempt) method of tax treatment.'' But it does not specifically mention ULIPs. So, does it mean that unit-linked insurance plans (ULIPs) won't enjoy the same tax-free status on maturity anymore?

Read on as we analyse the impact of revise Direct Tax Code on you salary components and your budget...

Next >>

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http://economictimes.indiatimes.com/quickiearticleshow/6057750.cms

Direct Taxes Code shock: Short-term can be 2 years

Khyati Dharamsi & Vivek Kaul / DNA
Thursday, June 17, 2010 2:21 IST
Mumbai: It's the devil-in-the-detail thing again.
In a move that could spook the stock markets, the revised discussion paper on the Direct Taxes Code (DTC) put out on June 15, 2010, has changed the definition of capital gains on equity and equity mutual funds.

Now, if you buy shares on say April 1, 2011, you would have to hold on to your investment at least till April 1, 2013 —- for a period of two years and one day — to be able to claim a long-term capital gain.

This is because, in the revised discussion paper, long-term capital gain has been defined as an investment held for a period of more than one year from the end of the financial year in which the asset was acquired, said chartered accountant Ameet Patel, partner at Sudit K Parekh & Co.

This is in sharp contrast to the practice under the current disposition, wherein you can book a long-term capital gain by selling the shares anytime after a year of the date of their acquisition, says Sandeep Shanbhag, director, Wonderland Consultants, a tax and financial planning firm. What's more, these capital gains do not attract any tax now.

"The holding period for long-term capital gains has been changed to anywhere between 12 month 1 day (if you buy stocks on the last day of the financial year i.e. March 31) to 24 months and 1 one day (if you happen to buy stocks on the first day of the financial year (i.e. April 1)," said Patel.

Currently, the holding period is the same for all investors.
On the other hand, the period of short-term capital gains on equity has gone up. If you buy shares on April 1, 2011 and sell on any date before April 1, 2013, your capital gains will be categorised as a short-term capital gains. Such gains will be lumped on to your income for the year and taxed at the marginal rate applicable.
Currently, shares sold within a year or less are categorised as short-term capital gains and taxed at 15%.

This move is bound to hurt speculators who trade in the short-term.

The good part, however, is that the period of holding for long-term capital gains made on sale of property, land and gold will come down.

"There is no distinction between financial assets and other
assets. Therefore, the period of holding would be uniform regardless of whether the asset is immovable property or gold or even equity shares," said Shanbhag.

Currently for capital gains on assets like gold, land etc to be categorised as long-term, they have to be held as investments for more than three years. The period of holding for capital gains to be categorised as long-term capital gains comes down to as low as one year and one day. Anything shorter than that will be short-term capital gains.

"For non-share assets such as property, etc, where short-term capital gains were taxed for a period of less than 36 months, now it will be under or equal to 12 months," said Parizad Sirwalla, partner - tax, BSR and Co.

The earlier version of the DTC had done away with the distinction between long-term capital gains and short-term capital gains. All capital gains had to be lumped on to the taxable income for the year and taxed at the top tax rate the tax payer falls into.

The revised discussion paper does away with this and reintroduces the distinction.

The paper also makes the calculation of long-term capital gains on equity a little complicated. Let us say you sell your shares in the stock market for Rs 10,000. You had bought these shares at Rs 4,000 nearly three years back. So you end up making a capital gain of Rs 6,000 (Rs 10,000 - Rs 4,000). Under the current regulations, there would be no tax on this gain.

As per the revised discussion paper, there will be a deduction allowed on this capital gain and the remaining gain will be lumped on to your income for the year and taxed according to the tax rate in the bracket you fall into.

The revised paper does not specify the deduction rate. But let us say this rate is at 50%. So 50% of Rs 6,000 works out to Rs 3,000. The remaining Rs 3,000 (Rs 6,000 - Rs 3,000) will be added to your income for the year and taxed accordingly. So if you come in the 30% tax bracket, this would mean a tax of Rs 900 (30% of Rs 3,000).

"Whatever will be the capital gains tax, it will be reduced by an ad-hoc deduction. Based on these deductions, in case the marginal tax rate is 30%, it will come down to 15%, if they give an ad-hoc deduction of 50%," said N C Hegde, tax partner, M&A tax leader at Deloitte.

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Good & bad news for the taxpayer

Sandeep Shanbhag
Wednesday, June 16, 2010 2:56 IST
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The revised discussion paper on the Direct Taxes Code (DTC) released by the Central Board of Direct Taxes (CBDT) has both good as well as bad news for the taxpayer.

First the good news: Public Provident Fund (PPF) and other employee provident funds will not be subjected to the much dreaded exempt-exempt-taxed (EET) system of taxation. In other words, your PPF and company PF will continue to remain tax-free as they are now. Also, EET would be applicable only prospectively, i.e. the maturity proceeds of any investment made under the current exempt-exempt-exempt (EEE) regime would remain tax-free.

In the case of house property, the original DTC bill had proposed to discontinue the Rs 1.50 lakh interest deduction on housing loans for self-occupied property. Also, rented properties were to be taxed on actual rent or a presumptive rent of 6% of ratable value, whichever was higher. Where no ratable value was available, 6% was to be calculated on cost of acquisition. In a move that will bring cheer to all taxpayers, both these provisions are proposed to be dropped.

Now for the flip side: There is an ad-hoc deduction proposed on long-term capital gains on equity and equity mutual funds. However, this deduction comes at a steep price. First, no indexation is to be allowed on cost. Secondly, the option of adopting the value as on April 1, 2000 instead of the actual cost is also not available. Thirdly, the Securities Transaction Tax (STT) that was proposed to be dropped has been retained — the rate may be modified but the fact is that STT would indeed be payable.
Lastly, the proposed Capital Gain Savings Scheme (CGSS) will also not be introduced. The original DTC bill had a provision where capital gains form sale of assets held for over one year could be saved by investing in CGSS within a period of 60 days from the date of sale.

One can't help but think that investors would have been better off paying a capital gains tax of 10% without indexation or 20% with indexation. At least then, they could have indexed their acquisition cost to allow for the time value of money and would also have had more options to save this tax than just investing in another property, as allowed by DTC.

Also, the original problem of doing away with the current blanket exemption limit remains to be addressed. There is a very clear and present danger that when investors wake up to the reality that the long-term capital gains tax on equity and equity MFs is scheduled to be withdrawn and going ahead there would be no tax-saving mechanism, shares would be sold en masse before the DTC becomes operational.

Such a fire sale is bound to eventually lead to a stock market crash. And since the change of law affects not only domestic retail investors but even FIIs, NRIs etc. alike, this crash could well go on to be the mother of all crashes. And since such a situation is undesirable not only for investors but even the government, any preventive measures need to be thought of from now on.

Last but not the least, the original DTC bill had proposed to impose extremely liberal tax slabs. For income between Rs 1.6 lakh and Rs 10 lakh, the tax rate was just 10%. The 20% rate was applicable for income between Rs 10 lakh and Rs 25 lakh and only those earning above Rs 25 lakh were to pay 30%. This had indeed come as a pleasant surprise and exceeded, I am sure, every taxpayer's expectation. But sadly, when something seems too good to be true, in all probability it is.

The revised Discussion Paper cryptically states that the indicative tax slabs and rates (as well as monetary limits for exemptions and deductions) proposed in the DTC will be decided while finalising the legislation. Translated, this means that the liberal limits proposed originally are going to be significantly toned down.
As of now, just the discussion paper has been released, the Bill containing the actual fine print is awaited. Watch this space for further details.

The writer is director, Wonderland Consultants, a tax and financial planning firm. He may be contacted at sandeep.shanbhag@gmail.com.

http://www.dnaindia.com/money/column_good-and-bad-news-for-the-taxpayer_1396924
Direct Tax Code 2011: Promises to simplify tax system
Direct Tax Code 2011 also takes into account capital gains, housing loans and long term savings. The draft of the Direct Tax Code was released by government yesterday.
 
Wed, Jun 16, 2010 15:23:00 IST
THE NEW Direct Tax Code 2011 promises to make the direct tax system flexible and easy to use for the tax payers as the rules and regulations are being simplified and many new measures introduced to make life easy for the employees as well as the corporates.
  
Direct Tax Code 2011 proposes that tax exemptions could be given on retirement benefits for Public Provident Fund (PPF), the Government Provident Fund (GPF), the Recognised Provident Funds and the Employees Provident Fund. Another issue which has been bugging the corporates is the Minimum Alternate Tax, which they want to be taken care of as soon as possible.
 
Direct Tax Code 2011 also takes into account capital gains, housing loans and long term savings. The draft of the Direct Tax Code was released by government yesterday.
 
Speaking on the release of DTC 2011, revenue secretary Sunil Mitra said that provident funds would not be taxed on withdrawal. The DTC also does not give any detail on the income tax structure such as slab rates, which were given in the first draft.
 
The rates of taxation have not been suggested in the present draft and as per the government, the new slabs would be revealed when the proposed act is tabled in the parliament.
 
Photos on India
http://www.merinews.com/article/direct-tax-code-2011-promises-to-simplify-tax-system/15823281.shtml

 

Systems reforms for a better world

17 Jun 2010, 0503 hrs IST,ARUN MAIRA,
Speaking to members of the Planning Commission at the first anniversary of UPA-II , Prime Minister Manmohan Singh called upon them to reform the role of the commission.

The commission should be a 'systems reform commission' to address the systemic problems of the 21st century, he said. Not only India, but the whole world is facing systemic problems that are endangering the sustainability of economic growth and human development. These systemic issues cannot be resolved with prevalent, non-systemic and compartmentalised approaches to planning and policymaking. Indeed, these approaches have contributed to the growth of systemic problems.

A systemic approach requires fundamental changes in the way we think and act. A cartoon to teach systems' thinking shows a boat whose one end is sinking into the water with the other end lifting into the air. Some people are bailing furiously in the sinking end. In the other end, two men are gloating: 'Thank goodness the hole is not in our end of the boat!'

'No man is an island entire to itself' , poet John Donne said. We cannot be safe within our man-made compartments because systemic problems cross state and national boundaries.

Climate change and terrorism cross national boundaries. The rich cannot be secure within their gated enclaves when there is poverty around. They cannot be smug about the future if only their children are well educated and well fed when hundreds of millions of poor children are not. Because those masses of children are supposed to give the demographic dividend on which the country is relying to sustain its economic growth.

Another cartoon makes another point about systems' thinking. The essence of systems is that many things are interconnected in ways we may not realise.

The cartoon shows a man sitting securely on a chair, and also shows what the man cannot see. He confidently pushes away a slab on his left that is about to fall on him. With his pushback that slab will fall onto another behind it, which will drop on to yet another in a long circle behind the man, ending with a slab on his right which will then drop on him.

He has solved an immediate problem, but has set in motion a chain of events which will hurt him later. In a rush to solve problems, without appreciating interconnections, trains of events can be set off that can create even worse problems . The US Army's gung-ho dash to Baghdad detonated a series of political problems from which the US has still to extricate itself. Systemic problems require many causes to be addressed simultaneously.

They are not amenable to 'silver bullet' solutions. For example, child malnutrition in India cannot be addressed only by nutritional supplements when children also suffer from disease and diarrhoea which washes out the nutrition . Many ministries and specialists must cooperate to make a difference.

A new set of gauges is required for systems reforms. India's economy has weathered the global economic crisis better than most countries, and could be looking ahead to double-digit growth. However the condition of India's sociopolity is causing concern.

Human development indicators are not improving fast enough. And the so-called Maoist cancer is spreading. Policymakers know that economic growth is not sustainable in these conditions. Therefore they must develop a more holistic approach to development and a dash board in which GDP growth is not the only indicator of how well the country is doing.
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The smart rebound in India's external trade draws attention to our shipping policy.
Manipur can't breathe easy yet
Even though the more than two month-long blockade of Manipur seems to be ending now, reports suggest trucks carrying essential supplies are yet to fully reach the state.
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It could have been a scene from a Bollywood film noir but Prakash Jha is not amused.

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Filling the information gaps
Prolific data on financial institutions can ensure better monitoring.
T K Arun
A brain graft for the ruling alliance
That the UPA needs the services of an advisory council is testimony to the bankruptcy of politics.
Swaminathan S Anklesaria Aiyar
Shale gas transforms geopolitics, energy
For decades, India has kowtowed to Gulf countries, notably Iran. With large shale gas deposits and new technology to extract it, India can afford to act tough, says Swaminathan S Anklesaria Aiyar.


http://economictimes.indiatimes.com/Opinion/opinionshome/897228639.cms

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16 Jun 2010, 1352 hrs IST, PTI NEW DELHI: A day after releasing a revised draft of the

TAXATION in INDIA

  India has a well developed tax structure with a three-tier federal structure, comprising the Union Government, the State Governments and the Urban/Rural Local Bodies. The power to levy taxes and duties is distributed among the three tiers of Governments, in accordance with the provisions of the Indian Constitution. The main taxes/duties that the Union Government is empowered to levy are Income Tax (except tax on agricultural income, which the State Governments can levy), Customs duties, Central Excise and Sales Tax and Service Tax. The principal taxes levied by the State Governments are Sales Tax (tax on intra-State sale of goods), Stamp Duty (duty on transfer of property), State Excise (duty on manufacture of alcohol), Land Revenue (levy on land used for agricultural/non-agricultural purposes), Duty on Entertainment and Tax on Professions & Callings. The Local Bodies are empowered to levy tax on properties (buildings, etc.), Octroi (tax on entry of goods for use/consumption within areas of the Local Bodies), Tax on Markets and Tax/User Charges for utilities like water supply, drainage, etc.

Since 1991 tax system in India has under gone a radical change, in line with liberal economic policy and WTO commitments of the country. Some of the changes are:

  • Reduction in customs and excise duties

  • Lowering corporate Tax

  • Widening of the tax base and toning up the tax administration

Direct Taxes

Personal Income Tax

Individual income slabs are 0%, 10%, 20%, 30% for annual incomes upto Rs 50,000, 50,000 - 60,000, 60,000 - 1,50,000 and above 1,50,000 respectively.

Corporate Income Tax

For domestic companies, this is levied @ 35% plus surcharge of 5%, where as for a foreign company (including branch/project offices), it is @ 40% plus surcharge of 5%. An Indian registered company, which is a subsidiary of a foreign company, is also considered an Indian company for this purpose. 

 

Depreciation and interest deductions:

Depreciation rates

Assets

Rates (%)

Buildings

5-100

Plant and Machinery

25-100

Furniture and Fittings

15

Vehicles (Other than for commercial use)

20

Pollution Control Equipment

80

Energy Saving Devices

80

Ships

25

Intangible assets

25

 

Withholding Tax for NRIs and Foreign Companies:

Withholding Tax Rates for payments made to Non-Residents are determined by the Finance Act passed by the Parliament for various years. The current rates are:

1. Interest - 20% of Gross Amount

2. Dividends - 10%

3. Royalties - 20%

4. Technical Services - 20%

5. Any other Services - Individuals - 30% of net income

                                        Companies/Corporates - 40% of net income

The above rates are general and in respect of the countries with which India does not have a Double Taxation Avoidance Agreement (DTAA).

Double Taxation Relief:

India has entered into DTAA with 65 countries including countries like U.S.A., U.K., Japan, France, Germany, etc. These agreements provides for relief from the double taxation in respect of incomes by providing exemption and also by providing credits for taxes paid in one of the countries. These treaties are based on the general principles laid down in the model draft of the Organisation for Economic Cooperation and Development (OECD) with suitable modifications as agreed to by the other contracting countries. In case of countries with which India has double taxation avoidance agreements, the tax rates are determined by such agreements and are indicated for various countries as under:

 

Country

Dividends

%

Interest

%

Royalties

%

Australia

15

15

15

Austria

20

20

30

Bangladesh

15

10

10

Belarus

15

10

15

Belgium

15

15

20

Brazil

15

15

15

Bulgaria

15

15

20

Canada

25

15

15

China

10

10

10

Cyprus

15

10

15

Czechoslovakia

20

15

30

Czech Republic

10

10

10

Denmark

20

15

20

Egypt

20

20

30

Finland

15

10

20

France

10

15

10/20

Germany

10

10

10

Greece

20

20

30

Hungary

15

15

30

Indonesia

15

10

15

Israel

10

10

10

Italy

20

15

20

Japan

15

15

20

Jordan

10

10

20

Kazakhstan

10

10

10

Kenya

15

15

20

Korea

20

15

15

Kyrgyzstan

10

10

15

Libya

20

20

30

Malaysia

20

20

30

Malta

15

10

15

Mauritius

15

20

15

Mongolia

15

15

15

Morocco

10

10

10

Namibia

10

10

10

Nepal

15

15

15

Netherlands

10

10

10

New Zealand

15

10

10

Norway

15

15

30

Oman

12.5

10

15

Philippines

20

15

15

Poland

15

15

22.5

Portugal

15

10

10

Qatar

10

10

10

Romania

20

15

22.5

Russian Federation

10

10

10

Singapore

15

15

15

South Africa

10

10

10

Spain

15

15

20

Sri Lanka

15

10

10

Sweden

10

10

10

Switzerland

15

15

20

Syria

0

7.5

10

Tanzania

15

12.5

20

Thailand

20

20

15

Trinidad and Tobago

10

10

10

Turkey

15

15

15

Turkmenistan

10

10

10

United Arab Emirates

15

12.5

10

United Kingdom

15

15

15

United States

20

15

15

Uzbekistan

15

15

15

Vietnam

10

10

10

Zambia

15

10

10

Non treaty countries

0

20

20

General Tax Incentives for Industries:

  • 100% deduction of profits and gains for ten years is available in respect of the following:

  • Any enterprise carrying on the business of developing, maintaining and operating infrastructure facilities viz., roads, highways, bridges, airports, ports, rail systems, industrial towns, inland waterways, water supply projects, water treatment systems, irrigation projects, sanitation and sewage projects, solid waste management systems.

  • Undertakings engaged in generation or generation and distribution, transmission or distribution of power, which commence these activities before 31.3.2006.

  • Any company engaged in scientific and industrial research and development activities, approved by the prescribed authority, before 31.3.2003.

  • Any undertaking which develops, operates, maintains an Industrial Park or Special Economic Zone before 31.3.2006.

  • Notified Industrial Undertakings set up in the North Eastern region including seven north-eastern states and the state of Sikkim.

  • Undertakings developing and building housing projects approved by the local authority before 31.3.2001and which are completed before 31.3.2003.

  • 100% deduction for seven years for undertakings producing or refining mineral oil.

  • 100% deduction from income for first five years and 30% (for persons other than companies: 25%) in subsequent five years is available in respect of the following:

  • Company which starts providing telecommunication services whether basic or cellular including radio paging, domestic satellite service, network or trunking, broad band network and internet services before 31.3.2003.

  • Industrial undertakings located in certain specified industrially backward states and districts.

  • Undertakings which begin to operate cold chain facilities for agricultural produce before 31.3.2003.

  • Undertakings engaged in the business of handling, storage, transportation of food grains.

  • 50% deduction for a period of five years is available to undertakings engaged in the business of building, owning and operating multiplex theatres or convention centres constructed before 31.3.2005.

  • Tax exemption of 100% on export profits for ten years upto F.Y. 2009-10, for new industries located in EHTPs and STPs and 100% Export Oriented Units. For units set up in Special Economic Zones (SEZs), 100% deduction of export income for first five years followed by 50% for next two years, even beyond 2009-10.

  • Tax exemption of 100% of Export profits for ten years for new industries located in Integrated Infrastructure Development Centres or Industrial Growth Centres of the North Eastern Region.

  • Deduction of 50% of export profits from the gross total income. The deduction would be restricted to 30% for financial year 2003-04 and no deduction is allowable subsequently.

  • Deduction from the gross total income of 50% of foreign exchange earnings by hotels and tour operators. The deduction would be restricted to 30% for financial year 2003-04 and no deduction is allowable subsequently.

  • 50% deduction of export income due to export of computer software or film software, television software, music software, from the gross total income. The deduction would be restricted to 30% for financial year 2003-04 and no deduction is allowable subsequently.

  • Deduction in respect of certain inter-corporate dividends to the extent of dividend declared.

  • Exemption of any income by way of dividend, interest or long term capital gains of an infrastructure capital fund or an infrastructure capital company from investment made by way of shares or long term finance in any enterprises carrying on the business of developing, maintaining and operating infrastructure facility.

Sales Tax

Central Sales Tax (CST)

CST is 4% on manufactured goods.

Local Sales Tax (LST)

Where a sale takes place within a state, LST would be levied. Such a tax would be governed by the relevant state tax legislation. This is normally up to 15%.

Excise Duty

Excise duty on most commodities ranges between 0 to 16%. Only on seven items duty is imposed at 32%, viz., motor cars, tyres, aerated soft drinks, air conditioners, polyesters filament yarn, pan masala and chewing tobacco. Duty is charged at 30% on petrol with additional excise duty at Rs. 7 per litre. The said rates are subject to exemptions and deductions thereon as may be notified from time to time. Central VAT (CENVAT) is applicable to practically all manufactured goods, so as to avoid cascading effect on duty.

Small Scale Sector is exempted from payment of excise duty from annual production upto Rs.10 million.

Customs Duty

The rates of basic duties vary from 0 to 30%.

Salient features are:

  • Peak customs duty reduced from 220% (in 1991) to 30% (in 2002).
  • The general project import duty (for new projects and substantial expansion of existing projects) reduced from 85% to 25%.

  • Import duty under EPCG Scheme is 5%.

  • R&D imports - 5% customs duty.

  • Export made with imported inputs get concessions in form of duty drawback, duty entitlement pass book scheme and advance licence.
  • Many type of industries such as 100% EOU and units in free trade zone get facility of zero import duty.
  • An Authority for Advance Ruling for foreign investor
Direct Taxes Code (DTC), the Finance Ministry today said its ...

Direct Tax Code 2011, revised direct tax code by finance ministry

Hotcurrentnews.com - ‎Jun 15, 2010‎
The government today released its reviseddiscussion paper on Direct Tax Code (DTC). The first draft tax code wasreleased in August 2009 and received 1600 ...

Direct Tax Code 2011 : direct tax code 2011, revised direct tax code, cbdt ...

Zoom News - ‎Jun 15, 2010‎
The government on Tuesday released a 35-page revised discussion paper on the draft direct tax code, which seeks to replace the 50-year-old Income Tax Act, ...



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http://siadipp.nic.in/publicat/invpub/taxation.htm

Experts' take on direct tax code

17 Jun 2010, 0305 hrs IST,ET Bureau
ET brings to you opinions of renowned experts on implications of the direct tax code for investors in different avenues.

Dinesh Kanabar Deputy CEO & Chairman Tax, KPMG

DTC closes important tax-saving avenue

On Direct Tax Code, the government has done a commendable job in not only simplifying income tax provisions, but also proactively seeking and reacting constructively to public feedback through successive discussion drafts.

From a capital gains perspective, a lot is spoken of its impact on shares and securities, but it is important not to lose sight of capital gains tax impact on 'other' assets.

Under the current tax regime, other assets such as immovable property were classified as long-term capital assets if held for more than three years, whereas under revised DTC a shorter period of one year is prescribed. Thus, all other assets will be entitled to indexation benefits much earlier under DTC.

Due to shift of base year, revised DTC provides capital gains exemption to unrealised gains from 1981 to 2000. While this may be positive news for investors who had purchased investment assets say, immovable property in 1980s, it will definitely impact adversely all other assets purchased post 2000, due to normal tax rate applicable under DTC as against the present reduced tax rate of 20%.

Under the revised DTC, the capital gains savings scheme (which entitled deduction against capital gains arising on sale of any investment asset) is dropped. This has closed out an important tax saving avenue for taxpayers. One hopes that with suitable representation, the government continues with such capital gains savings scheme or introduces other alternative saving schemes to encourage savings and avoid tax hardship to investor.

Kaushik Mukerjee Executive Director, PricewaterhouseCoopers

Good news for home buyers, retail investors

The draft Direct Tax Code (DTC) had envisaged a paradigm shift in the scheme of personal taxation. The focus was on taxation of income without exemptions, at a lower tax rate. The Discussion Paper on the revised DTC deviates from that scheme significantly.

Exempting retirement benefits like provident fund, life insurance products, annuity schemes under the current tax law is proposed to be continued under the revised DTC.

Originally, withdrawal from the retirement benefit schemes was to be taxed. Lumpsum withdrawals on maturity/retirement from life insurance schemes/provident fund would have resulted in taxation at the highest rate.

India does not yet have high-class social security like developed countries. The proposal to exempt the retirement benefits would leave a larger capital base for the retiree and offset the gap to some extent.

The salaried class is one of the most tax-burdened in this country. The original proposal to tax employer's contribution to provident/superannuation funds and valuation of rent free accommodation at market value would have left very little take-home pay for a salaried employee.

The proposal to exempt such contribution and valuing accommodation, possibly, as per current rules should remove the resultant anxiety of the salaried class. Similarly, house owners have reasons to cheer. It was proposed earlier that even vacant property would be taxed on presumptive rental value. There was no rationale for this. This has been done away with.

The deduction for interest on housing loan would help the buyers in the days of rising interest rates. There is good news for retail investors.

Gain on sale of listed shares held for more than one year will be partially exempted through specified deduction, though STT is proposed to be retained. Excluding financial assets from wealth tax should propel longer term investments.

One has to see the fine print to judge the exact implications. Hopefully, tax rates do not go up significantly to offset the benefits.

Shefali Goradia Partner BMR Advisors

FIIs do not have much to cheer about

The DTC proposals regarding change in the tax treatment of capital gains and treaty override had raised huge concerns for the FIIs investing in the Indian capital markets. This had prompted many FIIs to make representations before the government.
http://economictimes.indiatimes.com/personal-finance/tax-savers/tax-news/Experts-take-on-direct-tax-code/articleshow/6056832.cms

Direct Tax Code: Implications for housing, insurance and equities investors

17 Jun 2010, 0149 hrs IST,ET Bureau

At first sight the revised proposals under DTC give an impression that exemptions are back where they were. But a closer look at the details reveals that there is a twist in the tale. While it is a positive for housing, the same holds out a mixed bag for investors in insurance & equities.

The revised discussion paper on DTC has softened the blow on long-term equity investors. The earlier version of the code had proposed a long-term capital gains tax on sale of long-term investments.

If the proposals in the revised draft are implemented, a specified percentage will be deducted from long-term capital gains (instead of factoring in the indexation benefit) before adding the same to the individual's income for computing tax as per the applicable slab rate.

"Compared to the earlier draft, the proposal to deduct a specified percentage from long-term capital gains is a huge relief," says Vaibhav Sankla.

For instance, say you had purchased a stock for Rs 10 in 2000 and the indexed cost of acquisition rose to Rs 20, approximately and you sold the stock for Rs 100 making a gain of Rs 80 (100-20). Under the first draft, the entire Rs 80 will be subject to tax. However, under the revised draft, the long-term capital gain so computed could be just Rs 45, that is, 90 minus 45 (assuming 50% is the specified percentage).

Therefore, the newer version will reduce your tax outgo, since the long-term gain will come down from Rs 80 to Rs 45. If your slab rate is 10%, the effective tax rate on this gain will be 5%, as per the revised draft. The loss from sale of such assets will be scaled down in a similar manner, according to the revised discussion paper.

"My view is that the percentage, which is yet to be specified, could be linked to the slab rate, so as to ensure that those with lower incomes benefit more. On the flipside, securities transaction tax (STT) has been reintroduced, which the first draft had sought to abolish," he says.

Adds Prerana Salaskar-Apte, chartered accountant and certified financial planner: "It is likely that chartered accountants will advise their clients to sell equity assets whenever there is an opportunity to book profits, before the revised code comes into effect from April 1, 2011." At present, there are no taxes on long-term gains from equity.

Another change is that in the new regime, any equity asset that is held for a period of more than one year from the end of the financial year in which it is acquired will be termed a long-term investment while earlier any asset held for more than 12 months was considered long-term.

The revised draft has offered to provide for a transition regime for tax on long-term capital gains. However, the clarity on this count is yet to emerge. This apart, under the revised draft, non-residents will be treated at par with residents for taxation of such capital gains.

Insurance: Work your terms

At first look it appears that existing tax breaks will continue on life products under the revised Direct Tax Code. But a closer reading shows that this is not the case.

In the earlier code, it was proposed to tax maturity benefits of life insurance policies. Revised code reverts to existing exemptions but specifies that these are available only for 'pure' insurance plans. Since no definition is provided for a 'pure' insurance plan there is confusion.

If implemented, the changes in the tax system will be prospective in nature and products that are bought after April 1, 2011, will be subject to the proposed tax system.





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The Politics of Social Exclusion in India

Democracy at the Crossroads

Edited by Harihar Bhattacharyya, Partha Sarkar, Angshuman Kar

Social exclusion and inclusion remain issues of fundamental importance to democracy. Both exclusion and inclusion relate to the access to participation in the public realm, public goods and services for certain groups of people who are minorities, marginalized and deprived. Democratization has led to the inclusion of the previously excluded in the political process. While the problems of exclusion remain even in advanced Western countries in respect of the minorities of sorts, and the underprivileged, the problem of deep-rooted social and cultural exclusions is acute in post-colonial countries, including India. This book analyses social exclusions in India, which remain the most solid challenges to Indian democracy and development. Communal clashes, ethnic riots, political secessionist movements and extremist violence take place almost routinely, and are the outward manifestations of the entrenched culture of social exclusion in India. With its interdisciplinary approach, the book looks at the multidimensional problems of social exclusion and inclusion, providing a critical, comprehensive analysis of the problem and of potential solutions. The authors are experts in the fields of historical sociology, anthropology, political theory, social philosophy, economics and indigenous vernacular literature. Overall, the book offers an innovative theoretical perspective of the long-term issues facing contemporary Indian democracy.
http://www.routledge.com/books/details/9780415553575/

Identity Politics and Social Exclusion in India's North-East: A Critique of
By NAVA KISHOR DAS   
Rated "G" by the Author.
Last edited: Monday, January 25, 2010
Posted: Monday, January 25, 2010


ABSTRACT
This paper deals with the question of identity in relation to the vast deprived ethnic tribes of India's Northeast region, bordering China, Burma and Bhutan. It critically reviews the issue of various brands of identity politics since the colonial days, which created the bases for the exclusion of 'ethnic-groups', resulting in various forms of rifts, often envisaged in binary terms: majority-minority; sons of the soil'-immigrants; local-outsiders; tribal-non-tribal; hills-plains; inter-tribal; and intra-tribal. This paper argues that local people's anxiety for preservation of culture and language, often surfacing as 'narcissist self-awareness', and their demand of autonomy, cannot be seen unilaterally as dysfunctional for a healthy civil society. Their aspirations should be seen rather as prerequisites for distributive justice, to which no nation -state can neglect.

 

Identity Politics and Social Exclusion in India's North-East: A Critique of Nation-Building and Re-distributive Justice BY N.K.Das

 

This paper examines how various brands of identity politics since the colonial days have served to create the basis of exclusion of groups, resulting in various forms of rifts, often envisaged in binary terms: majority-minority; sons of the soil'-immigrants; local-outsiders; tribal-non-tribal; hills-plains; inter-tribal; and intra-tribal. Given the strategic and sensitive border areas, low level of development, immense cultural diversity, and participatory democratic processes, social exclusion has resulted in perceptions of marginalization, deprivation, and identity losses, all adding to the strong basis of brands of separatist movements in the garb of regionalism, sub-nationalism, and ethnic politics, most often verging on extremism and secession. It is argued that local people's anxiety for preservation of culture and language, often appearing as 'narcissist self-awareness', and their demand of autonomy, cannot be seen unilaterally as dysfunctional for a healthy civil society. Their aspirations should be seen rather as prerequisites for distributive justice, to which no nation state can neglect.

 

Northeast India is a politically vital and strategically vulnerable region of India. Surrounded by five countries, it is connected with the rest of India through a narrow, thirty-kilometre corridor. North-East India, then called Assam, is divided into Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. Diversities in terms of Mongoloid ethnic origins, linguistic variation and religious pluralism characterise the region. This ethnic-linguistic-ecological historical heritage characterizes the pervasiveness of the ethnic populations and Tibeto-Burman languages in northeast. North-East mountain ranges and river valleys indeed divide up South- East Asia from South Asia. This predominant tribal region, replete with protracted records of isolation, difficult terrain, and lack of intense inter-ethnic contacts, had witnessed formation of three types of society and polity such as 'tribe', 'chiefdom' and 'state' (Das 1989).

 

The British colonisation process of Assam started in 1826 and ended in 1898. The colonial regime, at the beginning, resorted to the policy of non-intervention in most of then larger Assam. Two administrators J.H. Hutton and N.E.Parry advocated for separation of hill areas from general administrative scheme. In 1873 was introduced "The Inner Line" in hill areas, beyond which no person could pass without a license. Local tribes-people resisted colonial interference in their midst, and thus they often attacked the British. Their resistances were depicted as 'raids' and 'uprisings' (Das 1989, 1993:28).  In the long history of this region the feelings of in-group-out-group, perceived marginalisation, and 'minority-consciousness' have variously surfaced as key factors causing ethnic unrest. Depending on varied influences of marginality and ethnicity some movements remained more explicit and specific than others, in articulating and defining their objectives. Strategies of operation correspondingly varied. Ethnic conflicts in northeast originally grew essentially through primordial affiliations. The distinctive ethnicity factor amongst communities led to steady expansion of aggressive binary categories of in-group and out-group (Das 1989, 1994, 2004, 2007).

 

 

Language has always been in the centre-stage of ethnic turmoil in northeast. The Bodo Sahitya Sabha (established in 1952) and PTCA however ultimately succeeded in making the Bodo language the medium of instruction (up to the secondary level). In doing so the Bodo-leaders opted for the Roman script - though they were ultimately convinced to accept the Devanagari script. The Mishing Agom Kebang (Mishing Sahitya Sabha) formed in 1972 and several other Missing organizations had also worked consistently and succeeded in 1987 to introduce Mishing language as a subject of study in primary schools. The rejection of the Assamese script by the Miris, the Bodos and others dismayed the Assamese, who thought, without their tribal counterparts they may become minority, overwhelmed by the Bengali - speaking population (Miri 1993: 71). The Ahom, Meitei, Zeliangrong, Seng Khasi, and Zomi communities had all felt threatened by the near extinction of their original language and religion (Das and Gupta 1982, Das 1989:). In Manipur Valley the Meitei revivalist leaders (before the formal inclusion of Manipur-Meitei in the Eighth schedule to the Constitution), had demanded that the Manipuri language be named "Meeteilon'. The Zeliangrong movement grew as a religious-cultural movement, originally against the spread of Christianity, but it assumed an anti –colonial political overtone. It actually came out to be the only tribal movement of north east which maintained links with the national freedom struggle (Das 1989). The Zeliangrong People's conference (ZPC), demanded the recognition of ethnic nomenclature 'Zeliangrong', an acronym ( Ze-Liang- - Rong), who are spread in contiguous areas of Manipur, Nagaland and Assam.

 

On the eve of Independence of India, several ethnic groups had variously made effective use of the factors of ethnicity and regionalism as basis of ethnic rage, and democratic struggle for self-rule, greater autonomy and militant actions. Other factors such as frontier location, development process, rise of Christianity and democratic process, partition of country, influx of 'infiltrators' and minority syndrome variously led to claims of separatism among the communities. The more assertive tribes who consistently rebelled against their incorporation within the new Indian nation-state such as the Nagas and Mizos ultimately succeeded in attaining status of 'statehood' and greater autonomy. Thereby they also succeeded in changing their minority status to that of a majority status in respective hilly states. Even after the formation of Nagaland, however, the Naga movement had not died, as A.Z Phizo, who had originally given the call for a ' long Naga struggle' in 1953, continued to occupy centre-stage later also (Das 1982, 1994, 2004, 2007). The Naga movement, in which both 'ethnicity' and 'extreme nationalism' were used as operational strategies, is regarded as the mother of all movements in northeast India. The origin of ethnicity among the Nagas may be traced first in the formation of a Naga Club in 1918, which consisted of the Naga headmen and members of English educated Naga middle class (Das 1982).

 

From the 1980's onwards, virtually the entire Northeast was plagued by various ethnic movements. Most of the movements were non-violent in earlier stages, but gradually assumed severe militant nature. In the seven states of the Northeast India reportedly more than 30 'insurgent' groups operated, carrying on protracted armed-struggle. Among them the National Socialist Council of Nagaland (NSCN -IM, NSCN-K) and the United Liberation Front of Asom (ULFA) remained prominent ones. Even though some scholars have tried to apply typology of class – formation to describe the ethnic conflict in the region, it may be argued that there are innumerable ethnic – regional factors buttressed by typical tribal features, which seem to influence the escalation of unrest.

 

It is amazing to note that at one point, more than 120 militant groups operated in India's northeast. Their demands ranged from autonomy to outright secession. In recent years, the Indian state has had considerable success in achieving stability in the region, using tactics from negotiations to military operations to root out militants. Militant outfits also used various tactics. They even joined hands as early as 1989 forming the Indo-Burmese Revolutionary Front (IBRF), which consisted of NSCN, ULFA, KNF (from India) and Chin National Front (Myanmar). The influence of IBRF diminished gradually. Until recently, the NSCN (IM), NSCN (K), Bodo Security Force (BSF), National Democratic Front of Bodoland (NDFB), United Liberation Front of Assam (ULFA) and Kamtapur Liberation Organisation (KLO) remained the most forceful and assertive groups. In the meantime quite a few Muslim extremist outfits too became active in the region (Das 1994). In the Manipur Hills, the most powerful defiant groups, besides the NSCN, are UNLF- (Meghen), PLA, KNO, KNF, KNA, KDF and KFC. The Kuki-Naga conflict rocked the state of Manipur in the mid-nineties. When the Naga claim of "proprietorship" over the vast hilly region of Manipur was endangered by demands for a 'Kuki Homeland', the NSCN quickly asserted its dominion. The Kuki Impi and the Zomi Council had worked tirelessly to bring about a permanent settlement. In Mizoram areas, the Reangs came to form Bru National Liberation Front whose leaders held talks with the Mizo Chief Minister. The population of displaced Reangs rose to 40,000 in camps in Tripura. The Mizos were specially perturbed when the Bru National union, formed in 1994 to protect the rights and privileges of the Reang minorities called for Autonomous District Council under the Sixth schedule of constitution. What gives strength to the demand of the Reangs (Brus) is their position as the second largest ethnic group in Mizoram. Both in pre-Independence and post-Independence eras, Tripura witnessed regular inflow of emigrants, and land alienation of tribals was rampant. The tribespeople thus became a minority in their own homeland. Tripura National Volunteers therefore did not target the state, but it opposed a community. In this respect, Bhaumik, says, "The TNV's anti-Bengali violence created a general climate of ethnic hatred, which were sharpened by large-scale alienation of the tribal lands and actual marginalization in jobs, professions and politics (1996). Prior to TNV, the Seng-krak (Clenched Fist) surfaced as a tribal insurgent group in 1967. It maintained close links with the Mizo National Front (MNF). Tribal leaders of Tripura, right from 1974, voiced demands of reservation, restoration of tribal land, and specially the restoration of native Kok-Borok as one of the official languages, and lastly the Autonomous District Council. The language and script issue, which engulfed Tripura for a long time, has hardly been addressed in right earnest.

 

There is a long history of incursion of outsiders, emigration and resettlement in Assam. One can see this broadly in four spheres; tea plantation related manual labour, Bengali Muslim emigration (mostly occupying agriculture), Hindu Bengali migration (mostly occupying service sector), and Marwari migration in trading sector. Bangladesh war resulted in over 10, 00,000 'refugees' taking shelter, who never returned. Modern Bangladeshi "infiltration" is however said to be a more severe phenomenon. It was alleged that Bangladesh Char area dialects spoken by the migrant Muslims, were declared as Assamese dialect to the census enumerators. Politicians too encouraged the Bangladeshi Muslims and other minorities into Assam, giving voting rights. This was a narrow exercise in electoral politics (Dixit 1998, 2003). This last wave of illegal- exodus from Bangladesh is a more dangerous phenomenon, as some among these infiltrators got involved in terrorist activities in parts of urban India. It is said fear within the native Assamese community of being overwhelmed by the unabated influx of illegal Bangladeshi migrants from across the porous border triggered off the long- drawn "Anti-Foreigner mass uprising -1979 - 1985", spearheaded by the All Assam Students' Union (AASU). It ended by arriving at an agreement, Assam Accord- 15 August 1985. The Accord fixed 25 March 1971 as the cut-off date for detection and expulsion of the illegal foreign migrants.  The Assam movement was led by AASU.  All Assam Gana Sangram Parishad- AAGSP, which was umbrella organization of several outfits, including Asom Sahitya Sabha, emerged as the political forum the AASU.

 

After its partitions, Assam was left with 23 tribes, comprising of 14 hill tribes of Karbi Anglong and North Cachar Hills; and nine plains tribes inhabiting the plains of the Brahmaputra Valley. Seeing development in the hills, some tribes became conscious to develop their sub-regions. Some tribes who had earlier launched movements rushed to renew their agitations. Thus the Ahom renewed the demand for the re- scheduling their scheduled tribe status. In order to push forward demand of a separate Ahom State, the 'Tai-Ahom Land Committee" was formed, by merging old organisations. In 1995 the Ahoms placed a 17-point charter of demands. Showing his concern for the Ahoms , the then Ahom Chief Minister of Assam, Hiteshwar Saikia, highlighted the unique cultural heritage of the Ahom people. The Karbis, have been conscious about their minority status vis-à-vis the majority - Assamese.

 

The Bodo movement is the longest social movement in the plains of Assam. The first two phases of the Bodo movement were concerned with social reforms (1947 – 1967) and consolidation of the Bodo identity vis-à-vis the Assamese community (1967 – 1987). Earlier phase of the Brahma movement (1907 onwards) was a short-lived 'Sanskritization movement' led by the Mech-Bodos. After second phase of mass protests, there was a Bodo Accord signed in February 1993 that had led to the creation of a Bodoland Autonomous Council (BAC). The BAC was a non-starter, as the territorial boundary issue remained unresolved. The movement for maximum autonomy by the Bodos, succeeded ultimately in securing a new politico-administrative structure within the existing State of Assam following a memorandum of understanding with the Government of India on 10 February, 2003. The Bodo-majority areas have now come under the new Bodoland Territorial Council (BTC), an elective body. The BTC Accord is seen as a fulfilment of the sub-national aspirations of the Bodos of Assam. Under the BTC understanding, the Government of India provides financial assistance of Rs 100 crores per annum for 5 years for projects to develop the socio-economic infrastructure.

 

The Naga peace initiative has a long tradition. Diverse perceptions surrounded the earlier 19-point Agreement of 1960 and the Shillong Accord of 1975. In recent times the Naga Hoho convened a series of meetings of Church leaders and NGOs from all Naga areas culminating in a call for "journey of conscience" to seek reconciliation and to rebuild the Naga society. A Declaration was adopted in 2001 to pursue the cause of peace. Since 1998-99 peace parleys particularly with the NSCN (IM) has been generally successful. The NSCN (IM) has been demanding a homeland for all Nagas living in North East, which will be called 'Nagalim'.

 

Ethnic unrest in northeast is as old as the country's independence. The Indian independence along with the partition, influx of émigrés, suspected fear of linguistic –cultural subjugation, economic negligence, and failure to value approaching political institutions variously infused in the minds of the ethnic communities a 'sense of narcissistic self-awareness'. The spectre of social exclusion, minority-syndrome and ethnic rivalry remained the driving force for protests demanding autonomy in the shape of homeland/state/ or autonomous district council, within constitutional framework. Some of the movements followed the violent paths. While the former opted for constitutional path, the later sought an extra-constitutional / secessionist ideational path. Ever increasing evidences, however, now indicate that most of the militant outfits in North-East have now transformed themselves into terrorist entities, empty of their original objectives and ideology. For example, U.L.F.A. in Assam, since 1990s, has repudiated its earlier anti-Bangladeshi position. Vested interest and quarrel over interests led militant groups to clash among themselves. It will be incorrect to attach terrorist label to N.S.C.N., but the media reports suggest that most fatalities in Nagaland are the result of the infighting between the two factions of the N.S.C.N., rather than from government forces. Despite several successful peace initiatives, the security force operations are in place by utilizing the army, state police forces and the paramilitary forces to contain militancy.


 Poor governance has been a major problem in the region. Wasbir Hussain says the region is caught in a vicious cycle of lack of economic development and then militancy and the resultant violence further retard economic growth. Under the circumstances, it is natural to find the people of the region harbouring a sense of alienation from the Indian mainstream and feel neglected. We have noted above how the state of Assam is under siege with the aspirations of different communities and groups showing no signs of a decline despite attempts at devolution of power to the grassroots level. B. P. Routray of the Institute for Conflict Management, has rightly observed that 'this is primarily a governance issue. Poor governance is the main trigger factor for ethnic groups clamouring for autonomy. Such demands from newer groups are here to stay.'  Special provisions for self-governance and autonomy are provided for people of North East within the Constitution of India, particularly through such Acts as the Sixth Schedule, NEC and Department of North Eastern Region (DONER). The DONER and the North-Eastern Council, under the central control need more effectively to tackle the problems of unemployment, underemployment, and economic backwardness of the region. Let the people's representatives monitor the activities of these institutions. The DONER has an annual budget of Rs.550 crores. The NEC has another Rs.500 crores earmarked for the region. These are apart from the enormous amount of funding available to the States through different central schemes, one-time packages announced by successive Prime Ministers, 'Peace Packages' provided to States like Nagaland and Mizoram, grants by international development agencies like the World Bank, and the Asian Development Bank (ADB), which in 2003 approved a master project of Rs.2, 000 crores for the Northeast. These institutional arrangements and provisions need to be appropriately regulated to assuage ethnic misgivings. In more recent years the peace initiatives, such as the bilateral cease- fire, and the peace talks held between militant leaders and government representatives, symbolize the determination of the Nation-state to resort to a broad -spectrum consensus on vital issues by adhering to flexibility and extendibility. These are basic foundations aimed at the national- consolidation, which should be strengthened. Peace, development and proper linkages are bound together and are intrinsic to harmony in the region. Gradually the region has increasingly witnessed not only naturalisation of electoral politics, but also slow adaptation of national political parties.

 

Resurgence of ethnic identity and persistence of ethnicised politics does not indicate repudiation of the political state. Their concern for variously perceived threats to their distinct ethnic identities and their anxiety for preservation of culture and language and their demand of autonomy can not be seen as dysfunctional for a healthy civil society. Their aspirations should be seen rather as prerequisites for distributive justice, to which no nation state can neglect. Indian path of institutional adjustments aimed at wining over and changing the opinion of hostile ethnic groups and extending special safeguards to hill States have helped solve ethnic problems to a great extent. These need to be endured.

 

 

 

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Mainstream, Vol XLVI, No 19

Cultural Heterogeneity and Exclusion in India

Vivek Kumar

For some politicians it is difficult to understand India's diversity and appreciate it too. The lesson taught in our school days that there exists 'unity in diversity' in Indian society is taught even today in our schools and colleges. Although the slogan emerged at a particular point in time yet it is as relevant as it used to be in the past. However, very few know the basis of this 'unity of diversity' contained in this slogan, which was coined by British historian Vincent Smith and later on popularised by our first Prime Minister, Jawaharlal Nehru. The basis of unity is unique because it did not emerge out of similarity. Unity in this slogan does not mean uniformity. This unity is organic in nature, because this emerges from differences. Very much like the unity of different organs of the human body. As in an organism, although the organs of the body are different in their shape, size and function yet they contribute to the maintenance of the body; similarly in Indian society, there are so many social groups which are of different shape, size and perform different functions but they all contribute to the main-tenance of the Indian society.

Each group has contributed in its own capacity since time immemorial to running the country's economy, polity and society. For instance, a very small religious group like the Parsis has contributed in a significant way to the development of the country's economy and science and technology. This helped India to maintain its scientific capability. Who can forget the labour of the Sikhs of Punjab for producing tonnes to wheat to feed the country, of course with the help of the migrant Bihar and Uttar Pradeshi labour. The Dalits and tribals have contributed their labour, acting as landless agricultural and industrial labourers, in running the economy and polity of this country. Moreover, what is known as Indian art and culture today comprises Buddhist, Jain, Mughal and British architecture as well as Madhubani and tribal paintings. Can we forget the role of Abdul Rahim Khan-e-Khana and Raskhan in popularising the Hindi language? If Pandit Bhimsen Joshi, Pandit Jasraj have enriched the Indian classical singing the Dagar Brothers popularised the Dhrupad style of singing which starts with Sanskrit shlokas. The jugalbandi of Ustad Bismillha Khan's shehnai and tabla of Ustad Zakir Hussain take Indian music to different heights. This list can be unending but I think these examples are enough to make the point that it is the collective effort of Indians which runs the country.

HOWEVER, diversity is the reality of Indian society. But what we have to understand is that no one community has deliberately created this diversity. Rather, it is natural in nature. The Indian diversity has evolved through eight interrelarted and interconnected epochs. If we take the Indus valley civilisation as the starting point, then the first epoch of the Indian society starts with the advent of the Aryans, which created a hierarchical social order and hence the diversity. The second epoch comprises Jain and Buddhist revolutions. The advent of Islam both through Sufism, that is, through peaceful means, and the 'kings' conquests' is the fourth epoch. The coming of the Europeans, the British victory and the establishment of colonial rule mark the beginning of the fifth epoch in making India more diverse culturally and religion-wise. The trauma of partition of the country the transfer of huge populations on both sides of the artificial but political borders is the sixth epoch of Indian history. The commencement of our democratic Constitution along with the process of modernisation, which included the establishment of big industries and dams, can be termed as the seventh epoch in the making of India as we see it today. This epoch is significant because after centuries Indians got the identity of free citizenship. The different identities of region, religion, caste, etc. became subservient to this identity of the citizen, at least in the spheres of constitutional rights and state run programmes and policies. The eighth epoch in the making of contemporary India started with the process globalisation along with its sub-processes of liberalisation, privatisation and information revolution.

In turn these aforementioned epochs have given birth to diversities of different types. That is why people of all major religions of the world—Hinduism, Islam, Christianity, Sikhism, Buddhism, Jainism, Zoroastrianism, Bahai live in India. Along with these religious groups there are a number of sects and cults and other divisions in all the religions found in India. It is interesting to note all the religions are internally differentiated. Further, according to B.S. Guha's classification, people of six racial stocks live in India. However, linguist Grierson reported 179 languages and 544 dialects in India. However, according to the 1971 census there were 1652 languages spoken as mother tongue. Knowing fully well this linguistic diversity the framers of the Indian Constitution gave certain languages a co-national status. The Constitution of India now recognises 22 languages, spoken in different parts the country, namely, Assamese, Bengali, Bodo, Dogri, Gujarati, Hindi, Kannada, Kashmiri, Konkani, Maithili, Malayalam, Meitei, Marathi, Nepali, Oriya, Punjabi, Sanskrit, Santhali, Sindhi, Tamil, Telugu and Urdu. The intellectuals always play down the caste system as if it shows them the mirror of their so-called tolerant society. However, the reality is that Indian diversity becomes more acute because of the presence of approximately 6000 castes in it. The Mandal Commission alone listed 3743 castes plus there are 1000 Scheduled Castes well. If we add to these castes, sub-castes and sub-sub-castes, it is very difficult to comprehend this diversity. Although intellectuals keep on downplaying the existence of caste in society, stressing on the difference between caste assertion and caste in Indian politics, there is 'caste in Indian politics', 'politics of caste' and caste-ism writ large in Indian society.

THE most worrisome aspect of this diversity in Indian society is that it is accompanied by exclusion as well. Although this exclusion because of different diversities is part and parcel of Indian society, it is not discussed among the masses in general and in classrooms in particular. We are told on and off about the unity in diversity but rarely are we told abot the hegemony in diversity. If we analyse the nature of the exclusions in Indian society we will find its different forms with different basis. There is exclusion on the basis of cultural heterogeneity. In this type of exclusion groups are excluded because they differ on the basis cultural diversities even though they belong to same country and religion. The cultural region becomes very important in this type of exclusion. But the positive aspect of this type of exclusions is that it is always temporary in nature. That is, it passes out quickly and is never successful in driving out the people en masse from the host society. The latest outburst of a politically naïve leader against the North Indians in Mumbai is one of the recent examples of such exclusion. We can observe ourselves that although the people from UP and Bihar are Indians and a majority of them belong to the same religious group, they are not welcome in the alien culture. However, it is certain that this politics of hate against North Indians will not last long and will die its own death. Nobody would have taken note of it had the media not aired it continually for several days. One can recall the Shiv Sena's example. It came to power on the plank 'Mumbai for Marathis' but soon its leadership added religious exclusion, which has a different basis. The leadership took a plank of the 'Hindu Hriday Samrat' for mobilisation and consolidation. Similarly, the allergy of the Dravidian parties in South India against Hindi did not last long as well. Both the Dravidian parties aligned with a party which swears in the name of Hindi and Hindutva.

In comparison to exclusion based on cultural heterogeneity the exclusion on the bases of gender, that is, between men and women, hierarchy and externality are more dangerous. Fifty per cent of the Indian population had been excluded because of gender only. Female foeticide is the latest form of eclusion. Further, around a quarter of the Indian population is excluded in Indian society on the basis of hierarchy, that is, on the basis of their caste. Here, especially in the case of ex-untouchables or Dalits, who are considered a part of the Hindu religion and belong to the same country, they are excluded from the main part of the village, certain occupations and day-to-day life interaction. They are now excluded from modern institutions like education, judiciary, bureaucracy, market and media. Another form of exclusion, which occurs in Indian society, is because certain people follow certain religious faiths which have a foreign origin. The exclusion of Muslims and Christians is the most glaring example. Even though they have been living here for generations and contribute with their labour in the process of nation-building, they are often told to got out of this country as they do not belong to this land. These types of exclusions are more permanent and harmful in nature. Their permanence is evident from the fact that in spite of a number of movements and campaigns since time immemorial they continue to survive and persist in society. Therefore, while celebrating diversity we should be more concerned about the exclusions based on gender, religion, caste and tribe. One should not worry too much about the exclusions emerging out of cultural heterogeneity. On the other hand the media should boycott such attempts of power hungry people creating hype to heighten the exclusions. The TV channels should be aware of the fact that, after all, India has survived all these years only celebrating its diversity and whosoever has tried to undermine this diversity for homogenisation has become history in due course of time.

The author is an Assistant Professor of Sociology, School of Social Sciences, Jawaharlal Nehru University, New Delhi.

http://www.mainstreamweekly.net/article661.html

Report of the Consultation on

Law, Caste and Communalism: Towards Evolving an Agenda for the Centre for the Study of Caste Communalism and Law, NLSIU

Introduction

The Centre for the Study of Caste Communalism and Law (CSCCL) was formally established in the NLSIU in May 2002. The primary objective of the CSCCL is to develop and contribute to the expansion of socio-legal research and critically informed jurisprudence in the area of caste and communalism. Following the early institutional phase, during which it focused largely on two research projects for the Ministry of Social Justice and Empowerment, Government of India, the CSCCL is now looking to significantly expand its scope of work. In this context it was felt necessary to convene a consultation of a range of experts in the field of law, caste and communalism to enable the CSCCL to both take stock of extant nature of work in this area as well as develop an informed agenda for itself.

The consultation on Law, Caste and Communalism: Towards Evolving an Agenda for CSCCL, was held at the NLSIU, Bangalore on the 17th and 18th December 2006. The consultation saw the participation of nearly 50 renowned academics, political commentators and activists, lawyers, jurists, journalists etc. The two day consultation provided a fertile ground for rich discussion and debate on a whole gamut of issues. This report attempts to succinctly capture the key issues emerging from the two day deliberation. The report has been crafted from the view point of highlighting the questions, issues and challenges that the consultation threw up in terms of the possible future direction of the work of the CSCCL and is best read in that context. Given that the consultation focused primarily on caste (it is proposed to have a more detailed discussion on communalism at a later point in time) the report discusses issues pertaining to caste far more extensively than communalism.     

1. Socio-legal Research on Caste: Issues and Challenges

1.1 Socio-legal Theorizing of Caste

The approaches to research on caste in the social sciences may be bracketed in two broad ways, the first being the Book View of caste. This approach focuses largely on theorizing caste and unpacking concepts such as varna , jati , caste etc. This approach is also characterized by its view of caste as social theory. Notable exponents of this approach include Ambedkar, Ghurye, Srinivas, Dumont etc. The second approach is what may be termed as a Field View of caste. This approach to caste may be characterized as one that that privileges the study of caste as a system and castes as groups. This approach has actively engaged with issues such as hierarchy, exploitation, and mobilization and has also been influenced by Constitutional discourses on inequality and emancipation. The two approaches are of course not mutually exclusive but are perhaps distinct only in so far as their starting points are concerned.

Some important further explorations that may be considered to be of immediate relevance include:

a) enhancing the use of employing diachronic approaches to the study of caste

b) deeper studies of the caste system amongst non-Hindus and its impacts and consequences

c) caste amongst Indian diasporas

An integral part of the challenge of engaging with research on caste is the question of bracketing specific knowledge complexes as social science. It is vital to go beyond social science readings of caste to understand how caste has figured, been engaged with and interrogated in other texts especially those from cinema, literature as well as official documents (statutory, policy and related texts).

Caste is best understood as a supra-enumerative concept, a set of inner determinants that position individuals and social groups alike. However the question of whether indeed these �positions' constitute a system has been a question that has been one of the many questions that has animated social science research recently. The systemic nature of caste draws upon its key organizing principles like �graded inequality', �hierarchy', and �purity and pollution'.

On the other hand the castes have also been read as discrete social groups not necessarily part of a larger system. In this view castes are more akin to communities, or at least would be so in certain contexts. The caste as community view tends to see caste as a shared cementing and segmenting identity in two distinct but inter-connected ways. Firstly, caste provides a platform, i.e. a shared identity that is a ready-made resource for social, political bargaining. Secondly it has been argued that the segmenting nature of caste has actually been instrumental in halting or impeded the ability of hegemonic discourses such as Hindutva from completely overrunning Indian society.

In addition to the gamut of issues above there is a wide spectrum of relational issues relevant to socio-legal theorizing of caste, these include caste and its relationship with gender, class, religion, ideology, power and rights. Also of great relevance are other knowledge power complexes such as brahmanism, dominance and casteism.

It is possible to construe of casteism as a socially disapproved category. However �ism' in this sense is better understood, particularly in the context of this discussion, as referring to knowledge production or forms of knowledge and/or making meaning of social realities rather than specific traits or characteristics. In this context how would socio-legal research on caste engage with the historic and even heroic meaning making endeavours of the dalit movement in India, sometimes characterized as both �old' and �new'? Further, how can such research account for the central historical conflict in �Indian' society between Hinduism and Buddhism. The last issue of course raises the critical question of whether discourses of development and/or empowerment of SCs/STs is frequently framed with the framework of the broader Hindu religio-socio-cultural complex, despite warnings against this by intellectuals like Ambedkar.

1.2 Socio-Legal Knowledge and Caste

The idea of socio-legal research could be characterized as socially constructed knowledge that is used for legal or statutory purposes. On the hand this feeds into jurisprudence and on the other into policy and/or broader public (governmental and civil society) concerns. The primary notion of jurisprudence is in the sense of accumulation of knowledge within the legal system as a whole, not just the Judges. The political and legal system draw legitimacy from the Constitution, but the social system, based as it is on caste, actually is at odds with the values and social vision espoused by the Constitution. However it is within this social system that the judicial/legal system operates. This raises the question, on the one hand of the social character of the judiciary and on the other hand, of the character of knowledge that is accumulated within the legal system as a whole. Is there a jurisprudence of casteism and communalism just as there is for instance, a jurisprudence of equality.

1.3 Caste and the Rule and Role of Law

Are caste and the rule of law, in so far as it is a narrative of the powerful, antithetical to each other, especially when it comes to responding effectively to issues of untouchability and other forms of caste based discrimination. With a conviction rate of less than 1 per cent and hardly any systematic effort at developing the institutional mechanisms needed for its effective implementation is the SC/ST Prevention of Atrocities Act a dead letter. More generally speaking to what extent are legal remedies and the legal system as whole meaningful in the context of caste discrimination. How substantively distinct in character are modern legal texts from the Manudharmashahtra. What could be the nature of socio-legal research endeavours that seek to �de-brahminise' law.

An important question that arises in this context is the role of law and that of social mobilization and popular education. The law, it has to be recognized, can at best provide for rights and mechanisms to deal with discriminatory practices but the basis of discrimination, which is really the wider social acceptance of caste cannot be dealt with law. Building a new consensus around the need to annihilate caste is an agenda for social mobilization based on popular education both in formal and non-formal spaces.  There is also a need to develop and sustain a more discerning and sophisticated critique of law and the legal system as a whole for, notwithstanding its myriad limitations, the law and jurisprudence in particular, still needs to be retained as a legitimate site of struggle.

1.4 Untouchability and Humiliation

Untouchability remains an extremely important agenda for socio-legal research. The legal and specifically judicial discourses have also failed to distinguish between caste and untouchability. In this direction, work on the ontological nature of untouchability and of other forms of humiliation in the context of a field view of caste assumes great importance. For instance it is clear that untouchability lives on even after physical/clinical death. There is therefore a need for articulation of Constitutional discourses of �touch', the �body' and by extension, even �space' and also perhaps socio-legal discourses of humiliation. This is critical in terms of �dismantling segregation' agenda, especially a critical reassessment of and examination of social distance and spatial segregation in both the rural and urban contexts. Any meaningful research into caste and law must engage with the question of the challenges to democratizing �touch' and �space'.

1.5 Law, Social Opportunity and Economic Development

As the work of Navsarjan and several other civil society organizations as well as trends in electoral politics show, the economic and social rights agenda of dalit liberation are critical. This research and action agenda assumes even greater importance in the context of economic globalization and the intense competition for resources as well as the erosion of the welfare state. Socio-legal research cannot ignore the question of access to land and productive resources/assets, social opportunities and capabilities such as health and education.

In addition to productive resources and assets is the question of access to public resources. The relatively low impact of a plethora of special plans and schemes is as much due to paltry budget allocations that seldom match the lofty rhetoric of policy as much as it is due to a whole host of implementation bottlenecks, many of them structural in nature, that impede and indeed even resist the genuine participation of those for whom it is meant. In this context the question of how to hold the state as well as civil society actors accountable to deliver on promised entitlements is crucially important. Building on the considerable body of theoretical knowledge and practice in this area socio-legal research should attempt to map accountability relationships, in a wide range of contexts including and especially development planning and practice that can enable a more effective understanding of these relationships and eventually their transformation.

It is also clear however that access to social opportunities and economic development is also a function of political processes, mobilization and action. The first of a series of questions that arises in this regard is that of what constitutes caste and in particular dalit identity in the context of the competition for resources. And in this context arises the question of how the law frames obligations, both of state and non-state actors, a point that assumes particular importance in the context of the demand for reservations in the private sector, for instance. The importance therefore of a thorough systems analysis that maps social and political relationships on the legal terrain would constitute a critical component of socio-legal research and enquiry into caste and socio-economic development.

1.6 Diversity and Representation

Social opportunities and issues of representation are inextricably linked. Apart from the judiciary institutions of higher education (universities etc) continue to be marked by severe under representation of SCs and STs , this despite affirmative action in the form of reservation. It is important to qualify however that this under representation peaks as one travels up the organizational hierarchy. For instance while reservation quotas may be filled or close to being filled at the Class IV level the gap increase sharply at the higher classes. Similarly in Universities while SCs and Sts may be found in some substantial numbers among non-teaching service staff, the gap is substantial at higher levels, especially in the Faculty positions. It is in this discursive context that socio-legal research needs to engage with caste in and of the courts. The question of inadequate representation of Dalits within the judiciary and recent judicial decisions that seek to limit the remit of reservations, especially the 50 per cent ceiling and the creamy layer criterion, need critical examination.

The question of under and even non-representation dogs civil society organizations, even those espousing the cause of dalit liberation and caste annihilation are found lacking and even unwilling to invest in diversity, especially in their leadership bodies/positions. While statutory obligations of diversity and representation may not invite the widest consensus, there is more than enough evidence to suggest that it can have a substantial positive impact. In the context of a highly diverse and fragmented socio-cultural environment any statutory or policy prescriptions or for that voluntary codes on diversity would need to be informed by substantive empirical and theoretical work that advances a thick understanding of diversity, with the caveat that visibility is a necessary but not sufficient condition for environment. And would this provide perhaps the necessary theoretical and empirical fertility needed to precipitate an epistemological shift in understanding, articulating and perhaps even advancing reservations.

1.7 Institutionalizing and (Re)Positioning Socio-Legal Research on Caste

In addition to the above there were at least three specific questions that the consultation gave rise that are relevant to developing the institutional agenda and positioning of the CSCCL. These are:

  • It is but a truism to say that it is vital that knowledge production and decision making are interfaced so as to enable informed and well considered decisions. However in practice the hiatus is there for all to see, with the State and even civil society actors/institutions starting with the wrong premises, and mistaken notions and faulty assumptions defeating the best of intentions and policies. What therefore would constitute the best strategies for developing an effective interface and mechanism to ensure that research is relevant to, feeds into and informs, in particular, state interventions and responses on the diverse questions/issues related to caste.
  • The fragmentation in civil society is in some senses both a cause and symptom of the ideological confusion and crisis. There is an urgent need today for facilitating and threading together diverse streams of though and action that characterize �the' anti-caste social movements. It is only from this will a clearer picture of the issues dogging both theory and practice of caste, and its annihilation, emerge. What processes of knowledge production and generation can facilitate such a threading together and influence a greater and a more diverse people into coming together.
  • The criticality of engaging with the particular, for instance responding to specific and egregious instances of violations, cannot be exaggerated, just as the �problem-oriented' research is critical. However at the same it is vital that all such specific and contextualized knowledge production initiatives lead to a theorizing of the particular thus contributing to the development of a wider body of knowledge. It is vital that a balance therefore be struck between the need for problem-oriented and area/discipline-oriented research. 

2. Socio-legal Research on Communalism: Issues and Challenges

Communalism has occupied a significant space in the social science imagination since about 1920's at least. Research on communalism has been built primarily around three axes: religion, nationalism and communities/identities. The rise of cultural nationalism and religion based separatism and its violent manifestation provided the early thrust to the engagement with communalism.

The considerably large body of work dedicated to riot anatomies and structures of communal identity has drawn attention to the urgent need to consider a wide range of issues relevant to socio-legal research. The first and most obvious question it throws up in this regard has to do with the focus of such research. Even while acknowledging that in post-colonial India nationalism has been displaced by secularism as the �other' of communalism it is important to guard against an over-emphasis on religion. If communalism is understood as the mobilization of religious identities for political ends does religion only have an instrumental value as far as communalism is concerned. 

In this context it is critical that socio-legal research on communalism steer clear of adopting an unproblematic and unsophisticated view of Muslims, one of the major problems that have dogged the theorizing of communalism in India . The framing of categories such as �Indian Muslims', �India's Muslim community' etc. have often tended to obscure and erase the complex and diverse nature of social, cultural, political, economic and even religious differentiation that exists amongst the large Muslim populace in India. Juridical and legal discourses need to be critical reassessed in terms of their construction and deployment of a Muslim identity.

In the recent past work on communalism has also been situated within the context of institutionalized mechanisms of violence on the one hand and institutionalized mechanisms of peace building.  A crucial agenda for socio-legal research concerned with communalism in this context is of course the communally adjusted perspective of criminality, law and order. The now well documented but systemically ignored fact of communal bias in law enforcement, which reached unprecedented and even genocidal proportions in Gujarat , needs to be of central concern.

To the extent that it fundamentally distorts fundamental Constitutional guarantees, law (such as those pertaining to conversion and �terrorism') and law enforcement has actually given rise to communally adjusted discourses of citizenship and criminalization of minority, particularly Muslim, identity, all of which warrant urgent unraveling and interrogation. This necessarily implies that such a socio-legal research endeavour will also have to map the contours of nationalism onto the field of law and jurisprudence in general and the �everyday' functioning of the Indian legal system in particular.

The conjunction of caste and religion and casteism and communalism, particularly post-Gujarat, presents a compelling challenge to a socio-legal research agenda on communalism. One critical dimension of this is the entire complex of issues related to issues of protective discrimination or affirmative action in favour of dalit who have renounced Hinduism. The expansion of the Constitutional discourse in this regard to cover Buddhist, Sikh and Jain converts but exclude Muslim and Christian converts is a burning political and near future perhaps will be a judicial issue.

http://www.nls.ac.in/csse/

The Reality of Mass Poverty and Social Exclusion: "How is India?"


Global Research, April 25, 2009

"How is India?" asked an erudite friend of mine from North America soon after I reached India last December.

How indeed? I write this piece this week as India goes to the polls: a mammoth process involving 714 million voters is about to unfold over the next one month. The polity looks fractured as never before. Each state – and India has 35 of them – has its own political dynamic shaped by a complex gamut of regional political parties. Relentless opportunism and political ambition, bolstered often by massive private wealth appears to have given rise to a multiplicity of candidates and parties who are able to cull a platform sometimes out of thin air, or even worse, by fuelling caste or ethnic conflict or abusing divisive 'local' issues. So deep is the fracture this time, that it looks like 543 discrete elections are being held for the 543 parliamentary seats. No party is able to shape or capture the national imagination, as it were.

Underneath this fractured polity, lies of course, a deeply exclusionary and unequal material reality. Some 200 million are chronically hungry, more than 90 percent of the workforce have no option but informal work with abysmal wages and no security; 80 percent live under $2 a day; 70 percent depend on agriculture for their livelihood; 182,936 farmers have committed suicide; and so on.

The global meltdown has brought yet another level of decimation for the ordinary people. It is estimated that at least half a million jobs have been lost in the export sectors, where barring the IT sector, those affected are informal wage workers, primarily migrants who are forced to return home as they are retrenched. There is little by way of employment opportunity there and entire families are in acute distress due to the sudden end to their remittance incomes. A secondary and more insidious effect is perhaps the fear such retrenchment generates amongst workers who are somehow able to retain their jobs. If migrant workers come from homes where opportunities are decimated and other family members are returning home as they are retrenched, they are very likely to work under conditions they otherwise would not. The fear of retrenchment is a disciplinary mechanism par excellence. Industry leaders thus routinely call for greater labour market flexibility, citing the fact that competition from countries such as Bangladesh – based on low labour costs – are hurting profitability of Indian exports.

Under these circumstances, a fractured polity plays a highly contradictory role. On the one hand, it helps resist the tyranny of a 'center.' It can provide the autonomy that a state or local government might require if it wishes to experiment with alternatives (this has been the case of Kerala, the state with the best development record). On the other hand, it vastly reduces the possibility of constructing resistance to problematic policy frameworks on a scale that can actually shift the direction of things. This happens via two causal mechanisms: first, that the fracture hides the constellations of power; and second, it vastly diminishes the possibilities of solidarity.

First about power. There are many dimensions of power – and many constellations that we can speak of. But given the election season, let me take one here: the dimension of private wealth and the manner in which it is facilitating access to political office.

Millionaire Candidates

National Election Watch, a civil society watchdog doing exemplary work on the elections, has released a report which analyses the criminal records, financial assets and educational background of all candidates. Most still refuse to declare their wealth, but even declared wealth has grown by 400 per cent since 2002. According to National Election Watch report, in Karnataka, the state which is home to India's Silicon Valley, one out of every four contestants is a multi-millionaire. In Maharashtra, home to Mumbai, about 12 percent are multi-millionaires. Seven multi-millionaires are contesting from one the poorest regions in the country in the state of Orissa (a region known historically for the incidence of famine and starvation deaths).

Quite apart from these multi-millionaires, a number of wealthy business professionals have joined the fray as independent candidates. Their mission, as they proclaim, is to "clean politics." While the political fate is not expected to shine too much in the current elections, they are playing an important role in numbing any possible critique of corporate power. Indeed, the idea that 'politics' is unrelated to 'business' and vice-versa and that business has the tools and the ethos to solve major social problems has been a critical element of the normative order of neoliberalism, in India and worldwide.

The material reality accompanying this normative order is quite extraordinary. The wealth of 40 richest Indians have come to equal about 30 percent of its trillion-dollar GDP. Of the 47 Indian companies that have made it to the Forbes List of the Global 2000 this year, the sales of each of the top two equal the GDP of India's poorest 12 states taken together. In a list of the top 50 economic entities in India – comprising of Indian states and Indian corporations – 28 are corporations. Reliance Industries, the corporation that tops the list, has an annual revenue that exceeds the gross domestic product of Kerala by about $2-billion.

The fracturing of the polity not only obscures these constellations of power, but also diminishes the possibility of solidarity and the construction of alternatives.

Consider for example, the resistance to Special Economic Zones (SEZs) or more generally, the resistance to industrialization which displaces small peasants without compensating them adequately or without their consent. In the state of West Bengal, which has been ruled by a Left government since 1977, this conflict came to a head over two projects. The Left Front government actively solicited these projects. Thereafter, it was found deficient in the way it planned these projects, – and worse, took recourse to violence when faced with resistance. It is likely that the Left is going to be punished for this failure of governance in the current elections, as it should be, if electoral politics is to have any substance.

But this is only half the story. What is likely to replace the Left, or dent its prowess, is not a progressive pro-people political configuration – but a constellation of opportunists of various shades. The latter has no agenda for growth or development, industrial or otherwise. The irony in these events is worth noting. While particular factors in West Bengal brought the SEZ/industrialization issue to such a head, the resistance to SEZ did not occur in West Bengal alone. The demand for appropriate designed and democratically governed models of industrialization was voiced by many different communities across India. This was not an opposition to one or two isolated projects, but a more fundamental opposition to the false choice between displacement on the one hand and absence of livelihood opportunities on the other. The deep fracturing of politics is systematically marginalizing precisely such issues, and in doing so is very effectively pre-empting solidarity. Indeed, solidarity has been critical in the recent successes in engendering change, such as the Right to Food movement, the Right to Information movement, the movement for the National Rural Employment Guarantee Act, etc.

So how is India? Fractured, harassed, trapped within a series of power games orchestrated by its elite? Though poignant and cinematic and Oscar-savvy, this Slumdog narrative is not entirely representative of India. By and large, people continue to struggle, negotiate and survive as best as they can, often winning victories that defy textbook understandings of agency or politics.

As voters, the average Indian remains incredibly astute. As the last elections showed us, all political calculations of an overconfident anti-poor government were revealed to be entirely incorrect, causing them electoral losses they had not imagined. Last week in Hyderabad, India's hi-tech city, a young man who drives taxis for a living gave me a brilliant analysis. I asked him what according to him "India" is. Without a moment's hesitation he said, "India is that place where the common man is perpetually looking for justice. There is no justice here, no justice at all." •

Ananya Mukherjee Reed teaches development studies at York University, Toronto.


 Global Research Articles by Ananya Mukherjee Reed



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 Issue : VOL 45 No. 24 June 12 - June 18, 2010

EDITORIALS

Chronic Denial of Justice


Growth with Imbalances


Worlding the Cup


H T PAREKH FINANCE COLUMN

World Economy Not Out of the Woods

 T T Ram Mohan

COMMENTARY

Kerala's LDF Government in Four Years of Office

 A K Pat

Mismanagement of Indian Management Education

 Abhijit Bhattacharya

A Critique of the Communal Violence Bill 2005

 S T Ramesh

Shadow-boxing in Punjab on Government Finances

 Atul Sood

Gandhi, Gujarati Spelling and the Ideology of Standardisation

 Himanshu Upadhyaya

Remembering Raj: A Reflection

 K S Krishnaswamy

BOOK REVIEWS

Keeping the Trust in the Commons

 Kanchan Chopra

Seminar: 50 Years of Exploring Indian Perspectives

 Sumanta Banerjee

Missing Millennium Goals

 Himanshu

PERSPECTIVES

Slumdog Millionaire and Epistemologies of the City

 Jonathan Shapiro Anjaria , Ulka Anjaria

SPECIAL ARTICLES

Dharavi: Makeover or Takeover?

 Shirish B Patel

Organised versus Unorganised Manufacturing Performance in the Post-Reform Period

 Vinish Kathuria , Rajesh Raj S N , Kunal Sen

Commercialisation of Microfinance in India: A Discussion of the Emperor's Apparel

 M S Sriram

Public Participation, Teacher Accountability and School Outcomes in Three States

 Priyanka Pandey , Sangeeta Goyal , Venkatesh Sundararaman

DISCUSSION

Replacing Science with Mystery

 George Thomas

CURRENT STATISTICS

Macroeconomic Indicators (12 June 2010)

 EPW Research Foundation

India's Quarterly GDP Estimates from 2007-08 to 2009-10 (2004-05 Series)

 EPW Research Foundation

Secondary Market Transactions in Government Securities and the Forex Market – May 2010

 Clearing Corporation of India Limited

LETTERS

Against the Death Penalty

 A K Dasgupta

Anjan Ghosh

 Ravindra K Jain

Conspiracy to Implicate Maoists

 Azad

Trends in Military Expenditure

 Pavan Nair

Who Is to Blame in Lalgarh?

 Arnab Pal

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Bhopal Gas Scandal
Letters From Dow
More proof of Dow's underhand dealings and its lobbying with the PMO and ministers on the GoM (viz P. Chidambaram and Kamalnath) that has been, shockingly, entrusted by the PM to report on the whole matter

Letter from the ministry of petroleum and natural gas that shows how Dow hid the UCC-origin of the product it was trying to sell to Indian Oil Corporation:

Indian Oil and Dow

Letter from Dow India to PM's principal secretary TKA Nair:

The letters that Dow CEO Andrew Liveris wrote to P. Chidambaram and Kamal Nath in October 2008, complaining about Chemical Ministry "recommending a delay" in Dow's projects and how it contradicts the "earlier discussions, before signing rgw MOU, when Dow India had met with the Ministry of Chemicals and Fertilizers, and was advised that the government would welcome this investment" and how "it is critical that the Government of India speaks with one voice on issues of foreign direct investment and sustained domestic economic growth."

Not only that, the letters also look for "tangible evidence of government action in the next 30 days"


 

Courtesy: Bhopal Group For Information and Action

Also See: Signals From Above and The PMO Documents

And Outlook's 2007 story: The Acid Wash Effect

http://outlookindia.com/article.aspx?265861

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