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THE HINDU: Push for IMF reform
BUSINESS STANDARD: Tweaking TDS norms will be
counterproductive
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THE
HINDU: Gujarat must give up terror bill
Gujarat
should give up its persistent
efforts to get the
controversial Gujarat Control of Terrorism and Organised Crime Bill, 2015,
approved by the President.
First moved by Narendra Modi in 2003 when he was
Chief Minister of the State, the Bill has been facing objections on the ground
that it contains some draconian provisions. The Centre refused to clear the
Bill three times when the United Progressive Alliance was in power. The Union
Home Ministry has now recalled the Bill from the office of the President, to
whom it had been sent for assent. The reason appears to be that it wants the
Bill to be reworked based on additional inputs from the State government. The
controversial nature of the GCTOC Bill became apparent after A.P.J. Abdul Kalam
as President objected to a clause that made evidence based on interception of
communication admissible in court. His successor, Pratibha Patil, too declined
assent. In March 2015, the Assembly passed the Bill and sent it afresh to the
Centre for presidential assent. The Centre ultimately prevailed in having the
clause that permitted the State Home Secretary to authorise the interception of
telephone calls on his own dropped. Under the Indian Telegraph Act, State Home
Secretaries do authorise telephone taps, but using power delegated to them by
the Centre. The watered-down Bill was sent last September to the President for
his assent. It has been recalled now, possibly because of fears that President
Pranab Mukherjee might refuse assent again.
India’s
repeated experiments with anti-terrorism laws have been, by and large,
unsuccessful. The Terrorist and Disruptive Activities (Prevention) Act, 1985, a
law considered as draconian as the Rowlatt Act of the colonial era, and its
latter-day version, the Prevention of Terrorism Act, 2003, had been allowed to
lapse after it was found that they were prone to persistent misuse. However,
with the substantive amendments made to the Unlawful Activities (Prevention)
Act in 2012, the country does have an effective law to curb modern-day
terrorism. The Gujarat law is modelled on the Maharashtra Control of Organised
Crime Act, but that does not make it any more acceptable. The Maharashtra law
itself has not achieved any remarkable success in curbing organised crime. When
it was invoked recently in a cricket spot-fixing case in Delhi, it failed
miserably during trial, demonstrating how such laws can be reduced to a mockery
through improper application. The GCTOC Bill also has provisions similar to
earlier anti-terrorism laws, such as making confession to a police officer of
the rank of Superintendent of Police admissible in court, and allowing 180
days, instead of the usual 90, for the filing of a charge sheet. There is
really no need for more State-level laws of such a nature. Police investigators
need better resources and training to combat organised crime and terror, and
not laws that abridge and modify conventional criminal procedure to the
detriment of human rights.
ap·par·ent
Clearly visible
or understood; obvious.
as·sent
The expression
of approval or agreement.
dra·co·ni·an
(of laws or
their application) excessively harsh and severe.
lapse
A temporary
failure of concentration, memory, or judgment.
a·bridge
Shorten (a
book, movie, speech, or other text) without losing the sense.
det·ri·ment
The state of
being harmed or damaged.
THE HINDU: Push for IMF reform
Finally,
the International Monetary Fund has made country
quota reformsagreed by the G20 in 2010 a reality. One could imagine a
collective, global sigh of relief as the chief objector to the changes, the
U.S. Congress, dropped its intransigence in December and allowed the
multilateral lender to adopt a country quota distribution that better reflects
the power balance of emerging markets in the global economy. With this
structural shift, more than 6 percentage points of the quota, including both
the Fund’s capital and its proportionate voting rights, have been transferred
from developed to emerging economies. The greatest gains from the reforms
accrue to the IMF itself, as the combined capital that its 188 member-countries
contribute will increase to approximately $659 billion from nearly $329
billion. Other winners are India and China, who have respectively increased
their voting shares by 0.292 and 2.265 percentage points. The emerging
economies wrested a 2.6 percentage points increase. The developed nations have
had a haircut in their voting share, somewhere between 0.2 and 0.5 percentage
points. Consequently, India, China, Brazil, and Russia will be among the 10
largest members alongside large advanced economies. As IMF Managing Director
Christine Lagarde said, it is appropriate to “commend [the IMF] for ratifying
these truly historic reforms”. But the reforms have come so late and after so
much wrangling that, similar to its crisis-lending policies, they leave a
bitter taste in the mouth.
Back
in May 2011, the Fund’s Executive Directors from the BRICS economies openly revolted against the prospect of the position
of Managing Director reverting to a European, deepening the woes of an
organisation that had been rocked by the resignation of Dominique Strauss-Kahn
following sexual assault allegations. At the time, Arvind Virmani, Executive
Director, from India, argued that the 2008 global financial crisis erupted in
developed countries and its provenance “underscored the urgency of reforming
international financial institutions so as to reflect the growing role of
developing countries in the world economy”. Multi-year Republican Party
obstructionism in the U.S. meant that the negotiations were dragged into the
mud of dirty domestic politics, with some threatening to veto them unless
President Barack Obama’s landmark health-care reform was repealed. Law-makers
relented only after years of
persuasion made them realise that
their inaction was hurting U.S.
diplomacy. Even so, they extracted their pound of flesh, and the final reform
plan acquiesces to their demand to rescind the “systemic exemption” loophole,
which allowed the Fund to lend to Greece in 2010. It is also a shame that BRICS
nations had to launch their own bank, the Asian Infrastructure Investment Bank,
before the high priests of the Fund felt the need to modernise their quota
structure. Despite all these push-factors, the process of governance
restructuring at the IMF has not ended; it has only just begun.
intransigence
Intransigency:
the trait of being intransigent; stubbornly refusing to compromis
ac·crue
(of sums of
money or benefits) be received by someone in regular or increasing amounts over
time.
wrest
Forcibly pull
(something) from a person's grasp.
wran·gle
Have a long and
complicated dispute.
woe
Great sorrow or
distress.
loop·hole
An ambiguity or
inadequacy in the law or a set of rules.
INDIAN EXPRESS: Calling it quits
Speculation about an
extension for the Pakistan army chief, General Raheel Sharif, was brought to an
end when a military spokesman announced on Twitter that Sharif will neither
seek nor accept another tenure. By all accounts, the general, scheduled to retire
on November 29, has chosen to publicly and definitively stanch the uncertainty
much in advance. Sharif’s predecessor, General Ashfaq Parvez Kayani, was given
a three-year extension at the end of his tenure in November 2010. Before
Kayani, General Pervez Musharraf had given himself an extension, which meant
that he remained the army chief from October 1998 till November 2007. Sharif
has been a popular army chief enjoying visible public support in Pakistan for
his policies on counter-insurgency, counter-terrorism and the political front.
It would have been hard for the Nawaz Sharif government to deny him an
extension, had he sought it.
Sharif’s decision is
welcome for breaking with an undesirable precedent, whereby individuals have
often refused to be subordinate to institutions. It could set a healthy
precedent in Pakistan wherein army chiefs retire in the routine course, as
happens in other democracies. But the fact that the announcement was made by
the military spokesperson casts unflattering light on civil-military relations
in Pakistan. Evidently, the decision was taken by the general himself and on
his own terms — the civilian government was not even nominally involved. This
imbalance in civil-military relations has been a feature of Pakistan for 65 years
and it has caused grievous damage to the country. If the balance of
civil-military relations is not reset in favour of a democratically elected
government, it is bound to hurt Pakistan even more in future.
With Sharif’s
announcement, there is speculation about who will replace him. Although the
names of five senior-most lieutenant generals on November 29 are known, it
cannot be said with certainty that one of them will replace Sharif. Seniority
has never been an overriding principle in appointments of army chiefs in
Pakistan, and more so with Nawaz Sharif as prime minister. He has selected four
army chiefs as prime minister — Asif Nawaz Janjua, Abdul Waheed Kakar, Pervez
Musharraf and Raheel Sharif — and all of the appointments have involved the
supersession of seniors. One thing, however, is certain. Whoever is selected by
Nawaz Sharif as the army chief will have the backing of the most powerful
institution in Pakistan, the army. That itself will make him the most powerful
person in that country.
spec·u·la·tion
The forming of
a theory or conjecture without firm evidence.
stanch
Stop or
restrict (a flow of blood) from a wound.
o·ver·ride
Use one's
authority to reject or cancel (a decision, view, etc.).
supersession
Supersedure:
act of replacing one person or thing by another especially one held to be
superior
BUSINESS STANDARD: Tweaking TDS norms will be
counterproductive
Finance Minister Arun Jaitley told industry
representatives at a conference last Saturday that the Budget for 2016-17 would
avoid populism and rely on sound policies to help the Indian economy achieve
higher growth. As an indication of what those sound policies could be, Mr Jaitley
said steps would be taken to ensure adequate investments in important sectors
such as infrastructure and irrigation. These statements are reassuring, coming
just a few weeks before the Budget is due to be presented later this month.
They perhaps indicate that the government is conscious of the enormity of the
twin challenges arising out of policy imperatives for domestic growth on the
one hand, and turbulence in financial markets across the world on the other.
The promise of sound policies should, therefore, imply that even as more
investments in infrastructure are committed, there is no deviation from the
path of fiscal consolidation. At a time when global financial turmoil has
increased uncertainties, it would make sense for the government to keep the
fundamentals of the economy in good shape, without announcing more tax
exemptions or unduly risking a higher fiscal deficit than what was promised in
the medium-term fiscal consolidation road map. An increase in public
investments does not have to be achieved at the cost of a higher fiscal
deficit; it could be achieved by reducing wasteful expenditure, phasing out tax
exemptions even while bringing down the corporation tax rates and undertaking
expenditure reforms like those for subsidies.
However, the message of pursuing sound policies in the coming Budget is somewhat contradicted by a few of the recommendations that seem to be under the ministry's consideration. In the name of rationalising the tax system, the ministry is considering raising the threshold levels for earnings on which taxes are to be deducted at source. Additionally, the amount of tax that is to be deducted on earnings from certain transactions is proposed to be reduced from 20 per cent to 10 per cent in some cases and from 10 per cent to five per cent in some others. Both the moves are being justified on grounds of rationalisation of the tax system and providing relief to small depositors and taxpayers including pensioners. Claiming refunds of taxes deducted at sources can be troublesome and entails long delays, it has been argued. And the proposed relaxation will make the tax system less onerous for such taxpayers. Another reason cited in favour of the proposal is that in spite of the relaxations, there would be no real revenue loss as the taxes due to the government would have to be paid in any case, albeit at the end of the year.
Such arguments, however, are deeply flawed. The principle of tax deduction at source is a well-established practice followed in many countries with mature and prudent tax policies. It helps track taxable transactions and prevents revenue leakages. The rates at which the taxes are deducted at source are already low at ten per cent-the lowest slab of individual income-tax rates. If refund delays and procedural problems have been complicating the system of tax deduction at source, a more sensible approach would be to fix those problems. That would be considered more effective and useful tax reform. Halving the tax deduction rate or raising the threshold levels for such tax deduction will be tantamount to barking up the wrong tree.
However, the message of pursuing sound policies in the coming Budget is somewhat contradicted by a few of the recommendations that seem to be under the ministry's consideration. In the name of rationalising the tax system, the ministry is considering raising the threshold levels for earnings on which taxes are to be deducted at source. Additionally, the amount of tax that is to be deducted on earnings from certain transactions is proposed to be reduced from 20 per cent to 10 per cent in some cases and from 10 per cent to five per cent in some others. Both the moves are being justified on grounds of rationalisation of the tax system and providing relief to small depositors and taxpayers including pensioners. Claiming refunds of taxes deducted at sources can be troublesome and entails long delays, it has been argued. And the proposed relaxation will make the tax system less onerous for such taxpayers. Another reason cited in favour of the proposal is that in spite of the relaxations, there would be no real revenue loss as the taxes due to the government would have to be paid in any case, albeit at the end of the year.
Such arguments, however, are deeply flawed. The principle of tax deduction at source is a well-established practice followed in many countries with mature and prudent tax policies. It helps track taxable transactions and prevents revenue leakages. The rates at which the taxes are deducted at source are already low at ten per cent-the lowest slab of individual income-tax rates. If refund delays and procedural problems have been complicating the system of tax deduction at source, a more sensible approach would be to fix those problems. That would be considered more effective and useful tax reform. Halving the tax deduction rate or raising the threshold levels for such tax deduction will be tantamount to barking up the wrong tree.
tweak
Twist or pull
(something) sharply.
coun·ter·pro·duc·tive
Having the
opposite of the desired effect.
con·scious
Aware of and
responding to one's surroundings; awake.
e·nor·mi·ty
The great or
extreme scale, seriousness, or extent of something perceived as bad or morally
wrong.
im·per·a·tive
An essential or
urgent thing.
tur·bu·lence
Violent or
unsteady movement of air or water, or of some other fluid.
tur·moil
A state of
great disturbance, confusion, or uncertainty.
en·tail
Involve
(something) as a necessary or inevitable part or consequence.
flawed
Blemished,
damaged, or imperfect in some way.
tan·ta·mount
Equivalent in
seriousness to; virtually the same as.
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