White Paper on Black Money: Opposition Terms Document Disappointing, Non-Paper

Finance Minister Pranab Mukherjee presented the White Paper on Black Money in the Parliament on May 21. The 108-page Paper trashed the huge figure of illegal wealth stashed away by Indians in Swiss banks and said much of the money may have already come back into India through illicit means. It did not disclose any names of Swiss account holders or provided any fresh estimate of black money in India.

Indian Black Money Issue

The Bharatiya Janata Party (BJP) has termed the government's White Paper on black money as "disappointing" and a "non-paper." The Opposition party said that it is "like a bikini" as it hides the essentials and reveals only the less significant details.

The issue of Indian black money stashed abroad has been raked by the Bharatiya Janata Party (BJP) time and again both inside and outside Parliament. Party veteran L K Advani had taken out a month long Jan Chetna yatra across the country to highlight the issue.

The White Paper has not revealed the quantum of Indian black money kept in tax havens abroad. Neither has the government shared details of steps it has taken to repatriate this wealth.

The bank deposits of Indians in Swiss banks have decreased from Rs 23,373 crore in 2006 to Rs 9,295 crore in 2010. The government has not disclosed where this money has gone. Has it come back to India? Or has it been transferred to some other tax haven? Or has it been invested somewhere?

The Opposition has been demanding that the government make all efforts to bring back this money as has been done by countries like the United States, Germany and Ireland, among others.

The White Paper is also silent on the black money made by illegal sale of arms and armaments, evasions on stamp duty especially in land transactions, and use of such funds in politics. This document has several shortcomings. It does not explicitly explain what has been done to deal with black money in arms and armaments.

The generation of black money through stamp duty evasion especially in land transactions has not been revealed. The black money made by corrupt politicians has also not been revealed.

Tax Immunity Scheme

On the possibility of any tax immunity scheme, especially gold deposit scheme, to deal with black money, the White Paper said, "The issue of complete tax immunity needs to be examined in the light of other policy objectives." The document seeks to dispel the impression that government was not doing enough to deal with black money and talks about various policy options and strategies it has been pursuing to address the issue of corruption in public life.

Referring to the issue of institutions like Lokpal and Lokayuktas, the Paper said, "(they) need to be put in place at the earliest, in the Centre and the states respectively, to expedite investigations into cases of corruption and bring the guilty to justice."

The government has not been able to push through the Lokpal Bill in Rajya Sabha (upper house of the Parliament), despite pressure from the civil society. The Bill was approved by the Lok Sabha.

Introduction of Goods and Services Tax

The introduction of Goods and Services Tax, the White Paper added, would be a major step in integrating the efforts of different agencies dealing with black money.

Referring to the misuse of corporate structure, the Paper stated, "The Vodafone tax case provides an instance of the misuse of corporate structure for avoiding the payment of taxes."

In this case, it said, the Hutchison Group had made investments in India from 1992 to 2006 through a number of subsidiaries having 'separate corporate personality' but which were essentially post box companies based in the Cayman Islands, British Virgin Islands, and Mauritius.

The Hutchison Group sold its entire business operation in India in February 2007 to the Vodafone Group for a total consideration of $11.2 billion and the same was effected through transfer of a solitary share of a Cayman Islands company.

Global Financial Integrity (GFI) has estimated that from 1948 to 2008 a total of $ 213.2 billion has been shifted out of India through illicit outflows and the adjusted gross transfer of illicit assets by residents of India amounts to $ 462 billion as of end-December 2008.

The White Paper’s view is that this money has at least partly already returned to India. This may have been happened through Foreign Direct Investment route and stock markets.

Four-Pronged Strategy

The Paper suggested four-pronged strategy to curb generation of black money. These include more incentives for voluntary compliance of tax laws, reforms in vulnerable sectors of economy and creation credible deterrence. It mentioned that reform of financial and real estate sectors would help in reducing generation of black money in long term as freeing of gold imports had helped in checking smuggling.

On the need to curb this menace in vulnerable sectors like real estate, the provision of deducting tax at source on payments made on real estate transactions and mandating it as a pre-condition for registering of the transacted property could be considered.

Large number of transactions in bullion and jewelry are unaccounted and there is also urgent need to improve the reporting and monitoring systems in this sector. On the informal sector and cash economy, the Paper states that there is a need to amend laws to check keeping very large amounts of cash. Another important measure could be the promotion of banking channels, including use of credit and debit cards through tax incentives, since they leave adequate audit trails and hence disincentivize black money generation. Levying tax at source at a low level on cash purchases may also be considered as a possible policy option.

The White Paper states that there does not seem to be much progress on repatriation of black money abroad. It says that the government has been working on bilateral treaties. However, these treaties do not have provisions for repatriation of undisclosed assets. Without international consensus on this issue it is difficult to implement domestic law on repatriation of assets located abroad.

Assessment

Undoubtedly, we now know that based on some recent international data, India is 15th in the world in terms of outgo of unaccounted or “black” money, namely money that has evaded the tax net and has been parked overseas.

The White Paper does not say anything that is not public knowledge but shifts the focus from foreign banks to domestic culprits and sources. Since the finance minister had refused to disclose the names of those holding illegal assets abroad in the Supreme Court as well as Parliament, it was futile to expect their mention in the White Paper. The government report talks of the possibility of one-time amnesty scheme for tax evaders to encourage disclosures and recover tax.

The Paper gives an idea of the generation of black money in the system, and calls for reforms in the financial sector, including taxation and in investment instruments such as participatory notes, as well as in real estate.

Some Facts

* To curb black money, a four-pronged strategy — reducing disincentives against voluntary compliance, reforms in vulnerable sectors of the economy, creating effective credible deterrence and supportive measures — is being worked out.

* The White Paper states that encouraging the use of credit and debit cards — as they leave adequate audit trails — could also help in preventing black money generation.

* It also proposes improved reporting and monitoring systems to track bullion and jewelry transactions and wants close tabs on real estate deals

NATO Summit: Prepares Road Map, Joint Exit Strategy for Afghanistan

The two-day summit of the 28-member North Atlantic Treaty Organization (NATO) was held in Chicago, first on the US soil in more than a decade. Approximately 60 world leaders, including presidents of the United States, Afghanistan and Pakistan have gathered to attend one of the biggest NATO summits in history. Despite a myriad of issues facing the 63-year-old organization founded in the wake of the Second World War as it confronts shifting 21st-century realities, the Chicago summit is set to be dominated by Afghanistan.

The Chicago summit was significant as President Barack Obama has announced that all combat operations led by the US forces will cease in the summer of 2013 and the NATO forces would move to a “support role.” The summit aimed at charting out a road map of international support to Afghanistan and prepare a blueprint for a joint exit strategy.

Afghanistan War

NATO allies declared that the end of a long and unpopular Afghanistan war is in sight even as they struggled to hold their fighting force together as France’s new President announced plans to pull troops out early.

The fate of the war is the centre of the two-day NATO summit that opened in Chicago. The alliance already has one foot out of the Afghanistan door, with the Europeans pinching pennies in a debt crisis and President Obama with an ear attuned to the politics of an economy-driven presidential election year.

Still, some cautioned against following France’s example while others played down stresses in the fighting alliance.

NATO Secretary General Anders Fogh Rasmussen said: “There will be no rush for the exits. Our goal, our strategy, our timetable remain unchanged.”

The military alliance is pledged to remain in Afghanistan till 2014, but will seal plans during the summit to shift foreign forces off the front lines a year faster than once planned.

Afghan forces will take the lead throughout the nation next year, instead of in 2014. The shift is in large part a response to the plummeting public support for the war in Europe and the United States, contributors of most of the 130,000 foreign troops now fighting the Taliban-led insurgency. A majority of Americans now say the war is unwinnable or not worth continuing.

Tough Time Ahead

The US president, who was hosting the summit in his hometown and the city where his reelection operation hums, spoke of a post-2014 world when “the Afghan war as we understand it is over.” Until then, though, remaining U.S. and allied troops face the continued likelihood of fierce combat.

Obama said: “We still have a lot of work to do and there will be great challenges ahead. “The loss of life continues in Afghanistan and there will be hard days ahead.”

In fact, the strategy has shifted many times over the course of more than 10 years of war, and the goal narrowed to objectives focused on the long-term security of the mostly Western nations fighting there. The timetable has also moved, despite the overall commitment to keep foreign forces in Afghanistan till 2014.

France’s Stand

Tension over newly elected French President Francois Hollande’s pledge to end his country’s combat mission two years early infused the meeting. German Chancellor Angela Merkel pointedly cited the credo of the allies in the Afghanistan war, “in together, out together,” and her foreign minister cautioned against a “withdrawal competition” by coalition countries.

The Taliban are urging nations fighting in Afghanistan to follow France’s lead and pull their international forces from the war this year.

The Chicago summit called upon all the other NATO member countries to avoid working for the political interests of the US officials and answer the call of your own people by immediately removing all your troops from Afghanistan,” the group said in a statement before the meeting.

Obama-Karzai Meet

Obama said that NATO envisions a decade of transformation after 2014, with the United States still contributing money and forces.

“What this NATO summit reflects is that the world is behind the strategy that we have laid out,” Obama said after lengthy talks with Afghan President Hamid Karzai. “Now it is our task to implement it effectively.”

Karzai said his nation is looking forward to the end of war, “so that Afghanistan is no longer a burden on the shoulder of our friends in the international community, on the shoulders of the United States and our other allies.”

Despite the stubborn Taliban insurgency, war-weary international forces are seeking to hand control of security to Afghan forces while withdrawing some 130,000 foreign combat troops by the end of 2014.

G8 Summit: Camp David Declaration Addresses Major Economic, Political Challenges

The leaders of the G8 countries of eight most developed countries of the world – Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States have met recently in Camp David, Maryland. They addressed major economic and political challenges faced by the world. The G8 summit in Camp David was the first major international event for the new French President Francois Hollande.

Camp David Declaration

The leaders of the summit in their Camp David Declaration recognized the importance of meeting our energy needs from a wide variety of sources ranging from traditional fuels to renewable to other clean technologies. As they reached implement their own individual energy strategies, they embraced the pursuit of an appropriate mix from all of the above in an environmentally safe, sustainable, secure, and affordable manner. They also recognized the importance of pursuing and promoting sustainable energy and low carbon policies in order to tackle the global challenge of climate change.

To facilitate the trade of energy around the world, they committed to take further steps to remove obstacles to the evolution of global energy infrastructure; to reduce barriers and refrain from discriminatory measures that impede market access; and to pursue universal access to cleaner, safer, and more affordable energy. The leaders remained committed to the principles on global energy security adopted by the G8 in St. Petersburg.

The group’s leaders papered over their deep-seated divisions on how best to tackle the Eurozone crisis, and declared that they wanted debt-stricken Greece to remain within the fold. However, they called on Athens to stick to the terms of a massive EU-International Monetary Fund (IMF) cash-for-reforms bailout, now hanging by a thread.

Incidentally, two Indian-Americans — PepsiCo chief Indra Nooyi and USAID administrator Raj Shah — were among the few special guests invited by US President

Barack Obama to a G-8 luncheon at Camp David on Saturday. They were invited to take part in a discussion with four African Presidents/PMs invited to the special luncheon. Obama said this was perhaps the first time business leaders attended a G8 summit.

Climate Change Problem

The summit leaders agreed to continue their efforts to address climate change and recognize the need for increased mitigation ambition in the period to 2020, with a view to doing their part to limit effectively the increase in global temperature below 2ºC above preindustrial levels, consistent with science. They strongly supported the outcome of the 17th Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC) in Durban to implement the Cancun agreements and the launch of the Durban Platform, which they welcomed as a significant breakthrough toward the adoption by 2015 of a protocol, another legal instrument or an agreed outcome with legal force applicable to all Parties, developed and developing countries alike.

The leaders agreed to continue to work together in the UNFCCC and other fora, including through the Major Economies Forum, toward a positive outcome at Doha.

Six-Point Settlement Plan

In its “Camp David Declaration”, the Group of Eight also supported six-point plan of the United Nations and Arab League Joint Special Envoy (JSE) Kofi Annan’s settlement plan for Syria and cautioned North Korea against further provocation, besides pledging steps to mitigate the economic impact of the Afghan transition and saying Greece, now battling a crippling debt crisis, should remain in the Eurozone.

The summit leaders supported the efforts of JSE Annan and look forward to seeing his evaluation, during his forthcoming report to the UN Security Council, of the prospects for beginning this political transition process in the near-term. Use of force endangering the lives of civilians must cease.  They called on the Syrian Government to grant safe and unhindered access of humanitarian personnel to populations in need of assistance in accordance with international law. They welcomed the deployment of the UN Supervision Mission in Syria, and urge all parties, in particular the Syrian government, to fully cooperate with the mission.

The Camp David leaders strongly condemned recent terrorist attacks in Syria. They remained deeply concerned about the threat to regional peace and security and humanitarian despair caused by the crisis and remain resolved to consider further UN measures as appropriate.

Incidentally, two Indian-Americans — PepsiCo chief Indra Nooyi and USAID administrator Raj Shah — were among the few special guests invited by US President Barack Obama to a G-8 luncheon at Camp David.

Iran and North Korea’s Nuclear Programs

Piling up pressure on Iran, the leaders of the world's eight most powerful economies have asked it to swiftly address all outstanding issues related to its nuclear program and vowed to ensure that crude markets are "fully and timely" supplied despite oil embargo on Teheran.

As Iran faced sanctions, the G8 leaders said increasing disruptions in the global oil supplies "pose a substantial risk" to the world economy.

The G8 leaders remained united in our grave concern over Iran’s nuclear program. They called on Iran to comply with all of its obligations under relevant UNSC resolutions and requirements of the International Atomic Energy Agency’s (IAEA) Board of Governors. They also call on Iran to continuously comply with its obligations under the Nuclear Non-Proliferation Treaty, including its safeguards obligations.

The summit leaders also called on Iran to address without delay all outstanding issues related to its nuclear program, including questions concerning possible military dimensions.  They desired a peaceful and negotiated solution to concerns over Iran’s nuclear program, and therefore remain committed to a dual-track approach. They welcomed the resumption of talks between Iran and the E3+3 (China, France, Germany, Russia, the United Kingdom, the United States, and the European Union High Representative). They called on Iran to seize the opportunity that began in Istanbul, and sustain this opening in Baghdad by engaging in detailed discussions about near-term, concrete steps that can, through a step-by-step approach based on reciprocity, lead towards a comprehensive negotiated solution which restores international confidence that Iran’s nuclear program is exclusively peaceful.

As regards North Korea, the G8 leaders continued to have deep concerns about provocative actions of the Democratic People’s Republic of Korea (DPRK) that threaten regional stability. They remained concerned about the DPRK's nuclear program, including its uranium enrichment program.  They condemned the April 13, 2012, launch that used ballistic missile technology in direct violation of UNSC Resolution.

The Camp David leaders urged the DPRK to comply with its international obligations and abandon all nuclear and ballistic missile programs in a complete, verifiable, and irreversible manner. They called on all UN member states to join the G8 in fully implementing the UNSC resolutions in this regard.

Countering Terrorism

At the summit, G8 leaders condemned transnational organized crime and terrorism in all forms and manifestations. They pledged to enhance our cooperation to combat threats of terrorism and terrorist groups, including Al-Qaida, its affiliates and adherents, and transnational organized crime, including individuals and groups engaged in illicit drug trafficking and production. They stressed that it is critical to strengthen efforts to curb illicit trafficking in arms in the Sahel area, in particular to eliminate the Man-Portable Air Defense Systems proliferated across the region; to counter financing of terrorism, including kidnapping for ransom; and to eliminate support for terrorist organizations and criminal networks.

The G8 leaders urged states to develop necessary capacities including in governance, education, and criminal justice systems, to address, reduce and undercut terrorist and criminal threats, including "lone wolf" terrorists and violent extremism, while safeguarding human rights and upholding the rule of law. They underscored the central role of the United Nations and welcome the Global Counterterrorism Forum (GCTF) and efforts of the Roma-Lyon Group in countering terrorism.

Growth and Employment Opportunities

“As all the leaders agreed, growth and jobs must be our top priority. A stable, growing European economy is in everybody’s best interests — including America’s,” Obama said after the end of the summit.

“Europe is our largest economic partner. Put simply, if a company is forced to cut back in Paris or Madrid, that might mean less business for manufacturers in Pittsburgh or Milwaukee. And that might mean a tougher time for families and communities that depend on that business,” he said.

“Even as we’ve confronted our own economic challenges over the past few years, we have collaborated closely with our European allies and partners as they’ve confronted theirs,” Obama said.

The US president said he discussed with other leaders the ways for promoting growth and job creation while still carrying out reforms necessary to stabilize and strengthen their economies for the future.

Poverty Alleviation

The Camp David leaders reaffirmed their commitment to the world’s poorest and most vulnerable people, and recognized the vital role of official development assistance in poverty alleviation and achieving the Millennium Development Goals. As such, they welcomed and endorsed the Camp David Accountability Report which records the important progress that the G8 has made on food security consistent with commitments made at the L’Aquila Summit, and in meeting our commitments on global health, including the Muskoka initiative on maternal, newborn and child health. They remained strongly committed to reporting transparently and consistently on the implementation of these commitments.

The next G8 Summit will be held the United Kingdom in 2013.

Poverty in India: Country's Rural Population Lives on Less Than Rs 35 a Day

Poverty is a stark realty in India. There are more poor people here than in the 20 poorest African countries. More Indians have an access to mobile phones than toilets. Hunger and malnutrition persist. Figures about the extent of poverty released occasionally do spark debates and political point-scoring for a day or two but are then forgotten. They do expose, however, even if for a short while the ugly side of India’s much-touted growth story. By and large, what is wrong and what needs to be done are known.

Keeping the aforementioned points in view, the National Sample Survey Organization (NSSO) has recently carried out the 66th round of National Sample Survey (NSS). The report states that around 60 per cent of India's rural population lives on less than Rs 35 a day and nearly as many in cities live on Rs 66 a day, reveals a government survey on income and expenditure.

The statistics pertaining to income and expenditures of the citizens presented by the NSSO has revealed that food accounted for about 57 per cent of the value of the average rural Indian household consumption during 2009-10 whereas it was 44 per cent in cities. And this, when 60 per cent of India’s rural population lives on less than Rs 35 a day and an identical percentage in several cities lives on Rs 66 per day.

If the average monthly per capita consumption of cereals was 11.3 kg in rural areas and 9.4 kg in cities, then the survey also pointed out that 10 per cent of the population at the lowest rung in rural areas lives on Rs 15 a day and on Rs 20 per day in urban areas.

In terms of average per capita daily expenditure, it comes out to be about Rs 35 in rural and Rs 66 in urban India. Approximately 60 per cent of the population lives with these expenditures or less in rural and urban areas.

July 2009–June 2010 Situation

According to NSS carried out between July 2009 and June 2010, all India average monthly per capita consumer expenditure (MPCE) in rural areas was Rs 1,054 and urban areas Rs 1,984. The survey also pointed out that 10 per cent of the population at the lowest rung in rural areas lives on Rs 15 a day, while in urban areas the figure is only a shade better at Rs 20 day.

The report states that the poorest 10 per cent of India's rural population had an average MPCE of Rs 453. The poorest 10 per cent of the urban population had an average MPCE of Rs 599.

The NSSO survey also revealed that average MPCE in rural areas was lowest in Bihar and Chhattisgarh at around Rs 780 followed by Orissa and Jharkhand at Rs 820.

States’ Condition

Among other states, Kerala has the highest rural MPCE at 1,835 followed by Punjab and Haryana at Rs 1,649 and Rs 1,510 respectively. The highest urban MCPE was in Maharashtra at Rs 2,437 followed by Kerala at Rs 2,413 and Haryana at Rs 2,321. It was lowest in Bihar at Rs 1,238. The median level of MCPE was Rs 895 in rural and Rs 1,502 in urban India, indicating consumption level of majority of population.

According to the study, food was estimated to account about 57 per cent of the value of the average rural Indian household consumption during 2009-10 whereas it was 44 per cent in cities.

Planning Commission’s Estimates

Based on NSSO estimates, the Planning Commission had pegged that poverty line at Rs 28.65 and Rs 22.42 daily consumption in urban and rural areas respectively in 2009-10. As per the Commission’s estimates the number of persons living below poverty line was 35.46 crore in 2009-10, as compared to 40.72 crore in 2004-05.

Hillary Clinton’s India Visit: New Delhi Reminds Washington of Country's Interests in Region

US Secretary of State Hillary Clinton wrapped up her three-day visit to India on May 8. Her trip came at a time when India and the United States are perceived to have taken somewhat different positions from each other on various issues. After two decades of increasing proximity, disagreements between the two countries over several key matters now seem to be slowing down the momentum of bilateral relations. Those who had hoped that Clinton’s visit would put the spark back in the ties will have been a bit disappointed as both parties have not done much, in addition to reiterating already-known positions.

During her stay, Clinton met key Indian leaders, including Prime Minister Manmohan Singh and Congress President Sonia Gandhi. and discussed a range of issues, including China, regional security and civil nuclear cooperation.

Pakistan’s Role in Eliminating Terror

The US secretary of state has pressed Pakistan to do more to ensure its territory is not used as "launching pad" by terror groups for attacks and also said that Hafiz Saeed was "one of the "principal architects" of the November 2008 Mumbai terror attacks. Hillary's comments came at a joint news conference after her talks with External Affairs Minister SM Krishna who spoke of the need for elimination of "terrorist sanctuaries" in the neighborhood.The two leaders nudged Pakistan to bring to justice the perpetrators of the 26/11 attacks and pledged to continue to work together in combating the menace.

In his remarks, Krishna said the recent terrorist attacks in Afghan capital – Kabul -- highlighted the need for elimination of terrorist sanctuaries in the neighborhood and for Pakistan to take steps against terrorism, including bringing to justice the perpetrators of 26/11 attacks. He also stressed the need for stronger action from Pakistan on terrorism, including on bringing to justice the perpetrators of the Mumbai terrorist attack.

In April 2012, the United States offered a $10 million reward for information leading to the conviction of Saeed, the founder of the Pakistan-based terror group Lashkar-e-Taiba (LeT).

Afghan Problem

The vision for Afghanistan was also discussed at the meeting. India stressed the need for sustained international commitment to build Afghan capacity for governance, security and economic development, and to support Afghanistan with assistance, investment and regional linkages.

To ask India to “do more” on the Iranian issue, therefore, is not fair on the part of the United States. The US secretary of state should understand that if the US has to do all it can to safeguard its geo-political interests in the Afghanistan-Pakistan area, India, too, has its interests in Kabul which cannot be properly taken care of if New Delhi loses the Iranian link.

US Investment in West Bengal

Clinton’s offer to Chief Minister Mamata Banerjee to invest in West Bengal is, however, a welcome development. The state will also gain immensely once the issues between India and Bangladesh are settled conclusively. An agreement between the two neighbors on the Teesta River water issue could have been signed by now had Banerjee not taken a stand different from New Delhi’s line of thinking. But, as External Affairs Minister SM Krishna told his Bangladesh counterpart Dipu Moni, in New Delhi, efforts are on to bring the West Bengal Chief Minister to the view that the country’s overall interests must be given precedence over the state’s interest.

Earlier, the West Bengal chief minister had scuttled the United Progressive Alliance’s plans to allow Foreign Direct Investment in multi-brand retail, arguing that the move would destroy small businesses. The US secretary of state seems to have failed to force a change of heart in the feisty Chief Minister Mamata Banerjee.

Issue of Oil Imports From Iran

The Damocles sword is still hanging on India. The United States gave no firm assurance to India that the proposed American sanctions will not apply to it for oil purchases from Iran even as New Delhi stated that the Iranian issue was not a source of discord between the two countries.

Continuing to resist American pressure over the matter, India also made it clear that it would abide only by UN Security Council sanctions against Iran and not those imposed by individual countries.

The US pressure on India regarding oil imports from Iran leaves a bad taste in the mouth. Does it not tantamount to interference in our internal affairs? As long as Manmohan Singh is the prime minister any directions of the United States in India's internal affairs and treaties like nuclear deal are cake walks.

In March 2012, the United States announced sanctions which threaten to shut out importers of Iranian oil from the US financial system unless they make significant and continuing cuts to their purchases by the end of June. Japan and 10 European Union nations have been granted exemption while India and China remain at risk.

In addition to its need for oil, there are two reasons why India must not take the US pressure lying down. India's only reliable land-route into Afghanistan and Central Asia runs through Iran. Moreover, the current US approach is likely to make the Iranian — and regional — security situation worse, not better. Saudi Arabia and Israel, which is already nuclear-armed, worry that a nuclear-capable Iran would tilt the regional balance and want the squeeze put on Iran. But too much financial or military pressure could backfire, goading the regime to commit to acquiring a strategic weapon — something it has not done until today.

India has demonstrated that it has come of age and stood its ground. Iran, despite its saber rattling, is a responsible power and we have a very useful conduit to their Leaders, which could be invaluable, when the World needs stability and growth. India must neither shut off Iran's oil imports nor Iran's access routes to Afghanistan and Central Asia. Pakistan can make overtures to a new relationship, but India cannot afford to alienate the country that can provide a counter balance to the Taliban-Pakistan nexus.

India has been firm in its foreign policy right since independence, and rightly so; we are a country with one of the fastest growing economy. We have recently done an arm deal which is considered world's biggest. We have to manage our allies ourselves. The Indian external affairs minister’s decision to disagree with Clinton and reminding her of India's interests in the region.

Supreme Court Strikes Down Hajj Policy: Government Asked To End Subsidy Within 10 Years

The Supreme Court has struck down the federal government's policy of giving subsidies to Hajj pilgrims and directed that it be progressively "eliminated" within a period of 10 years. It said it will look into the functioning of Hajj Committee of India and it process for selecting people for Hajj pilgrimage.

The apex court was hearing an appeal filed by the government challenging a Bombay High Court judgment which had directed the Ministry of External Affairs to allow certain private operators (travel agents) to handle 800 of the 11,000 pilgrims earmarked under the VIP quota subsidized by the government.

On private operators, the Bench upheld the government policy for 2012, observing that it did not warrant any interference by the Supreme Court.

Citing “Verse-97 in Surah-3” of the Quran, the apex court stated that according to the verse, the Hajj pilgrimage is only permitted to those who can afford the expenses for “one’s conveyance and provision for residence” in Mecca.

Pilgrims and Travel Cost

Quoting statistics provided by the government for the past 19 years, the Bench pointed out that the subsidy had been increasing every year. This was on account of increase in the number of pilgrims and the travel cost.

In 1994, the number of pilgrims from India was as low as 21,035 and the subsidy amounted to Rs 10.51 crore. In 2011, the number of pilgrims went up to 1.25 lakh and the subsidy amounted to Rs 685 crore.

More than 1.5 lakh pilgrims performed Hajj paying for their own expenses without availing of the subsidy, the Bench pointed out.

The Bench, however, acknowledged that the air fare to Jeddah for the Hajjis was more than double the normal fare during other seasons due to regulations imposed by the Saudi Arabian authorities. In 2011, the two-way air fare for the Hajjis was Rs 58,800 against the normal air fare of Rs 25,000. On account of government subsidy, each pilgrim was charged Rs 16,000 as air fare.

Federal Government’s Plea

The bench while hearing the plea of the federal government had expanded the purview of the plea and decided to look into the legality of the government's policy on granting subsidies to Hajj pilgrims. During the hearing in the case, the government had defended the policy of giving subsidies to the Hajj pilgrims and had said it had framed guidelines so that people get subsidies only once in their lifetime.

In an affidavit, the government had told the court that it has decided to restrict Hajj pilgrimage at government subsidy to Muslims only as a "once in a lifetime" affair as against the existing policy of "once in five years." It had said the new guidelines have been framed to ensure that priority is given to those applicants who have never performed Hajj.

The government, however, had refrained from disclosing the amount of subsidy being incurred by it for 2012, saying, "The exact figure in respect of the travel subsidy to the pilgrims going through Hajj Committee of India for 2012 will be known after the Hajjis completed their Hajj journey and return to India."

The apex court had earlier expressed its dismay at the practice of sending official delegations to accompany the pilgrims and had asked the Centre to furnish entire details regarding Hajj subsidy, as also about the criteria adopted.

The court further observed: "These goodwill delegations need to be scrapped altogether. They are no longer relevant. Even a team of 9 to 10 persons is not required. The court had also pulled up the federal government's practice of ‘politicizing’ Hajj by permitting official delegations to accompany the pilgrims, for which the government offers huge subsidy, saying, It is a bad religious practice."

Welcome Decision

There was near-unanimity among the leaders of the political class in welcoming the verdict, with a few even demanding immediate scrapping of the subsidy and suggesting use of the money for the educational needs of Muslims.

Asaduddin Owaisi of the Majlis-e-Ittehadul Muslimeen, an ally of the UPA said: “Why wait for 10 years to scrap it. It should be done away with this year itself, because it does not benefit the pilgrims. In the name of giving subsidy, the government has been fooling people till now, for, it has been investing the money in Air India.”

Senior BJP leader Mukhtar Abbas Naqvi said: “The BJP welcomes the verdict but we are of the opinion that the government should continue to help out the pilgrims with basic services.”

There was no need to club the educational needs of Muslims with the Hajj subsidy. “The government should try to implement the schemes for providing scholarship to Muslim girls, which are not getting properly implemented in the first place.”

Communist Party of India leader D. Raja said giving subsidy to any community was a policy decision and the Central government needed to explain its position.

Raja said: “There have been several court verdicts against the policy decisions of the government and it is for the government to explain.”

Referring to Law Minister Salman Khurshid's reaction that the government was considering the Hajj subsidy and discussions had taken place for its rollback, Raja said this was a “vague” stand.

Zafarul Islam Khan, president of the All India Muslim Majlis-e-Mushawarat, an umbrella organization of several Muslim groups, said: “The so-called Hajj subsidy is of no use to the pilgrims. We never asked for it.”

Countering Terrorism in India: Major Political Parties Fail To Break Logjam Over Proposed NCTC

The one-day meeting between Prime Minister Manmohan Singh, Home Minister P Chidambaram and the Chief Ministers, representing virtually all the major political parties, was held in New Delhi on May 5. The meeting that was organized on the setting up of the National Counter Terrorism Centre (NCTC) remained inconclusive after steadfast opposition from chief ministers, including those from the Congress, United Progressive Alliance (UPA) allies, the Bharatiya Janata Party (BJP) and those of regional parties.

The opposition to it in the present form leaves the federal government with no option but to go back to the drawing board to redraft the NCTC, probably give it a new name. It will have to prune some powers of the proposed body and, in all possibilities, remove it from the ambit of the Intelligence Bureau (IB).

With chief ministers strongly opposed to the NCTC in its current form, the Home Ministry has no option but to remove the antiterror body outside IB and to have a mechanism for mandatory coordination between central agencies and state police forces.

Home Minister P Chidambaram made it abundantly clear that his ministry would work on removing the biggest hurdle in forming the anti-terror body in his concluding remarks at the chief ministers’ conference that were released officially on May 6.

Emerging Key Sticking Issues

Two key sticking issues emerged after the meeting. One that the anti-terror body should not be under the control of IB. Two, the counter-terror body - in whatever shape it is formed - should not carry out independent operations in states.

The NCTC, an anti-terror body proposed by the Union Ministry of Home Affairs on February 3, is not acceptable to chief ministers in its present form. 

The states which did not agree on the NCTC in its present form include a couple of Congress-ruled states, all BJP-ruled states and the states ruled by regional parties like the Akali Dal in Punjab, the National Conference (Jammu and Kashmir), the Trinamool Congress (West Bengal), the Biju Janata Dal (Odisha) and the AIADMK (Tamil Nadu). Many chief ministers questioned the logic of putting the NCTC under the IB.

Possible Options

One of the possible options is splitting the work of the NCTC-type body. A counter- terror body with central command could have access to IB databases on suspects, informers, friends of suspects and financiers for analysis. Operations could be handed over to the National Investigative Agency (NIA) formed after the November 2008 Mumbai attacks. Since the NIA was formed under an act of Parliament, Chief Ministers would have no objections to it.

The second contentious issue is of having only joint operations of central forces and state police forces. The chief ministers, even those of Congress and UPA allies-ruled states, made it clear that the NCTC type-body could not carry out independent operations -- arrests or detentions of suspects -- in states without prior information to the state DGP.

One of the options being studied is the possibility of forming small nodes of the NCTC type-body in states. These would have a dedicated unit of the state police force attached with the central agency team. As most state capitals already have a small central agency team, staffing the nodes would not be problem.

The joint team would be kept in the loop on all information and would simultaneously keep the state DGP informed. Haryana Chief Minister Bhupinder Singh Hooda was among those who suggested joint training of state and central forces at the meeting.

Instrument of Subversion

When Manmohan Singh says the NCTC is not meant for facilitating the federal government’s intrusion into the domain of the State Governments and Chidambaram seeks to allay the States’ apprehensions that this is yet another instrument of subversion of the Constitution, they do so in the hope of softening the tough stand taken by the chief ministers, especially of those States where the Congress is not in power. But the fact that their protestations have failed to move hearts and minds reaffirms, though not for the first time, what has been known for long now: Neither commands credibility.

There can be an endless debate on the need for an over-arching Central authority to deal with counter-terrorism across States. Those who argue in favor of the proposed NCTC have made points that cannot be entirely ignored. However, those opposed to the idea of erecting such a super-structure have raised issues that cannot be brushed aside. But much of the debate has been based on theoretical precepts that are borrowed from others’ experiences and are not necessarily rooted in the Indian reality. As Gujarat Chief Minister Narendra Modi says, a robust, well-trained and well-equipped local police force is the best weapon to counter terrorism; after all, it is the local policeman who is, and shall remain, the first respondent. Second, to nibble away at the States’ constitutional rights, in this case maintenance of law and order, can never be acceptable, more so when the intentions of the federal government are questionable.

Pleas and Assurances

Undoubtedly, it is not a positive sign that despite the prime minister and the home minister’s impassioned pleas and assurances to dissenting states, the deadlock between the federal government and some states on the setting up of the NCTC could not be resolved. This should not, however, come as a surprise because the 10 dissenting states had made their stand clear beforehand. While most of the dissenters were non-UPA-ruled states and had a stake in keeping the pot boiling, the steadfast opposition of Trinamool Congress’s Mamata Banerjee and to a lesser degree Mulayam Singh Yadav and Omar Abdullah cannot but be deemed to be a blow to the Congress which spearheaded the move to set up the NCTC.

The scathing criticism of the federal government on the issue by Tamil Nadu Chief Minister J. Jayalalithaa was along expected lines but while it was reassuring to the opposition, it was a reminder for the Congress that it was up against a wall.

However, the Manmohan Singh government, on its part, merely restated its earlier position and made no efforts to address the specific provisions which the dissenting states were objecting to. For instance, the argument that the NCTC would undermine the states’ police powers was denied by both the prime minister and the home minister but there was no indication that the Centre was prepared to clothe the state police with greater powers to deal with terrorists while building up the NCTC as an apex body to coordinate action.

Assessment

Clearly, some of states chief ministers do not sufficiently appreciate the sophisticated features of international terrorism which has targeted India for three decades; its reach, resources and swiftness of mobility of its deadly practitioners who flit across boundaries; the ultra-modern nature of communications and fighting equipment it employs; and the enormous funds at its disposal, not to mention ideological, political and occasionally ground-level support that becomes available to it. All of this was encapsulated in the November 2008 Mumbai terror attacks.