In an recent article “The End of An Era For White Men” by David Rothkopf in FOREIGN POLICY Journal (Dated 01 Feb 2016) there is the historic admission of steady global dominance of western world.

It states:-

“While men had a great run from the rise of the Greeks to the birth of western based global empires – they have controlled much of the world sought to. So much of history is a consequence of decisions made by and at the behest of the white guys in-charge’.

 The learned author adds:-

“Several factors are contributing to make this historic moment a watershed in global history. ….. …. ….. ….. While the planet earth has always been home to great non-white civilisations, such societies have ebbed and flowed in relative importance. Today it is clear that these emerging societies, namely China and India are on the rise.”

 In context of above, what our Hon’ble Home Minister Shri Rajnath Singh had stated sometime back that Maharana Pratap of Udaipur deserves to be titled “The Great”; it quintessentially sounds logical and convincing.

Interestingly, historians world over have not yet found as to which august body (or a group of individuals) had constructed the qualifying requirements for the title “The Great”. And, also who (and when) the title(s) were conferred on the selected few. Just to mention some of them:-

• Alexander The Great (of Macedonia)
• Constantine The Great (of Byzantium Empire)
• Peter The Great (of Russia)
• Fredrick The Great (of Germany)
• Ashoka The Great (of India)
• Akbar The Great (of India)

Interestingly, commentary on the traditional belief in the decline of greatness; THOMAS CARLYLE laments in his classics “Heroes, Heroworship And The HEROICS IN HISTORY (1841)” that “Napoleon was our last Great man”. He also singles out the lone social fact that “Greatness has been equated with fame and the fame could not be made overnight”.

Delving deep into the dynamics of above stated “Greatness” conferred on heroes of yester-years; shouldn’t we presume that it was the western media which was on the beck and call of European world conquerors that played the trick. History is testimony to the fact that whenever civilisations preferred convenience, they spelt their downfall. Dr. Radha Krishnan had once said “India was never conquered from “without”; it was always from “within” that it was subdued”. Third world countries have not only lost on battle-fields but also on brand/image projections. Maharana Pratap’s case is to be viewed through the above prism.

Battle of Haldighati (fought on 21^st June 1576) with Raja Man Singh as Commander-in-Chief of Mughal army and Maharana Pratap of Udaipur leading conglomerate of Rajput warriors – the episode is well documented. The outcome of the clash is known to students of history. Mewar army was routed in the final run. General Sagat Singh of Indian army (hero of Bangladesh’s liberation: 1971 India-Pak war) has attributed Mughal army’s success to their superior artillery.

A moot point is that Pratap could not be captured and his flight from battle-field was orchestrated by his faithful(s) – for yet another day to settle scores with the Mughals. It is also on record that Emperor Akbar had refused to meet Raja Man Singh and Asaf Khan while expressing his dissatisfaction over the results. On this subject, we have the last word from eminent history scholar Prof. G.N. Sharma. He states:-

“The Kachhawaha General (Raja Man Singh) had failed either to kill or capture the Rana. Hence Haldighati was a barren victory for the Mughals”.

 The Battle of Haldighati has immortalised Maharana Pratap as a warrior of freedom and pride. Amongst the Mughal Kings, Akbar rose to dizzy heights of greatness and the title “AKBAR THE GREAT” is well deserved. But Maharana Pratap’s rugged defiance against Mughal rule qualifies him as fountain-head of liberty and self-rule. It wasn’t easy – those were the times when consequences of not towing the diktat of an Emperor could bring-in untold miseries; Maharana Pratap who epitomised exemplary courage and indomitable spirit had outrightly rejected the olive branch. He toiled hard for decades – post-Haldighati clash, practicing guerilla tactics against the adversary and refused to compromise with freedom.

There are some unsung heroes of Battle of Haldighati.

1. Jhala (Bida) Man – who had assisted Maharana Pratap in moving to a place of safety (in this manouvre he got killed).
2. Hakim Khan Sur – The Afghan General and a loyalist. He was a strategist and warrior of repute. (Not much literature is available on him).
3. Bhama Shah – He was the financier who greatly helped Maharana Pratap during his “exile” after the Battle of Haldighati.
4. Rana Punja – The Bhil Chieftain – his band of followers had inflicted severe blows on enemy flanks. His generosity towards Rana Pratap in providing “men and material”, assistance during “war and peace” periods with Mughals is well known.

It is said that “History has been unfair to its heroes, leaving ordinary men to decide the difference between posterity and oblivion”.

For the six eminent luminaries viz. Rani Gaidinliu, Lala Lajpat Rai, Tatya Tope, Maharana Pratap, Shri Bhisham Sahni and Sage Chaitanya Mahaprabhu; the recent initiative in constituting an Implementation Committee on Commemoration under the Ministry of Culture is worth mention.

Govt. of India’s effort to “resurrect” heroic images from our hoary past are well-meaning. Maharana Pratap of Mewar richly deserves the title “The Great”. One is reminded of Martin Luther King Jr.’s words “The Arc of moral Universe is long, but it bends towards Justice”. Yes, we are talking about Justice for recognition to a great Indian warrior Maharana Pratap.

Gp Capt DC Bakshi, VSM, IAF (retd.)

Introduction: Power to Tax and Sovereignty

Power to levy taxes has been universally acknowledged as an essential attribute of sovereignty. Cooley in his Book on Taxation – Volume-1 (4th Edn.) in Chapter-2, recognises the power of taxation to be inherent in a sovereign State. The power, says Cooley, is inherent in the people and is meant to recover a contribution of money or other property in accordance with some reasonable rule or apportionment for the purpose of defraying public expenses.

In Commissioner of Income Tax, Udiapur, Rajasthan v. MCdowell and Co. Ltd. (2009) 10 SCC 755, the Supreme Court observed as follows:

“(iv)  As an incident of sovereignty and in the nature of compulsory exaction, a liability founded on principle of contract cannot be a “tax” in its technical sense as an impost, general, local or special.”

Further, a tax is a compulsory exaction of money for general public good and is defined as under by Thomas M. Cooley in his book The Law of Taxation at page 61(Clark A. Nichols ed., 4th ed. 1924) as follows:

 “Taxes are the enforced proportional contributions from persons and property, levied by the state by virtue of its sovereignty for the support of government and for all public needs. This definition of taxes, often referred to as “Cooley’s definition,” has been quoted and endorsed, or approved, expressly or otherwise, by many different courts. While this definition of taxes characterizes them as ‘contributions’, other definitions refer to them as ‘imposts’, ‘duty or impost’, ‘charges’, ‘burdens’, or ‘exactions’, ; but these variations in phraseology are of no practical importance.”

GST and the World

Prior to the implementation of the Goods and Service Tax (GST), there were several indirect taxes which were being levied at different levels of the supply chain. The implementation of the GST has resulted in the merger of indirect taxes (central as well as state) thereby making the GST an umbrella tax, which would facilitate Indian Businesses compete globally. GST is inter-alia structured for efficient tax collection, seamless inter-state movement of goods and reduction of the number of indirect taxation departments such as VAT, Excise, Service Tax, etc which resulted in glitches and undue delays.

France was the first country to implement GST to reduce tax-evasion in 1954. Since then, more than 160 countries have implemented GST with some countries having Dual-GST (e.g. Brazil, Canada etc.) model i.e. Federal GST and State GST. India has chosen the Canadian model of dual GST i.e. CGST and SGST or IGST in case of inter-state transport of goods or provision of services.

In Canada, the GST is known as Federal Goods and Service Tax and Harmonized Sales Tax which is being implemented since 1991. A table made below provides a comparison of scheme of GST in India and the prevailing schemes in Canada, Singapore and Malaysia.

Therefore, GST model across the commonwealth countries are similar with some variations with respect to the rates and threshold limits, which may be economy specific.

GST in India: Biggest Economic Reform since Independence

GST is a single tax that simplifies the giant tax structure by supporting and enhancing the economic growth of a country, and is levied on the supply of goods and services, right from the manufacturer to the consumer. GST is a destination i.e. final consumption based tax regime, however, credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer would thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages. To the credit of the Finance Minister and the GST Council, the efficient input tax credit system ensures that there is no cascading of taxes i.e. taxes on tax paid on inputs that go into manufacture of goods.

In order to avoid the payment of multiple taxes such as excise duty and service tax at Central level and VAT at the State level, GST has unified indirect taxes and created a uniform market throughout the country. Integration of various taxes into a GST system has brought about an effective cross-utilization of credits. The current system taxes production, whereas the GST will aim to tax final consumption. The following taxes have been subsumed in the GST:

At the Central level, Central Excise Duty, Additional Excise Duty, Service Tax, Additional Customs Duty commonly known as Countervailing Duty, and Special Additional Duty of Customs.

At the State level, State Value Added Tax/Sales Tax, Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States), Octroi and Entry tax, Purchase Tax, Luxury tax, Taxes on lottery, betting and gambling.

There are following benefits of the GST:

• Two-tiered One-Country-One-Tax regime.
• Subsuming indirect taxes at the centre and the state level.
• Widen the tax regime by covering goods and services and make it transparent.
• Benefit to the manufacturing sector from cascading effect of taxes, thus by improve the cost-competitiveness of goods and services.
• Bring down the prices of goods and services and thus by, increase consumption.
• It would create business-friendly environment, thus by increase tax-GDP ratio thereby enhancing the ease of doing business in India.
• Direct benefit to Manufacturing: Logistics and More Employment – The manufacturing sector has great importance for many developing countries. India’s manufacturing sector has complex tax structure with only 16% share in GDP, India’s manufacturing sector has been close to stagnant for the last two decades. India has shifted itself from an agricultural economy to a manufacturing and service economy. The direct benefit in the hand of manufacturers and logistic companies, warehousing facilitators rather than industries. GST will bring slight change in prices & tax burden on consumers. It will reduce the transit time by which more efficiency will be and benefiting manufactures. Further, logistics sectors would benefit after implementation of GST, reducing compliance cost, dropping number of warehouse and allowing tax credit across the supply chain. Almost all the sector would have indirect benefit from it and expand their operation that will create a more employment.
• Under GST, without costs on Inter-state movement of goods (CST or Entry taxes) and change in the point of taxation to be the consumer, businesses shall have greater flexibility to muster and re-design their supply chains thereby optimizing their logistic cost. Since sellers are also likely to get benefit from changes, Companies ought to negotiate and get benefit on Input Prices.

Conclusion: Challenges ahead

The most critical challenge in the implementation of the GST would be the IT transformation that is required to be made by the businesses and their respective organisations. Technical systems would have to be in synchronisation with the scheme of GST as monthly returns would have to be filed electronically. Secondly, since the threshold exemption limit has been kept low, SME’s and small traders may be would have to compete aggressively. However, with time it would be the SMEs and small traders who would benefit the most from the implementation of the GST, and lastly, the intended revenue collection would depend on the strict implementation in letter and spirit of the GST Act and allied Rules.  

(Sagar Suri is an advocate practicing at the High Court of Delhi and Supreme Court of India.)

We have been hearing about India’s developing debt crisis for a while now. News reports also listed top defaulters.

Insolvency or Bankruptcy are terms which are usually used interchangeably for a situation of a person or a corporate when they are unable to repay their debts. Bankruptcy is the legal adjudication of Insolvency which is a factual scenario. Insolvency can occur due to a set of factors which include, slowdown of the cash flow, poorly managed cash system, increase in cash expenditures, etc. The reasons for insolvency are important, as the specific rights are allowed for the creditor to be exercised against the entity which is insolvent in any legal system.

The Indian insolvency law recently went through an overhaul with the government notifying most of the provisions of the new Insolvency and Bankruptcy Code (IBC) earlier this year. The Indian Law is one of the better drafted legislations if we compare it globally and has borrowed best practices from both UK and the USA. The new Law was passed, enacted and notified at a break neck speed.

Last month Reserve Bank of India was armed with a set of powers by the Government to identify and initiate proceedings, through the respective banks, against defaulters under the Code. These powers flow through an amendment to the Banking Regulation Act, which adds Sections 35AA and 35AB to the Act.

Though any set of Insolvency laws in any jurisdiction are not a debt recovery tool per se but they certainly play an important role in promoting credit discipline at large. India’s debt problem is concentrated to a few entities as has been pointed out by the RBI. As per the RBI only 12 NPA accounts account for 25% of the total NPAs by volume. The gross bad debt of the Indian banking system as of March, was at Rs 7.11 lakh crore, which means the 12 accounts would be responsible for about Rs 1.78 lakh crore.Recently the Finance Minister, Arun Jaitely remarked that the whole NPA problem is only limited 20-30 accounts and is not spread to large number of accounts.

The RBI will in all probability recommend the respective commercial banks to initiate proceedings under the IBC against these 12 accounts. This move has drawn an international applause, including a praise from the international credit rating agency Moody’s too.

This is a valid point considering the proceedings under the code can’t go beyond 180 days which are stretchable upto 270 days at the most. Time is of essence for the resolution of this problem because the debt is growing day by day. There is a counter argument to this, that the time limit may actually force the corporate into liquidation. This is a very flawed argument. Insolvency is not necessarily the worst outcome in the current situation and in fact it is probably the best solution. The corporates which we are dealing with here, most probably have already been subject to multiple restructuring through various schemes of RBI like Strategic debt restructuring, S4A, 5/25 etc. Hence, insolvency under the IBC is not that bad afterall, since the banks and the creditors will atleast be able to recover a part of their credit. This will certainly help them improve their asset quality which is under tremendous amount of stress right now.

Had there been no IBC, the resolution of each case would atleast take 4 years, which has been India’s average of resolving Insolvency in the recent past.

Given the knowledge of the cancer of debt, surgery shouldn’t be a problem if we are prepared to take bold decisions. All top 20-30 accounts in fact can be subjected to IBC proceedings. Even if they result in a 40% of haircut by the banks on an average, 60% of the money gets back to the banks which can be used for their recapitalisation.

If we start now with the resolution of the first 12 accounts, as recommended by the RBI, the judicial proceedings can be done within a year and the rest 10-15 accounts or so in the next year. The amendment in the Banking Regulation Act is very critical here. The creditors, which being the banks, anyways don’t need a sanction or a permission from the RBI to initiate proceedings under IBC, as per its provisions. What happens in practical situations is that the defaulter is a person who is politically connected and pressurizes the bank administration to not proceed and usually succeeds in doing it. Now after the amendment it is the RBI can be authorized by the Central Government to direct the banks to initiate proceedings under the IBC. This way the bank administration can escape any political pressure which is usually the problem.

Due to a small number of NPA accounts accounting for the major NPA by volume, our debt problem is still a problem only and not a crisis. For the sake of comparison, the sub-prime crises in the USA, involved a large number of accounts and hence became unmanageable and ultimately resulted in global recession. India’s debt problem therefore can be effectively resolved or at least contained by effective implementation of the IBC. The priority here should be saving the banks and an impending debt crises and not saving a few corporates.

(Raghav Pandey is a Research Scholar at School of Humanities, IIT, Mumbai.)

A rather peculiar phenomenon which is now appearing on the political landscape and in the mainstream and social media, is that anyone who is anyone, feels compelled to comment on the country’s Armed Forces, more so on the actions of the Army. The trend gained traction after the  terror attack on the Air Force Station at Pathankot in January 2016, which caused casualties to own forces before the terrorists were eliminated. This was followed a month later by a terror attack on  a government building in the outskirts of Srinagar which resulted in the loss of three para commandos including two Captains, before the lone terrorist was eliminated. Then in September, 17 soldiers lost their lives in a sneak attack on a brigade HQ in Uri sector, which rightly caused rage and indignation across the country and led to the Indian Army responding by a surgical strike across the border, successfully targeting a number of terrorist bases. Finally, in November, the terrorists struck once again, this time at an artillery unit in Nagrota, killing three soldiers, including one Captain.

2017 has not yet seen the type of high profile attacks of 2016 on military targets, which perhaps points to the success of the Army in keeping the area under effective domination, but civil disobedience in the form of pelting stones at the security forces has taken on a more ominous dimension. It was to save the lives of election officials and their protection party from a thousand or so stone pelters intent on creating mayhem that Maj Gogoi, who was detailed to rescue the beleaguered officials, tied up a stone pelter in front of his jeep and carried out the rescue without mishap in April this year. But then all hell broke loose, with exaggerated concern being expressed for the human rights of the tied up stone pelter, but muted or no criticism being showered on the murderous stone pelters and their attempts to thwart the election process. The Army supported the action of Gogoi, with the Chief giving him his commendation card while stating at the same time that though not the norm for the Army, different situations required different responses. A former Army Commander of Northern Command however openly expressed his displeasure to the act of tying up a stone pelter, taking the high moral ground that such an act had no place in the Army’s ethos. The Government supported the Army Chief, but predictably, the opposition came out all guns blazing, indicting the Centre and the alliance government at the State  for its perceived failure in bringing peace and normalcy to the Valley and infringement of the human rights of the civilian stone pelter.

Soon public opinion was divided on the issue. Editorial pieces in the Indian Express slammed the Army, the Telegraph termed the sequence of incidents as shocking and unbecoming and the Hindustan Times bluntly stated “The General has it wrong”. Karan Thapar, the son of  a former Chief also jumped into the fray, stating that it was ‘not the Indian Army I know’. But other mainstream papers supported the Army, support pouring in overwhelmingly also from the social media. In all the brouhaha, the basic issue however got ignored.

Commanders need to take decisions in real time in situations which are akin to war. Their actions cannot be judged in terms of right or wrong — but on whether their action was done in good faith. How an action will eventually pan out can never be pre-determined and young commanders must always have the backing of their superiors in the chain of command for taking on the spot decisions. Otherwise, our junior leadership will lose confidence in the higher leadership with disastrous consequences for the Army and the nation. More importantly, as said so eloquently by Sadguru, decisions on the battlefield must be left to the commanders who are facing the bullets and cannot be the subject of debate in the media. Every action cannot be put open to public gaze. The Army is the instrument of final resolve and its edge must never be allowed to be eroded. Which is why the Chief supported his officers fighting on the battlefield. On a different note, Karan Thapar may be right when he stated that this is not the Army he grew up in. It most certainly is not. The present Chief upheld the interests of the Army. Sadly, that did not happen when his father was the Chief and we suffered humiliation at the hands of the Chinese in 1962.

(The writer is Director of India Foundation)

The article was published in Salute magazine, April-May 2017 issue.