Archive for November, 2016

Making of Big Brother: Breaking Free from RSS/Hindutva Shadow?

20 November 2016

While the tumult over De-Re-Monetisation [DeReMo] continues to whiplash through the economy and polity of India, one of the first notices by the taxman for high value deposits [> 2.5 lacs at the moment] have already been served even before the deadline for surrendering old  ₹1000/500 notes, 30th December 2016, is anywhere near. Curiously, the “scan” of the notice dated 18th November issued by IT-investigation unit based in Siliguri was produced in the Economic Times, probably the same day or very early next day, because a “Modi-Devotee friend” shared it on WhatsApp early on19th November morning. Such IT notices are perhaps not governed by any confidentiality requirement, but their widespread publicity with such alacrity surely smacks of deliberate leak with far bigger agenda. Message is out: “BIG BROTHER is WATCHING”. At one level it can be construed as a measure to deter many others scheming and plotting to deposit their stash of black money into banks and thus render a “potentially huge” cache of  ₹1000/500 notes worthless; which then can be declared resounding victory over black money.  But at another, it seems to be just a step in an overarching grand plot.

The government machinery moves agonisingly slowly. Leave alone day to day affairs, but even in matters like tax collection its progress is marked by legendary lethargy. Modi has repeatedly positioned himself in the forefront of “battle against terrorism” at international meets. Yet, there was an inexplicable [and possibly unpardonable] delay of close to 5 months between surfacing of allegations that Dr. Zakir Naik’s sermons inspired the terrorists who killed and took hostages at Holey Artisan Bakery in Dacca and the NIA raid on the premises of NGOs run by him. The HSBC Swiss and Singapore leaks too took considerable time before action was initiated; and Panama papers investigations took a “seven months breather”. How come did the taxman act with such welcome but unheard of ever before alacrity; especially when income tax department is saddled with staggering mountain of Tax-Demands worth  ₹ 7 lacs crores, {corporate component is  over ₹  2 lacs crores},almost 50% of the DeReMo Value? Assessing officers or other tax officials barely manage to issue notices or demands, finalise proceedings or impose penalties before the statutory time limitations. Income tax, Excise and Customs, Sales tax or Mining departments are unable to or not allowed to pursue even high profile cases of people like Janardan Reddy, ex-BJP minister in Karnataka’s Yediyurappa led government, who even disapparated [aka Harry Potter] tens of thousands of tons of illegally mined iron ore that was impounded by former Lokayukata, Justice Santosh Hegde, at Belekeri port {Modi friend Adani is implicated too}. Bang in the midst of this nation-churning Anti-Corruption DeReMo Hoopla, Reddy had the temerity to celebrate a big fat wedding, thronged by several political leaders including from BJP, thumping his nose at the “iron-man” PM when the common man was running from pillar to post to get hold of small change of “legal” money to meet his daily needs.


Tens of thousands of DeReMo notices would be issued by the taxman in the next few weeks, but bringing the real crooks to early justice would likely remain a pipe dream. The honest taxpayers and even the mildly dishonest ones [afraid of the law, but tempted by the success of real crooks] would manage to exchange the few old notes they hold or deposit them in their accounts without much ado. The real crooks are any way not afraid of the law because they know how the venal system works and how to manage it; and can engage the best legal brains to sabotage the law enforcement, whenever the system threatens to work as it is supposed to. There could be a constitutional challenge to DeReMo too: (1) Not backed by RBI Act for complete demonetisation of a denomination or for limiting withdrawals (2) Deprivation of property, even temporarily, is only by authority of law, which is absent here. Therefore, the new spate of tax demands, especially the big ticket ones, would be embroiled in years, if not decades of tax-litigation spanning at least next two general elections. What purpose then, these “hasty notices”, issued quite obviously at the express command of highest political authority, would serve? But there could be a method in apparent madness. Why?

Modi rode to phenomenal success in 2014 elections on the promise to get rid of corruption {काँग्रेसमुक्त भारत} and to hasten development with jobs; an assurance that was especially bought into by what pundits called aspirational and youthful India. However, the backend and backbone of his campaign was sustained and held together by uncompromising Hindutva {recall the communal polarisation engineered by 2013 Muzaffarnagar Riots and the 71 seats [90% of total] won by BJP in UP} and the dedicated RSS cadre. Modi was never averse to Hindutva. In fact he made most of it to ace three successive Gujarat elections. But when he became prime minister and grabbed the chance to hug powerful world leaders, he relished the grandeur of strutting on the world stage. He saw a bigger role for himself than being just the PM of India -the leader of a “major world power”. An ambition that was lovingly encouraged, of course contingent upon “opening up the economy”, by global capital, rating agencies and world media; who had been weary of stagnating world economy and had begin to panic at the palpable slowdown of China that had almost singlehandedly kept the system afloat after the great recession. The initially welcome baggage of sundry Swamis, Maharajas, Sadhwis and diehards that Hindutva brought into his “parliamentary entourage” must have begun to bite in the new role he aspired to, conscious as he must be of his pariah treatment by USA or UK because of the perceived role he played in Gujarat riots. He has little use for RSS or Hindutva in his new aspirational vision if he can help it and needs a loyal constituency above and beyond RSS. This explains his active silence in espousing communal sentiments though he also keeps mum when rabble-rousers rake the communal-muck. Modi’s hopes for building this loyal constituency were dashed when on one hand despite GDP numbers job growth stagnated or even dwindled prompting president Pranab Mukherjee to speak up. On the other, his anti-corruption crusade that promised  ₹ 15 lacs in every Indian’s pocket came a cropper with “foreign accounts/assets” and domestic “income” declaration schemes yielding painfully embarrassing outcomes. And at the same time UP, Punjab and few other state elections are looming large. Modi is acutely aware that path to his reelection in 2019 passes through UP. Modi needed a spectacular, headline-hunting move that will touch and move every Indian and demonetising  ₹1000/500 notes was the answer possibly provided by FM Arun Jaitley. “Touch” and “Move” it did. In fact, it overwhelmed! But Modi has in the process jettisoned the loyal RSS/Hindutva constituency of traders, shopkeepers, small and medium manufacturers, miners and so on, who depend heavily on “cash economy”. Simultaneously, Modi has walked into an economic quagmire, which is likely to backfire at least in the next three quarters by affecting negatively growth, trade, agriculture, livelihoods and jobs. People are greatly inconvenienced, but are putting up with DeReMo bravely because somewhere they feel that black money holders will be served their just desserts finally; and therefore their own suffering is not in vain. Modi needs to uphold that feeling of “suffering for a cause” with everything at his command at least until the state-elections. Even if that means that the revenue collection administration reels over under the combined onslaught of pre-existing/regular workload and the sudden exponential surge of DeReMo “follow up” work. But just serving notices won’t do. There would have to be regular  headline grabbing “fireworks” over the next few months comprising of tax raids, seizures or even high profile arrests to provide talking points to people, whose own misery may be assuaged by thinking that the justice to “high and mighty” is finally being served. The surveys against real estate industry; gold, diamonds and jewellery; mining industry etc. may be sequenced in tandem. He has ominously warned that “there is no guarantee that more won’t follow”. He would have to make his warning count at least until the elections are over if he wants to outgrow his RSS roots.

Would his big bang moves eliminate corruption? Already there have been a few reported cases of graft by government employees  caught with newly minted Modi-notes of  ₹ 2000; two of them from Gujarat. Won’t his gamble to cleanse the system with compromised government machinery come to a naught? After all India won’t have Modis as assessing officers  to supervise black money cases, even the big-ticket ones.

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