THE ECONOMIC TIMES

The Edit Page

World Has a Stake

in Hillary Clinton
Her rival seeks to reverse globalisation
President Barack Obama was spot on when he said this
years election for US president is not just another election and that it is vital to get Hillary Clinton elected. Clinton is an accomplished politician with a long track record of public service, dating back to before she married
aspiring politician Bill. She has shown commitment,
grit and discipline in her long years of public service.
But this is not what makes her the candidate the rest of
the world would like to see Americans elect this November. Her primary virtue is that she is not Donald Trump.
The Republican Party has chosen as its candidate a man
cast in a very un-Republican some would say, un-American mould. A Trump presidency would change not
just America but the world order in undesirable ways.
Given growing interdependence of nations, thanks to
globalisation, what the more powerful nations do matters to the rest of the world. A rule-based world trading
system underpinned by the World Trade Organisation,
trade treaties spanning many countries and governing many areas of economic policy, coordination on matters
such as tax information sharing and
preventing base erosion and profit
shifting, global action on climate
change, etc, are important aspects of
economic interdependence. Even more important are geopolitics and the political values deemed normative, which derive from policies of the great
powers. Trump offers an isolationist America, less open
to outsiders and hostile to Muslims. He tells supporters
that slapping huge taxes on imports would bring manufacturing jobs back to the US. His vision is the antithesis
of globalisation from which much of the developing
world, and particularly India, has gained over the last
quarter of a century.
Not that globalisation has only brought cheer and prosperity. Like in the case of any transformative new paradigm, there are losers, whose resentment has whipped
up enough support to make Trump the Republican candidate. He leads over Clinton in some opinion polls. If we
had a vote, we would vote Hillary.

THE ECONOMIC TIMES | BENGALURU | FRIDAY | 29 JULY 2016

The model goods and services tax law should be firmly aligned with the digital economy needs

Get the Bill Connected

T V Mohandas Pai
& Sudhir Singh

t seems that the nationwide anxiety on the Goods and Services Tax (GST) Bill is about to
end soon in the current monsoon session. The government
has released the draft model GST
law. All eyes are now set on the empowered committee of the state finance
ministers chaired by Amit Mitra.
This is the first major building
block for a GST rollout. All states and
the Centre will be adopting a GST
(Central GST, State GST, Integrated
GST) Act based on this model law.
The other major building block is the
information technology (IT) backbone, the Goods and Services Tax Network (GSTN). It is in a relatively more advanced stage, under a separate
body also called the GSTN.

Wrong Code
The GSTN is going to be end-to-end
digital, thus giving GST a digital frame or body. It will perhaps become
the largest digital platform in the country and will be set to an Open API
(application programming interface)-based futuristic technology platform right from the architecture stage. By design, the GSTN will support
seamless interface and operational
integration of diverse business applications. But when one reads the fine print of the model GST law, the

euphoria evaporates, at least for the

ICT industry. It does not incorporate
the needs of the digital economy. Nor
does it make progress on a number of
issues that plague the emerging digital industry.
A digital economy is powered by
both digital goods and digital services. New technology trends like the
Internet of Things, deep learning
and cloud computing will soon precipitate a digital world in unprecedented ways. The GST Bill doesnt acknowledge the reality. Strangely, it still harks back to the old formulation
where all intangibles are services.
By doing so, it completely disregards
the emergence of digital economy.
The plea, that most countries treat
intangibles as services, sticks well
to single tax (VAT) systems. It does
not stand ground in the scheme of
goods and services. The HS (harmonised system) code-dependent oldworld order was limited to the physically transported goods era. This has
to be extended to digital goods. It
must provide for intangibles to be
products. Both digital products and
services have an important role to
play in the new economy.
China has defined an HS code for
software products. The US has a Bill
pending in Congress on defining digital goods and digital services distinctly. Why is India missing this opportunity of defining digital goods?
Getting the definitions right is important to having a fair and neutral
tax regime.
Digital goods have all inherent
properties of goods, except tangibility. As per the model GST law, tax
will apply on stock transfers. Both stocking of digital goods and stock transfer is possible. But services cant
be stock transferred or stocked. In se-

While defining of business models can be an aid for

taxmen, using business model-based tax treatment is
detrimental to fairness and neutrality in the long run

Meaning of
Renunciation
RADHANATH SWAMI

FILE PHOTO

16

Well, of course, digital goods are tangible!

rvices, provisioning and consumption are almost simultaneous events.

As far as possible, the structure of
the tax regime should be business
model-agnostic. The recent overexcitement over e-commerce has resulted in definitions like aggregator
and electronic commerce operator.
While defining of business models
can be an aid for taxmen on the ground, using business model-based tax
treatment is detrimental to fairness
and neutrality in the long run.

vy should be on the nature of the transaction and on the nature of the relationship between the two parties.
Our tax regime should not have favoured business models. The model tax
law seems to raise apprehensions on
increased compliance. Many registrations across states are needed and
this goes against the concept of a simplified tax system. GST should not lose focus on ease of doing business.
The empowered committee and finance ministry should look at a consultative process as an opportunity
to produce a futuristic law. Accepting the reality of digital goods at par
with tangible goods is a serious issue
that needs to be addressed. It will
help harness the power of a subcontinental-sized single digital products
market. Dependence on specific business models should be reworked.
India can provide thought leadership to the world. Several international fora, such as the World Trade Organisation and the World Customs
Organisation, will welcome Indias
decision on these issues.

Future-Vulnerable
Who could conceive the business models of Ola or Uber five years ago?
Businesses will use a mix of new systems and technologies like the Unified Payment Interface, cloud computing, IP telephony and biometric authentication to reimagine financial
services, education, healthcare and
agriculture sectors in the coming years. Currently unthinkable new models will emerge. This challenge will
multiply as we progress into a datadriven digital economy.
It is essential that the GST Bill accommodates heterogeneous platforms and business models. The tax le-

Pai was CFO, Infosys, and Singh is a

fellow, iSPIRT

Bell Curves
Workers in the UK have suffered the biggest fall in real wages among
leading OECD countries, according to TUC. Between 2007 and 2015,
real wages in the UK fell by 10.4% a drop equalled only by Greece. In
contrast, real wages increased sharply in France, Germany & Poland

No man ever
steps in the
same river twice,
for its not the
same river and
hes not the
same man.

Change in real wages between 2007 and 2015

Real wage* change (%)
10.4
10.4
3.7
Italy
Ireland
Spain
Netherlands
Denmark
Japan
US
Sweden
France
Switzerland
Germany
Poland

Heraclitus
Philosopher

Towards a Healthier
Office Environment?
Research showing that sitting glued to a desk for eight hours
at a stretch is as harmful for health and longevity as smoking should be music to the ears of those hankering for less intense workdays. That it is actually healthier to take hourly five-minute breaks whether to the water cooler, coffee machine or round the corner should, however, be communicated first to supervisors as they may otherwise take a dim
view of such apparently health-related excursions by staff.
The fact that researchers have so far not been able to pinpoint why specifically sitting rather than other sedentary postures are hazardous to health rather weakens the case for frequent perambulations. However, as earlier studies have also
shown that standing is no healthier than sitting, sit-stand
workstations are not the answer either.
Since current thinking on tackling the problem envisages
doubling the usual amount of recommended daily exercise,
the suggested options are not likely to give much joy to workplace couch (or chair) potatoes. Neither spacing bus stops
further apart so that people walk more nor closing major
streets on weekends to cars so that people are encouraged to
turn to sports or exercise rather than rides to the mall, are likely to find widespread approval. Coolers and coffee machines in far corners could be an acceptable compromise.

Greece
UK
Portugal
0.9
1.6
2.8
3.4
4.0
4.7
6.4
10.1
10.5
11.3
13.9
23.0

Employment rate change

(percentage points)
9.0
0.6
5.4
2.3
7.9
8.5
1.7
3.2
2.6
OECD average
3.4
0.7
Employment rate change 1.8
(percentage points)
0.5
5.1
4.5

6.7%
0.6

TUC works to promote trade union solidarity in the UK. It represents 5.8 million workers in 51 unions
*Income from work adjusted for inflation

GST Ball Now in

Congress Court

The glass ceiling is broken.

Tread cautiously!

FOLK THEOREM

Retelling the Tale of Indias

Biggest Organised Genocide
Abheek Barman

An hourly stroll can also update one on

office gossip faster than social media

Chat Room

Irom Sharmila will step out of confinement after 16 years in Imphal, the
capital of Manipur. She will fight
elections and most likely win. She
will get to be unfettered by prison
regulations with the love of her
life, Desmond Coutinho.
Sharmila spent nearly 16 years
fasting, and being force-fed through
her nose, because she was witness to
whats called the Malom massacre.
It happened one day in November
2000. For no particular reason, a posse of Assam Rifles, a heavily armed
colonial creation, shot at and killed
at least 10 people at a bus stand. Their later, lame excuse for this atrocity
was that they thought they were under attack. Their victims included
children and old ladies.
Sharmila is a global icon. Because
of her name, a small industry of globetrotting human rights activists
flourishes. But thats really not the
point here. The point is one of independent Indias biggest genocides
is least reported. It was executed
ruthlessly by people who call themselves communists, the best friends
of poor folks. It happened under my
nose, though I was maybe a little
young to notice it.
It is poorly documented, apart from
three sources. One is the novel, The
Hungry Tide, by Amitav Ghosh. The
other is research that Ghosh graciously attributes to Annu Jalais.
Jalais is a scholar who does her
fieldwork in West Bengal and Bangladesh. The third is Ross Mallick
who has researched Bengal politics

for decades.
What happened, unequivocally,
was that a gigantic influx of refugees came from what was then East
Pakistan to West Bengal. The numbers are in tens of millions and people are still scratching their heads to
get the exact figure. A rough estimate from 1947 to 1971is 19 million. That
is around the combined populations
of Portugal and Sweden.
No matter. The then-West Bengal
Congress sarkar decided to deport
most of these new arrivals to Dandakaranya, a parched place between
modern Orissa, Jharkhand and Chhattisgarh. So, an entire population
of riverine fishing folk was transplanted to what to them seemed like
a desert.
Mallick tells the story well. A peculiar coincidence: all the folks kicked
out to Dandakaranya were Namasudras, Bengali Dalits. The upper cast-

es had managed, thank you.

Then our comrades got into action.
Ram Chatterjee, a Forward Bloc leader, visited these guys and promised
them refuge in the rivers and estuaries of south West Bengal. They agreed readily, and so started a stream of
people coming back to West Bengal.
Marichjhhapi, a sort of island in the
Sundarbans, was selected for them.
All this happened just before the
Left came to power in 1977.
So, before 1977, the Left had invited
Bengali refugees, abandoned in
no-mans-land, to come back to West
Bengal. What happened thereafter
is beautifully described by Ghosh
and Jalais. In 1977, the Left came to
power, the refugees came back from
Dandakaranya to what they thought
would be their waterful haven. They
started salt pans, prawn and fish
ponds, schools and clinics.
Within two years, the Left by

FILE PHOTO

The Centre should swiftly notify the law and rules to unearth
property registered in the name of third parties by owners
who remain anonymous. Lok Sabha has cleared amendments
to the three-decade-old legislation on benami property. Such
property is an obvious instrument to generate and hide black
money. Nevertheless, the Benami Transactions (Prohibition)
Act 1988 has not been operationalised as rules have not been
framed to empower an authority to acquire benami property.
The dither by successive governments is inexcusable.
The amendments establish adjudicating authorities and an
Appellate Tribunal to deal with benami transactions. It excludes from the ambit of benami transactions transfer of property via power of attorney. This makes sense. Land is a state subject. However, the
Centre has not accepted the standing
committees recommendation to vest rights and titles with the state government
whenever benami property is confiscated. All the rights and titles will vest with
the central government. Unclear titles to
land lead to fraud in land transactions. Who owns a piece of
land should be clear. State governments already capture electronic records of land ownership, similar to holding of securities in an electronic form. The need is also to ensure guaranteed titles to property holders. It makes sense for India to adopt
the Torrens system where the ownership of land is directly registered by the state. Clear government-guaranteed titles will
curb sham realty deals.
The law should be supported by larger institutional reform
to reduce the artificial scarcity of urban land and stop off-thebook funding of political parties. They should be mandated to
show the source of income for their spending. Benami property deals will vanish when every rupee is accounted for.

Real Wages in UK

Source: TUC, Statista

Get Benami Property

Law Up and Running

R Prasad

True renunciation is not becoming a monk or swami, living

homeless and sleeping on the
floor. True renunciation can
be attained by anyone: whether a millionaire, parent, student, politician, farmer or engineer. Its not what you have or
dont have; its your state of
consciousness. In essence, it
means that true peace that
comes from true renunciation
arrives when we understand
that nothing is mine.
Whatever intelligence I have,
whatever abilities I have, whatever family members I have,
whatever wealth or property I
have, is the sacred property of
God or the Divine. Im a caretaker. And to use what we
have, not for selfish purposes,
but for service to God and service to others, is the true principle of renunciation.
When we have that consciousness, we use our wealth in
wonderful ways because its
the greatest joy in life for us to
see what an incredible difference we can make as an instrument of Gods grace with
our talents and with our wealth. I know people who are both
extremely wealthy, people
who are middle class and people with little material wealth.
Whatever their circumstance may be, they are every bit as
renounced as monks because
they have that spirit. The
spirit of charity on a spiritual
platform. The Gita explains
that real wisdom is when we
see every living being with
equal vision. When we love
God, we naturally love our
neighbour as our self, as the
Bible also tells us.

Home bitter home: Drawing by Vishwajyoti Ghosh, from This Side That Side:
Restorying Partition

then in power turned around. The

statistics are clouded but Mallick
probably has the best estimate: roughly 4,200 families killed. Assuming
four people per family, that is more
than 16,000 people. In the Sundarbans, its easy to dispose of corpses.
Dump them in the water.
But the most important question is
this: why did the Left invite all these
people over, just to kill them? Jalais
has an explanation, which says once
in power, the Left got overwhelmed
about global concerns about tigers
versus people.
Actual news reports from the time
indicate no such concerns. Complete outsiders were sent to raze settlements to the ground. Police shot at
boats trying to take people away, and
sank them. Entire villages were
tear-gassed first before being shot to
pieces. So why did they do this?
Jalais tries to make the man versus tiger her central argument about
Marichjhhapi. The Sundarbans is
home to tigers, so a lot of encroaching fishermen were not welcome.
Its probably fractionally correct.
If only the data agreed with this.
The most plausible explanation is
again from Mallick. He argues that
almost all the folks who came from
Dandakaranya to Marichjhhapi
were Dalits: we call them Namasudras in Bengali.
Now this is my observation. The
Bengal Left leadership, mostly high
caste, took up tigers as an excuse to
commit genocide on Dalits. Then, of
course, numbers show the place was
quickly repopulated. By people who
were not Namasudras and, as Mallick points out, were committed
party slaves.
This is the tale of Indias biggest
organised genocide. But why it
resonates and should be remembered by our children is this: if youre a
minority, tribal or Dalit, who will
you call a friend when in trouble?

Acceding to the demands of

the states, the Centre has dropped the additional 1% tax by
producing states and making
provision for compensating
the states for any revenue loss
in the first five years post the
GST rollout. The Congress should now drop its illogical demand for specifying the GST
rate in the Constitution that
will require a constitutional
amendment every time the
GST rate is to be revised, and
support the Bill in the Rajya
Sabha. The GST tax rate may
be part of the GST Bill to be
legislated separately by the
Centre and the states.
M C JOSHI
Lucknow

Bureaucracy
Up for Reforms
Apropos the Edit, This Bold
Reform Could be Bolder Still
(Jul 28), the performance appraisal system focuses on interpersonal relationship than on
objective assessment. This
helps the IAS (I Am Safe) fraternity to perpetuate their dominance in
the bureaucracy. Another
contributing
factor is the
neta-babu
axis for mutual benefit and
survival. Reforms in bureaucracy, like those in economy, should be contingent on induction of fresh
talent from the joint secretary-level upwards. Competition would reward the performer and eliminate deadwood.
DEBAKI NANDAN MANDAL
Kolkata

No Hurry, Time
isnt Fleeting
Apropos the Edit, How Time
Stretches Around the Globe
(Jul 28), time is eternal and
perpetual, and what you cant
accomplish in this birth can
be carried forward to the succeeding ones: this is Indian
time management. So, excluding the army and students, no
one needs to be punctual. Salman Rushdie writes in Midnights Children, No people whose word for yesterday is the
same as their word for tomorrow can be said to have a firm
grip on time. A punctual person is looked upon as an odd
animal with not much to do.
Y G CHOUKSEY
Pune
Letters to the editor may be addressed to

editet@timesgroup.com