Daily Excelsior... Editorial

EDITORIAL

By Tinu Singh

By Vivek Kumar Mishra

Pakistan publicly ended its support for the Taliban in the aftermath of the September 11, 2001. It is to be recalled Pakistan was one of the three countries along with Saudi Arabia and the United Arab Emirates that recognized Taliban Government in 1996. After wards, global pressure ... .......more

Taxation of agricultural income

By Ramesh Kanitkar

EDITORIAL

Handle with care

Low price of liquefied petroleum gas (LPG) is one ostensible reason why the people are tempted to use it as fuel for their vehicles. They seem to care little that it is highly dangerous and illegal to do so. Since it is much subsidised for domestic use the diversion of LPG for any other purpose invites action under the law. It is a matter of common sense and should brook no ignorance. Moreover, the cylinders in which it is stored are designed for cooking. Safety measures take into account this specific application alone. Any change, therefore, in their position in a horizontal or vertical manner can only spell disaster. LPG is stated to be about twice as heavier than air. Unlike Compressed Natural Gas (CNG) it does not go away easily in the air. According to experts, LPG's flammability limits and auto ignition temperature are also lower than natural gas. That makes it further incumbent upon its users to be extremely careful while handling it. A vessel containing LPG when ruptured can cause a type of explosion called BLEVE (boiling liquid expanding vapour explosion). It can be very risky. It does not require direct contact with an ignitable material to burst into a fireball. An external fire, among other factors, can trigger BLEVEs in a LPG container by heating its contents and increasing pressure. Of course, this does not mean that LPG canisters are without any protective gear. In fact, it is precisely because these have integral security system one does not normally hear about any mishap involving LPG. There are prescribed standards for its safety, storage and distribution. It is also true that LPG has much utility as automotive fuel. Way back in the 1980s the Indian Institute of Petroleum (Dehradun) had carried out studies in this behalf with the help of dual-fuel engine kits. Indian Institute of Technology (Chennai) and Anna University (Chennai) are among institutions that have done pioneering work in this regard. Some manufacturers have already acquired the technology for LPG-propelled vehicles especially two-wheelers.

What is to be noted in all these efforts is that there is an altogether different kit for using LPG in vehicles. Household cylinders are no substitute for it. What is disturbing, however, is that these are utilised in means of transport without applying minds about their harmful consequences. It is an open invitation to accidents. Just because there has not been any such unpleasant occurrence so far does not mean that there will be none now or in the future. Any time a calamity can strike. One must shudder while thinking of its negative impact. It is criminal that domestic LPG cylinders are employed in buses meant for school children. A report in this newspaper has recently pointed out that the State is no exception and is fully exposed to the threat. According to it there are a number of agencies that can nip the hazard in the bud. To the contrary they appear to be simply revelling in passing the buck. Is this not a case of too many cooks spoiling the broth?

Let there be no leniency in this matter. Those not playing by the rules should be brought to book. They can't be allowed to thrive at the expense of others' lives. The Government is expected to wake up to the task it has on hand and weed out those not honestly discharging their duties. At the same time the citizens should also become conscious of their right to live and do so with dignity. They should not surrender it at any cost. Silence in such an instance can be counter-productive.

Some more light

An article in the last Sunday magazine of this newspaper throws some more light on the Mubarak Mandi complex of palaces. It brings into sharp focus the challenge of reviving architectural grandeur of the erstwhile seat of the Dogra kings. The task is unique because it varies from building to building. It calls for deep study of the Dogra history as well as knowledge about the development of the site over the centuries --- and, of course, the reasons for its deterioration during the last more than five decades. It is only too well known that the historic buildings have suffered because of too little maintenance. Some of these have partly collapsed. There has been loot and plunder also at some stage. This is evident from the acts of vandalism which are visible in the form of missing semi-precious stones and cultural property. Now it turns out that care had also not been taken while constructing the Circular Road to prevent its adverse effects on the hill on the top of which Mubarak Mandi is perched. It has resulted in the erosion of natural props and vegetation. In addition, there is monkey menace. An argument has also been made against the unrestricted entry of people. The park in the middle with its amazing fountains speaks of its glorious past. There is at least nearly three centuries of history woven around the place. Raja Dhruv Dev (1703-1725) had selected it for his accommodation to shift from what has been described as "increasing crowd" around his baradari at Purani Mandi which now houses the Rajput Sabha. However, Maharaja Gulab Singh decided upon its model development which was actually embellished by Maharaja Ranbir Singh and Maharaja Pratap Singh later. There were offices of Army Headquarters and Foreign Department. There was a Green Hall (rebuilt and renamed as Grey Hall) where Parsi theatre companies had performed, Golghar and Sheesh Mahal. Fortunately, many of these structures are still in tact as rare relics but are known more after the names of their post-1947 government occupants under the popular rule.

There is merit in the plea that no time should be lost to save all that is possible. For this it is necessary to prepare not only a detailed inventory but also a status report. There should be periodical reviews. At the moment most of the rooms are in a bad shape. Some are locked for reasons which are not clear. Cultural, architectural and archaeological preservation has become a full-fledged science by now. Skilled professionals are available and should be roped in to rescue and review the aesthetic aspects of the complex. One finds no justification for cemented buildings that have been built right inside. These are monstrosities and should be replaced by the original for which one will have to dig into archives to secure correct guidance. Happily now there is the will to apply necessary correctives. What has to be found is the accurate way.

Indo-US relations

By Tinu Singh

The political wisdom of world's two largest democracies has won the day as the US lawmakers voted by an overwhelmingly bipartisan 85-12 margin there approval of the US-India nuclear deal aimed at overturning nearly three decades of nuclear sanctions against India. En route to the landmark legislation, the Senate also rejected by big margins several "killer amendments" to the US-India Peaceful Nuclear Cooperation Bill pressed for by a few non-proliferation hardliners. These amendments sought, among other constraints, to cap India's nuclear weapons and restrict its ties with Iran, neither of which was acceptable to New Delhi. Lawmakers broadly accepted arguments that it was not politic to dictate or hamstring India's geo-strategic outlook.

The massive support for the deal, with 85 per cent of the vote in both chamber of Congress (the House of Representatives had earlier approved a similar bill 358-69) signalled a seismic shift in political sentiments towards a country now seen as a close US ally regardless of which party is in power in Washington.

Random unsubstantiated references by some Senators to India's close military ties with Iran and the prospect of an unbridled growth of New Delhi's nuclear arsenal (if the deal goes through) were overshadowed by the importance many lawmakers gave to allowing India attain its full economic and geo-strategic potential.

India has welcomed the passage of the Senate Bill on civil nuclear cooperation initiative, but the welcome has a healthy dose of caution, with the government not bringing out the sweets till the final version of the enabling legislation is passed, hopefully, before the end of the year.

The BJP, meanwhile, has urged that India's nuclear deterrence should remain a sovereign right, while the Left has said the Senate Bill is against Indian interests.

In New Delhi, the official line that the champagne bottles will remain in storage till December was taken by the External Affairs Minister, Pranab Mukherjee, who said that India will "await the final version before drawing any conclusions on the legislation". The house of Representatives and Senate versions are to be 'reconciled' before the thanks giving recess on December 4.

But the UPA Government's concerns are clear as Mr. Mukherjee stated that India expects the final version to "adhere as closely as possible to the understandings incorporated in the 18 July 2005 India-US joint statement and the March 2006 Separation Plan, so that full civil nuclear cooperation between India and the US becomes a reality and contributes to India's energy security".

As per the 18 July 2005 understanding, India will negotiate an India-specific safeguards agreement and additional protocol for 14 out of its 22 nuclear reactors, according to the Separation Plan. As a de-facto nuclear weapons country, it could not accept the regular protocol that applies to non-NPT states, INFIRC 66, as the starting point for talks. This strict protocol allows for safeguards in perpetuity.

Instead, India was hoping for its talks to be more like the one of the five nuclear weapon states' 'voluntary' safeguards agreement. The non-nuclear weapon states who are part of the NPT sign a safeguards agreement, INFIRC 153, which does not have this escape clause.

A September report in the Nucleonics Week magazine stated that India wants to retain the right to terminate or withdraw safeguards at any time if India is denied nuclear cooperation due to sanctions by the US or members of the NSG.

The US administration had, however, made it clear that it would not support a 'voluntary offer' arrangement, neither will other NSG members. "We have similarly indicated to India that we would not view such an arrangement as defensible from a non-proliferation standpoint," said the US Secretary of State, Dr. Condoleezza Rice, at a Senate hearing in November 2005. She had also asserted that the US believed that "the logical approach to formulating a safeguards agreement for India is to use INFCIRC/66, which is currently used at India's four safeguarded reactors".

The Prime Minister, Dr. Manmohan Singh, had told Parliament that the nuclear agreement will not be allowed to be used as a backdoor bid to introduce "NPT type restrictions".

The NSG could take a decision on change in guidelines for India, as the final bill would most probably have been passed and signed into law by its next meeting in South Africa. But their decision would not only be determined by the US legislation, but also the shape of the IAEA safeguards agreement. There would also be concerns over Chinese, efforts to bring Pakistan into the fold by building nuclear reactors for its "all weather friend".

Further, there are also serious doubts that the final bill would have sections will not be "acceptable" to the Indian government. For example, the Senate Bill talks about restrictions on reprocessing of spent nuclear fuel, which the PM had termed as deal-breaker.

But there are also chances of intervention by the US administration at the stage of the joint Conference committee, which it did not have during the passage of the two bills so far. This could help in at least dropping some of the more controversial clauses.

It will be pertinent to recall the PM's conclusion to his speech. "In their final form, if US legislation or the NSG guidelines impose extraneous conditions on India, the Government will draw the necessary conclusions consistent with my commitments to Parliament."

India and the US will now be able to speed up their negotiations on the 123 bilateral agreement, which will also go for an "up-down" vote to the US Congress. On a parallel track, India's diplomatic efforts with NSG countries will restart soon. The special envoy for the nuclear deal, Mr. Shyam Saran, is expected to travel to many countries to convince them about India's peaceful utilisation of nuclear energy for peaceful purposes. INAV

Pakistan's new dilemma

By Vivek Kumar Mishra

Over the years, Pakistan realised that Taliban's manpower and material would be helpful in future for its proxy war in Kashmir valley. The close nexus of Taliban with the Kashmiri Jihadi groups was expected to provide strategic depth to Islamabad against India. In that sense, Taliban would be friendly, as Pakistan presumed.

Stephen Cohen argued that ‘‘In Pakistan, Jihadi groups have been more of a tool of the state than a serious threat to it. ’’ But such Jihadi madrasas and militant groups would create more problems for Pakistan's internal security. The bitter truth has been overwhelmingly accepted at the global level, Pakistan one time involved in nurturing the Taliban is facing a threat from it. It is reported in the Pakistani Urdu press that the Taliban is trying to build their base in north and South Waziristan as well as in the North West Frontier Province (NWFP) and recent reports confirmed it.

A serious problem that is emerging now in Pakistan is that some groups are morphing and forming previously unobserved coalitions. The reason for this new phenomenon is the result of US launched war on terrorism in Afghanistan and Iraq and the large scale presence of US troops in Pakistan. The Jihadi groups are forming coalitions that would have previously been considered improbable. One such coalition is Lashkar-e-Omar (the Army of Omar), which has been associated with various attacks in Karachi. It is believed that this group is named after Ahmed Omar Sheikh, the militant convicted in the kidnapping and murder of Daniel Pearl. This coalition is believed to comprise surviving members of Lashkar-e-Toiba, Jaish-e-Mohammed, and Lashkar-e-Jhangvi. The same coalition also was started by the Jaish-e-Muhammed, the recent example being the London plot, (August 2005), where the nexus was made with the al-Qaida while executing.

The United States and Afghan officials have become increasingly vocal in their criticism of Pakistan for suicide attacks that has hit Afgan provinces bordering Pakistan. Many persons have been killed by Taliban militias, including US soldiers, a Canadian diplomat, and NATO peacekeepers-as well as dozens of Afghan civilians. Experts believe that the Taliban has developed an infrastructure in Quetta and Chaman in Balochistan that includes recruiters, trainers safe houses and suicide bombers. The fact is that these fugitives also get the cover of Pakistan security personnel. For instance, the NATO officials stated that the Pakistan army stood by when hundreds of Taliban fighters were infiltrating into Afghanistan. The role of Pakistan's Inter-Services Intelligence (ISI) and retired military officers sympathy and support cannot be ruled out in providing covert support to the Taliban. The bonhomie between Pakistani security personnel and Taliban that started in 1993 and came to public gaze in 1996 appears to be still continuing. This is threatening the deployment of coalition troops in Pakistan.

The Afghan President Karzai during a state visit to Pakistan in February 2006 gave detailed database to Musharraf on Taliban suicide bombers and trainers and asked for help in stopping the attacks against Afghanistan. In response President Musharraf said Pakistan was affected by the activities of the Taliban in Kandahar region in southern Afghanistan, and asked Kabul to stop making allegations that Pakistan was helping them. In March 2006, again Afghan leaders reiterated that Pakistan has failed to prevent Taliban remnants operating from the Pakistani soil. Pakistan's President Pervez Musharraf retorted that Afghanistan's information on Taliban suspects operating in Pakistan is ‘‘old and unreliable.’’

In Pakistan, where a conservative religious movement is gaining momentum, the impact of the Government's slogan is questionable. The Government has not taken effective measures to curb extremism and President Musharraf's rhetoric does not match his practices on the ground. Some observers suggest that the anti-US sentiment that is often heard in Pakistan foments religious extremism; they think that American hegemony is not good for the Muslim (community. Islamabad's efforts to check extremism and prevent infiltration of Taliban insurgents are described as inconsistent and incomplete.

The former chairman of the department of Political Science (Punjab University Lahore) Dr Hassan Askari Rizvi has rightly observed on the recent developments in Pakistan, ‘‘Terrorists can be defeated in Iraq and Afghanistan, but if nothing is done to end the intolerance and the teaching of hard-line Islam in classrooms, militants will have a never-ending supply of new recruits. And nowhere is this more evident than in Pakistan, whose madrasas have already been dubbed as ‘‘incubators’’ for violent extremism by the 9/11 commission’’.

The root cause of the problem seems to be the Jihadi orientation of the Pakistani military leadership and its continued alliance with fundamentalists. Jihad in the name of God continues to be the motto of the Pakistan Army, making its officers and soldiers believe that they are the custodians of militant Islam worldwide. They perceive that Jihad is part and parcel of state-craft.

Fundamentally, the United States will have to face the real terrorist threat that still could emerge from Pakistan. Once a militant is trained, it makes little difference whether the militant was trained in Pakistan or Afghanistan. With sufficient resources and adequate logistical support, the trained militant can operate in any theatre and destabilize any region. Thus, it is in Washington's interest to persuade Pakistan to permanently dismantle terrorist infrastructure and to stop the support of Taliban.

Moreover, dismantling this infrastructure will restore a quality of life and economic opportunity to the Pakistani polity, restore a semblance of quality life to the Kashmiris, and diminish the prospect of conventional conflict between India and Pakistan. There is no short term; quick fix solution to the scourge of terrorism. Any anti-terror strategy has to be multi-pronged and dynamic.- CNF

Taxation of agricultural income

By Ramesh Kanitkar

The Finance Ministry has mooted an idea that the long forgotten proposal to tax agricultural income should be re-examined to enlarge the taxation network. The proposal has the backing of Finance Minister, Mr. P. Chidambaram. If the government is really serious about fattening its kitty, the best thing would be to evolve a mechanism by an amendment of the Constitution to tax agricultural income which forms roughly 25 per cent of the GDP. As it is now, the farming community, particularly the affluent farmers with large holdings, do not pay any income tax. Agriculturists, get subsidised inputs - fertilisers, seeds, canal water for irrigation and electricity to run their pump sets to draw ground water. Such subsidies cost the national exchequer more than Rs. 68,000 crore per annum.

The landholding patterns in our country consists - 76.42 per cent small and marginal farmers, the rest are large holdings in the hands of a few rural rich with incomes running in crores of rupees.

For taxing this section of the farming community, the Centre has to transfer the agriculture sector from the State List to the Centre List by amending the Constitution. Unfortunately, the agricultural income is a holy cow which no political party wants to touch; the reason being the votebank politics as the kulak lobby in the country side can mar and create political standing of our leaders. The rationale behind the demand for levying agricultural income tax is which a view to achieving inter-sectoral parity.

It is well known that there are certain administrative difficulties in levying a comprehensive agricultural income tax. Any income tax requires at least an approved form of accounting relating to total income from agricultural activity, specific cost of cultivation and other relevant information for the purpose of arriving at net taxable income. Farmers, whether big or small, are hardly conversant with keeping accounts. If they are compelled to do it, they will be driven into the hands to tax planners who might fleece them. Even so, this argument cannot be stretched too far because agricultural income tax, once levied, will become applicable only to better-off farmers who can afford to learn to kept accounts.

At present, land owners are paying land revenue though it has lost its importance. In some states, small farmers are exempted from even this meagre land revenue while in some others, water rates and betterment levy are imposed on irrigated lands. Two tax rental arrangements are already operating. One relates to the levy of additional union excise duties in lieu of sales tax on sugar, textiles and tobacco. The second is related to the tax on railway fare which has been abolished. In both cases, compensatory grants are given to states on the recommendations of the finance commission.

Both these arrangements are not operating satisfactory. The state governments have repeatedly complained to successive finance commissions of the failure of the central government to fulfil the terms of agreement. On several occasions, they have also demanded the termination of these arrangements.

The suggestion to amend the Constitution to transfer the power to levy agricultural income tax by deleting entry 46 of the State List and suitably amending entry 82 under the Union List will raise the question of whether it amounts to changing the basic structure of the Constitution. Such an amendment will have to be passed by two-thirds of the state assemblies.

The urban corporate, which consists of the organised manufacturing and tertiary sectors and all other unorganised activities support only 40 per cent of the people.

Though the GDP originating in the urban sector is as high as 73 per cent, only 26 per cent is in the form of goods and the rest of it is only income transfers in the form of earnings of people employed in defence, public administration, insurance, transport and banking.

In other words, though the agriculture sector's share in GDP has been going down, it still contributes 72 per cent of the goods to the GDP. Therefore, the question of inter-sectoral equity has got to be abandoned and replaced by specific group comparisons.

Though the corporate sector does make a contribution in the form of corporate tax, it collects this from the consumers of the products and pays to the government. This is not its own contribution.

Therefore, if we want to convince the rural rich to pay income tax, we first have to make the corporate sector pay wealth tax on corporate wealth. Until such time, all arguments for agricultural income will remain academic and inconsequential in this country.

The suggestion to levy agricultural income tax is still coming from economists whose ideological persuasion reveals a pronounced anti-rural bias. Here, the sociology of knowledge still operates.

This is one of the reasons why Punjab Chief Minister Amrinder Singh's statement that sons of farmers have to reach the policy formulation desks in governments to ensure justice to the agricultural sector is relevant.

This statement implies that the present bureaucracy is not conversant with the problems and conditions of the farmers and the agricultural economy, not to speak of their inbuilt prejudice against rural people in particular.

A section of the caste-ridden bureaucracy has even grown jealous of the prosperity of the enterprising farmers. Therefore, any suggestion coming from this section of the urban elite class will be suspect.

Even so, in the recent past, a large number of economists and a few bureaucrats have come from rural areas and posses' knowledge of the rural economy and society. They are not as prejudiced against the farming community as some of the urban elites have been.

It is necessary for them to view the whole issue of taxing agricultural income dispassionately from the point of view of meeting the revenue needs of the states as also to make the rural rich contribute their mite to the development efforts of the country. INAV