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TheIndian EXPRESS
www.indianexpress.com

NEW DELHI l MONDAY l SEPTEMBER 3 l 2012

The Indian EXPRESS

BECAUSE THE TRUTH INVOLVES US ALL

Undoing the damage

HE recommendations of the Parthasarathi Shome committee on the controversial general anti-avoidance tax rules (GAAR) build on a premise few governments in India have acknowledged: India is a relatively high-cost economy to do business in compared to other emerging markets, both because of higher interest rates and outdated labour laws. In the absence of cheap capital or labour, therefore, the economy can ill afford to play around with its tax rules to create yet more hurdles for investors. The misplaced zeal to tweak tax laws to chase chimeras like the unearthing of black money has sometimes made fiscal provisions arbitrary. Worse, it has provided tax-haven-like advantages to those who could play the game. In this scenario, Budget 2012-13 stands out as Indias first budget that has had to be entirely rewritten within the year. The Shome committee report makes it clear that what is needed is predictability in Indian tax laws. On the subject of non-resident taxation, it has made a clear distinction between tax avoidance and evasion, recommended postponement of the GAAR by three years and asked for abolition of the short-term capital gains tax from the securities

Shome panel underlines need for predictability and efficiency in tax law and administration

market to make it immaterial whether an investor uses a tax haven or registers directly in the Indian market. The report is clear that in modern tax regimes, authorities cannot presume wrongdoing by the assessees and begin a sweeping probe into their affairs. They have to first build a strong case. In postponing GAAR, a powerful investigation tool for tax sleuths, the committee has reiterated its belief that taxmen do not yet have the requisite training to work it wisely. For instance, tax officials in India rarely work more than three to four years in tax-related work before they get transferred. The committees recommendations herald significant changes that will create an impact only when the government implements them. Also, in the short term, it is unlikely that the flow of investments into the Indian economy will show a rapid upswing. The impact of the tax-related apprehensions unleashed by this years budget will take time to subside, and globally, money is scared to move to any destination where tax laws change fast. But the report provides a good base to announce a schedule for the implementation of the delayed Direct Tax Code, if not for the Goods and Services Tax as well.

EARLY three weeks after a rumour campaign forced many northeasterners to go back to the region, the return journey has begun. The first batch of 350 youth who fled Karnataka in panic in mid-August, took the special train from Guwahati to Bangalore on Saturday; they will reach this evening, to pick up the threads of their life and work in the city. The second special train from Guwahati to Bangalore will run later this week. This is a moment of satisfaction the campaign of fear has been dissipated and defeated. But it cannot be a moment of complacency. It calls for a renewed resolve by government and civil society groups to make sustained efforts to address the sense of vulnerability of citizens from the Northeast that was so starkly framed in the entire episode. There have been attempts to reach out, since the crisis erupted. While initially the Karnataka government was slow to respond to the scare that had gripped so many citizens, subsequently it did make visible gestures to reassure those who were poised to flee. A senior minis-

As northeasterners return to Bangalore, efforts must be made to address their vulnerabilities

ter talked to northeasterners huddled at the railway station over the public address system, and the chief minister met delegations of community leaders. Later, Karnatakas deputy chief minister R. Ashok visited Assam and announced that his government had directed all employers to ensure there were no pay cuts for the days workers from the Northeast were absent. Reports have spoken of individual efforts made by employers to calm apprehensions of workers about returning to the workplace. The spread of fear by SMS and MMS has sparked an overdue debate on the regulation of social media in times of crisis. But more crucially, it has spotlighted the gaps in the everyday integration of the northeasterners in the rest of the country. The problem will only go away if there is a greater crossing of boundaries, if more people from the region feel more at home in other parts of the country. As the scare campaign showed, in a country like India, work on the constitutional project of a nation that is at ease with its diversities and hospitable to them, is never quite done.

The return journey

OUGHLY a decade ago, senior Chinese leaders became more acutely aware of the growing uneasiness in the international community over their countrys rapid increase of power. To allay fears of a rising China, Beijing came up with a reassuring message, encapsulated in the slogan peaceful rise. Although the phrase was later dropped in favour of an even more anodyne one, peaceful development, the essence of Chinas reassurance remained the same: there is no need to get alarmed about our power; we will behave differently from other great powers in history. Of course, despite Beijings repeated pledges of peaceful intentions, the rest of the world has kept its scepticism. For one thing, the historical record of conflicts between incumbent great powers and rising powers has provided no cause for complacency. One may find various reasons to suggest that conflict between China and the US-led West is avoidable. But there are equally plausible reasons why such a conflict may be quite likely. In addition, the international community may initially give Beijing the benefit of the doubt. Indeed, the utterance of peaceful rise by top Chinese leaders, including President Hu Jintao, was applauded in the United States and Asia. However, Chinese deeds, not words, would be the most convincing evidence that a resurgent Middle Kingdom will pose no threat to its neighbours, let alone directly challenge American hegemony. Unfortunately, Chinese foreign policy behaviour in the last decade has failed to put to rest the fears of its neighbours and the international community. While on the whole Beijing has followed a pragmatic diplomatic strategy and refrained from directly challenging the status quo, the Chinese government has also engaged in many acts that are deeply disturbing. Topping the list is its military modernisation. As its economy grows, China has more resources to upgrade its military hardware and acquire new capabilities, such as quieter submarines, more advanced jetfighters, and smarter

Chinas trust problem

Why the world is wary of Chinas peaceful development
MINXIN PEI
missiles. In the eyes of the Chinese, there is nothing wrong with this, especially considering the relative technological backwardness of the Chinese military. However, such a move inevitably disrupts the fragile balance of power in Asia: a militarily more capable China simply means a relative decline in the military capability of its neighbours and the regions security guarantor, the US. The response to this classic security dilemma (one countrys pursuit of security makes other countries less secure) is predictable other Asian countries have also increased their military spending and the US has rebalanced its military deployment to address the rising Chinese military might (popularly known as the pivot to Asia). Sadly, in Beijing, these countermoves are seen in a very different such as Japan, India, and Vietnam. But that is not the case. To make things worse, in the last few years, Beijing has demonstrated a new firmness in asserting its maritime claims, specifically in the South China Sea and the East China Sea. In the South China Sea, Chinese claims have contributed to unprecedented tensions with Vietnam and the Philippines, and undone the image of a benevolent great power carefully crafted by China since the late 1990s. The clash with Japan over the Senkaku Islands, or Diaoyu in Chinese, has escalated as well. Two years ago, the detention of the captain of a Chinese fishing trawler in the waters near the Senkaku/Diaoyu islands led to a serious rupture in Sino-Japanese relations because Beijing used disproportional retaliation, including the suspension of

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Military modernisation alone probably would have caused less alarm had China successfully resolved its territorial disputes with its most important neighbours, such as India, Japan and Vietnam. But that is not the case.
light. Instead of interpreting them as a natural response to Chinas power, most Chinese policy-makers and strategic thinkers view them as part of a US-led ploy to constrain China and frustrate its legitimate aspirations of becoming Asias pre-eminent power. As a result, strategic distrust grows along with the potential for a more adversarial strategic rivalry between China and the US. If one is looking for the latest evidence, all one needs to do is read recent newspaper headlines on American plans to deploy anti-missile systems in Asia and Chinas advance in its missile programmes. This military modernisation alone probably would have caused less alarm had China successfully resolved its territorial disputes with its most important neighbours, exports of rare-earth materials to Japan, to force Tokyo to release the detained fisherman. This year, the Beijing-Tokyo ties have further deteriorated because of a series of diplomatic confrontations over the same islands. Constrained by domestic political factors (leadership transition in China and a weak government facing a snap election in Japan), neither side has shown willingness to back down. Without assigning blame for the latest diplomatic fights and geopolitical tensions between China, the US, and Chinas neighbours, we can probably agree on one thing: Beijings peaceful rise or peaceful development slogan has lost its appeal, if not credibility. After a decade of waiting for Beijing to match its words with deeds, countries that

have the biggest stake in Chinas peaceful rise are growing more, not less, concerned. Assuaging the anxieties of its neighbours and regaining their trust should be among the top priorities of Chinas new leadership. There are several things they can do right away: First, Beijing needs to change its strategy for handling territorial disputes. Instead of vigorously asserting its claims, it must pledge to adhere to applicable international laws. For example, in the South China Sea dispute, its refusal to resolve the disputes through multilateral means and in accordance with the United Nations Convention on the Law of the Sea has severely undermined its standing and credibility. A complete reversal here should help Beijing repair its relations with the Association of Southeast Asian Nations (ASEAN) and avoid a potential conflict with the other claimants, particularly Vietnam. Second, China may have a legitimate reason to strengthen its military power, but it has to accompany its military modernisation with complementary measures of confidence-building and transparency. Genuinely reciprocal and substantive exchanges with the militaries of the countries most concerned with Chinas defence modernisation, such as the US, Japan and India, will help reduce, though not eliminate, distrust. Establishing rules that will avoid accidents is another critical measure. Imposing tight restrictions on military deployment and exercise can also send a reassuring message. Last, and most importantly, Chinas new leaders will need to learn to see Chinas rise not from Beijings perspective, but from that of the international community, particularly its neighbours. Such a change of perspective, rather than another marketing slogan, could go a long way towards calming their fears. The writer is a professor of government and non-resident senior fellow at the German Marshall Fund of the US
express@expressindia.com

EDITOR
APROPOS Coal row: SP teams up with Left, TDP to seek judicial probe, debate in House (IE, August 31), the UPA should accept the suggestion that all coal block allocations be cancelled and a judicial probe be ordered. This could help break the current logjam in Parliament. Steering such a course may even compel the BJP to climb down from its demand for Prime Minister Manmohan Singhs resignation. Hema Langeri

Letters to the

Set House in order

Long shadows

PURNIMA MENON
VEN as Gujarat surpasses many Indian states with impressive investments in infrastructure, agriculture, and general economic growth, little is known about how this growth is affecting the states social indicators. The recent buzz about the causes of undernutrition in Gujarat raise a number of issues about social and cultural preferences. However, this can be interpreted only in the broader context of what causes undernutrition in India, and indeed, in Gujarat, and through reflection on the extent to which economic growth has the potential to contribute to reducing undernutrition. First, undernutrition among children is no mystery begging an explanation. The causes of undernutrition globally are well known. They include poor pre-pregnancy nutrition among women, low pregnancy weight gain, poor infant and young child feeding practices, poor hygiene and sanitation, infectious diseases, and underlying social causes such as education, food insecurity, poverty and inequity of every type against women, against the poor, lower castes and against religious minorities. Undernutrition in India is the result of this perfect storm that creates poor conditions for optimal child growth. In India, and in Gujarat, a majority of young women and children under the age of two years (the age group in which it is essential to

Gujarat is growing, but its children remain undernourished

ensure all inputs are available), are simply not getting all the critical nutritional inputs they need. The NFHS-3 data from 2005-06 showed that no single recommended input was available for more than 70 per cent of the children in Gujarat, and that on most inputs, such as diets of these young children, or sanitation, the situation was abysmally poor. An updated survey in 2009 does not indicate any dramatic change. Second, the role of social and cultural preferences is recognised in the scientific literature on food and nutrition behaviours. Raising awareness about nutrition and healthy behaviour should be a through community-based programmes, but also ensured that basic health, water-sanitation and poverty reduction actions were in place. Vietnam, Senegal, and Madagascar are all marching on to address undernutrition through similar approaches. We must ask ourselves if India is doing enough on this front. Gujarat has already embarked on an ambitious programme of infrastructure improvement, agricultural growth and economic growth. The literature indicates that improvements in nutrition can be expected to be, in the best case, only about half the growth rate. Thus, in nutritional outcomes. Last, but not least, no one in India has a clue as to where the country stands on the undernutrition statistics today. We can only wonder how much the situation might have improved, who might have benefited from the growth of incredible India, and who might have been left behind. Around us, Nepal, Bangladesh and now Pakistan have updated nutrition indicators in 2011-12, but in India, we are left debating the merits of different types of data collection. In this context, it might well be time for state governments to step in and invest in their own routine health and nutrition surveys. Madhya Pradesh has already done so, and Maharashtra is well on its way to having updated data. An urgent need, especially in times of intense social and economic change, is to establish reliable data systems to capture the impacts of these changes on social and health outcomes. Data for decision-making and awareness-raising campaigns are among the many smart investments that smart governments around the world are making. This is as good a time as any to make those investments in Gujarat and in as many states across India as possible. The writer is senior research fellow, International Food Policy Research Institute
express@expressindia.com

How Modi got it wrong

Tiwaris Embers will singe (IE, August 31). Tiwari has suggested that the Naroda Patiya verdict could damage the Gujarat governments image. However, Gujarat Chief Minister Narendra Modi still seems to be riding on a wave of popularity. Tiwari adds that, had the verdict gone the other way, it would not have been good for the nation as it could have dented the faith of the minority communities in our judicial system. However, there are other instances where peoples faith in the judicial system may have been dented and where crimes against minorities have not been addressed. In the editorial Where law wins out (IE, August 30), it has been asked why justice and reparation are still missing for another scar in recent history the 1984 riots in Delhi, in which Sikhs bore the brunt of the violence. The Nellie massacre has also been mentioned in the editorial. It is tragic that justice is still awaited in these cases. A.K. Vijayakumar Chandigarh
THE death of Kausar Bano in the Gujarat riots of 2002 was caused by a failure of the system (Even demons have shame: Kausars husband, IE, August 29). The police must be held guilty of dereliction of duty. They gave the violent mob leeway to go on a rampage. It is inexplicable why they reached the spot late. Pawan Saraswati New Delhi

THIS refers to Shivanand

Tragic absence

NS chief Raj Thackeray objects to the very premise of Sur Kshetra, an upcoming show on Colors where Indian and Pakistani singers will compete and collaborate. The MNS has sent a letter to the channel, asking it to scrap the show, and communicated its ire to Asha Bhosle, who is set to judge the show. Thackeray is practising the only stunt he knows, inflating trivial things into matters of Maratha pride, threatening violence. However, the 69-year-old velvety-voiced Bhosle has reaffirmed why she is a national treasure by playfully puncturing Thackerays threats, and going ahead with exactly what she had intended. Unlike the long line of entertainment industry luminaries who apologise, placate and make nice when the Thackerays get aggressive, Bhosle undercut their very plank. She pointed out that she was a good Maharashtrian who believed, as her culture taught her, to respect a guest. She said Athithi

Asha Bhosle has demonstrated the best way to counter Raj Thackeray, by ignoring his bluster
devo bhava, and in the next breath, Jai Maharashtra. At which point, Raj Thackeray lapsed into nonsense like, Asha Bhosle says atithi devo bhava. Why did she not say this when Kasab was arrested?, and accused her of singing only for money. This isnt the first time Bhosle and Thackeray have squared off. At an event in March 2010, he suggested that all Indians accepted her songs as their own because she was Marathi. Bhosle sweetly rebuffed him later, saying: Mumbai belongs to all of India... No one can snatch the job of a man who works here from morning to evening. Bhosles feat is that she has stood up to Thackeray without dignifying his bullying with a counterstatement. She affected naivete, saying she only knew the language of music, she did not understand politics, but she loved him anyway and knew he liked her music. That response both demolishes Thackerays bravado and provides a more likeable vision of the world.

Changing the tune

Raising awareness about nutrition should be a priority, but this has been one of the most neglected areas.
priority for India, but this has been one of the most neglected areas. There are no robust mass media campaigns on air yet, and behaviour change communications in health and nutrition programmes is known to be poor. Third, undernutrition can indeed be reduced drastically, but economic growth is not enough. A comprehensive and inclusive approach is essential for success. Brazil took on the task of improving poverty, health, hunger and inequity through comprehensive social programmes and, as a result, almost eliminated childhood stunting. Thailand scaled up essential nutrition actions spite of the high growth rates in Gujarat, the undernutrition situation is likely to need attention for a while, given how poor the situation was in 2005-06. The state is scaling up health and nutrition programmes as well, and this increased spending could yield benefits but will it be enough, and will it yield improvements across the board? Inequity must be recognised as a major contributor to poor nutrition outcomes, and explicit equity-enhancing actions must be taken. Research in India shows that the poorest and socially-excluded groups have benefited the least in terms of

Green signal

Greater than the tread of mighty WORDLY WISE armies is an idea whose time has come. Victor Hugo

ORE than a decade after he was captured in Afghanistan, John Walker Lindh, the so-called American Taliban, was in a federal court in Indiana... seeking not his release from a federal prison in Terre Haute but the right to pray with fellow Muslim inmates several times a day. Lindh makes a plausible case that the facility is needlessly restricting his rights under federal law. Lindh, a teenage convert to Islam who joined the Taliban before September 11, 2001, never waged war against his fellow Americans. Yet he was sentenced to 20 years in prison for violating a Clinton-era presidential order that prohibits providing services to the Taliban.

Living on a prayer
PRINTLINE

Even if Lindhs sentence werent excessive and it was he has the right to practice his religion under the 1993 Religious Freedom Restoration Act... Obviously, prisoners dont enjoy the same rights as other citizens, and even under the Religious Freedom Restoration Act officials can limit religious freedom for a compelling reason. But Lindh makes a persuasive case that the prison in the past was able to allow regular group prayers without unduly undermining security or the rights of non-Muslim believers. From a leader in the Los Angeles Times

Sheila Dikshit must be commended for spreading awareness on environmentrelated issues (House sparrow named state bird for Delhi, IE, August 15). By making the house sparrow the state bird of Delhi, the government has underscored the birds importance to the ecosystem. One hopes that the Delhi government will now put in place measures to protect the bird. Factors that have a direct impact on its survival are air pollution and lack of space for the birds to nest in. The Delhi CM has taken other eco-friendly measures as well, such as calling for subsidies on LED bulbs. This could eventually help them replace CFL bulbs. Other state governments should emulate these commendable initiatives. S. Kamat Bardez

DELHI Chief Minister