Sunday 10 November 2019

Warning: PC Network is striking back (Sunday Guardian)

By M D Nalapat

North Block and the babus have armed themselves with punitive powers.

The single biggest impediment to growth in India is the battery of prosecutable violations of the statute and the regulations, both of which have been made so opaque and complex by North Block that strict adherence to the same is practically impossible for most enterprises operating in India, thereby ensuring that officials on the hunt for bribes have a plentiful field of victims. Some weeks ago, this columnist had in a front page article yet again pointed to the depth and toxicity of the “PC network” within the portals of the present administration. This is a web of corrupt officials, bankers and businesspersons that have relentlessly skewed economic performance for personal gain. It had been mentioned in the report that some names of influential citizens with illicit foreign accounts in the list that had been furnished by Germany to India went missing when the list was handed over to authorities outside North Block. The long-term closeness in both word and deed of a senior ED official to a very senior Congress politician was mentioned, as also the efforts of the daughter of a now deceased politician to secure for herself some of the multiple benami assets of the departed leader. Days after the report got published, this columnist was warned by a well-wisher in the system that “unpleasant consequences were being planned» by members of the PC network holding high positions within the government.They sought to punish him for his effrontery in exposing patches of rot. Perhaps by coincidence ,  on 1 November, on his return from a visit to the US, a missive from the Central GST Deputy Commissioner of the jurisdiction where this columnist resides was awaiting perusal. Dated 14 October, the communication carried a warning that a reply needed to be sent “within 10 days”, although the missive had not been received by 20 October, the date this columnist left for Washington. The letter claimed that there “appears to be a short payment of taxes paid during 2015-16”, and that “Copy of Balance Sheet, Profit & Loss Account, ST 3, 26AS and ITR for that year be furnished”. All such records are of course easily accessible within government to the department in question, as would be details of bank accounts and a host of other matters involving citizens, especially in the smartphone era. Why citizens are asked over and over to give information that is already accessible within government is yet another sign that the time of the citizen is regarded as being wholly at the disposal of government agencies to expend, as indeed are most of their incomes. Balance sheets and other records were demanded, but names not being mentioned, it was left to the columnist to figure out what was meant. North Block and others across the bureaucracy have armed themselves with punitive powers far in excess of those given to officials in the days when the Union Jack flew over the then Viceregal Palace. Even technical and harmless transgressions (even when not proven) have been made subject to prosecution and imprisonment, making  rational individuals hesitate before undertaking any activity in India other than joining politics or the gazetted services. It is child’s play for India’s babus to conjure up some technical issue that can be used as an excuse for harassment and worse. In India, the bold and the innovative usually fall foul of some greedy official, and succeed only after moving to a more hospitable overseas location. Investors and entrepreneurs remain bound hand, foot and mouth by the all-powerful official machinery in India.
Whatever be the reason for the Deputy Commissioner’s demand, which followed the expose on the PC network, he as well as those much below him in the pecking order have wide punitive powers, including that of prosecution and the right to repeatedly ask a citizen for more and more tranches of information (all readily available to the authorities) that would be impossible to procure even after spending 18 hours each day for an indeterminate period by the target individual. An income-tax raid would mean forced confinement in a room of the entire family, sometimes for days and weeks. It would mean the seizing of any bit of paper or electronic equipment found in the location, and the freezing of bank accounts, leaving those affected to beg for charity from friends who have somehow escaped a similar fate. Its continuing colonial culture has meant that India is among the easiest of countries for any of a widening pool of officials to send any citizen to jail. Despite being certain that all taxes due have been paid, a copy of the 14 October missive was sent by this columnist to his chartered accountant, who has the task of ensuring that all taxes due get paid out of actual income. Anecdotal evidence suggests that similar and indeed harsher notices are raining like confetti across India, as our bureaucracy strives to do what it has been taught by the British colonial masters to do, which is to grab as much from the pockets of taxpayers as possible, now that the coercive and intrusive powers of so many layers of officials have been vastly expanded from the already excessive levels present in pre-1947 India. A lack of respect for, and confidence in, the citizen has been a characteristic of the bureaucracy even after 1947, and has manifested itself through the many coercive powers that politicians have bestowed on it.  For India to grow, North Block has to have faith in the citizen, in the manner Prime Minister Narendra Modi showed at the very start of his tenure, when he replaced with self-verification of documents the previously mandatory signature of a gazetted officer. The plethora of repressive and regressive rules (and their accompanying punishments) in a presumed democracy is the principal cause of the difference in performance of Indian nationals within the country and in locations such as the US, Europe or other places where per capita incomes are far higher than the meagre levels achieved by India even 72 years after 1947. The more restrictive the regulations, the more corruption grew, and the less the appetite to invest in India. Although our politicians point to the economic growth of the country, this is half what it could be, if North Block moved away from its colonial ways.
Ministers and officials need to take the cue from Prime Minister Modi’s 15 August speech and make the doing of business in India a pleasure rather than a risk-laden enterprise for those not having influential officials and politicians in their pockets. Nirmala Sitharaman has made welcome moves to reverse some of the Chidambaram-style ways that ought to have disappeared in May 2014 rather continue into 2019.More is needed. Extraordinary powers need to be used only in exceptional cases rather than indiscriminately. They should get used on the few dozen involved in huge losses to the exchequer caused by under or over invoicing, or on the handful of PC network operators manipulating stock exchanges the way this toxic cabal has done for many years. Scams that destroy confidence in the market (such as co-location) need to be prosecuted US-style with massive fines and in some exemplary cases with prison terms, rather than ignored because babus act to protect their own. Vultures who have siphoned off huge amounts from banks should either pay up or lose their liberty. It is wrong to use to indiscriminate effect an AK47 whose fire gets directed at masses of citizens, rather than employ a sniper rifle that is focused on India’s mega depredators. The AK 47s so plentifully handed over by trusting politicians to the babus clustered around them are often wielded by corrupt elements angered by any attempt at exposure of systemic rot. The continuance of such a situation is not acceptable in a country where Narendra Modi is the Prime Minister.

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