Category Archives: India

India news

Foreign Investment, Mauritius route and black money

Lalit Shastri

Prime Minister Narendra Modi had promised during the 2014 election campaign that he would bring back the black money stashed abroad by Indian citzens after coming to power. The Modi led Government’s report card on this count draws a blank and people have started asking questions.

Date from RBI Annual Report 2017-2018

A lot has already been analysed and written by experts on Foreign Investment in India and the Mauritius connection. A particular piece of information available through the latest Annual Report released by Reserve Bank of India on Wednesday (29 August 2018) underscores that Foreign investment into India by companies that took the Mauritius route has surpassed all other channels during 2016-17 and 2017-18.

Taking the record smashing investment from Mauritius at face value, nothing appears to be amiss since money was invested in India by companies legally registered in Mauritius that took the benefit of the Double Tax Avoidance Agreement between India and Mauritius. This agreement provided for tax exemption to the foreign investors who were exempted from paying Capital Gains Tax arising on sale of shares of an Indan company till March 31 2017.

India’s treaty with Mauritius has been revised from April 1, 2017. Under the reformatted agreement, companies routing funds into India through Mauritius will have to pay short-term capital gains tax at half the rate as applicable during the 24-month transition period. The full rate of 15%, now applicable will apply from April 1, 2019.

The legal position notwithstanding, the enforcement authorities in India are aware of the benefit drawn by corrupt elements, smugglers and big time mafia within the country, who started following the Mauritius route to convert black money into white after India entered into the Double Tax Avoidance agreement with Mauritius.

Fly-by-night companies shown as running small time enterprises got registered in Mauritius. All kinds of unscrupulous elements, even politicians, it is said, invested in these companies. According to knowledgeable sources, cash or black money was physically transferred to these companies and shown as profit and the money invested in this way became white on payment of 1% tax on it in Mauritius. After this the Mauritius based companies invested in the Indian stock market by giving funds to Indian companies. A year later, this money was withdrawn and there was no tax liability on it since the Long Term Capital Gains Tax was 0% under the Indian law till recently. This money was then routed back to Mauritious and the tax avoidance business on the basis of the bilateral Double Tax Avoidance Agreement continued to flourish. In the process people stopped stashing black money abroad when they had the freedom to follow the Mauritius route.

With the revised treaty between India and Mauritius now in force, the round tripping should stop.

This analysis is based on data provided by Reserve Bank of India. It focuses on the modus operandi of those who could use the Mauritius route to convert black money into white. Newsroom24x7 has taken up this issue in public interest and it is for the enforcement authorities to go to the root of the problem and address the issue in its entirety.

“Reservation in promotion for SCs and STs is against fundamental right to equality”

Newsroom24x7 network

New Delhi: The five-Judge Constitution Bench of Supreme Court of India hearing arguments linked with the 2006 apex court judgment in the M Nagaraj case was told by senior advocate Rajeev Dhawan during the hearing in this matter today that the ordinary citizens belonging to the Scheduled Castes (SCs) and Scheduled Tribes (STs) category cannot be compared with those from the same category who have already secured government jobs.

Dhawan is representing in Supreme Court the Madhya Pradesh government officers and employees from the general, OBC and minority communities, who are suffering due to the reservation in promotion rule, and SAPAKS (a registered society formed by the Madhya Pradesh government employees belonging to the general, backward and minority category). The BJP Government in Madhya Pradesh has challenged the Jabalpur High Court order of 30 April 2017 which declared as null and void the 2002 Rule which provides for Reservation in Promotion for the SC and ST officers and employees. The outcome of the case now before the Constitution bench will have a direct bearing on the Madhya Pradesh rule for reservation in promotion.

Continuing his argument, Dhawan underscored the point before the Constitution Bench that a government employee cannot consider himself as backward only if he/she belongs to the SC/ST category. After taking the full benefit of reservation, when someone from the SC/ST category secures a government job, that person should be treated at par with all others, he pointed out adding hence only when the conditions specified for backwardness by the Supreme Court in the M Nagaraj case are fulfilled, one should be entitled for more benefits. Under no circumstances, a government employee should cite social inequality as reason to claim any special benefit, Dhawan emphasised. He also went on to observe that no officer or employee should use for his own benefit the discrimination and injustice being done to the commoners from the SC/ST category. This is against the Fundamantal Right to equality as guaranteed under Articles 14, 15 and 16 of the Constitution, Dhawan told the Bench.

Representing the respondents, Rakesh Dwivedi focused attention on Article 16(4A) of the Constitution which does not prevent the State from making any provision for reservation in matters of promotion, with consequential seniority, to any class or classes of posts in the services under the State in favor of the Scheduled Castes and the Scheduled Tribes with the condition that the state has to ensure while granting such promotion that in the opinion of the State, the beneficiaries of such promotion are not adequately represented in the services under the State. Hence, he pointed out that the argument that it is not necessary to examine the backwardness of SCs and STs as in the case of other backward classes, lacks any basis and is not the correct position.

Hearing in this case will continue on Thursday (30 August 2018).


“One Nation One Poll is not possible without Amendment of the Constitution”

Lalit Shastri

Bhopal: Dispelling all doubts, Chief Election Commissioner O P Rawat today (29 August 2018) categorically stated that the concept of “One Nation One Poll” cannot be implemented without amending the Constitution.

The Chief Election Commissioner was addressing media-persons in the State capital.

Simultaneous elections for Lok Sabha and State Assemblies had become a serious topic of discussion both in political circles and the among the people after ruling Bharatiy Janata Party President Amit Shah not only gave voice to this demand but even wrote to the Law Commission earlier this month (13 August 2018) to push the case for simultaneous elections.

Rawat also made a major announcement today. It is significant for Madhya Pradesh, the central Indian State that goes to polls later this year. He announced that the Citizen’s Vigilance Application will be put in use during the general election for the State Assembly. It was earlier used on a trial basis in Bengaluru. Action will be taken within 100 minutes, in response to any complaint lodged by using this application, the CEC said adding the complainant will also receive information about the action taken.

The Citizen’s Vigilance App would be a major leap forward when it comes to combating the menace of bogus voting, booth capturing and intimidation of voters by those who have always been bent upon rigging and subverting the election process. Poll rigging has been a major problem in States like West Bengal and Bihar. I can never forget how people opposing booth capturing were gunned down in the Nawada Assembly constituency of Bihar when the State went to polls in 1977 right after Emergency. On polling day in Nabinagar Assembly Constituency in the next phase of polling, gun toting goons with their faces covered were all over and had instilled so much fear that no one had the guts to object when minors, and there were so many of them, had been engaged for casting bogus votes. It was not the least surprising that there was no one to stop them. I was present on the spot and was a witness to all this. When I tried to intervene, an armed ruffian reminded me of what had happened at Nawada in the first phase of polling. At this moment, I saw the district magistrate’s Jeep coming towards the polling station. So I ran towards the dirt track to stop the officer and lodge a complaint. I could succeed in stopping and narrating to him what was happening barely a few yards away. To my bewilderment, he told me that since he was in a hurry and had to reach somewhere, I should submit a written complaint at his office -the Aurangabad district headquarters that was more than 50 kms from that spot. This was the response from an officer entrusted with the constitutional responsibility to conduct the elections when polling was about to end on that fateful day.

During successive elections, there has been no dearth of pockets and polling booths in even in Madhya Pradesh, where poll-rigging has raised its ugly head, often resulting in violence and the problem is not been restricted only to the polling day.

Many candidates resort to bribing or they intimidate the voters during electioneering. Speeches are made to instigate, foment trouble, divide society and defame rivals without basis.  It has also been noticed how the politically powerful continue to campaign even after the curtain comes down on electioneering 48 hours before polling with total connivance of the district administration. When  upright officers try to stop this, they end up facing dire consequences.  (check for example: Did Diwan Get Special Training)

Even helicopters are used covertly during electioneering and this is not brought on record by some candidates when it comes to showing electoral expenses. This happens when the district collectors/electoral officers go out of their way and turn a nelson’s eye and compromise on the objective of ensuring free and fair polls.

I recall once a district collector had told me when I met him while covering an election as a journalist in the Gwalior division a few years ago that he had been asked by the Election Commission to send a report as there was a complaint regarding the unlimited use of helicopter by a resourceful and powerful candidate. He had the audacity to say when the helicopter in question was taking off within hearing distance right at that moment that he was going to send a reply that he had not seen any helicopter being used by any candidate.

Why Madhya Pradesh lacks good air connectivity

Lalit Shastri

Gwalior doesn’t offer any traffic, still due to Madhavrao Scindia, I had to connect it by air although it was a loss making circuit – PC Sen, when he was heading the national carrier in the 90s of the last century

There has been a trail of comments on a facebook post today with everyone tagged expressing concern about Madhya Pradesh, especially the two cities Gwalior and Jabalpur, lacking good air connectivity.

Air connectivity is a barometer of economic progress that has to be across the board… One can’t think of airlines, including the national carrier, to stick their neck out and serve a sector that’s uneconomical and beyond redemption. The adverse situation has only got precipitated over time since we have allowed the creation of an environment in which only politicians, crony capitalists and their cronies prosper while industries crumble and investment becomes a mirage due to soaring production costs, extreme corruption and a warped and complicated system of enforcement and tax collection. It is rather sad that most people, who are in the unorganized sector, suffer drudgery and receive less than economic wages. We have to change the political narrative and break the politician-bureaucrat-crony capitalist nexus to think big and look forward to a robust aviation sector.

Now coming to the point about Gwalior and Jabalpur lacking good air connectivity…I recall when PC Sen was CMD Indian Airlines and Air India between 1995 and 1998, I had interviewed him as Principal Correspondent of The Hindu. Sen had told me that Gwalior offera hardly any traffic, still due to Madhavrao Scindia, he had to connect it by air although it was a loss making circuit.

Development and progress, more than two decades after what the CMD of Air India had observed regarding Gwalior, remains a mirage. Now what’s being flaunted by the present political leadership and those in the government as infrastructure for growth is grossly inadequate and it’s only in pockets that stand out as oasis in a vast desert that needs focussed attention.