Be it demonetisation, Aadhaar, or GST, people are cornered, vexed – T.J.S. George

PAN & Aadhaar Identification Cards

T.J.S. GeorgeFirst, it was demonetisation. The dislocations that abrupt adventure triggered are still haunting people. As if that were not enough, a whole new mess has developed around Aadhaar. Then a bigger mess around GST. The wise men in government tell us that it’s all simple, that it’s all good. What we know in everyday life is that it’s all oppressive. – T. J. S. George

Usually life gets simpler as nations progress. But not in India where a barrage of sudden changes, new rules and revised regulations are making life burdensome for ordinary people.

First, it was demonetisation. The dislocations that abrupt adventure triggered are still haunting people. As if that were not enough, a whole new mess has developed around Aadhaar. Then a bigger mess around GST. The wise men in government tell us that it’s all simple, that it’s all good. What we know in everyday life is that it’s all oppressive.

All tax paying in India is oppressive and vexatious. In a small outpost like Hong Kong, to cite one example, there is a one-page form (that’s right, one page) for the citizen to fill up and send to a named tax officer along with a cheque. If there is a doubt, the officer will phone you and settle the matter. That simple. In our country, the system is designed to sustain the chartered accountants of the country. Not even an educated citizen can file his tax return on his own because of the technicalities involved. The ground rule is that the tax-paying citizen is guilty until proved innocent.

In this climate, Aadhaar is turned into all kinds of things it was not meant to be. Way back in Nandan Nilekani’s days, Aadhaar looked like a decent thing—an ID card for Indians, the more sensible because it was voluntary. There was nothing intimidating about it; it merely confirmed your presence and identity in a yes-no format.

What we now have is mandatory Aadhaar. It has acquired a whole new existential importance because a citizen cannot get a passport, cannot open a bank account, cannot file tax returns, cannot buy a car, cannot even get a railway ticket unless he produces his Aadhaar. Tens of thousands of pensioners have not received their sustenance because their PF accounts are not linked to Aadhaar. Weak or infirm, they are now part of a huge rush to get the paper work done—presenting Aadhaar card, pension passbook, bank passbook and biometric details to be qualified to get their own money.

Franz Kafka foresaw this kind of nightmarish situation where an omnipotent power floated just beyond the senses. “You go to the city to see the law. Upon arrival outside the building, there is a guard who says ‘you may not pass without permission’, you notice that the door is open, but it closed enough for you not to see anything (the law)”.

Not just Kafka, George Orwell also saw what was coming. The expanded, post-Nilekani Aadhaar violates norms of privacy and individual freedom with joyful abandon, making surveillance of citizens as patriotic as in the days of Big Brother. Orwell was cited in the Supreme Court when a petition came up against Aadhaar. Countering it, the new Attorney General, K. K. Venugopal, argued that Aadhaar had helped more than 300 million poor. Why does Aadhaar attract such contrarian reactions, Kafkaesque, Orwellian and Venugopalish? And indeed Narendra Modi-like? One month before he became Prime Minister, Modi said that in Aadhaar, “there is no vision, only political gimmick.”

Is there vision in GST? Minister Venkaiah Naidu, who sees life in simple blacks and whites with no inconvenient greys in between, said last week that only those who avoid taxes would criticise GST. Is the Finance Minister of Telengana one who avoids taxes? For, the state minister said that GST was “impractical” because of “irrational tax rates”.

By Naidu’s yardstick, textile businessmen, small traders, hotel keepers, farmers, fishermen, petrol bunk operators, chicken traders, and a whole lot of people who are on the margins are tax dodgers. For they are all at their wit’s end over the GST complexities such as price variations and overcharging. Fishermen leading a harsh hand-to-mouth existence, are placed in the tax squeeze for the first time. How will they live during the off-season months when they cannot go out into the waters? – The New Indian Express, 16 July 2017

» T. J. S. George is an author, biographer, and political columnist in Bangalore.

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2 Responses

  1. Demonetisation again? There are signs of another currency ban coming – Economic Times – July 26, 2017

    Is the Central government quietly planning another round of demonetisation? A large number of people believe the Rs 2,000 note will be scrapped. Now the talk has reached Parliament too.

    The Opposition in Rajya Sabha today asked Finance Minister Arun Jaitley to clarify whether the government has decided to scrap the newly launched Rs 2,000 note. However, Jaitley did not respond even as many Opposition members insisted for clarification from him.

    Recent weeks have seen a shortage of Rs 2,000 notes which many attribute to hoarding. Cash, especially black money, is easier to hoard in Rs 2,000 notes as notes of lower denominations need more space.

    Also, most people find the note cumbersome as it is not easy to change.

    The supply of Rs 2,000 notes from the RBI has declined. There might be a deliberate plan to limit the supply of these notes. The RBI rushed to print Rs 2,000 notes immediately after demonetisation was announced in November last year and that supply may have reached a level that the central bank is not comfortable with now. This may be a conscious strategy to curb the new supply of high-value notes and print more low-value notes.

    There are reports that the Reserve Bank of India has stopped printing the Rs 2,000 currency notes altogether and will not be bringing new notes in the current financial year.

    What has further fuelled rumours of another round of demonetisation is the government launching Rs 200 note. With more Rs 200 and Rs 500 notes in circulation, the common people will not be impacted much by a ban on the Rs 2,000 note. The ban will be an effective step against black cash as demonetisation of Rs 2,000 currency note will hit hoarders more than the masses.

    Rs 2,000 note had an important purpose when it was launched after demonetisation in November 2016. It was meant to ease the shortage of money supply. Now there is no such need.

    If the government plans to increase supply of lower denomination notes such as Rs 500 and Rs 200 and restrict supply of Rs 2,000 note, it is quite possible that these steps would lead to demonetisation of Rs 2,000 note.

  2. Government figures suggest demonetisation wasn’t worth the trouble – R.N. Bhaskar – Money Control – 24 July 2017

    Did demonetisation help the government unearth significant amounts of black money?

    No, or at least not as a proportion of undisclosed income uncovered by the authorities over the past three years, the Centre’s own data suggests.

    In its submission before the Supreme Court of India, the government stated, on 23 July 2017, that it had uncovered undisclosed income of Rs 71,941 crore during the three years ranging from 2014-15 to 2016-17.

    This “undisclosed income” was ferreted out, the government stated, through massive searches, seizures and surveys by the Income Tax department.

    The government also stated before the apex court that immediately after demonetisation came into effect—in about two months from November 9 2016 to January 10, 2017—”significantly large number of enforcement actions were undertaken by the IT Department” . . . “They included 1,100 searches and surveys and more than 5,100 verifications. The total seizure through these actions was of about Rs 610 crore, including cash of Rs 513 crore. The cash seizure included seizures in new currency of more than Rs 110 crore. The total undisclosed income admitted was more than Rs 5,400 crore.”

    This tallies with the statement the government made before the Lok Sabha on 3 February 2017 (in reply to the unstarred question no. 387) that the Income Tax Department conducted more than 1,100 searches, seizures and surveys and issued more than 5,100 notices, during the period November 9, 2016 to January 10, 2017, for verification of suspicious high-value cash deposits in old high denominations. These actions led to seizure of valuables of more than Rs 610 crore which includes cash of Rs 513 crore.

    The rest of the seized valuables are mainly in the form of gold, jewellary and silver. This means that unaccounted gold & jewellery was just Rs 97 crore! Moneycontrol.com had pointed out a fortnight ago that of the 100 tonnes of gold estimated to be smuggled into India each year, the total seizure during this period accounted for just 0.003 percent!

    What this also means is that demonetisation by itself accounted for seizures that were considerably small compared to the seizures and the disclosures the Income Tax managed outside the period of demonetisation. Even if one deducts Rs 5,400 crore from Rs 71,941 crore, it would appear that money, “undisclosed income” unearthed by the government outside the demonetisation period was larger than during the period.

    So, going by the government’s own figures, it looks as if the pain caused by demonetisation wasn’t worth the effort. Maybe data it will release in the future would suggest a great success, but we are not holding our breath.

    > R. N. Bhaskar is a consulting editor with Moneycontrol

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