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Night of November 26th
Nov 26th
I was at Wasabi , the ceremonialized Japanese restaurant at the Taj Mahal hotel in Mumbai a few days ago. Taj Mahal after the nightmarish violence of 26/11 televised non-stop world-wide has become a must- see monumental structure like its magnificent namesake at Agra. Often backpack tourists stare awe-struck at the 108 year old building, their backs to the iconic Gateway of India, perhaps reminiscing those bloodcurdling moments of its hideous siege three years ago. Terror tourism is our brutal reality, as people relive a vicarious horror.
It is human to rewind events; at Wasabi I feel completely overwhelmed , imagining the chaotic last moments of innocent people making desperate attempts for survival against an unexpected unrelenting enemy. So close to open skies, the Arabian Sea, police headquarters, the buzzing , pounding energy of Colaba. And yet tragically enough even closer to death.
It was approximately 10.13 pm on a Wednesday three years ago when I saw a missed call message. It was from my driver of eleven long years, still unfamiliar with mobile technology and prone to eccentric bouts of making accidental calls. Slightly unusual though I surmised as he had clear instructions to be on a long evening duty and there was no apparent reason for its abrupt abbreviation. My elder daughter was out attending a friend’s birthday dinner. Albeit a wee bit exasperated, I called him back.
“Sir, there has been some shooting in the Taj Hotel. Gunfire. Also in Colaba.” The panic in his voice was evident “ Which Taj? I asked nervously fully aware that my daughter was at the Taj President at Cuffe Parade, not far from it’s more illustrious cousin. Before he could answer I did what millions did, switched on the TV instantly on hearing of the sudden attacks. The first news break stated that there was firing reported at Café Leopold , a seaman’s anchorage and yuppie hang-out , where over agreeable omelet and chicken fry, beer consumption beats the national average by a whopper. It could always be the handiwork of a loony man gone berserk , or inebriated by excess of bubbly, I thought . Or just some inter-gang warfare. But that was not the case. Within minutes, the initial anxiety had assumed frightening proportions. CST (Victoria Terminus) and Trident Towers at Nariman Point too had witnessed a similar exchange . There seemed to be a diabolical deadly pattern emerging. This was not just a one-off violent incident .It was a well constructed conspiracy to create havoc on an unsuspecting city just hitting its early night notes . People would die, they were meant to perhaps . Memories of serial bombings in a bloody March afternoon fifteen years earlier came back to me at frenetic speed. It seemed like the beginning of a long chilling night.
The fast-paced frantic journey to fetch my daughter from the Taj President was a hellish experience. The crowd had thinned considerably in minutes but the traffic signals seemed to stretch to infinity. Just a few kilometers away the terrorists had pumped bullets into our senior police officers. Trident Towers was already barricaded with siren-blowing police vans and resembled a towering skyscraper in spectacular loneliness reaching out to unresponsive skies for help. Marine Drive , usually a late-night speedster’s fancy wore a deserted expression. For the first time, I missed a traffic jam. The city was fast getting enveloped in a deathly stillness. I drove on.
By the time I had crossed the Badhwar Park jetty where the ten cold-blooded young merchants of death had alighted not too long ago , it seemed like eternity . I kept calling my daughter intermittently , apprehending every time the cold clinical auto recording, “the number is not reachable ”. But soon she was waving at me from the guarded , crowded entry to the hotel porch . Just seeing her , I felt an unfathomable lightness of being.
Over the next few weeks and onwards one has heard the familiar statement : “Mumbai will never be the same again”. But we forgot Mumbai has never been the same since 1992 when insane fury ostensibly termed as religious convictions over a disputed temple site wreaked havoc on India’s most cosmopolitan city. When political leaders conveniently presided over the planned destruction of a historical mosque. When nefarious elements danced atop it’s falling dome celebrating the success of their organized devastation of age-old bricks. When a state machinery targeted a specific community as riots broke out. The serial blasts that followed in 1993 as an aftermath was a reminder that retribution would be lethal. A decade later Gujarat refueled the hate-tank. The fact that India has looked sideways instead of addressing the harsh reality of emerging militancy has only accentuated matters. The bottom-line is that we have unleashed upon ourselves a difficult local monster, which has now mingled with disaffected global disruptive forces with their own sinister agendas. It is a toxic combination. It is imperative that the infiltration by rogue terrorist bodies appropriately buttressed by an unfriendly neighbor does not impinge into impressionable minds in the minority community . There are many vulnerable borderline youth caught in an unfortunate cross-fire. It is like a ticking bomb. There is a lot of hard work ahead, and as the July bombing this year demonstrated, perhaps even more pain. Worse, it has resulted in the rise of extreme Hindu militancy, thus exacerbating an already volatile state of affairs. Religious fundamentalism is assuming ominous scales from the majority community as well. Mumbai is a soft sitting duck vulnerable to every disruptive group conceivable.
And yet, life must move on , like an inexorable formidable machine in an assembly line where even a transitory pause is considered a fatal disruption. The third anniversary of 26/11 is upon us. As I departed Wasabi one could hear the archetypal loud conversations of happy souls , animated chatter near the sushi bar, the pulsating energy of Mumbai’s night-life vibrating through its bright-red colored spiral steps and wondered about this amazing unseen, untouched, and yet unmatched thing called the human spirit.
Taxing the Richie Rich!
Oct 18th
“In this world nothing can be said to be certain, except death and taxes.”
( As Occupy Wall Street spreads into a global protest, there is a compelling case for taxing the rich. Rising income inequality is India’s biggest challenge. Why India needs to also introduce differential corporate tax rates! ).
There is a discernible chill in the dealing rooms of Wall Street’s investment banks, forever inebriated on the toxic philosophy of Gordon Gecko; greed. But joining their sleek Jaguars on the pavement outside are now thousands of resolute protestors, carrying placards with arresting messages: I got 99 problems, the rich got none; Banks got bailed-out, we got sold-out, and Occupation is my occupation. Occupy London Stock Exchange has quickly followed on the heels of Occupy Wall Street. In an unusual expostulation of spirited candor, the philanthropist son of the world’s third richest man Warren Buffett, chairman of Berkshire Hathaway has conceded that “ corporations really screw people”. Evidently, following the Arab spring, we now have an American winter, but for entirely different reasons; glaring income inequality. The top 1% earners in America paid 40% share of income tax. Says the Economist; “ the rich have done very well in recent decades, and the richest have done best of all”. With American unemployment at a record 10% the anger on the streets of North Manhattan is understandable. But in India, are we any different? Have we not stretched the income distortions to its maximum elastic levels? Isn’t it time for systemic corrective action ?
The famous Buffet tax is simple math which can be calculated with insouciant ease; in short, Mr Buffett paid a lower average tax rate than his not –so-magnanimously compensated secretary. Now that is elementary commerce; personal income tax rate is higher than capital gains/ dividend tax which comprises of bulk earnings of fat cats of the financial services industry, particularly investment banks, private equity, stock-market brokers and hedge funds. I guess salaried persons are considered second-rate citizens because they do not take crazy risks with other people’s hard-earned cash. Occupy Wall Street is not a contrarian movement to the Tea Party, it is the expression of public revulsion for obscene extravagance of overpaid money sharks. Those who created The Great Recession through their propensity for recklessness.
In India, we have a peculiar dichotomy; burgeoning economic growth for a decade coupled with accentuating inequalities. It is a dangerous mix. Over 120,000 dollar millionaires and 69 dollar billionaires reside in premium luxury homes in India . The aggregate wealth of the latter exceeds USD 280 billion. Alongside co-exists 500-700 million ( depending upon your subjective interpretation ) whose poverty line status of Rs 32 or more is currently undergoing rigorous research upheaval in the Planning Commission . It makes for a grotesque mismatch, whose continued existence threatens our social fabric. The poverty line in US is $ 22000 per annum for a family of 4; India is at $ 100 per month for a family of 5. The gap is disconcertingly high even if you factor in purchasing power parity. There are 40 crore at BPL levels, for heaven’s sake!
Is it fair to apply on a hard-working middle-class man earning more than Rs 8 lakhs the same tax rate as Mukesh Ambani or Vijay Mallya or Ratan Tata? By the same analogy is it appropriate that an SME firm or a start-up or any modest operation pays the same tax rate as Reliance, Infosys, Tata Motors or ITC ? Is our tax system compromising with equity in a trade-off for efficiency? Worse, our low-paid workers do not have the safety net of social security like their counterparts in the west. And everyone pays the same sales tax and other indirect taxes anyway, right?
Instead of conveniently following the conventional model of widening the tax base and lowering the tax rate, what India needs is new bands of tax rates that provides lower-tax at base level, and rises steeply at the higher levels.
For instance, I recommend the following on personal income tax:
Upto Rs 5 lakhs: 0%
5-10 Lakhs: 10%
10-20 lakhs: 20%
20-30 lakhs: 25%
30–50 lakhs: 30%
Above 50 lakhs: 40%
On corporate income-tax, there should be a similar tiered system based on net profit :
Upto 2 crore: 10%
2-10 Crore: 15%
10-25Crore: 20%
25-100 crore: 25%
Above 100 crore: 40%
Needless to add, but the tax structure can change periodically depending upon our fiscal fitness. It is time for out-of-the-box thinking. Wealth tax , for instance, requires a certain review upwards. We also need to scrap meaningless deductions for tax avoidance. As a country, we are at a unique cross-road, we need a radical fresh innovative approach to our economic model shorn of traditional panacea. I am not suggesting robbing Peter to pay Paul, but to give Paul his basic pocket-money. Besides, it will increase consumer spending power and lower administrative burden of micro-tax management .
The rich actually get away with double-bonanza of benefits; low corporate and personal tax rates corresponding to capacity to pay. There is a strong argument in favor of minimizing the tax rate gap between salaries and bonuses and capital gains and dividends It exacerbates the sharp income divide. There is a compelling case for raising taxes on the crème de la crème , without the exaggerated apprehensions of an investment backlash or tax evasion. Despite a top tax rate of 50% doesn’t London still remain a formidable financial center???Is it any surprise that in Italy a special levy for those earning more than USD 410000 and in France of Euro 500,000 are now being doggedly pursued. Inequality is a global phenomenon, only, in India both its magnitude and acuteness is shockingly high. We cannot pretend to turn a blind eye to it. Moreover, we need large public resources to fund welfare schemes. Taxation will have to be integral to budgetary plans. We have a difficult predicament which remains unresolved by our gigantic GDP size or even per capita income; there is a severe disproportionate distribution of assets.
The old classical argument correlating high income tax rates with and tax evasion needs to be looked at afresh. Procedures are less red-tape, electronic-filing systems have introduced transparency, bureaucratic procedures are relatively simplified, and a Lok Pal bill is round the corner that will cover government , corporate sector, public-private partnerships and PSU’s. Thus, the trade off between high tax rate and evasion may not be as symmetrical as before. Likewise, a differential corporate tax which provides exemption at lower levels for start-ups, SME’s will actually encourage entrepreneurship instead of the hackneyed assumption of it being a disincentive for the highly affluent.
For India the big transformational change will come through cashless transfers for welfare schemes through UID Adhaar of approximately Rs 300,000 crores . Even a 10% operational leakage is a staggering Rs 30,000 crores almost equal to CBI’s alleged estimation of 2 G loss. MNREGA, RFS, RTE, etc will need public spending and we need to increase tax revenues ; supply-side economics that depends on pure growth stimulus has serious limitations. While we need to unleash reforms and privatize operations for an efficient corporate India, we need to concurrently invest in education, health, skills and infrastructure. Somewhere in the midst of our gold-rush bullet-train, we need to ponder over the fate of 700 million Indians who may never understand the big India story. For the world’s largest democracy, lifting a huge mass of humanity up the poverty curve is its litmus test, its gargantuan challenge. After all every 1% uplift will alter over 10 million human lives. It is time to make a renewed beginning. Now.
The author is Co-Founder, HamaraCongress.com. He can be followed on Twitter@JhaSanjay
