Wednesday, 25 May, 2022
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VG Siddhartha case shows Modi govt must opt for lighter touch towards citizens

India needs statutory protections that citizens can be assured of, and institutional safeguards that buttress them, not more power for central officials.

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The ‘suicide note’ purportedly sent out by V.G. Siddhartha mentions aggravations that have earned him much posthumous sympathy. Among the aggravations, almost inevitably, is harassment by tax officials. In response, the income-tax department has put out a detailed note, with the assertion that the late ‘coffee king’ had confessed to an unreported income of about Rs 350 crore.

However, someone presumably informed on the subject has contended that tax officials acted prematurely in seizing shares held by Siddhartha. The full facts will emerge in due course. It is possible that this case, like many others, will testify to the Jekyll-and-Hyde worlds in which many of our businessmen (feel they have to) function.

The charge of tax harassment has struck a responsive chord in the business community and the broader public. The finance minister is well aware of the issue. In her Budget speech, she used picturesque imagery from classical Sangam literature to say that if the elephant enters the paddy field, it will trample far more paddy than it can eat. It is also worth recalling what an earlier finance minister, Jaswant Singh, said in his Budget speech 16 years ago: “Let us, to start with, readily acknowledge that the essential entrepreneurial character and the creative genius of our citizens is our greatest asset.” Later in the speech, he talked of moving “away from a suspicion-ridden, harassment-generating, coercion-inclined regime to a trust-based, ‘green channel’ system. I do this entirely on the basis of my faith in my countrymen and women.”

A picture of TN Ninan, chairman of Business Standard Private Limited

Singh stood tall at the time for emphasising that taxpayers must be treated with respect. So, it is worth recalling what he committed to: “First, hereafter, stocks found during the course of a search and seizure operation will not be seized under any circumstances. Second, no confession shall be obtained during such search and seizure operations. Third, no survey operation will be authorized by an officer below the rank of Joint Commissioner of Income Tax. Finally, books of account impounded during survey will not be retained beyond ten days, without the prior approval of the Chief Commissioner.”

Businessmen who have been subjected to tax surveys or search and seizure operations will be able to confirm whether these promises have been kept. Meanwhile, on the positive side, the use of digital technology has made tax dealings simpler and safer for the average taxpayer. Most importantly, it has helped to obviate the need for direct personal contact between the taxpayer and assessing officials, removing much of the harassment and (mostly) petty bribery that had been rampant.

In addition, immediately after the new Modi government took office, more than two dozen senior tax officials were sent packing — reportedly because of corruption charges. One presumes that sent a powerful message down the line.


Also read: Ambitious economic targets could embarrass Modi govt if it doesn’t show greater purpose


But if power tends to corrupt, and absolute power corrupts absolutely (as Lord Acton famously said), it is notable that there is a fairly consistent pattern to recent tax and other raids: They have tended to focus on those opposed to or critical of the government. Meanwhile, the government has been busy getting parliamentary approval for legislation that arms officials in multiple departments with extra powers to prosecute, arrest, sequester, brand as terrorists, and so on — with fewer safeguards, and with greater concentration of power in the hands of the central government, at the expense of states.

Now, it is possible to make the case for prison terms for traffic offences like speeding. Other countries too provide for it, limiting extreme penalties to extreme cases. And the home minister has assured that the government’s many new powers will not be misused. But can even the most powerful and best-intentioned minister guarantee that in a country where everyone knows that the abuse of power is routine? Wouldn’t it make more sense, then, to opt for a lighter touch, and the Jaswant Singh approach?

Particularly after the scandalous sequence of events at Unnao, what people have been made conscious of is the need for statutory protections that ordinary citizens can be assured of without having to appeal 25 times to the police, and institutional safeguards that buttress them, even as they fret about the danger of disproportionate penalties.

By Special Arrangement with Business Standard


Also read: What CCD founder Siddhartha’s suicide shows – India can’t become $5 trillion economy this way


 

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9 COMMENTS

  1. Sometimes, media have vested interest to make govt slow on loan defaulters, few of them from their fraternities. Since nationalization of banks in 1969, banks have been used by politicians and business men having nexus with politicians. The corruption was so rampant that no big loans were sanctioned without a share to political system. Moat of the banks top management get calls from Finance ministries and other influential ministries. The bank top positions are given like you scratch my back, I scratch yours. RBI was no where in picture to punish wrong doing banks. NPAs were cycled with new loan paying back old loans or banks taking heavy haircuts in debt restructuring. No fraud case has ever finished in court as they are dragged for decades. There was a saying those days that as industries become poor, but industrialists became rich. Banks loans are public money and there should not be any soft approach. Business men knows the risk profile, but get away non payment of debts easily with connections. Siddhartha case is unfortunate, but given that because of him many lenders and private venture funds lost money believing him.

  2. Government is all about more and more powers and pelf to politicians and bureaucracy. Corruption inevitably comes from power. A few takes the bigger portion of the cake. Corruption is never an issue.

  3. Modi is running govt as profitable company
    Not as social activity
    He totally drove many companies reserved cash as like ongc
    चाय वाले को क्या पता किसानो की बेरोजगारी की दर्द क्या होता हैं
    He is just supporting foreign companies & foreign entrepreneur
    Because of tax collecting greed if he wants to run goverment by higher tax collecting money ? Then what are doing govt owned companies like SBI LIC HPCL BPCL PSU BANKS indian railway
    NARATNA MAHARATNA MINIRATNA companies
    Employees not working properly and worst then wort service by these companies
    First of all GST Is very higher it must 5 to 6%
    It’s very dangerous for country more money having with govt rather then public , I’m not saying this it was said by chanakya before some century
    He will bring Indian economy to ground will not touch 5 trillion

  4. Mr.T.N.Ninian could’ve done better than this.Yes we need to be “pragmatic” and “soft” towards people who have it easy.(means easy loans,inflated valuation (remember the “kingfisher” logo was valued at few hundreds crores),and lender’s got virtually nothing.Please lend me the book on “how to gets absurd loans and Not pay”.Will be grateful.

  5. Part / much of the desperation is due to the parlous state of the economy. It simply cannot generate the tax revenues the government is expecting to keep its show going. Almost entirely on consumption, very little on creation of durable, productive assets and high quality infrastructure. Ms Tavleen Singh’s drive from Bombay to Goa refers to a highway very different from the autobahns the ever smiling Minister claims to be creating. Trust and cooperation between government and business has broken down almost completely. One does not know who the lucky crony capitalists are; almost everyone is seeing erosion of wealth. It is a myth / fallacy to believe that empowering the state – and its minions – even further will make us either safe or prosperous. This paddling and splashing is not how Michael Phelps moves through water.

  6. Perhaps it’s too late. The current government doesn’t have a clue about anything. They will run India into the ground.

    Barring a few voices (including in the Print), everyone has been complicit in this crime against India, including the Supreme Court: see how they’ve contributed to the inhumane mess in Assam.

    It’s worth repeating (Martin Niemöller) :

    ” First they came for the socialists, and I did not speak out—because I was not a socialist.

    Then they came for the trade unionists, and I did not speak out— because I was not a trade unionist.

    Then they came for the Jews, and I did not speak out—because I was not a Jew.

    Then they came for me—and there was no one left to speak for me.”

  7. The lighter touch , yes , that is what we need , not just in the sphere of govt – citizen relationship ,but almost everywhere else too . Parent – Ward , teacher=student , husband -wife , society -individual , the hand is too harsh and the consquences show .

  8. The author is completely miopic about the need for tough laws to reign in corrupt businessmen. He wants the govt. to show sympathy to corrupt businesses men in the name of development. A typical Congress era mindset. Sorry Mr. journalist, this is new govt and new India. Don’t teach lessons from your journalistic wisdom.

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