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Thursday, March 29, 2007

The Supreme Court strikes again

The Supreme Court of India, in its interim order, has stayed the implementation of the reservation of 27% of seats in central government-run educational institutions including the IITs and IIMs. Basically, the SC has agreed to two of the points raised by the petitioners: One, how was the figure of 27% arrived at? In other words, what scientifically-gathered data is there which puts the figure of OBCs at 27% of India's population? Definitely not a 1930 census! Second, why should the 'creamy layer' be given the benefit of reservation? It has also made the caustic observation that the Central Government should not use votebank politics to divide the country. The Government has been given time to come up with supportive documents by August.
This interim order is sure to hog the headlines in the coming days. The HRD minister Arjun Singh, who was the man behind this Act, has expressed 'hope' that the final order will be in government's favour. The 'Mandal' man VP Singh has called for a referendum on reservations.
Now, a lot of questions remain unanswered. As the Left says, how can the SC which upheld reservation of 27% to government jobs now trounce this? Then again, as one student representative said on one of the TV channels, caste in isolation is not a criterion for determining backwardness. There are other barriers also, like the gender divide, the rural-urban gap, the inter- and intra-regional imbalances which all cumulatively determine backwardness. Just the reason that someone is born into a particular caste does not automatically entitle him to work less than others!
A crucial question that everyone conveniently skirts around is this: How effective is reservation / quotas as a tool for the amelioration of the sufferings of millions? Agreed, we need to have an inclusive growth. But, is reservation the only mechanism? No!! Reservation can at best be cosmetic. It does not treat the underlying disease. An analogy comes up in my mind. If two athletes are competing and if one belongs to a backward caste, do we say that he needs to run less distance? No, but we need to give the right kind of nurture and equip him to put up a better performance. One hopes that the SC will give due consideration to all these in its final verdict.
The world around us is marching ahead. Also, there are growing inter-linkages between the global affairs and what happens in India. We're no longer an island that we once were under the likes of Nehru and Indira Gandhi. The world does not tolerate mediocrity. It needs fighters. Need proof? Look at India's ignominious exit from the World Cup Cricket. We should not be resting on past laurels, but we need to keep achieving more, small or big.
Finally, why did I say that the 'SC has struck again'? Yes, the first time was when it ruled that all laws put under the 9th schedule of the constitution after the verdict in the Kesavananda Bharathi case (1973) are open to judicial review. The said schedule was being used as a mechanism to dodge uncomfortable questions in the form of judicial review. By asserting that all laws are open to question in the court, the SC only reiterated the 'basic structure doctrine'.

Monday, March 19, 2007

Budget 07 - A short note!

A long distance travel followed by a bout of serious illness and a pre-occupation with an exam result saw to it that there was a break in my posts, extended to more than a month. In this intervening period, there were some significant developments on the economic front. Inflation is soaring, Economic Survey and the biggie, Budget 07 were presented, EASIEST was introduced, CRR was hiked, etc. Surely, my blog missed out on all the heat and action!!
It's been close to three weeks since the presentation of Budget 07. I'm still not ready for a full-fledged reflection on it; still two points are worthy of immediate mention.
First is the proposal to formulate a scheme of 'Reverse Mortgage'. "In the scheme, being conceptualized, a senior citizen of 62 years or more, who owns a house, can be given loan up to a fixed amount worked out on the percentage basis of the market value of the house owned and given on mortgage. They can, if they so desire, opt for receiving the amount in monthly installments also. In such a case, the amount admissible will be spread over in 15 years in the form of annuity....The loan amount need not be repaid in the lifetime of person / spouse.....In the event of their death, the institution will realize the amount through selling the property or their progeny can take it back paying the necessary amount." It surely does look good, theoretically, I hasten to add. The reason is simple: it's the Indian psyche! Our customs and mindset are against taking up a liability as we age. Moreover, the scheme applies only to self-acquired property and not ancestral property (that's as I understand it). Besides, the children of the loanees may be against foisting another liability upon them.
Second, "Finance Act section 83 made an amendment in Service Tax and now Central Excise Section 14AA is also made applicable to service tax provisions for the purpose of Audit. Now the Cost Accountants empowered to conduct audit in service tax also as referred in section 14AA Central Excise Act." This is music to the ears of Cost Accountants in practice, given the growing scope of service tax. This amendment is all the more heartening since the amendment (I was told) was made despite strong lobbying by ICAI. The crucial question, as raised by a member of the Chapter in my home town, is about how many Cost Accountants would be ready to rise to this. Hope there will be many....
More in next....