Menu

The world is increasingly becoming 1 large country. Borders are shrinking and commerce is growing. However, despite the increasing trend of cross-border business, a significant factor remains that each country and its economy is unique.

Countries are blessed with certain resources that another country would have in shortage, leading to certain economic advantages or disadvantages. Businesses ideally set up their business in a particular State with the intention of capitalising on their economic, demographic or commercial benefits, to do business. These economic barometers play a crucial role in defining the tax systems and tax rates of a particular State. This is also the reason why tax rates are different from one country to another.

What is Treaty Shopping

“Treaty shopping” generally refers to a situation where a person, who is resident in one country (say the “home” country) and who earns income or capital gains from another country (say the “source” country), is able to benefit from a tax treaty between the source country and yet another country (say the “third” country). Once the third-country resident investor has found such a country, income from the Home State may be channelled through a corporation organized under the laws of that country. The withholding tax rate on passive income under a tax treaty is usually less than the statutory rate applicable to residents of non-treaty countries, in many cases exempting the income from taxation.

The residents who indulge in Treaty Shopping take the benefits of the different tax system in a particular State. This situation often arises often where a person is resident in the home country but the home country does not have a tax treaty with the source country. It also happens when incomes of a specific nature are treated different in different States. Therefore, the roots of the Treaty shopping are in the inconsistencies among international tax regimes. As long as there exist dissimilarities of tax systems, it can lead to distortion of incomes and investments.

The term “treaty shopping” is thought to have originated in the United States. The analogy was drawn with the term “forum shopping”, which described the situation in US civil procedure whereby a litigant tried to “shop” between jurisdictions in which he expected a more favourable decision to be rendered. David Rosenbloom, who served as International Tax Counsel in the US Treasury Department during 1977-198 1, described the phenomenon as “the practice of some investors of ‘borrowing’ a tax treaty by forming an entity (usually a corporation) in a country having a favourable tax treaty with the country of source -that is, the country where the investment is to be made and the income in question is to be earned”. In other words, a person “shops” into an otherwise unavailable treaty through complicated structures; hence the term “treaty shopping”.

The term ‘Treaty Shopping’ has never featured in OECD and UN Model Treaties and their commentaries, but there has been a significant emphasis in eliminating treaty shopping through other measures. For example, references to the “problem commonly referred to as treaty-shopping” are made for the first time in the OECD Commentary on Art. 1, when discussing Limitation-of-Benefits (LOB) provisions and how these provisions are meant “to address the issue in a comprehensive way”. A description of treaty shopping is given indirectly and in very general terms. It is stated that LOB provisions are there to address treaty shopping. Then it is stated that LOB provisions are “aimed at preventing persons who are not residents of either Contracting States from accessing the benefits of a Convention through the use of an entity that would otherwise qualify as a resident of one of these States”.

If one looks at the quasi-definitions of treaty shopping, what one notes is that the term “treaty shopping”, as used, may encompass a broad spectrum of structures, ranging from the purely abusive and artificial ones to others with more substance. However, are all these instances of improper use of tax treaties? The OECD Commentary seems to perpetuate this confusion. The descriptions given in Paras. 9 and 20 of the OECD Commentary to Art. 1 would seem to catch general forms of treaty shopping; i.e. treaty shopping without tax haven or conduit connotations. However, the examples given in Para. 11 of the Commentary would seem to catch treaty shopping of a more specific and abusive nature; i.e. treaty shopping through conduits and/or base companies.

Does Treaty Shopping Begin where Tax Avoidance ends?

Tax avoidance is defined as the arrangement of one’s financial affairs to minimize tax liability within the ambit of law. Tax evasion on the other hand is defined to as the illegal non-payment or under payment of tax. Now the question arises, can tax avoidance be distinguished from tax evasion?

There is no imaginary line that distinguishes one from another. As the difference cannot be codified, these matters are evaluated by a competent authority based on the facts and circumstances of each case. This brings us to a very important question. Is Treaty Shopping tax avoidance or is it tax evasion? And it is when we raise this question that the already undiscernible line becomes even more blurred. What is it about treaty shopping that makes it an instance of the former rather than the latter? Why is it assumed that all forms of treaty shopping, irrespective of their degree of artificiality, constitute tax avoidance?

The term “treaty shopping”, applied generically, may encompass a variety of entities and forms of business. It will encompass legitimate businesses conducted with economic substance in a secondary state, as much as an intermediary company established as a conduit to capitalise on tax haven benefits. However, this is only one end of the spectrum. There is also the other end, where the intermediary company is a company with some substance, conducting its own trading activities, not controlled by the parent company and liable to some tax in the country of residence. It should always be remembered that an arrangement may be imbued with some economic substance that is not immediately apparent to the tax authorities. Therefore, it is clear that not all treaty shopping structures can be classified as one that is artificial or devoid of any economic substance. This is a discussion that is represented in India through the highly publicized Vodafone case. In Vodafone India Services Pvt Ltd. vs Union of India, the Appellant(Vodafone) had decided to enter into the India market to expand its global footprint, by buying Hutchison Essar. The company purchased shares of Hutchison Essar Cayman Island (which is a tax haven), which held Essar India’s shares. Therefore, in effect there was no transfer of Hutch India’s shares. Therefore, the sale of shares did not attract any capital gains tax in India. The Supreme Court ultimately decided that the entire transaction was within the four corners of law and hence not tax evasion.

Therefore, we can draw a conclusion from the recent high profile Vodafone case that the Supreme Court has recognised that this is a case of Treaty Shopping but the same does not amount to tax evasion; it is merely tax planning. The same was upheld in the Andhra Pradesh High Court in the case of Sanofi Pasteur Holdings SA.

Which State Has the Right to Tax?

While States strongly feel that Treaty Shopping is illegal and is a form of tax evasion, treaty shopping is, arguably, an instrument of international tax planning. But, what is it about this kind of tax planning that makes it objectionable? A number of arguments have been advanced in the international tax community. It has been argued that treaty shopping is an instance of tax avoidance and as such improper and contrary to the purposes of tax treaties. Secondly, it has also been argued that treaty shopping breaches the reciprocity of a treaty and alters the balance of concessions attained therein between the two contracting states. When a third-country resident “shops” into a treaty, then the treaty concessions are extended to a resident, whose state has not participated in this arrangement and may not reciprocate with corresponding benefits (e.g. exchange of information). The usual quid pro quo of the treaty is therefore compromised and the process subverted.

The Economic Allegiance Theory was first proposed by Georg Van Schnaz. The Theory is largely considered the bedrock for International Tax Theory and Administration. Van Schnaz argued that the resident (company or individual) owes significant responsibility and allegiance to the geographical State he does business in. The home state of the business provides resources, infrastructure, protection and domicile; due to the above reasons, they Resident ought to compensate the State through his/her allegiance to the State.

Furthermore, it is often claimed that treaty shopping creates a disincentive for countries to negotiate tax treaties. The general life of a tax treaty is a decade or more, due to the significantly long process that it is, from negotiation to finalisation. If third countries can get the benefits of reduced taxation for their residents without conferring reciprocal benefits to non-resident investors, then there is no need to enter into a tax treaty, especially if there are concerns that the tax treaty might be imbalanced. This may put countries which comply with their duties of fiscal co-operation arising through tax treaties (e.g. exchange of information), at a competitive disadvantage internationally. Furthermore, lack of fiscal co-operation enhances opportunities for international tax evasion.

Double Taxation Avoidance:

The bedrock of taxation is the principle of Source and Residence. States normally follow residence taxation or source taxation or a mix of both. Disputes arise when residents of a State deal with one and another. While one State would follow Source Taxation, the other would follow Residence based taxation and this leads to double taxation. Double taxation exists in 2 forms:

Juridical Double Taxation: Where the same income is taxed twice in the hands of the same tax payer in two different States

Economic Double Taxation: The same source of income is taxed twice but in the hands of difference payers. Eg: Profits of the company are taxed and later the dividend income is taxed in the hands of the shareholder

The aim of International Taxation is to mitigate Juridical Double Taxation to the extent possible. However, economic taxation is normally considered to be acceptable.

As detailed above, the most common form of double taxation is juridical double taxation and this happens due to existence of two different tax systems in either State. The dispute in claim over taxation is normally settled through Double Tax Avoidance Treaties that are entered into by the States. The Treaty, usually based on the OECD or UN Models, consists of 32 Articles detailing the treatment of income and taxation of incomes of various types, collection and enforcement of taxes.

The Double Taxation Avoidance Agreements(DTAAs) play a significant role in mitigating double taxation. While this is so, DTAAs are bilateral in nature; which means they are entered into between 2 countries taking cognizance of the economic and tax conditions and systems prevailing in either state and the expectant impact of the same on the treaty. Hence, each Treaty is very specific to either State; but does not consider a 3rd State, unless it is multilateral in nature. The very bilateral nature of DTAAs lends itself in presenting opportunities to derive tax advantages by a resident of a 3rd State operating with another DTAA (with either State) or no DTAA at all.

How to Mitigate Tax Avoidance – Limitation of Benefits:

With the increasing trend of entities using the DTAAs to their benefit, to avoid taxes as detailed above, the nature and scope of DTAAs has been made wider. While originally envisaged for avoid double taxation, one of the critical roles played by DTAAs today is avoidance of double NON-Taxation.

The Limitation of Benefits Article was originally introduced by the US, in the US Model Treaty, and every DTAA negotiated by the US includes this article. The importance of the Limitation of Benefits, or LOB, lies in its expansive nature. The Article is an anti-abuse rule which empowers the Revenue Authorities of the USA to deny the treaty benefits to a resident that is merely a conduit to obtain benefits of the treaty.

This Article is however, not present in the OECD or UN Model Treaty. Hence, countries which adopted these Model Treaties would have to voluntarily include the same, which isn’t done commonly. This lack of LOB clauses presented legal challenges in bringing to tax transactions which are in the nature of avoidance of tax but are still within the 4 corners of the law. This trend has been increasingly over time which has led to BEPS Committee formulating an action plan to address Treaty Abuse.

Action Plan 6 of the BEPS does exactly that. The Action Plan to Prevent Treaty Abuse is targeted at the strategy of establishing companies in States with desirable tax treaties that are often qualified as “letterboxes” “shell companies” or “conduits” because these companies exist on paper but have no or hardly any substance in reality. The Action Plan, though not binding unless adopted, proposes that States should first include in their title and preamble of the DTAA, a clear statement that the States that enter into a tax treaty intend to avoid creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance, including through treaty shopping. Second, countries will implement this common intention by including in their treaties: requires

A combination of a “limitation-on-benefits” rule (LOB, which is a specific anti-abuse rule) and of a “principal purpose test” rule (PPT, a general anti-abuse rule);

The inclusion of the PPT rule, or

The inclusion of the LOB rule supplemented by a mechanism that deals with conduit arrangements, such as a restricted PPT rule applicable to conduit financing arrangements in which an entity otherwise entitled to treaty benefits acts as a conduit for payments to third-country investors

Therefore, the Limitation of Benefits article acts as a tool that enables the revenue authorities to look beyond the façade of an entity and look into the substance and not merely the form of the entity. Much like Corporate Law, Limitation of Benefits provides the law-maker a device to lift the corporate veil of the entity and look into the purpose, objects and history of the entity in question. LOB will be the single most powerful rule that can be used by revenue authorities to reduce treaty abuse through conduits.

Should Treaty Shopping Be Allowed:

Treaty Shopping presumes that there is an overall economic and revenue loss to the affected States. It could be argued that when treaty shopping increases economic activity, the overall economic gain might exceed source-country tax losses. This begs the question. When does treaty shopping increase economic activity and when does it not? Does it depend on whether the source country is a developing country? For example, in Union of India v. Azadi Bachao Andolan, the Supreme Court refused to imply an anti-treaty-shopping clause in the India-Mauritius tax treaty.

In the judgment, the Supreme Court emphasized that in developing countries, treaty shopping was often regarded as a tax incentive to attract scarce foreign capital or technology. “Developing countries need foreign investments, and the treaty shopping opportunities can be an additional factor to attract them”. Countries had to take a holistic view. “The developing countries allow treaty shopping to encourage capital and technology inflows, which developed countries are keen to provide to them. The loss of tax revenues could be insignificant compared to the other non-tax benefits to their economy. Many of them do not appear to be too concerned unless the revenue losses are significant compared to the other tax and non-tax benefits from the treaty, or the treaty shopping leads to other tax abuses.” Treaty shopping may be a necessary evil, tolerated in a developing economy, in the interest of long-term development.

Another important element to consider in the elimination of treaty shopping, is the purpose of DTAAs itself. The ultimate objective of avoiding double taxation or double non-taxation itself is neutralising the differences in global tax rates. The goals of a universal tax rate can be considered a pipe dream. As explained earlier, the tax rates of any country are linked to its economic condition and prevailing market situation. Therefore, as resources of the world are unevenly distributed, it is almost impossible that one can expect the tax rates between 3 countries to be the same, let alone across all countries in the world. Absent a truly neutral tax system, it is difficult to assess any distortions caused by treaty shopping. In fact, it could be argued that the inherent non-neutralities of tax systems create an incentive to treaty shop. In other words, the very existence of treaties itself lends itself to Treaty Shopping. Treaty shopping is perhaps a self-help way of lessening or removing fiscal impediments to international business imposed by the inadequate relief of international double taxation and the incomplete nature of the treaty network.

Therefore, we can establish that inadequate definitions and theoretical objections which are detached from reality.

Conclusion:

The arguments for Treaty Shopping from an objective and legal point of view point to the direction that supports the revenue, that Treaty Shopping is abusive in nature and lends itself to cheating the revenue of its dues. However, as seen above, the rationale that double taxation weakens countries ability to tax income by encouraging shifting income from domestic to cross-border countries maybe right, however it fails to taken into consideration the economic benefits accruing to the Residence State. Therefore, Treaty Shopping while from the perspective of the Source State is abusive in nature, for a Residence State (most likely a developing country) has significant economic benefits.

Further, considering the ultimate goal of tax neutrality is a pipe dream and is impossible to achieve, the existence of globally different tax regimes will stay, as will Bilateral Treaties, Treaty Shopping looks like a phenomenon that is set to stay.

The Supreme Court of India has been the figure head and guardian of the Constitution of our country and history has proven that it has been the last bastion of democracy. However, the very same organ that is established to protect the fundamental rights of the members of the country, has violated them in a shocking judgement. The bench of Justices Dipak Mishra and Amitava Roy, today, mandated that the Indian National Anthem must be compulsorily played at every theatre across the country before a movie begins.

This judgement of the Supreme Court has been delivered at a time when there is a worrying increase in the usage of the word ‘Nationalism’. The word itself is fairly harmless. It denotes pride and patriotism for a citizen of particular country towards his or her country. However, Nationalism today has become the dagger of action and the shield from repercussions. Almost as if an escutcheon, incidents of crowd vigilantism, lynching and communalism has taken shelter in the public eye. The Nationalist agenda runs deeper and thicker than what it actually means and has traditionally manifested in vested interests using it as a tool to further power.

Nationalism and Dictators

History has shown us that the rise of nationalism has been followed with dictatorial reigns with vested interests. The rise of Nazism in Germany, Idi Amin in Uganda, Facism in Italy, Soviet Communism(Stalin) in USSR, Fransico Franco in Spain, Saddam Hussein of Iraq and Gaddafi of Libya. Nationalism is an ideology evokes enthusiasm—elicits an emotional response—to the extent that it articulates a fantasy that is shared by members of a population. And when such an enthusiasm can be captured by a powerful and admired leader of the society, it can elicit passion among the population. Passion is usually associated with an enemy and this can be dangerous as the enemy could be anybody or anything that the leader directs to be.

Something more disconcerting is the rise of nationalism in India, at a time when borders between countries are vanishing and the world is becoming a unified global country. If borders are to be taken into cognizance then one must first delve into the borders that exist in our very own country. With 29 States and even more cultures in a single country, India really is multiple countries within the single country. For instance, a Punjabi Sindhi would find more in common with a Pakistani than a Tamilian or a Keralite. The Tamilian or a Keralite will be more similar to a Sri Lankan than an India from Assam. However, the Punjabi, the Tamil, the Keralite and the Assamese are bound by the agenda of India and nationalism while Sri-Lanka or Pakistan become the neighbour or the enemy. It’s not to say that we must wage war upon our brethren in various parts of country, but a hilarious factual representation of why nationalism is a concept which is fictional and fairy-dust.

“Time has come when people must respect national anthem which is part of constitutional patriotism. People must feel that it is their country. It is because of the country that they are enjoying freedom and liberty” – Justice Dipak Mishra, Hon’ble Judge Supreme Court of India

“Your life is bound up with the life of your whole people(your country). The nation is not merely the root of your strength; it is the root of your very life” – Adolf Hitler, Dictator and murderer of 6 million people

The Solution – Not Nationalism but National Fraternity

There exist too many differences between the very members of our own great country. Unity is mere term and divisiveness exists in spirit and can be seen in day-to-day interactions with people in different states. However, to genuinely overcome this challenge, one must lift the veil of nationalism and look beyond it into jungles of culture and fraternity. While students in school are taught that India is a melting pot of cultures, they’re not taught enough about the ingredients that make up the wonderful stew in the pot. Acceptance to different cultures, religions, languages, food, personal choices and lifestyles is the first step in achieving this object of fraternity.

Tolerance allows free and rational thinking and bring people together. Indians will love India, not because they happened to be born in specific geographical zone in the world, but because they genuinely love the people of the country and hence, love the country as a whole.

The archaic children’s tale, Emperor’s New Clothes is really a story layered with clever subtext. Something widely accepted as true or professed as being praiseworthy due to an unwillingness of the general population to criticize it or be seen as going against popular opinion (due to ignorance or otherwise). Never has this subtext been more relevant than the extremely disconcerting violence in Kashmir, just another chapter in what has been a few year dominant with public unrest in various parts of the country due to polarising reasons.

For almost 2 months now the beautiful state of Jammu & Kashmir has been overwhelmed with violence across multiple districts. The killing of a Kashmiri Militant Youth Burhan Wani in early July has sparked protests across the state, with concerned citizens and youths turning hostile due the increased proliferation of security and the transgression of personal rights of Kashmiris. Things escalated quickly with Pakistan and Indian representatives engaging in a war of words and the most citizens of our country trained their guns on Pakistan for causing this issue. However, if ignorance could be quantified, then the weighing scale would be out of order at this point.

What really plagues Kashmir?

To try to get the proverbial handle on this let’s delve into the quagmire that is Kashmir. The place that is known as Heaven on Earth is no stranger to problems. Dogged by violent clashes and almost always the tipping point of tempers between Pakistan and India, it is considered the most unstable and dangerous places in India. The State borders the only two countries that India has gone to war against and neither China nor Pakistan have eased up on their border incursion stances leading to increased deployment of security personnel, both with the Indian Army and the State Controlled J&K Police.

This rapacious growth of security personnel overtime has created discomfort and displeasure among the Kashmiris, leading to disillusionment with a Government that has been accused of little dialogue with its people and their needs. The increasing national identity of Pro-Hindutva activists, and silence from position of power, across the country has also threatened the secularity of the entire country and has further unsettled the already unstable Kashmiri populace. The communal polarisation was complete with the PDP merging with the BJP after it’s figure head Mufti Mohammed Sayeed passed away.

With requests of independent statehood rebuffed on a constant basis, normalcy has never been restored to the Kashmir Valley. Many of the youth are now taking to arms and are creating Militant outfits to attack security personnel. Burhan Wani was one such youth who was abused by Indian security personnel at the age of 10.

Burhan took up militancy at the young age of 15 and had gone on to become a commander at 21. He released a 6 minute video where he urged Kashmiri’s to report Indian security movements to him and his team so that they could ‘take action’ against the ‘enemies of the state’. Following this video, Burhan was shot and killed by the Kashmir Police, sparking outrage and protests across the state. Over 50,000 Kashmiri’s are said to have attended the funeral of Burhan.

Repeated Human Rights Violations

With an increasing death toll coupled with multiplying injuries and threats, the Kashmir unrest continues the disturbing trend of repeated human right violations in the country. The Rohit Vermula unrest, the JNU unrest, the Patidhar stir, the Jat Stir, constant attacks and murders by ‘Gau Rakshaks’, the Kashmir unrest and the increasing no.of attacks on Dalits in recent months are worrying. There appears to be an undercurrent of malcontentment that is being swept under the rug with no affirmative actions or resolutions taken to address the root of the problems.

Deeply ingrained is the belief that the evil conceal their dangerous predilections for violence, polarization and domination that when they wear them like bangles for all to see, the gullible laugh and call it a pose, or find it strangely charming.

When the United Nations Chief Ban Ki Moon conveyed his concern over the current situation and wished to send a delegation to investigate the Human Rights Violation, the request was rejected by Cabinet stating that it is an internal matter and not an international one.

This is where the pillars of logical argument start crumbling into fine dust. If the matter happened to be as internal as made out, what is the need to constantly engage Pakistan in a war of words through this event. To put things into perspective, the USA, UK, China and EU have all also released statements deploring the acts of the security forces in Kashmir today, but only Pakistan has been targeted. Also, wouldn’t engaging Pakistan automatically indicate it is not merely an internal matter?

Putting all that aside, irrespective of whether it is an international matter or an internal matter, why was the UN HR delegation denied entry to India? It’s not as if they are run by the US or China or Pakistan. The UN happens to be a non-partisan group that report facts and not opinions. A report from the UN would have equipped policy makers with information that could have been used to effectively curb Human Right abuse, however a golden opportunity was missed. One cannot help but hope the motive is not sinister, especially when considering a British team wishing to examine to communal harmony in India was also denied entry earlier this year.

Potential Solution?

Is there a potential solution for the issue raging on in J&K? In my opinion there can. I strongly feel Kashmir is now an integral part of India, granting the state independent statehood would have a debilitating effect on both India and J&K itself, as it is unequipped to handle the rigours of its geographical position.

One of the biggest reasons Kashmir will never be seceded by India is the fact that it happens to be a strategic vantage point. The Kashmir mountains and valleys make it a natural barrier from invasions outside the country. This will also explain why Kargil was a big battle for India as the points seized by Pakistan were critical barrier points.

But in my opinion the entire issue with J&K is it is largely viewed as a military and strategic place of interest for the country. So much so that there has been limited infrastructure development and minimal economic growth in industrial segments of the State. This has not only created a paucity in jobs but also resentment as the rest of India sees significant investment in the above mentioned areas.

Pakistan is a punching bag for a lot of issues in the State. The thought that Pakistan are the enemy is something that is pulverised into minds right from early school. This significantly affects free thinking as a lot of the issues really do not involve Pakistan at all. Schooling of an erudite manner needs to be in place to make Indians feel that Pakistan is not just a country, it’s a congregation of people. There will be good people and there will be bad people, just like how they are in India. The more this thought is approbated, the less virulent will our opinions be about Pakistan.

This more cultured approach to tackling the root of the challenges faced by Kashmiris will yield positive results, and while it may be impossible to remove militancy or cross border incursions, addressing issues by providing Kashmiri’s alternatives and valuing their life will drastically reduce the insurgents and will create a more positive and conducive atmosphere across the State and the country as whole. We have citizens that have incredible potential and hopefully this potential is achieved in the right way, by being empowered with knowledge and information rather than propaganda. This will genuinely help India prosper as a country with both economic growth and valuing Human Rights.

It is an issue which is constantly rumbling in the pits of the stomach of the country. Multiple stirs and suicides, paired with the Ruling Party’s strategic silence on the matter has meant it’s slowly working its way to the forefront of challenges faced by our Overlords. Most recently, the Censor Board banned a movie about the Patidhar Stir in Gujarat stating that it is likely to cause unrest and it will be a threat to the sovereignty and security of the country. I’m inclined to agree with this move and personally feel that the country is not educated or aware enough to handle a subject of that level of seriousness. The likelihood of the populous being swayed by simple yet emotional or violent portrayals of reservations might evoke passion and cause unrest in certain parts the country. Unfortunately, none of these acts nor movies will delve deep enough into the Jungle, that is reservation, to find the solution and solace that the country really needs.

Reservation is not Unique to India, its prevalent across the world

Before, we journey into the treacherous issued posed by Reservation, I felt it appropriate to brief the uniqueness of this problem in India. While reservations is a concept that is fairly common across the world, to uplift certain parts of the society that require facilitation, caste is a concept that entirely unique to India and does not exist anywhere else in the world. ‘Casteism’ was reasonably prevalent in the 1700s and 1800s in India. It was something that originated from centuries old customs and writings that nobody questioned. If someone broke the designated duty of the caste, they were either shunned or moved away from that society of people. It was a problem but not one which was out of hand, not until the British realised it could be.

Divide and rule was a strategy used by the British to devastating effect and the trappings of which are still felt to this day. Caste was one of the victims of this Divide & Rule policy where the Monarchy constantly gave benefits to a particular part of the society and quite vocally neglected another. This exercise was done in frequent intervals, ignoring one community while favouring another community/caste, driving a wedge between the different castes and societies in India. This vitriol channelled itself into various outlets including theatre, music, news and, the most damning of them all, story-tales to children. Is there any surprise this dislike has continued not only shortly after 1947 but even till 2017, almost 70 years after the British Oligarchs left the promise-land?

“History shows that where ethics and economics come in conflict, victory is always with economics. Vested interests have never been known to have willingly divested themselves unless there was sufficient force to compel them. “

Reservations were meant to be for 15 years only. The Constituent Assembly was short-sighted

The most eminent, Nationalist, far-sighted group of individuals were tasked with the responsibility of developing the Constitution for the largest democracy in the world. They set-out to tackle some of the greatest challenges faced by the country at the time and set precedents for the future of India. As Casteism and offshoots of the same, such as untouchability, was rampant at the time of Independence, the Assembly felt it appropriate to genuinely adhere to equality guaranteed by the Fundamental Rights and give every person in the country an equal opportunity to lead a dignified life.

‘What are we having this liberty for? We are having this liberty in order to reform our social system, which is full of inequality, discrimination and other things, which conflict with our fundamental rights. ‘

They felt not providing reservation for the oppressed sections of the society would only perpetuate inequality and would therefore not be true to the Constitution of India. They introduced Reservation but stated it would exist for 15 years for the specified classes of people. This move, in my opinion, is 2 of the most short-sighted decisions taken by the assembly. While I am in total agreement with the concept of reservation and the idea behind it, the fact that it was meant to be only for a period of 15 years automatically invalidates the ideology of equality. Humans by nature discriminate and it would only be a matter of time before another society becomes oppressed while one becomes the oppressor. Further, the Assembly introduced rigid ‘classes’ that would be eligible for the benefits of reservation. Another shockingly short-sighted view as, yet again, it invalidates the point of reservation itself as it guarantees reservations for a certain set of people constantly, which means they are never really empowered.

Needless to say, 70 years on, we have seen this part of the Constitution to be the most contentious. Repeatedly Politicians have used it as a weapon for political vote-banks and have kept these sections of the society oppressed and uneducated to benefit their political ambitions. These ambitions saw the 15 year reservation period extended indefinitely and classes of people eligible for reservation, constantly increased with the % of reservation also constantly being pushed. Despite, Supreme Court directing a cap on the % of reservation, some State Governments have still found ways to increase the reservations to 60%.

Why is it always Reservation or No Reservation? There Exists a Middle Ground – My Solution

Reservation is essential to enable equality and growth to specific people. But Reservation as it stands is a failure and the very fact that it has existed for 70 years and continues to remain static goes to show that it has done nothing to fuel the growth of the people whom reservations has been made for. It has merely been a powerful tool for the Politicians to wield and use effectively for their vested interests.

Reservation needs to be dynamic. It needs to be something that can be reviewed on a regular basis and check the effectiveness. A system should be in place which ensures the right level of reservation and resources need to be directed to the identified groups of people. It needs to be measurable. But considering the diverse nature and amount of people that exist in India, is it practically possible? How are you going to identify these people?

I believe it’s easily possible. We have an existing very powerful and expensive exercise that is carried out by all governments, irrespective of who is in power. The Census! Every person in India is visited and demographic details are obtained from the people of India. All the Government will need to do is expand the scope of the census, add more questions understanding the income status, wealth status and education status of everyone in the household. Get a trained representative to ask more questions about the social challenges and difficulties faced and the impacts of the same. The Census process will probably take a year longer to complete, but it’ll be a process that will be entirely worth it. The Government will have quantifiable and quantitative information regarding every citizen in India. The information will enable the Govt. to take decisions which are directly at addressing any inequalities which have been measured by this census data. All resources and reservation can be directed effectively in addressing these issues. A firmer stand can be taken where qualitative issues have plagued the growth of a certain class of people. Further, the Govt every 10 years can evaluate the impact of the decisions and resources to the specific class of people. The Govt. will be dynamic and will evolve and ration the right amount of resources to be administered to oppressed groups of people, the ones that are improving and new groups of people that might feature in the census.

I believe, this approach will ensure that there is genuine eradication of inequality and it will uphold the soul of the Constitution to enable Right to Equality. It will make reservation more effective and transparent and it will transform the Country.

‘People are pretty much alike. It’s only that our differences are more susceptible to definition than our similarities‘ – Linda Ellerbee

The tirade of Tanmy Bhatt, of AIB fame, about the beloved public figures Sachin Tendulkar and Lata Mangeshkar has evoked some very strong reactions on twitter and in the upper echelons of the Government. Needless to say, this has brought to forefront the ever raging tempest, the Free Speech debate.

India has the longest constitution in the world and this is not without reason. A fairly young constitution, less than 70 years old, the Constitution has already seen 100 amendments made compared to just 27 made to the 228 year old Constitution of the United States of America. In an almost comical and ironic, but relevant comparison, the first amendment to the Indian Constitution put into place ‘reasonable restrictions’ on Freedom of Speech, while the first amendment of the US Constitution prohibited any sort of abridgement of free speech.

So what happened in the 1 year of Absolute Free Speech in India?

Earlier, in March 1950, in Delhi, the government’s attempts at pre-censoring the Rashtriya Swayamsevak Sangh’s mouthpiece, the Organiser, had been over-ruled. The East Punjab Public Safety Act, 1949, under which the curbs were being applied, was held to be unconstitutional by the Supreme Court. In another case in May 1950, involving a left-leaning journal called Crossroads, published by Romesh Thapar from Mumbai, met with the same fate. At the time, Madras state had banned the Communist Party and, as part of that policy, prohibited the entry and circulation of Crossroads in the state. Thapar contested this ban legally and won, with the Supreme Court declaring the Madras Maintenance of Public Safety Act, 1949 unconstitutional.

Within a week of the decision, Home Minister Vallabhbhai Patel wrote to Prime Minister Jawaharlal Nehru, complaining that this ruling weakened the power of the Center in regulation of Press and the Public. Patel feared not being empowered to gag a Leader who was campaigning to annul Bengal’s partition (at the time). Despite their dissensions on most matters, both Nehru and the Iron Man of India believed in a powerful centralised state and decided to put into place certain controls which they could use as a device to restrict free speech in specific places. It is believed that the Father of the Constitution, BR Ambedkar, did not agree with these views but was a minority. However, he still managed to place the caveat of ‘reasonable’ restrictions that would be decided by the Judiciary, opposed to the Patel camp which insisted on total restriction which was in power of the executive.

Ridiculous Reasonable Restrictions Restore Ringleader Rule

We’re today saddled with vaguely defined hate speech, sedition and blasphemy laws that are repeatedly used on a regular basis for political ends. When people found solace in the internet, the Government sought to control the same and passed the Information Technology Act, 2000 which even went so far as to penalise “offensive” electronic messages. While one might argue that curbs on free speech are required in a country as wide and culturally different as India is, one fails to appreciate the ground reality of the situation. As we have seen in Mumbai in 1993 or in Gujarat in 2002, the state does not really seek to clamp down on free speech for such altruistic purposes. Instead, free speech curbs are used for petty political ends, banning books, movies, paintings, college gatherings and even Facebook status updates.

Even the last bastion of happiness has not been left alone in India. Comedy has always been an art that is liberal-minded. Almost all comedians will fight against censorship and have a way of interspersing comedy with public messages on freedom which has for several decades been a medium to reflect the mood of the public to changing jurisprudence. Ofcourse, this is something which is pure evil and shouldn’t be allowed.

Hence, in India, we’ve seen crackdown on a comedy roast hosted by All India Bakchod which poked fun at actors, directors and producers with their consent. We’ve further seen crackdown on poetry or music which capture the mood of the nation or take jibes at the ruling party; and now we’re witnessing the ruthless onslaught of an entertainer who ridiculed, on a lighter note, two famous Indian people on his personal snapchat account. This has been blown out of proportion and now the incumbent government and many political parties are urging the police to arrest the comedian and put him behind bars.

I personally don’t find All India Bakchod or Tanmay Bhatt too funny. In fact, a lot of their humour borders on being obnoxious and heavy handed, however, this remains their fundamental right and their freedom of speech. Tanmay Bhatt has not incited violence, nor has he indulged in hate speech. Neither the roast, nor his snapchat tirade been an attack on the democracy or freedom of the people of India. It might have been idiotic, sure, but it’s definitely not a crime. If anything, instead of putting restrictions on freedom of speech, the government could make idiocy a crime. Then again, if that is done, most of our Parliament would be behind bars.

Freedom of speech needs to be appreciated and put on the pedestal it deserves. Even if absolute freedom is not given in India, the reasonable restriction should genuinely be reasonable and the archaic sedition and hate speech laws should be vanquished in place of genuine laws to protect the sovereignty and integrity of India.

‘The Framers of the Constitution knew that free speech is the friend of change and revolution. But they also knew that it is always the deadliest enemy of tyranny’ – Hugo Black

The Opposition Leader MK Stalin is seated with the general public at the CM Swearing in Ceremony

The move by MK Stalin to attend the swearing-in ceremony of Hon’ble Chief Minister Jayalalitha a few days earlier is not really a political move; atleast not in any sense understood by traditional Tamil Nadu politics. That’s not to say it isn’t political at all. It strikes one as a move that is scathingly political but it’s disruptive, different and ruthlessly transparent. It’s a spit in the face of the modern politician, the culture of the soulless ghouls who inhabit that world, and the vacuous public multitude that seeks to worship and emulate them.

The State of Madras (as Tamil Nadu used to be called) was dominated by Congress till the DMK ousted the grand old party from its comfortable seat. Led by the charismatic Anna and assisted by his trusted Lieutenant, the fiery and dynamic, MK Karunanidhi and the razzle-dazzle of the party mascot, MG Ramachandran. After Anna’s passing, Karunanidhi ascended to the throne of Chief Minister, still with the help of his good friend MG Ramachandran.

Things soon turned sour as both the film-star and the Kalaignar looked to eclipse each other on the stage, vying for the love of the general public. The Film-Star won the battle and went to become the Chief Minister of the State and continued to be the Chief Minister till his death, a feat never repeated till Jayalalitha won the Legislative Assembly this month. However, the politicians continued to remain friends despite their differences and allegiances to their parties.

“Both MGR and I attacked each other in debates. But I can never forget my 40 year friendship with MGR. When I came to know of MGR’s death I rushed back from the railway station to pay my last respects. Rationalist leader Periyar E V Ramasamy had serious differences with Rajaji, but when the latter passed away, Periyar cried inconsolably”, Karunanidhi recalled. ”These great leaders had set examples of the great political culture in the state. Now, we have the responsibility of preserving it”, he added.

Well, that’s rather touching from Kalaignar, but neither him or nor the current ruling Supremo, Hon’ble CM Jayalalitha took efforts to mend their fences, instead focussed on undoing what the previous leader had done. This has been the legacy of Tamil Nadu politics, the state is littered with examples of discontinued work of the previous government, as if it was a haunted relic stayed fearing completion will unleash an unspeakable torment on the people, yet dominant enough to not be destroyed.

However, there now appears to be a new leaf in the primordial book of Tamil Nadu politics from left field. The source is none other than the 63 year old MK Stalin, son of the former Chief Minister MK Karunanidhi. Though, the ‘Thalapathi’ was not projected as the CM candidate of the DMK, he has led the party from the front and despite defeat has said all the right things (or the things the public want to hear but have never heard in the past).

On defeat, Stalin tweeted “We respect the people’s verdict & will work as a responsible opposition party. I take this opportunity to congratulate Selvi J Jayalalithaa”. He also stated that he would attend the swearing in ceremony of the AIADMK Supremo. While this could all be done by his Public Relations team, one may be allowed to dream that positive thoughts have been communicated, even if it’s sham. To the credit of the DMK leader, he went on to attend the swearing in ceremony and despite being seated in the 16th row(considered by his father as an insult), went on to wish the Chief Minister, the best for her term.

The move from Stalin is simple but unprecedented, atleast in recent times, and has evoked many a positive sentiment from the general public and his political competition. Infact, the Hon’ble CM later went on to apologise for his seating debacle and said “I convey my good wishes to him and look forward to working with his party for the betterment of the state”.

While one could call these leaders charlatans and their actions simply those where they pull wool over our eyes, we must have faith in our democratic system and trust that change will happen and I’d like to think that the change is happening right now. Sometimes, a little change is a good thing.

In a new featurette of the blog, we look at the worst dictators in history of the world and their lasting impacts.

‘The Last King of Scotland’ Idi Amin is among the worst tyrants of all time

The Homogeneity of India and Africa is sometimes striking. Like two peas in a pod, both the Sub-Continent and the Continent of sweeping savannahs have been rapaciously plundered by various European powers, but while India was able to consolidate and integrate itself into one collective democratic unit, numerous countries in Africa fell into the hands of power-hungry, barbaric and greedy tyrants – effects of which still prevail several decades later. Perhaps the most infamous of the barbaric Tyrants to torment the continent in recent decades was Idi Amin, the former pawn of Imperial Britain who rose through the ranks to become military dictator of Uganda. Amin, who was initially paraded as a charming and witty man, later was noticed for what he really was. He became the killer clown of Africa, butchering hundreds of thousands of his people while proclaiming himself the “Conqueror of the British Empire” and sending notes to Queen Elizabeth II, inviting her to come to Uganda to experience “a real man”.

Idi Amin first rose to prominence in the ranks of the King’s African Rifles, a regiment of the British Empire’s Colonial Army, derived from various native African tribes. Back in the waning days of the British Empire – when the British nobility could still just about get away with the rape and plunder of the tropics while pretending to bring civilisation to the “savages” – there was plenty of opportunity for an ambitious black man, so long as he was sufficiently subservient and willing to do the Empire’s dirty work when told to.

In 1962, the Brits handed Amin the job of suppressing a cattle rustling operation, being carried out in northern Uganda by the neighbouring Turkana tribe of Kenya. Amin had succeeded in doing the same however it later came to knowledge that Amin had been waging a campaign of sustained terror against the Turkanan tribesmen. His men carried out gruesome torture, cut off the testicles of their victims, bludgeoned some of them to death with clubs and buried others alive. Well, they did say that they wanted the Turkanans to stop stealing cattle. By this time, the British Empire was rapidly fading and since they weren’t used to the swamps and mosquitoes of Uganda, they decided to get the hell out of there. While any soldier would have been court martialed for his actions, Amin got away because the British didn’t want a prolonged legal battle at a country that was no longer their colony.

The Rise To Power

Uganda was officially granted independence on 9 October, 1962. Sir Edward Mutesa, King of the Baganda tribe, became the nation’s new President. Milton Obote, a good buddy of Amin, became the Prime Minister. Obote liked Amin even better than his previous British bosses had, and awarded him with rapid promotion. Amin became the deputy commander of Uganda’s armed forces. Obote had rapidly begun smuggling operations where he had made a lot money at the cost of Ugandan economy. When King Mutesa objected to the same, Obote suspended the constitution and made himself the overall leader of Uganda. King Mutesa was deported out of the country and Obote ruled with his trusted side-kick Amin.

However, as it turned out Amin wasn’t really a trust worthy side-kick. Amin waited until Obote went on holiday to Singapore, and then ordered the army to take over the country. Israel sent their General Chief of Staff, Colonel Bar-Lev, to Uganda to assist Amin with his coup. Amin declared himself the new President of Uganda. But Amin assured the people that he was only the temporary President, and that elections would take place very soon. However, Amin was forgetful and the elections never came. Probably because Amin was busy killing off anyone who he didn’t like.

Consolidation of Power

Amin went on to execute two thirds of the Ugandan army (6,000 out of about 9,000 troops) and replaced them with his own loyalists. Then Amin decided that Uganda would be a country for black people only, and set about expelling the 80,000 odd Indians and Pakistanis who were living there at the time, claiming that they were sabotaging the economy. He stole all of their property and gave it to the most loyal officers in his army and ofcourse, took some for himself – thank you very much. But, the only problem was, the Indians and Pakistanis constituted the majority of the professional and business class in Uganda, and without them, the economy collapsed.

Members of rival tribes, diplomats, businessmen, academics, members of the clergy, journalists, bothersome foreigners and plain old ordinary Ugandan citizens all got the chop. Anywhere between 100,000 and 500,000 people (depending on who you ask) were murdered. Entire villages were wiped out, and the Nile became so clogged with dead bodies that they began blocking up the dam intake pipes.

Amin goes Bat-Shit Crazy

By 1975, Amin had consolidated his grip on impoverished Uganda by ruthlessly eliminating anybody who was in his way. Most of the nation’s scarce resources were diverted into the ever expanding military. Not much was spared for civilian development. The military chiefs loyal to Amin became Uganda’s new elite. In a demonstration of his authority, Amin decided to stage a publicity stunt for the benefit of the world media. In an elaborate ceremony, he forced a group of Kampala’s white residents to carry him around on a throne, then kneel before him and pledge loyalty.

In 1976, Amin caused an international outrage by allowing a hijacked Air France passenger aircraft, carrying 105 Israeli hostages, to land in Uganda. Amin tried to put up the pretence of “assisting” with the hostage negotiations, while in fact he was collaborating with the Palestinian hijackers all along. Israel had no patience with the charade and promptly dispatched a unit of commandoes to Entebbe to take care of business. During the 58 minute operation, two of the hostages were killed and one left behind. The remaining 102 hostages were rescued, while the 8 hijackers were liquidated, along with 45 Ugandan soldiers who happened to get in the way.

The whole affair was considered a major embarrassment for Amin, and he reacted with insane fury. He ordered a fresh purge to be carried out, involving the murder of anybody suspected of “opposing” him, on whatever pretext. He pretty much just got totally pissed off and wanted to see some heads roll for it. Amin also expelled all remaining foreigners from the country.

The Beginning of the End

Post the Air France event, global ties with Uganda began to weaken. The UK and US decided that they didn’t want to be associated with terrorism (genocide is perfectly okay. But terrorism, oh no that awful). All economic and diplomatic ties were severed. Amin’s grip on the country was beginning to weaken. He could no longer count on much in the way of international support, and Uganda’s already battered economy suffered. Civil unrest became a constant threat. Amin attempted to distract the public’s attention from internal strife by acting on long standing plans to invade neighbouring Tanzania.

However, during the invasion, the Tanzanian forces showed they were no pushovers and decimated the Ugandan army. They went on to stage a counter-invasion and took the Ugandan capital of Kampala, forcing Amin to flee to safety. His reign of terror was finally over. Idi Amin left a legacy of chronic national debt, an annual inflation rate of over 200%, crime rate through the roof, catastrophic divide between the rich and the poor, and hundreds of thousands of its citizens left dead.

In 1989, Amin attempted to return to Uganda in order to stage a coup, but he was intercepted by authorities in Zaire and sent back to Saudi Arabia. There he remained until 2003, when he died from massive internal organ failure. In an interview that Amin gave, shortly before his death, he stated that he had no regrets about his actions in Uganda and claimed he was happier at Saudi Arabia than he had ever been in Uganda.

My Experience of Uganda

‘Everything you read and heard about Idi Amin, in papers and movies regarding how bad it was when he was in power. Well, how it really was, was much much worse’ – Abdullah – a Ugandan rebel at the time of Idi Amin – now a driver for my client.

As much as I’d like to make it seem that I travelled to Uganda to write up this blog post, its completely not the case. I had gone to Uganda with very limited knowledge about Idi Amin but during my 3 week stay there, learnt a lot about him and his impact on Uganda. His legacy and reign of terror is still very strongly felt in Kampala. There exists an almost tangible feeling in the air that signifies the divide between Foreigners and the Locals. The way they treat each other and how conversations happen. There still exists a fear that whoever is in power can at any time just assume charge over the entire country (and seemingly the current President is trying to do the same).

I only felt glad that despite all the similarities between India and Uganda (and many other African countries), we were lucky enough not to have a dictator at the helm of affairs, and a constitution that is strong enough to protect our people and the country.