Modi Vishwaguru

“Relief to thieves, and Thousands of Crores of Rupees Loss to Government and Public,” says Swadeshi (SJM) leader, on Modi Govt Bill . Modi’s “swadeshi” regime passes Bill to benefit global capital, to the detriment of the Indian economy.

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“It is true that under pressure from international arbitration, government had no other option, but the title should be Relief to thieves — Thousands of Crores of Rupees Loss to Government and Public. A great example of disadvantages of foreign investment,” wrote economics professor Dr. Ashwani Mahajan, co-convenor of RSS-affiliate Swadeshi Jagaran Manch (SJM) on his microblogging website. (ASHWANI MAHAJAN (@ashwani_mahajan) August 6, 2021)

He was referring to Modi government’s decision to do away with the retrospective tax amendment.

Reacting to Mahajan’s tweet, Dr Vijay Chauthaiwale, who is in charge of the ruling BJP’s foreign affairs department, wrote on Twitter: “Dear Shri @ashwani_mahajan, so are you demanding total ban on FDI?” (Dr Vijay Chauthaiwale (@vijai63) August 6, 2021.

Mahajan responded:

Sir ji, read the tweet. Is it a crime to talk about advantages and disadvantages of a policy? https://t.co/UeibCj3xeP

— ASHWANI MAHAJAN (@ashwani_mahajan) August 6, 2021

Everything that is not criminal may not be in larger national interest, a point you repeatedly fail to acknowledge. https://t.co/aJuGzdaa4B

— Dr Vijay Chauthaiwale (@vijai63) August 6, 2021

Mahajan asked the BJP spokesman to come for a debate on the issue.

Shri @vijai63 why don’t you come for a debate about your ‘great’ beliefs? https://t.co/Lup1gUIzKi

— ASHWANI MAHAJAN (@ashwani_mahajan) August 6, 2021

The BJP leader is yet to respond to the tweet.

It was a war of words that broke out between Rashtriya Swayamsevak Sangh (RSS) affiliate Swadeshi Jagran Manch (SJM) and a senior BJP leader over the Modi government’s decision to do away with the retrospective tax amendment.

The Lok Sabha passed the Taxation Laws (Amendment) Bill, 2021 on August 6 Friday amid continuous protests by opposition parties over the Pegasus snooping row and other issues.

In a tweet the national co-convenor of SJM, Ashwani Mahajan, said the decision would lead to a loss of revenue to the government and cited it as a peril of Foreign Direct Investment (FDI). The SJM is the economic wing of the RSS. BJP govt did not relish the fact being cited.

In a move aimed at doing away with the controversial retrospective tax amendments of 2012 by the then UPA government, the Modi government August 5 Thursday tabled a bill in the Lok Sabha to amend the Income-Tax Act.

The bill has been passed in the Lok Sabha and does not require Rajya Sabha’s approval as it is a money bill.

Terming it as a ‘sore point’, Finance Minister Nirmala Sitharaman had said: “In the past few years, major reforms have been initiated in the financial and infrastructure sector which has created a positive environment for investment in the country. However, this retrospective clarificatory amendment and consequent demand created in a few cases continues to be a sore point with potential investors.” Now Modi regime  removed the sore point.

The move will end India’s dispute with Vodafone Plc and Cairn Energy among others wherein tax demands were raised by the I-T department going by the retrospective changes to tax laws.

The lobbies that serve MNCs have been pressing Modi Govt.And Bodi regime buckled under pressure, as commented by SJM:  

“It is true that under pressure from international arbitration, government had no other option, but the title should be Relief to thieves — Thousands of Crores of Rupees Loss to Government and Public. A great example of disadvantages of foreign investment,” wrote economics professor Dr. Ashwani Mahajan.

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Why and how the huge “Loss to Government and Public”?

“This time, the government brandished a court-blessed $7.8 billion demand as its share of past revenue from Vodafone Idea Ltd. With $30 billion of debt, the telco is teetering on the precipice. Should the service provider to 280 million subscribers go under, India would earn yet more bad rep by being seen as the world’s most treacherous telecom market.”

Cairn can expect to see real money from the scrapping of retrospective taxation, but not Vodafone. Unless there’s a solution to the existential challenge facing its Indian unit, Chief Executive Officer Nick Read would be unlikely to provide meaningful rescue capital. To that extent, the finance ministry’s belated move to unwind the previous government’s mistake becomes a damage-control PR tool: “Look, we did our best.”

Reflecting the pressures and sentiments of imperialist capital, a Bloomberg report says: 

“If retrospective taxation dented India’s image, the stubborn refusal to accept arbitration awards tarnished it further. Cairn is seeking enforcement action against Indian sovereign assets from New York to Paris, putting a major future power in the same league as Venezuela, Qatar, Lithuania and Tunisia.”

“Retrospective taxes are just one facet of arbitrary state action. Multinationals that have committed billions of dollars, drawn by the potential of India’s 1.4 billion-people market, have many other legal minefields awaiting them. Walmart Inc. is battling a draft consumer protection regulation that threatens to undermine the business model of Flipkart, the local e-commerce site it bought for $16 billion in 2018. Facebook Inc.’s WhatsApp service has taken the Indian government to court over rules that it says will destroy end-to-end message encryption.

theprint.in, 6 August, further reported the background:

The Congress government, which by then was facing a major scandal over telecom licenses, lashed out and went after the British operator by changing the tax code retrospectively.

“After pussyfooting for seven years and damaging its international reputation, India’s government has finally taken a decisive step toward ending “tax terror,” fulfilling a pledge it had made during the 2014 campaign that first brought Prime Minister Narendra Modi to power.”

Thus Modi fulfilled his pledge to imperialists… “a sore point with potential investors” was removed, even if a little late,  as Nirmala Sitaraman said.. but meanwhile…

Crony capitalism:Mukesh Ambani gains

Had the Modi government scrapped retrospective taxation after taking power in 2014, it would have been enough to signal India’s intentions to keep the economy open, transparent and rules-based. Now it will take a lot more work. But Modi was “pussyfooting for seven years”…

Vodafone’s fortunes in India, meanwhile have dwindled. The tax overhang and the price war unleashed by petrochemicals czar Mukesh Ambani’s 2016 telecom entry frustrated the local unit’s plans to go public. It merged with metals magnate Kumar Mangalam Birla’s wireless service in 2018, but found itself once again on the wrong side of the state.

Vodafone Group Plc was sent a 200 billion-rupee ($2.7 billion) bill for buying, in 2007, a Cayman Islands-based investment firm that controlled Hong Kong tycoon Li Ka-shing’s Indian wireless business.

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Swadeshi in the service of cronies and compradors

Swadeshi is not meant to benefit small national or capitalists, as believed by some, but serves cronies and compradors to consolidate their own monopolies. Bloomberg contrasted policies of India with China’s:

“From fintech and online gaming to ride-hailing and after-school tutoring, Beijing is taking much harsher steps to bend the private sector to its will.

“But in India, the state seems to be targeting global firms, reducing competition and turning the economy into a monopoly board for local capitalists. Telecom is about to become a two-horse race, led by Ambani.

“ One firm, Adani Airport Holdings Ltd., now accounts for 25% of all passenger traffic and 33% of air cargo. Mastercard Inc. has been barred from taking new customers for alleged  noncompliance with data localization rules, handing over the market to Visa Inc. and RuPay, a local network that state-run banks have been asked to promote.”

Cairn Energy Plc was hauled up for a restructuring whereby the U.K. energy explorer had transferred ownership of its Indian oil field in 2006 to Cairn India Ltd. to prepare for the local unit’s initial public offering. The $4.3 billion tax demand came in March 2015.

Last Christmas, the Edinburgh-based firm won a $1.2 billion international arbitration award to restore the losses it suffered after India seized its shares in Vedanta Ltd. (with which Cairn had merged the Rajasthan oil field, India’s biggest onshore discovery in two decades), kept the dividends and sold the stock. Vodafone had won its victory earlier, when a panel in The Hague threw out the tax demand, finding it to be in breach of fair treatment under India’s investment protection pact with the Netherlands, and awarded costs to the telco.

“Look, we did our best.” That is the message of Modi regime to not only Ambanis and Adanis, but to MNCs as well who welcome it, Bloomberg reports:

“But the political executive will also need to strive for a fairer playing field. Getting rid of retrospective taxation is a welcome first step.”

Opening various areas including the Defence sector to 100 % FDI, disinvestment of all PSUs sooner than later are among the steps awaited by imperialists.

Modi regime admittedly succumbs to imperialists, in the form of “pressure from international arbitration” as the Swadeshi (SJM)  leader suggests, and he claims it had “no other option.” But Modi-led BJP is unhappy even with that mild comment by SJM, which it says is “not be in larger national interest”!

It conveys the fact that it is a Swadeshi policy of –by- and for the MNCs, Compradors and cronies.  

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The author was a media person.


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One Comment

  1. S. N. Murthy Ch says:

    We need a separate dictionary for the meaning of certain words like “swadeshi”, “independence”, “self-reliance”, “democracy”, “nationalism”, “socialism “, “people”, “development” etc. when they are used by Indian Ruling classes and their political parties.