Jammu Kashmir and Article 370 - An Assessment - Part I

The latest development on Kashmir comes in from the Statement of Minister of State for PMO India Mr Jitendra Singh that Government is was open to debate on Article 370 in Jammu & Kashmir (J&K),while making it clear that efforts would be made through this exercise to "convince" the "unconvinced". A sharp reaction from Mr. Omar Abdullah the Chief Minister of J&K came in stating that either Article 370 stays or J&K wouldn't me part of India.

Now that's a very bold statement by Mr. Omar Abdullah that certainly would fuel a lot more controversy than helping the new Government handle the situation on J&K front. 

However, before we get into the controversy in brewing it is important for us to understand the History and what led Article 370 find a place in the Constitution of India....

So, looking back at the history, we find that the Article 370 was worked out between the then Prime Minister of J&K Mr. Sheikh Abdullah and Mr. Jawaharlal Nehru, the then Prime Minister of India. This certainly was a mistake from Mr. J.L. Nehru as he overstepped the into the Portfolio of the then Home Minister Sardar Vallabh Bhai Patel. (Let's Term it as Mistake 1). Incidentally, the commission and omissions of Article 370 could be explained either by Mr. J.L. Nehru (not possible) or anyone who might be alive (distant case or I may be day dreaming). But these commissions and omissions are responsible for the Controversy surrounding J&K and we have been suffering the consequences for last 67 years now.

Another blunder was the clause to Article 370 that any change to this article would be brought in only after concurrence of J&K assembly (Let's Term it as Mistake 2). Why? if J&K is supposed to be integral part of Republic of India, why does J&K assembly be intervening? This clause certainly was inducted to please Mr. Sheikh Abdullah who happened to become Sardar-e-Riyasat after doing away with the monarchy as he always wanted to for his hatred towards the then Hindu King of J&K Mr. Hari Singh. It is to be noted that the accession of J&K to republic of India was approved by J&K assembly only in 1956 after all the changes in J&K ruling front were introduced and Mr. Sheikh Abdullah was designated as Sardar-e-Riyasat. 

Mr. J.L. Nehru promised that Article 370 would be a temporary measure (a False promise) but there was no timeline defined for the review and owing to the causes mentioned in the previous paragraph, it never got reviewed for changes / repeal. Certainly another blunder by Nehru.

Nehru then brought in Mr. Gopalswamy Ayyangar (erstwhile PM of J&K) to help deal with the newly coined Article 370 and take it to the Constitution committee. Sardar Patel opposed but then Mr. J.L. Nehru made a statement on Dec. 27, 1947 that can be called as Mistake 3 - 

“Gopalaswamy Ayyangar has been especially asked to help in Kashmir matters. Both for this reason and because of his intimate knowledge and experience of Kashmir, he had to be given full latitude. I really do not know where the States Ministry (Sardar Patel’s ministry) comes into the picture except that it should be kept informed for the steps taken. All this was done at my instance and I do not propose to abdicate my functions in regard to matters for which I consider myself responsible. May I say that the manner of approach to Gopalaswamy was hardly in keeping with the courtesy due to a colleague.”

Apparently Sardar Patel got miffed with the development and resigned from his post and the matter was then taken up with Mr. M.K. Gandhi to resolve the tiff between Mr. Nehru and Sardar Patel.

On the other hand the proposal for Article 370 was rejected by the Constitution Committee as well as the Working Committee of Congress. Mr. Nehru then had to turn to Sardar Patel to get the Article included in the Constitution and this is where Sardar Patel erred to support Mr. Nehru and succeeded in convincing the Constitution Committee and Congress Working Committee. (Mistake 4)

In 1947 itself Mr. Sheikh Abdullah was arrested by King Hari Singh on the charges of Sedition and Mr. Nehru is said to have pleaded his case (Mistake 5). It is said that Mr. Nehru too was arrested while trying to enter J&K then. Later on Aug. 9, 1953, Mr. Nehru himself had to have Mr. Sheikh Abdullah arrested on Sedition Charges, but Mr. Nehru let go the option of repealing Article 370 (Mistake 6). A golden opportunity lost....

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References:

• Either Article 370 will exist, or J&K won't be a part of India, Omar Abdullah tweets 
• Article 370: The untold story
• What is Article 370?
• Understanding Article 370

Economic Policy and New Government

So, after a long time we are going to see a stable government at Center.  In the previous two coalition government tenures, we saw the policy reforms going from dirt to dogs and the economy of the country though doing good from one aspect, not to good from the Inflation as well as Foreign Currency reserve perspective.

The markets are upbeat, the Gold Price seems to be easing, Rupee seems to be appreciating (though marginally), but what does that mean for a Common man in India?  

As a common man from India my eyes are set for the outcome of Prime Ministers Swearing in Ceremony. My guess is most of us from the Middle class would be interested in knowing what is in store for us from the Financial and Economic Development perspective?

Yes, it would be very interesting to see who would be appointed as the Finance Minister and who would be at the helm of Economic affairs in soon to be announced results.  Through some of my discussions with few friends and colleagues, they opined it may be Mr. Jaitely or Mr Shourie. I would say, Mr. Jaitely may be appointed as Law Minister but certainly would not be the right choice. Mr Shourie for  that matter would be more appropriate as the Finance Minister as he has that experience on Economic front and has worked with World Bank too.

Saying that, coming back to view the aspects of what would be the expectation of a common man to have better control on their financial status?  The common man that generally makes up the Middle Income Group and is mostly salaried would like to see reforms in the Income Tax bracket with may be following Raise the Income exempt from Tax to say 300,000 / 400,000 / 500,000 for Male / Female / Senior Citizen categories

• Raise Limit under Section 80 C to 20,000 from current limit of 100,000
• Revise the Tax brackets as revision suggestion above would mean that till the salary of 500,000, there would be no tax. So the revise slabs should ideally look like - 

1. Salary from 0 to 300,000 - No Tax
2. Salary from 300,001 to 1,000,000 - 10%
3. Salary from 1,000,001 to 2,000,000 - 20% (flat)
4. Salary from 2,000,001 and above - 30% (flat)

In the suggested slab above, the reason I mentioned "Flat" is that at current the calculation of Income tax is prorated basis, that means if an individual has a Salary of 1,500,000, the Tax calculation is on the slab basis and the upper limit of Tax is applicable only on the portion of Salary exceeding the limit.  but that way, the calculations actually do not seem to be appropriate to me

• Revise the limits for LTA, Conveyance Allowance, Medical Reimbursement and HRA as the current limits have been there from ages and they have lost relevance in the ever changing world.  

1. LTA should be made an yearly affair from two times in four years
2. Conveyance Allowance of 800/month seems to be pea nuts for the escalated cost of commuting.  I should be hiked to say 2500 for those who own a Two Wheeler and 5000 for those who own a Four Wheeler
3. Medical Reimbursement needs to be more connected to the health conditions and should be slabbed for various cases than just the general slab today.  Suggestive Slabs could be - 
1. General Physician / Medicine related expenditures - 25000/household/year
2. Specialty Cases not including Oral Care - 75000/household/year
3. Oral Care - 10000/household/year
4. HRA also needs to be revised to meet the current market driven conditions with ever escalating rental prices

• Revise the Deductions for Housing Loans as the prices in this sector have sky rocketed and the interest rates have been really fluctuating to touch the higher end. the limit that is currently 150,000 on the interest being payed needs to be revised to something in the vicinity of 500,000. 
• Revise the Income Tax limits for the Income from Agriculture
• Tax on Banking Transaction - this certainly doesn't seem to be a good way of taxation as then there would be more in Cash Transactions that could boost the Black Money coffers
• There are also other provisions including deduction of tax at source for deposits yielding interest of more that 10,000.  That limit also needs to be reviewed as women and Senior Citizens get troubled by that.  In certain cases even harassed.  

I would expect that the Newer Government would look at this aspect of the changes to be brought in the Income Tax Regime.  However, I would also like to highlight that the Government would also need to look at overhauling the Tax regime as a whole to ensure that the whole burden doesn't fall back on the so called Middle Income Group that pays the tax as they earn.