The Kashmir Issue

The furious protests that erupted in Indian-administered Kashmir on July 8 are a poignant reminder that popular sentiment cannot be ignored merely because it does not fit in with the nationalist narrative of an unrepresentative government.

That is especially true where popular sentiment is grounded in the cause of a unique identity.

In the absence of legitimate political forums, such sentiment foments unrest which builds until circumstances provide a martyr such as Burhan Wani, the young rebel whose killing by Indian security forces has ignited the protests in Kashmir.

Burhan Wani, the 22-year-old “commander” of the Hizb-ul-Mujahideen gunned down last week by the security forces in Anantnag, was credited with mobilising a new generation of the disaffected in Jammu and Kashmir. In the violent aftermath of his death, however, young men and women have taken the fight to the security forces on the street. Pitched battles have engulfed the Valley. Wani was obviously a prize catch. His engaging manner had turned him into a legend before his death, as he coasted on personal charisma and social media smarts to become the ‘poster boy’ of a new phase of Kashmiri militancy that is homegrown. But having got their man, the security forces failed spectacularly in managing the situation.

 After the death of over a hundred Kashmiris in the stone-pelting protests in the summer of 2010, the J&K police and the paramilitary forces were said to have evolved less lethal ways of bringing under control what is essentially political mobilisation. The fact that so many civilians have been killed or injured in the eye this month, with a high percentage having possibly lost vision altogether, suggests that no care has gone into keeping the casualties low. Faced with an attacking mob, policemen are bound to perceive a sense of siege. But it is imperative that any response should be measured and never grossly disproportionate to the cause of action — forgetting this lesson in Kashmir has time and again led to the fuelling of a further cycle of protests, to attracting more impressionable and aggrieved youngsters to attack symbols of authority.

This is a cycle that cannot be broken by brute force. The Central and State governments have reached out to the Opposition and separatist leaders to dissuade young Kashmiris from street violence. But appeals for calm must be strengthened with a demonstrable capacity for a political conversation. When tens of thousands of Kashmiris hit the streets in mourning for a fallen militant, there is a spectrum of political opinion that presents itself. They can be dispersed with pellets. But if ‘mainstream’ politics does not speak to them, if their arguments are not heard patiently to be countered or fleshed out, as the case may be, the calm that eventually obtains will be an illusion.

Often, such protest movements are acts of desperation without a chance of success, so they ebb and flow in cycles linked with angry violence and inconclusive attempts at political engagement.

The outcome is more violence between armed occupiers and young activists who become increasingly militant over time.

Unsurprisingly, the emergent generation of stone-pelting young Kashmiris identify with their Palestinian counterparts and are calling the new wave of protests an "Intifada".

Another similarity is that the situation in Kashmir is a mess created by departing Western colonialists.

In drawing up the map for the division of the Indian Subcontinent in 1947, the British viewed Kashmir entirely through the spectacles of recent history.

 The Valley has been restive for more than a year now. In this period, Wani is not the only militant whose funeral has drawn people in the thousands. But after long, after more than a decade of violence led by foreign militants, he was the rare local boy to be seen in a leadership role. To put his mourners in a with-us-against-us binary would, as Omar Abdullah has said, give him a recruiting power from beyond the grave.

GST EXPLAINED & MADE EASY

Taxes are indeed a difficult subject foraam aadmi. It looks like a maze of legalese and maths, signifying nothing much. With the GST, the government is aiming to simplify it for the general public.

The government explains the GST in simple terms in the recenlty-published frequently asked questions.

Here's what it has to say: GST is one indirect tax for the whole nation, which will make India one unified common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.

In other words, the prices that we pay for goods and services have the taxes embedded in them. Mostly, the consumers are not even aware of or ignore the tax they pay for things they buy.

This is because there is a maze of indirect taxes such as sales tax, excise and VAT, which leads to increased complexity. The GST seeks to untangle this and subsume all in one single tax, thereby making India an economically unified market.

The Empowered Committee of State Finance Ministers, which deliberated on the tax and its implications, has recommended what all taxes are to be subsumed in the GST:

In the Central taxes: 1) Central Excise Duty; 2) Additional Excise Duties; 3) The Excise Duty levied under the Medicinal and Toiletries Preparation Act Service Tax; 4) Additional Customs Duty, commonly known as Countervailing Duty (CVD); 5) Special Additional Duty of Customs - 4% (SAD); 6) Surcharges, and 7) Cesses.

Among the state taxes and levies: 1) VAT / Sales tax; 2) Entertainment tax (unless it is levied by the local bodies); 3) Luxury tax; 4) Taxes on lottery, betting and gambling; 5) State Cesses and Surcharges in so far as they relate to supply of goods and services; and 6) Entry tax not in lieu of Octroi.

Wait, this explainer is most likely getting all the more complex now.

So check out the table below from PRS Legislative which explains the implications for the common man in simple terms.

PRS explains this table as this:

In the example given above the cost of the raw material is Rs 100. The manufacturer and the retailer add Rs 20 value each. The rax rate is assumed to be 10 percent for all taxes.

Under the current tax regime, both excise and sales are a value added tax system. However, there is no set-off for the taxes paid.

So on the Rs 100 raw material, the manufacturer pay Rs 10 as tax. The manufactuer adds Rs 20 value. To this the manufacturer adds Rs 2, which is the CENVAT or central Value Added Tax. in the example, the CENVAT is assumed at 10 percent of the Rs 20 value added by the manufacturer. So the cost for the retailer is Rs 132, which is Rs 100 (raw material) + Rs 10 (tax on raw material) + Rs 20 (manufacturer value addition) + Rs 2 (tax on the value addition). When the retailer sells it to the consumer, he adds his own margin at Rs 20. This takes the price to Rs 152. Add 10 percent sales tax to this, which increases the price by Rs 15.2. Thus the final price the consumer pays will be Rs 167.2. Of this final amount, the taxes the consumer paid is Rs 27.2.

Now look at the GST. Here, as PRS says, there is input tax credit. This means each person pays tax only on the value added by her. So the overall tax for the consumer comes down. In the above example, when the retailer sells the tax is applied only on her margin of Rs 20 and not on the Rs 132 which is the cost she paid to the manufacturer. So the tax the consumer pays is much lower at Rs 14 - Rs 10 (the tax paid by manufacturer when the raw material was bought) + Rs 2 (the tax on the manufacturer's value addition) + Rs 2 (the tax paid on the margin of the retailer).

In other words, under the current system, there is the cascading efffect or double taxation - the consumer pays tax on tax already paid by the manufactuer which is embedded in the prices. That is what makes the consumer higher tax, and in turn pay higher prices.

With GST, this anomaly will be corrected, thus bringing down the end price.