India, the world’s second largest food producer, is witnessing growing distress and declining confidence in agriculture as most small and landless farmers, with less of a stake, are found to quit farming
The recent unseasonal heavy rains, thunder and hailstorms originating from unusually intense western disturbances from the Mediterranean interacting with the south-easterly winds from the Bay of Bengal have ravaged the due-for-harvesting chana, lentils and wheat in Madhya Pradesh, mustard in Rajasthan and onions and grapes in Maharashtra. Instead of an expected bumper harvest on the back of excellent monsoons, farmers reaped only misery.
Compounding it is the Model Election Code of Conduct stopping any relief for months. It is well acknowledged that our agriculture is inherently risk-prone by being highly susceptible to weather vagaries. According to a nationwide survey, 70% of over 5,000 households polled, reported crop damage in the last three years and the present National Agricultural Insurance Scheme cover is far too inadequate.
India, the world’s second largest food producer is witnessing growing distress and declining confidence in agriculture. Most small and landless farmers with less of a stake are found to quit farming. Sharad Pawar, union minister for Agriculture blames the highly fragmented small holdings for making agriculture economically unviable.
Our Food Security is heading for an alarming toss going by the grim statistics in a Bharat Krishak Samaj commissioned survey on ‘The State of the Indian Farmer’ -
Mere holistic fixes like subsidies, procurement policies, minimum support prices (MSP) have been failures, loan waivers have not served their purpose as the prices obtained by the farmers are far below those charged to the ultimate urban consumers.
More of softer infrastructure for the rural population like better education, good primary health care, decent sanitation, clean drinking water, check dams ring and bore wells, constant power supply to run them are the need of the hour in addition to better road connectivity.
Interestingly, the survey, reiterated the best kept of secrets of the benefits of the Governments’ farmer-related schemes are invariably availed only by few rich farmers to the detriment of many few.
The loan repayment and interest waiver schemes don’t benefit the many poor who have availed credit by borrowing from the money lenders at usurious rates of interest leading to suicides. The large and rich farmers borrowing from commercial and co-operative institutions abuse these facilities.
The Chief Minister of Rajasthan, on record had stated that the NREGA Scheme has been making the farm labour ‘lazy’ by enabling them to collect money from government project work that drive them all away from farming.
The major concerns faced by the agricultural sector in India as mentioned by Dr Bharat Jhunjhunwala, in an article published by Daily Excelsior are-
• Structural limitations in earnings from agriculture - even for an area of 10 hectares make it impossible to invest beyond two tube wells and one tractor.
• Income from agriculture is limited essentially because the investment cannot be upped.
• An average Indian farmer, with even large pieces of lands, is hard pressed to produce even Rs10 lakh worth crops.
• When one hundred software engineers working out of urban building can turn out software worth many more crores, the same number of farmers can’t turn out the same from labour.
• America exports large quantities of food grains and fruits like Californian apples and Washington apples to India even with less than 1% of the population engaged in agriculture.
• For our planners it is more cost-effective to provide cheaper power, water, roads and sanitation to urban areas than to the rural areas.
• In a study of the Water Policy of Rajasthan, it was found that the cost of reaching drinking water to rural communities was a whopping 10 times more than to the cities because of the need to lay new, longer water lines, much breakage and leakages in rural areas.
• It is far less costly to provide 10 MW of power to a single urban high-rise while hundreds of kilometres of power cables has got to be laid for the same electricity supply to villages.
• In rural areas it is well-nigh impossible to recover user charges as it is compounded with high transmission and distribution losses (T&D losses) arising out of unauthorised direct pole connections that are thefts.
• The absence of sustained and regular passenger traffic makes bus services to villages sporadic simply because there is not enough traffic to make trips economically viable.
• Quality of education suffers because the required large numbers of students are just not available. Living conditions are not conducive also hamper good teaching talent.
• Similar bad conditions equally apply to health and sanitation services.
• The many rural development programmes laid out by the government fail to take off purely on economic grounds - industries can flourish where the costs for transporting raw materials and finished products are minimum. It is far cheaper to procure from farms and transport raw cane even by bullock carts and tractors to the sugar factories in the hinterlands of Maharashtra.
• Flour mills have moved to the larger metros because of ease and relatively lower costs of transporting raw wheat and finished flour. The same applies to weaving.
• The power situation in rural India is abysmal. The relatively more regular supply of power, availability of skilled and semi-skilled labour and easier access to markets makes metros a choice.
• The rural non-tax paying rich elite also choose to migrate to the metros for their glamour and proximity to centres of power, especially the state capitals. This is despite the fact that they build jazzy farm houses/bungalows guzzling millions of gallons of scarce water in drought hit areas.
(Nagesh Kini is a Mumbai based chartered accountant turned activist.)
The matters in our burgeoning private universities would even make the angels weep. God save education and the country!
“Education is the ability to listen to almost anything without losing your temper or your self-confidence.”
There is a craze for Western type of English medium education. Firstly, those students become cocooned in a shell far removed from the millions of their peers who cannot afford such education! They develop a holier than thou attitude towards the other sections of society. They truly believe that those who did not go to such elite schools are lesser mortals who are incapable of joining their elite club. Such individuals demean others who have not been to such institutions little realising that some of the great thinkers of this country had no idea about those institutions.
In fact, those who came up the hard way in life are best suited to rule this country as they have experienced poverty personally to know where it pinches and how to alleviate poverty.
A study in the US showed how the Ivy League institutes are churning out mediocre students at the tax payers’ cost. In an article entitled “Close Harvard to save America", an economics professor in Ohio has shown how these elite institutions are being favoured by the tax authorities. Giving an example the professor shows how five of those institutions in the last one year collected $one billion in endowment funds on which they do not pay income tax. Neither do they pay income tax on their huge endowment fund fixed deposit interests while the ordinary citizen pays nearly 25% of his income in taxes from which the government has to fund hundreds of state colleges which educate almost 75% of the country's students. The latter also give scholarships to the poorest of the poor to the tune of 75 %.
The following paragraph from the same economics professor at Ohio University tells it all: “A student graduating from Yale or Princeton, with their roughly $2 million endowments per student, has a ticket to a well-paying job, while one graduating from the College of St. Joseph in Vermont, with its $29,000 endowment per student, does not. Only 12 percent of the Yale and Princeton students have Pells, compared with 71 percent at St. Joseph. (Pells refer to US Federal govt.) Pell Grant is a post-secondary educational Federal grant sponsored by the U.S Department of Education-enacted to help undergraduates of low-income families in receiving financial aid." The difference between elite and non-elite/commoner colleges in the USA seems to be stark.”
Perhaps if somebody does (or has done) a similar comparison in India the difference between elite and non-elite college education would be similar. The people who give large endowments do not do it for nothing. They have an eye on seats for their progeny and friends in the long run. This breeds mediocrity. That is what is happening these days.
The other big blow for good teaching is the undue importance given to research in western universities. There are these ace professors who live on grant collection, paper production on a mass scale and lecturing and conference attending. They rarely have time to spend with students to teach. Teaching has taken a back seat. Even to get tenure positions in Ivy League institutes it is the research CV that matters. No university gives importance to cultivate a good teacher who has a flare for teaching and making students feel comfortable. The other side of the coin is that standards of research have come down so much that a recent study showed that more than 95% of research done in these universities does not take knowledge forward and in many cases is not even worth the paper on which it is written. Professors have little time left to guide their doctoral students properly and PhD thesis standards are falling.
There are exceptions to what this Ohio professor was saying. Exceptions only prove the rule. One alumnus from Berkeley has this to say. “There are good teachers like Walter Levin at MIT, Richard Karp at Berkeley, etc., who are not only top researchers but also top undergraduate teachers. They teach beginners, unlike in India where senior teachers teach only senior students. Their lectures are highly inspirational and change many a student's career. And these teachers are not exceptions; people who are predominantly driven by research go to industry research, which is a lot more comfortable life than tenure-track positions. Only those that are passionate about teaching join academia and are willing to go through the pains of getting tenure. At Berkeley for example, I sat in undergrad 101 classes (although I was a PhD student) of some great teachers, simply to get inspired, or to look at the subject matter from a different angle. The top universities in US have "best teacher" awards, to encourage and motivate teaching, and such awards are a real honour, "much more than a Nobel prize", as they say in Berkeley.
Adam Smith had noted similar trends in Oxford of his days! With tenure posts of professors and the latter receiving their salaries from the tax payers’ money, teaching standards had fallen there even at that time. Adam Smith had shown how job security removed the need to work hard to please the students’ curiosity. In the past the professors had to get their salary from students when the latter were satisfied. If you compare this with the present western fad for big salaries in tenure posts and job security there is no incentive for good teaching at all. To keep up the facade that these great institutions get only excellent students they practice grade enhancement methods. So no student who gets into Harvard gets anything other than “A” grade! Even the grades have become very liberal. In the 1950, the average GPA was 2.5. Today it is in the range of 3.5-3.9 out of 4! It is not that western students have become super intelligent in forty odd years. It is a proof that grade meddling is accepted in those institutions.
Now we come down to our institutions. If that were the scenario in the West one can only shudder to think of the goings on in our institutions including the large private institutions where all these and more should be going on. The same applies to Indian elite institutions. The matters in our burgeoning private universities would even make the angels weep. God save education and the country!
(Professor Dr BM Hegde, a Padma Bhushan awardee in 2010, is an MD, PhD, FRCP (London, Edinburgh, Glasgow & Dublin), FACC and FAMS. He is also Editor-in-Chief of the Journal of the Science of Healing Outcomes, chairman of the State Health Society's Expert Committee, Govt of Bihar, Patna. He is former Vice Chancellor of Manipal University at Mangalore and former professor for Cardiology of the Middlesex Hospital Medical School, University of London.)
The income tax department is on an overdrive and its notices of potential tax evasion are harassing retired people, senior citizens, homemakers and widows. Worse, the I-T department has even sent notices in time-barred cases that are over a decade old and to people without a taxable income
On the day, the Union Finance Minister presented Vote on Account for 2014-15 in the Parliament, the Income Tax (I-T) Department went on an overdrive. It issued a press releases saying - “Letters to be sent to 23 lakh assesses for not filing returns”. Around then a news report said, “40.72 lakh high spenders under tax lens”. It now turns out that the I-T department has sent out notices to lakhs of people who include women homemakers, widows, pensioner or senior citizens. The department thinks these people are tax evaders when most of them do not even have any taxable income or have an income that is well below the permitted no-tax slab.
Let me discuss two cases that I have personally looked at. Both are housewives and have received similar notices – one is a senior citizen, who had been filing regular tax returns as long as she had taxable income. She ceased to do so after her income went down below the taxable limit. Another had income only from an investment in debentures. Both cases were apparently picked up from the Annual Information Reports (AIR). While the process is fine, the tax department could have avoided creating a needless scare only applying its mind to the tax status of the two women, based on their permanent account number (PAN). Instead it shot off evasion notices, forcing them to seek professional help to file appropriate replies.
I myself have been served notices, not once but thrice, even though I have retired few years ago. Worse, the notices pertain to 1994-95, a period for which the law does not even require me to maintain documents. As a chartered accountant, I am among the few people who does not discard old documents, so I was able to pull out information and responded to the notices adequately. But that hasn't stopped the department from sending me more.
Assessment duly completed and refund order for Rs1,080 received
Revised return filed for tax payable of only Rs78
Assessment completed on 31/03/2004 refund order for Rs3,051
Order of 18/10/2010 wrongly adjusts 1994 refund Rs477 and Rs633 for 2000
To add insult to injury the tax deducted at source (TDS) refund of Rs10,000 due to me for AY 2012-13 is held up only because of their not resolving the issues mentioned above. This was brought to the attention of the Jurisdictional Assessing Officer 11(3)1 at Mumbai and the CPC at Bengaluru by submitting copies of assessment and refund orders on 24 October 2013 and on 3 May 2013 and by updating the Compliance – I-T e-filing on the CPC site on 21 March 2014.
The AIRs are meant to help the tax department catch evasion, it is not a tool of harassment through reckless application or to frighten senior citizens. The Offices of Jurisdictional Income Tax at various locations in the country, which assess those who have filed returns, as well as the assesses, are at a loss for explanation of how this happened. The Centralised Processing Centre (CPC) at Bengaluru, conveniently choose not to respond to the taxpayers’ clarificatory letters and has continued to issue follow-up notices.
Based on the information picked up from the annual information return (AIR), the I-T Intelligence and Criminal Investigation Directorate, based at Delhi, has been routinely shooting out stereotyped computer-generated notices. These notices are being sent to a cross section of citizens for perceived ‘potential evasion of taxes’ in earlier years and also calling upon them to inform the I-T Department, whether they have filed tax returns.
According to the news report, based the AIR, they claim to “have located potential ‘tax evasions’ (?) of 40.73 lakh persons who have made cash deposits of Rs10 lakh and more, 40.40 lakh purchased mutual fund (MF) units of Rs2 lakh or more, bonds and debentures of Rs5 lakh or more, purchase of company shares worth Rs1 lakh or more, RBI bonds of Rs5 lakh and above, 15.55 lakh purchased or sold immovable property worth Rs30 lakh or more, 20.61 lakh made credit card payments exceeding Rs2 lakh and had interest income of more than Rs50,000 from banks and purchased bullion or jewellery worth Rs5 lakhs or more”.
The I-T department coolly boasts, “We have identified 23 lakh people, who have invested money, but have not filed returns. We will be sending out letters, asking those details of their tax returns. We have already issued letters in 2.45 lakh cases.” A simple check would show the Central Board of Direct Taxes (CBDT) that there are overlaps in the numbers of perceived ‘evaders’ mentioned above.
A media report says “The Finance Ministry is also developing a module on the e-filing portal that will provide individual taxpayers’ details of returns not filed, ITR-V not submitted, demands not paid as steps towards greater transparency”. In my opinion, this comment comes rather late. Even today, PAN data is a part of know your customer (KYC) requirement and is embedded in practically every transaction passing through the bank accounts. It also appears in all applications for shares, MF units, bonds, debentures, credit card payments to banks, as also purchase and sale documents for immovable property.
All that is required to resolve this concern is to the track a sample of a few high value transactions by matching the respective names and PAN with the Jurisdictional Officer and/or the CPC to ascertain the veracity of the transaction. Only after due confirmation, should the I-T Department send out notices to people. These notices not only cause needless panic, but also increase the work load at the tax department.
To elicit the desired information from the presumed “non–return fillers” they could be required to furnish a simple listing/ declaration of the amounts/ sources during a year of incomes from:
• Interests from all bank deposits savings, FD, RD, Swipe etc. with account numbers
• Income from Dividends
• Income from units of Mutual Funds
• Capital gains on sale of shares or redemption of MF instruments
• Income from House Property
• Income from other sources
• Less: All permissible deductions and exemptions
• Total income during the year
If the income is ultimately found to be not taxable the matter needs to be closed.
(Nagesh Kini is a Mumbai based chartered accountant turned activist.)