Revised Indo-Swiss taxation treaty comes into effect

The amended taxation treaty contains provisions on the exchange of information in accordance with international standards applicable at present. The treaty would be applicable in Switzerland on income originating in tax years starting on or after 1 January 2012, the Swiss Federal Department of Finance said on Monday

Geneva/New Delhi: The amended Indo-Swiss taxation treaty has came into effect, a development that will allow India to seek specific information on black money and tax evasion cases dating back to 1 January 2011, reports PTI.

The revised taxation pact between the two countries came into force on Monday, at a time when the black money issue has triggered an intense political debate in India.

Senior BJP leader LK Advani has said that he would highlight the issue during his 'Jan Chetna Yatra', starting today.

The Swiss Federal Department of Finance yesterday said the revised double taxation agreement with India in the area of taxes on income and capital entered into force on Monday.

"It contains provisions on the exchange of information in accordance with international standards applicable at present," it said in a statement.

The treaty would be applicable in Switzerland on income originating in tax years starting on or after 1 January 2012.

When it comes to the exchange of information, the provisions in the treaty would "apply to information referring to tax years which start on or after 1 January 2011".

The revised treaty would allow India to seek information on cases related to tax evasion. Under the earlier pact, India could only seek bank details in relation to tax fraud cases.

"The provisions of the agreement will apply in India to income originating in tax years which start on or after 1 April 2012," the statement added.

The treaty will contribute to further the positive development of bilateral economic relations, it said.

The revised treaty was approved by Swiss Parliament on 17th June. As per Swiss rules, bilateral tax treaties are subject to public scrutiny for a period of 100 days, which ended on 6th October. India had inked the agreement with Switzerland to revise the treaty in August 2010.

The latest data from the Swiss National Bank shows that the total deposits of Indian individuals and companies in Swiss banks stood at about $2.5 billion at the end of 2010.

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Maruti Suzuki industrial unrest at Manesar: The inside story

The strike at the Maruti Suzuki plant at Manesar has entered the 5th day. Production has stopped and the workers have taken over the plant, staging a ‘sit-in’ protest. What has fuelled this ugly face-off?

This is verbatim feedback received from a friend who tried to visit the
Maruti Suzuki factory at Manesar earlier. His identity will be protected as he does value his job too. His account goes something like this-"A kilometre away from the Maruti Suzuki factory in Manesar is when it becomes apparent that further progress is going to be impossible. Private individuals with faces masked standing around barriers and stakes dug into the road with policemen watching on from the sidelines insist that since they are private individuals, their photos should not be taken, and that in any case, the road ahead is shut, so please turn around. That's it. In Haryana, if somebody 'big' tells you not to take your camera out, you do not take your camera out."
 
Here's more from a senior person in one of the companies on strike in the troubled industrial belt. (The company names have already been reported in the media). "Some of the senior Japanese officials are making preparations to send their families back to Japan and moving into hotels for better security. Specifically in context with Maruti Suzuki, some amount of work for companies like Nissan and GM is already being done in Haryana, and it is expected that reciprocal work will be done in Tamil Nadu and Gujarat at the Nissan and GM facilities respectively. There are also unconfirmed whispers about a possible plant in the UAE, probably Sharjah or Fujairah."
 
Meanwhile, the strike at Maruti has entered the 5th day, with no production activity at Manesar. A spokesperson from the company has said that the Manesar plant "remains captive in the hands of workers. There is no production possible there." Yesterday, the company had said the Gurgaon plant produced around 1,800 vehicles, as against the normal 2,800 units a day.

Maruti Suzuki's management claims that workers have indulged in "random acts of violence like beating up company managers, supervisors and those co-workers not supporting the strike", along with "damaging equipment and property." Production remains at a standstill at the plant.

Workers at Maruti's Manesar plant went on a 'sit-in' strike in the afternoon on Friday (7th October). On Sunday, the automaker dismissed 10 workers, terminated five trainees and suspended 10 employees in connection "with the strike and violence at the Manesar factory premises".

Around 2,000 workers in all categories-including regular and contractual employees, apprentices and trainees-have been taking part in the "sit-in" strike inside the Manesar plant.

Communication with people inside the plant is not feasible, and so all one gets is rumours. Hopefully, people inside are being provided basic sanitation, food and water-but the company, as usual, is not inclined to provide any information. Incidentally, there does appear to be an element of truculence and provocation in some of the steps taken by the management-withdrawing local transportation to and from the factory, for example, which does appear to be very petty. But it is, once again, the visible sullen atmosphere-which cannot be described-that is apparently underway in this and other industrial units in and around Gurgaon. Senior managers talk about workers who have been friendly and now they are not as friendly as before. Looking behind your back has become second nature. Whispers about how managers were lynched and done to death in Noida, and what that did to industry there, have started circulating again.
 
And then, of course, is the larger issue-what is happening, why is this happening in what used to be an industrially-peaceful city, and where does this go next?
 
To understand this, one has to look beyond issues at the workplace-of which there always have been and will continue to be differences. Reportage on the subject of unions and working conditions in the larger and better factories have done the rounds, and reportage on what actually happens in some of the smaller ancillaries which are often no better than Victorian-era sweatshops is never reported. That is the nature of things in industry. We live with that on a
day-to-day basis all over India.
 
Likewise, there is no dearth of information being provided by people purporting to be acting on the 'behest' of the management-here again, the value and genuineness of such information is not very clear. As in all cases like this, and as the cliché goes-truth is the first victim.
 
However, if one digs deeper, it does appear as though the Maruti Suzuki strife is more a symbol of all that is going wrong in this part of the country. And less of industrial unrest as well as labour action. And then some.
 
Here are a few facts to consider:

1)    The cost of living in and around Gurgaon has gone through the roof. At the simplest, anybody who is living in ancestral properties could probably make as much as he or she is earning by renting out the rooms they occupy. Which leads to the question-where else do they go and live, then? Rentals are extremely high too-so unless workers are willing to live in shanty-town type bedroom accommodation (Rs1,000-Rs1,500 per bed per month with a dozen people or more to a 'room'), they will end up spending, easily, Rs3,000-Rs4,000 per person for "shared" accommodation. Food is not cheap, either, and the workload is so heavy at some of these units, that after an 8-hour/6-day per week shift, there is simply no time or energy to cook.
 
The demand, therefore, is that the industry should provide free or subsidised housing as well as food. This is partly also because some of the factories that have relocated to remote locations in other parts of the country-Uttarakhand, Andhra Pradesh, Madhya Pradesh and Chhattisgarh are examples-are providing in-campus housing with full meals and facilities including washing of clothes.
 
2)    The heavily skewed male-female ratio in this part of India brings its own share of sociological problems. Add to that a huge number of migrant labour, again predominantly male, and you have a tinderbox which has been described as close to what one would expect in an all-male environment. In addition, this is a part of the country where society does not have a tolerant view on prostitution-whether it exists or not.
 
This is not something that people usually speak about, but it is a simple fact of life-industrial township areas always provide for what can be called some form of recreation. Where sexual release is not available, it shows up in other forms-excess alcohol consumption, narcotics and even aggression. Can strikes be one offshoot? An interesting theory-but this is one that is being suggested.
 
3)    Take the syndrome of the landowner, who became an employee, and often a pauper in one or two generations. Land sold for thousands of rupees an acre is now valued at lakhs per square metre, and a lot of the landowners-real, imaginary, tenants, squatters, multiple-claimants or otherwise, bear a grudge towards anybody and everybody who is on that land now. In fact this is the most commonly-heard issue behind disciplinary episodes-of people shouting back in sheer frustration that this land belonged to their parents and grandparents, who frittered the money away, and now they don't have to work for a salary.
 
To this boiling-pot, add the issue of a new generation of land sharks who are seizing and usurping property of those who really have the title to existing remaining land parcels. And to that add the way litigation is taking its toll on this issue too. Expecting somebody to stand for 8 hours a day on an assembly line when these sorts of problems are chewing his mind is another reality which brings out behaviour of the "strike" sort.
 
4)    There is a saying in the areas that surround Delhi that this ancient capital is burnt to the ground every 200-odd years, and it is those who live around and encircling Delhi who will benefit from this-it is almost like a truism here. The cycle time is expected to shorten, though. For a part of the country where higher or even basic education is not anywhere near what it is in other parts of the country, it is also a fact that better-educated "outsiders" come and pick up the higher-valued jobs, and that adds to the logic, if any, behind this aspiration-destroy and get your "rights" back.
 
The result is that there is often a destructive streak in interactions, which is based on these aspects, wherein the recycled nature of the multiple cities beneath Delhi as well as the history of bloodshed by and against "outsiders" while those who lived around Delhi continued with their agrarian existences, is considered to be inevitable. It is not unusual to find agricultural methods that have not changed for a thousand years not more than 30-40 kilometres from Delhi's borders-especially in some Haryana districts which lie beyond Gurgaon. Saying anything more will be considered communal.
 
5)    Corruption across-the-board in Haryana is reported to have gone past all previous records and levels. This has been repeated to me so often and by so many, that even if it were not true, it has become folklore. The tolls collected on the Delhi-Gurgaon Expressway, where you now take the same amount of time to go from Delhi to Gurgaon as you used to in the past-mainly because of bad design and faulty implementation, are quoted as a live example. Behind the walls and office doors, of course, it is another matter. The cost of this corruption extends all the way down- and that is another truth. You want to work in Gurgaon, or if you need a mobile phone or anything else-just pay up.
 
And then there are the palaces that have come up, the open display of extreme wealth by all sorts of people who should have been in clean governance, but are actually in the dirty money-making business, and the arrogance of it all-is appalling even for the middle class, which can withdraw into comfort zones every evening. But what about those who toil, are trying to pretend that they have arrived with that sought-after job in an MNC or large company, and are still nowhere?
 
6)    There is of course the final truth-that the bottom has fallen out of the Indian car industry, and once it resurfaces, there will be a new range of leaders whose products will be judged (and bought) on more than the inferior price and simpler functionality curve that Maruti had carefully cultivated all these decades. Higher technology and lower price will be the new paradigms, and in that, Maruti-Suzuki may well be already lagging behind with all products.
 
The new kid on the block, with cars that are giving everybody else a race for their money, is Hyundai. Their new small car, the 'Eon', whose brochures have already been "leaked", is likely to bring a change in the market of a sort not seen in a while. Think about it this way-if you were a manufacturer who had already made as much as you wanted to in a protected environment, would you want to fight bigger rivals in an open contest, or would you rather pack up and move on? Suzuki versus Hyundai, is that even the semblance of a fair contest?
 
To some extent, that appears to be what the grapevine has already picked up, and in pure business terms, it does seem to make perfect business sense, if you look only at numbers. Book your profits, exit before they become losses, and leave somebody else to clean up behind you.
 
And at the end of the day, whether striking employee or management director, it is the number at the bottom which influences the decision.
 
Sad about what it may do to the Gurgaon belt, though. And as one sends this to the editor, news just filters in that some local people who tried to deliver food and water were turned back, and that it appears that a bigger group will try to do the same soon.

User

COMMENTS

mangaldas sagoriya

5 years ago

i recd mail from (MSIL) regarding DIRECT RECRUITMENT OFFER
is it true

REPLY

malq

In Reply to mangaldas sagoriya 5 years ago

Dear Mangaldas - there have been scams of this sort reported in the past, it would be better to contact the company directly on their website and send them a copy of the letter received so that they can do their investiations.

rgds/VM

joel

5 years ago

maruti suzuki made a large profit in the recent years, dont u think that the workers should be rewarded nicely, in the meantim japan, suzukis homeground,the company failed utterly. U kno the they hav a horrible system for salary distribution, while the workers are given a very less amount, ceo os getting more than 2 cr inr as salary. This isnt right,justice has to be done.

REPLY

shadi katyal

In Reply to joel 5 years ago

All businesses are invested for return to shareholders and thus profit is a necessity. The investors also provide jobs and without that there is no income but with sit ins and killing management will not bring any investment in India.
The workers are paid what is market price. The unions cannot demand on gun point and show such indiscipline and either go on strike or sit in.
We Indians must forget that management and invesotrs have to meet all demands of unions.
Look at Calcutta Jute Industry and Mumbai textile industry and destruction of those industries.by such illegal methods by unions.
This idea that any company makes profits and thus share it with workers at gun point is moot.
Notice what happened to USA car companies due to such unions power.
If we wish to develop the nation we must learn working ethics and discipline

jaganathan

5 years ago

technical

Shadi Katyal

5 years ago

One is surprised to read the 6 facts to consider as a NO REASON because anyone reading such conclusion will find that it is not the duty of industry to provide housing,subsidised food and transport. Is the industries supposed to provide brothels for the workers???What has industry got to do with lands sold earlier.
This sit in shows that indiscipline is the rule of the day. One can learn lessons from Jute industry in Bengal and it is how this started.
Where is the State and Center governments for any action?
A killing in NOIDA of a Japanese manager has scared the management for their security of family. Does GOI or Haryana Govt give any protection.
This strike will cost INDIA for all future development as no investor or industry is willing to provide jobs to such undisciplined and unethical workers. If some machinery is destroyed ,who will pay for it?
We talk of poverty but not willing to take action to stop this kind of goondaism.One can learn what happened to USA industry where Unions played such hardball and India is yet to develop .
We must change our Labour Laws and provide security to industry and not lawless labour for votes.

REPLY

nagesh kini

In Reply to Shadi Katyal 5 years ago

Wonder how Sanjay Gandhi would have dealt with the goings-on in his brain child. I was in Delhi when it was incubated!

PRViswanathanh

5 years ago

The information reveals the real status of Industrial unrest created by "ONLY PROFIT" motivated companies whether National or International
what the so called MANAGEMENT STALWARTS associated with the Company say about.
IIM.s may send their students after everything to find out the cause or to make a case study.Let good sense prevail for both MANAGEMENT & WORKERS.
KALI YUGA PORTRAYS.








SGangopadhyay

5 years ago

Well thought out article. Actually history is repeating itself. In West Bengal many so called famous British and Marwari companies came up by offering peanuts to the employees and that planted the seeds of discontent among workers. Same is true in farm sector also. Unless India corrects this anomaly it is impossible to move forward, but that means good basic education, governance and who will bell the cat? Politicians, administration, judiciary and media the four pillars of democracy are acting together against common people.

REPLY

shadi katyal

In Reply to SGangopadhyay 5 years ago

Will the writer explain by peanuts as salary. Is Mr.SGangopadhyay aware that such industries had 8 times more labour as compared with other nations. I remember seeing one lady working on jute yarn spinner for 4 machines in Europe whereas in Calcutta there were 3 people on each. when asked was told tht some are temporary or Badli etc.What happened to that Golden Fiber and Iron industry????
Why in India we forget that any industrial and other investments are not for charity but to make profit and above all provide JOBS and reinvest for more jobs. How many people lost even livelihood by closure of those industries???
Time to wake up and work hard and show some discipline and ethics .

malq

In Reply to SGangopadhyay 5 years ago

Thank you for writing in, Gangopadhyay ji, and yes, the West Bengal example is very apt, too.

We invite investment and industry by offering access to cheap labour and land, and then look on as disparities between the original inhabitants and later arrivals soar, and then make it worse by not handling the larger sociological aspects.

I hope we will learn some day soon.

Thanks again/vm

Chowdary

5 years ago

It wasn't long ago that the Maruti management was boasting to Fortune magazine, that they saved 2000 crores simply by improving "procedures".

These procedures may have improved the Swift production rate, but they took a heavy toll on worker morale.

Labour unions need to be aware that their wishes can come true, only when the management is greedy for more profits. In this case, Maruti seems to be hell bent on teaching the lower rung in these unions a lesson that they will never forget.

K B Patil

5 years ago

Once again, a brilliant piece of 'investigative' writing by Mr. Malik. Let me add my two bits of opinion on the problem. To go back to the basics of human behaviour, my simplistic observation is that the "caveman" instinct is not totally extinct in human beings. So, whenever a man finds himself in a powerful group, he reverts to being a petty tyrant. In other words, where management is all powerful, they resort to shortcuts like having majority of the workmen employed on contract basis. When workmen find themselves powerful i.e during moments of strikes and the violence that occurs on such occassions, you have instances of assaulting management or in rare instances of murdering them. Whether it is Maruti or Honda, I think that the Japanese are a bit unsure of handling things with finesse. The other problems such as cost of living is a direct outcome of our corrupt and shortsighted politics. Things wont change as long as our politics doesnt go through a churn.

Govind Shanbhag

5 years ago

Malik jee - after going through an excellent article, I remember days of DATTA SAMANT/ R J MEHTA in Maharashtra. Many existing well run units and/or even new units had to shut the shop due to unreasonable demand. If India wants to invite multinationals, labour reform which now is generally pro labour need to thoroughly revisited, make it pro industrial development if necessary enacting laws which now support labour at the cost development. But who will bell the cat as this is sensitive issue in vote bank politics.

malQ

5 years ago

Thank you for writing in, Nandy ji, and your kind comments noted.

However, it is my submission that the people at Maruti-Suzuki have always had probably the best feel of the pulse of India, and they obviously have a Plan B, C, D and more ready - which might involve a new approach not just in a coastal location but also in another nearby country.

The Japanese will not tolerate indiscipline of any sort, it goes against their "dharma", and the point here is the larger issue which most everybody is missing - that it is the whole Gurgaon - Manesar till Rajasthan border industrial belt that is going to be impacted. The downstream impact on the other industries in the area is only to be expected to be bad - there was a reason when some of them came to this part of India, to be closer to the Centre, but whether that reason still holds good remains to be seen.

The present bye-elections in Hissar have diverted the attention of the government, and they can not take any perceived people unfriendly steps either at this juncture, nor can they take any really harsh steps.

There appear to be not too many options left for the Japanese management - and they are hard-headed good businessmen first.

regards/vm

R Nandy

5 years ago

Veereshji,
Yet another excellent article!
The management seems to be a bit inept.They are not able to handle the situation.The insistence on signing of good behavior bonds by the employees was ludicrous.Good behavior is a part and parcel of discipline, which is written in every employee handbook and is every employees duty.It seemed more of a management ego in display.

REPLY

nagesh kini

In Reply to R Nandy 5 years ago

As one who resided close to the just emerging Maruti factory and owning the first of the Hi-roof vans, I must say that Veeresh is absolutely right.
Yes, we had Datta Samant closing down Mumbai's textile industry.George Fernades went for Bandhs. Sharad Rao is holding the Municipal Corporation and the public to ransom.
The Law Minister is blaming the Judiciary for 'driving FDI', the Govt. is equally to blame for pampering the vote-bank labour leaders, Telangana agitation cutting off the south is national shame.

Moneylife Foundation conducts seminar to help people avoid pyramid schemes

Almost every day, get-rich-quick, pyramid, multi-level marketing and Ponzi schemes try to dazzle the gullible to loot their hard-earned money. Ms Sucheta Dalal, Founder-Trustee, Moneylife Foundation, conducted a seminar to warn people to stay away from such fraudulent proposals

“Individual lawsuits are being registered and action is being taken against multi-level marketing schemes, but there are thousands of them which are still running,” said Ms Sucheta Dalal, managing editor, Moneylife magazine. She was speaking at a seminar organised by Moneylife Foundation.

Ms Dalal said that states like Kerala, Andhra Pradesh and Tamil Nadu have been active against fraudulent pyramid and MLM schemes, but police estimate that each state has more than thousand schemes going on. According to Andhra police, there are 10,000 schemes running there. Despite legal action and some court rulings, these schemes proliferate because the regulators are silent.

“Most countries like USA, UK, Singapore and The Netherlands have banned such schemes. India has the Prize Chits and Money Circulation (Banning) Act, 1978, which is the toughest law on paper, but since many influential people are associated with these MLM schemes, they get away with cheating people,” she said.

The 1978 Act is a Central legislation but is administered by states. However, in most cases, policemen and regulators are ensnared by the Ponzi schemes and hence, no action is taken. Moreover, very few complaints are registered until money is lost by investors, and by that time, it is usually too late.

Many MLM companies however, have a more complex model and offer a tangible product~ like Amway, Tupperware and Oriflame. Such companies usually have a global presence and persist for a long time. But apart from the top layer, none of the other investors make money.

Member of the audience talked about numismatic coin schemes and Gold Quest, an MLM scheme~ which promised high returns in gold or precious coins and took investors for a ride. “No coin is precious if it is not rare. If such coins are churned out by a factory and don’t have a market like for genuine collectibles, it is surely a fraudulent product”, Ms Dalal said.

Even though there have been lawsuits, most investors don’t get their money back. It is better to stay away from these schemes altogether~ rather than invest and repent, she said.

Even some insurance companies have started to sell their products through a multi-level-marketing (MLM) model, said Ms Dalal. She gave the example of National Insurance Company, which is a government undertaking. “The selling technique for some products look like MLM, but the company denies it,” she said.

User

COMMENTS

Sathyanarayana

5 years ago

Corruption, fraud, deceit, fudging and many more actions have reached monumental proportions. The cause appears to be monumental neglect of Government, Governance, Regulations, Oversight functions, Responsible Civil Society, Apathy of people, Extended honey moon period of the joy of freedom, Blissfully ignoring the cancerous role of hijacking of institutional mechanisms by elected representatives, Use of corruption as spring board by Elected Politicians, Institutionalization of the attitude that corruption in society or nation is like DNA to Human race without which there can be no human, (broadly under one phrase “Checks and balances”) and so on and so forth since 1947. Now the solace for political parties as well as people (Voters) is that any way corruption (covers a large number ranging from day to day bribes to fly by night business shops to mega companies to mega schemes to mega scams to balance sheets fudging to harassment of employees {Senior Colleague-Junior Colleague kind} in offices, organizations, adulteration, duplicate business ( ---the list is very long) has become incurable cancer and it is impossible to get out of it and hence it will be useless to support any one on this issue. If at all anybody supports this he would be an idiot and indulging in doing anything about it is madness. So the net result is Human race has two substances that separate life from death that is corruption and life material (so far it has not been discovered) which means Human is dead without corruption.

Madhusudan Thakkar

5 years ago

Thank You Sucheta ji.You are doing a wonderful job at Moneylife.Mainstream media and so called champions of "Independent Media" will never enlighten general public on these important issues of personal finance.Mainstream media will do anything for advertisements.
KEEP IT UP.

Mohan Das

5 years ago

Has National Insurance Company tied up with any Ponzi company for marketing Medicliam policies? If yes, which are these companies?

Who authorized sanction to a Thrissur (Kerala State) based MLM Company to sell Mediclaim policy?

How can a company that has closed its registered office (declared illegal & shut down its registered office by the police) sell insurance (mediclaim) policies of a Government of India undertaking?

National Insurance Company must give an official clarification.

Kishore N

5 years ago

How can National Insurance Company deny? National Insurance Company must immediately ask the Ponzi company to remove the page.

National Insurance Company page in Penta world India website:-

http://pentaworldindia.biz/medi-claim.as...

REPLY

Raj

In Reply to Kishore N 5 years ago

Please one of the Products of Penta world India. It is nothing but mediclaim policy. These are hard facts. National Insurance must clarify.

http://pentaworldindia.biz/products.asp

Raj

In Reply to Raj 5 years ago

Medicalim policy is one of the products of Penta world India is selling through money chain route. Please see the products :

http://pentaworldindia.biz/products.asp

Kishore N

In Reply to Raj 5 years ago

National Insurance company cannot just deny and wash off their hands. What is IRDA doing?. There is some thing fishy. need a thorough inquiry.

Kishore N

In Reply to Raj 5 years ago

Penta world removes mediclaim products from its product list !

HONEST CITIZEN

5 years ago

Thank You Ms. Dalal. We are grateful to you.

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