Indian woman must step forward and claim what it rightfully theirs under the law, as they are “coparceners” along with their brothers.
In 2005, the Hindu Succession Act, 1956, was amended, Neil Armstrong style: “One small step for a man; a giant leap for mankind”. Women, along with their brothers and fathers, were made coparceners in Hindu Undivided Family (HUF) Property. A coparcener is a kind of co-heir; someone who inherits property along with others and is a sort of joint owner. In the HUF context, a coparcener has greater rights: the eldest is usually the karta (manager); without being questioned, the karta runs the HUF business, controls its affairs and only in the event of transfer or sale of immovable property are his hands tied down by considerations of legal necessity and benefit of the family; a coparcener can demand partition of his interest; and hitherto a coparcener just by being born a male (at the pain of a woman screaming) acquired an interest in Mitakshara HUF property.
Effectively, women (sisters) too can demand partition of HUF property by metes and bounds and walk away with their share, which may be as large or as small as their brother’s or father’s.
Yet, almost a decade later, a young lady asked my husband, at a recent Moneylife seminar, how her deceased father’s property would devolve since he died ‘without any heirs’. Taken aback, she was asked to explain herself. Well, and so the story goes, the father died intestate leaving behind a widow and two daughters, but no male issues. There should not be any issues with that, for sure! Milady spoke perfect English. The Universal Declaration on Human Rights, The Constitution of India – the supreme law of the land – all evaporated in one fell swoop. The reasons follow.
The effect of being made a coparcener is far wider as it affects property rights not only in the event of a death within the family but during its existence.
The amendment comes coupled with another change i.e. ................
“Where a Hindu dies after the commencement of the Hindu Succession (Amendment) Act, 2005, his interest in the property of a Joint Hindu family governed by the Mitakshara law, shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship, and the coparcenary property shall be deemed to have been divided as if a partition had taken place and,—
(a) the daughter is allotted the same share as is allotted to a son;”
Survivorship in the aforesaid context of Mitakshara HUF meant that the existing male coparceners acquired the property instead of the same devolving upon the female relatives of the deceased. The sons, grandsons and great-grandsons thus, just by being born, got a share in the HUF property. It is a sort of joint ownership as against co-ownership. The differences are subtle.
If A and B hold any property as joint owners the property ultimately vests in the survivor of the two. However, if the same property were to be held by A & B as co-owners it would then ultimately vest in either the heirs or legatees of A or B respectively. In co-ownership each party can separately deal with his share. But joint ownership comes heavily laden with shackles. The consent of the joint owner is a must in any dealings concerning the property. There is in law thus, until the contrary intention appears, a presumption in favour of co-ownership and against joint-ownership. Strangely, in a number of documents the two terms are used interchangeably, a fertile ground for endless litigation
The breakaway from the traditional coparcenary HUF rights is therefore twofold: (i) survivorship has been done away with and (ii) women given inheritance and greater property rights. A Hindu can further make a testamentary bequest, in favour of a complete stranger, of his undivided interest in the HUF property.
All this and more, but 2005 still cannot be regarded as the watershed year. Way back in 1956 when Hindu laws were codified, under section 6, if a Hindu died leaving behind him inter alia a widow, son, daughter, child of a predeceased son or daughter etc. i.e. Class I heirs, his share / interest in HUF property would devolve not by survivorship but by intestate succession. A year short of half a century, the same principle was merely amplified.
The lady who asked the question above has the rights. Yet, she was unwilling to accept what is rightfully hers.
Cairn India can grow faster if the government policies are more sensible
Cairn India has come a long way in 20 years, having started with 3,000 barrels of oil a day, in Ravaa fields, to a current output of 180,000 barrels, representing 25% of India's needs, which are growing by the hour! They could notch to 300,000 barrels, a thousand leaps forward from the tiny step they took two decades ago. And, when they do, which is within their reach, they would be able to meet 35% of India's oil requirements.
Cairn India, along with its joint venture partner ONGC (Government of India company), holds 70% with the balance 30% stake held by the latter. They operate in four basins and have made 40 discoveries so far. Around 95% of its production is oil and the balance is gas, in which they have shown serious interest in recent times.
It may be recalled that the Rajasthan block initially covered an area of 11,108 sq kms but the licence was given to explore only 10,558 sq kms, as 550 sq km being the unexplored area, which was surrendered, by Cairn India, to the Government, in line with the norms laid down in the Barmer block. Now, once surrendered, it looks like it makes it obligatory for the government to go for an auction once again! This is what Veerappa Moily has recently mentioned in a statement.
It appears that Cairn India has now sought reinstatement of the block to the government and the appeal made by them to the Cabinet, if accepted, would be the right step in the right direction, as this would eliminate new processing cost and loss of time. In any case, we may bear in mind that it is now Cairn India is taking the risk in taking up the exploration costs that may or may not bear any oil or gas for that matter! Why not give them the chance?
Another important issue that has come up is that the contract for the Rajasthan block is valid till May 2020, hardly seven years away from now, which is, practically small lead time in the oil industry. Cairn India have approached the government that the contract should be actually extended to the full life and economic potential of the block, which, they estimate may be for about 20 years or so. Such a move would enable them to plan their exploration work, investment plans and options which are likely to involve capital expenditure of millions of dollars.
It must be borne in mind that the Rajasthan block was awarded much before the establishment of the New Exploration Licensing Policy (NELP), which does not stipulate any "expiry" date as such. Since this is the case for new contracts, why not apply to all existing contracts the same rule?
While Cairn India investigates the prospects for oil and gas under the ground, they have, above on hand, clean cash reserves of over $3 billion! Thankfully, when the government permitted them to explore in existing, producing fields, Cairn India took expeditious action and have discovered oil and gas in Barmer basin in Rajasthan, and in Nagaylanka in Andhra Pradesh.
With these encouraging finds, Cairn India hope to invest a substantial portion of this cash reserves in Rajasthan initially, and with others to follow in due course.
Moneylife has carried stories on Cairn India on a regular basis. It may be recalled that Cairn India had sought government clearance to go in for a swap arrangement by which they may be permitted to export the crude oil and gas from Barmer to get a better price in the international market (currently Rajasthan oil is being sold at about 8% to 13% cheaper then Brent) and, in lieu, import cheaper crude that can be supplied to Indian refineries who are designed to handle them with ease. For this, Cairn India had suggested that they would use the service of Indian Oil (a Government of India company), so that everyone benefits. For, at the moment, India imports crude and does not permit its export. Such a move would benefit refineries like Mangalore Refinery, which has been largely dependent upon Iranian crude.
A look at the web site of Cairn India is educative. The capital expenditure plans are on the anvil and it is apparent that they are awaiting government clearances to take major steps in the right direction. From the Rajasthan block itself, they project a production of 200,000 to 250,000 barrels a day by 2013-14, just in the next few months.
In addition to their development and expansion plans in India, Cairn India has taken steps to explore in the neighbouring unexplored areas in Sri Lanka, which looks promising, and South Africa. The onshore discovery of oil and gas in Nagaylanka in Andhra Pradesh involves additional investment of about Rs500 crore in the next 2/3 years, details of which are expected.
On the whole, in the next few months, Cairn India, being an active member of the Vedanta family, may spring pleasant surprises for its share holders, considering its huge cash reserves, and the capex plans ahead for its future expansion and development.
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
Revision of data, including inflation numbers, with such wide variation, does not augur well for a country like India known for leadership in technology and innovation
The Ministry of Commerce & Industry (MCI) periodically releases economic data relating to inflation, gross domestic product (GDP) growth, index of industrial production (IIP). But many times, these basic figures do not reflect the correct position, as MCI first publish provisional figures and thereafter, with a delay of one to two months, release the final figures which are generally found to be in variance with the provisional figures.
Last week, on 14th of November, data relating to wholesale price index (WPI) for ‘all commodities’ for October 2013 was released. The annual rate of inflation based on WPI rose to 7% (provisional) as compared to 6.46% (provisional) for September 2013.
Meanwhile, on the same day, the annual rate of inflation based on final WPI for August 2013 has been revised upwards to 6.99% from a provisional figure of 6.10% reported on 16 September 2013. Obviously, the provisional figures for August 2013 released by the MCI on 16th September were faulty and the final improved figures have now been released after a gap of two months. The variation between these two figures is as high as 15%, which is not a happy situation in the present environment. Is there no tolerance limit for such variations?
Similarly, the IIP for August this year has been revised to 0.43% from the provisional estimate of 0.60% announced earlier. These revisions in economic data have been going on for long without any rhyme or reason, and the Ministry appears to be immune to these aberrations.
It is a well-known fact that the stock market, securities market, commodities market and even the foreign exchange markets react to these economic data sometimes violently and speculative activity in all these markets get heightened by the faulty or inaccurate data published by the MCI, causing upheaval in the economy.
It does not stand to reason as to why the officials cannot collate accurate market information in the first instance itself, as revision of data, with such wide variation, does not augur well for a country like ours known for leadership in technology and innovation.
RBI governor had questioned the reliability of economic data
As early as in July 2011, the then Reserve Bank of India (RBI) governor, D Subbarao had questioned the reliability and frequent revisions of some of these basic data which are vital for all policy decisions of the central bank and the government. “The RBI’s policy formulation is handicapped by frequent revisions to data. We make policies in real time and if the provisional data that these are based on are inaccurate, the resultant policies can turn out to be sub-optimal choices,” Subbarao had said.
As per media reports, he was even critical of estimates of GDP growth. For FY2009-10, the advance estimate of GDP growth rate at market prices from the expenditure side that came out in February 2010 was 6.8%. That was changed to 7.7% in the revised estimate in May 2010 and further to 9.1% in the quick estimate in February 2011. “The policy that perforce had to use information on advance estimate of GDP was fraught with the risk of underestimating the growth momentum,” Subbarao had said.
Despite all the criticism by the RBI, there appears to be no effort on the part of the department concerned of the government to improve the position by ensuring that the difference between the provisional figures and the final figures is as little as possible, if such the practice cannot be totally avoided. But to ensure credibility of this vital information about the state of the economy it is necessary for the government to find a way to perfect the system and totally avoid these aberrations and thus help the policy makers in achieving the desired objectives.
Lies, damned lies, and statistics" so goes the adage.
In the context of the wide variations in the figures, especially inflation data, published, whether the economic data periodically released by the government fall into any one of these categories, it is for you to decide. You be the judge!
(The author is a banking analyst and he writes for Moneylife under the pen name ‘Gurpur’ )