India Positive

by Chetan Bhagat

  Uri Changed One Thing: India Is Never Going to Compare Itself with Pakistan

  Using Pakistan to bolster its self-image cannot possibly do India any good

  Imagine two kids in the same class of an elite school. Both kids come from poor backgrounds and are among the bottom rankers. Both fail often, but the first kid scores a few more marks than the second. The first kid feels good about this; at least he is doing better than the other one. The second kid hates himself, but lives for the occasional moment when he scores more than the first. They are both losers, but each is happy to compare himself with the other and feel better whenever possible.

  However, things change over time. The first student’s performance begins to improve. In time, he even reaches the top 10 in class. Meanwhile, the second student gets steadily worse in academics. He also joins a gang of bullies and starts taking drugs.

  One day, a realisation dawns on the first student. He no longer wants to compare himself with this second student. The boy he revelled in beating once, now disgusts him. His only thought now is of emulating the class toppers.

  In the analogy above, the first student is India and the second is Pakistan. Ever since Independence, we have loved to compare ourselves with Pakistan. It helped us cope with our Third-World status in the world. At least we were better than Pakistan. So, we took Pakistan seriously. Even though Pakistan was never able to build itself into a real country (it witnessed a military coup a decade into Independence, and then split into two pieces a decade after), we legitimised it. Pakistan was a failed state to begin with, but India needed it around because it reinforced her own political legitimacy. ‘At least we are better off than Pakistan’ is a rhetoric that worked for Indians for a very long time.

  And then, something snapped. The Uri attack became the proverbial last straw, and India grew up overnight. We finally realised our self-worth. We understood that comparing ourselves to a student who comes last in class and is a certified bully is just not worth it.

  India is today the fastest growing economy in the world. We have a functioning capital market, legal system, labour force, large consumer base and democracy. We would be stupid to not focus on what we have. Keeping the idea of Pakistan alive just to feel better about ourselves doesn’t make sense anymore.

  Pakistan was doomed from the start—a haphazard creation of a belligerent leader who preyed on the fears of the Muslim population. The British, reeling from the impact of the Second World War and in a hurry to leave, couldn’t care less. Pakistan was created on the basis of a single emotion—fear of India’s Hindus. It was essentially a giant refugee camp born out of irrational fear. Of course, such a setup was unlikely to create a strong country. It never did.

  Also, since Pakistan was carved out in a hurry, they never had central structures and organised civil services like India’s (such as the IAS or IPS) to help run the country. Adding to these misfortunes, its founder died within a year of its creation, leaving behind a leadership void and chaos. The army eventually took over, and things became worse. They have been, ever since.

  Indians might say we never liked Pakistan. However, it was India that legitimised it the most, by inviting regime after regime for talks. This policy was only making things worse. It is still believed in some circles that India’s Muslim vote bank does not want India to act tough against Pakistan. So Indian leaders wooed Pakistan, in a bid to woo the Muslim vote bank at home.

  But it has all changed with the Uri attack; that was the tipping point. Indians—Hindus, Muslims and others—no longer feel sympathy for Pakistan. In fact, they feel disgust. Which country kills innocent people of other countries on a routine basis? Only Pakistan. No Indian today wants to be associated with it. And this is a major step in the growth of our national self-esteem. It is no longer defined in the context of Pakistan. That is setting our standards so low that it is almost an insult to ourselves.

  India’s lack of dependence on Pakistan to bolster its self-image hurts the latter most. For India is no longer interested in legitimising Pakistan. This will only speed up the disintegration of that country, barring an unlikely scenario where Pakistan’s regime and its radical elements both turn over a new leaf. One feels bad for sane Pakistanis. In a land ruled by guns, they are powerless. Maybe the need of the hour there is the rise of a pro-India party. It may be against Pakistan’s very DNA, but might be the only solution to its crisis.

  However, the chances of Pakistan fixing itself are rather remote. And if it doesn’t, the country could end up having to split again. It almost seems like that is Pakistan’s karmic curse, for they caused a great nation to split once.

  We, on the other hand, should congratulate ourselves as a nation. Not just for standing up to Pakistan or for the surgical strikes, but for finally growing up as a nation and realising our own value.

  The Parable of PK: Having a Loud, Indecent Neighbour Calls for Out-of-the-box Solutions

  India must look at fresh strategies to resolve the Kashmir dispute with Pakistan

  Imagine you live in a colony of row houses. You have a big family with modest means. Somehow you make it work, taking everyone’s needs and views into account. Your family’s young generation is trying its best to come up in life, by working hard and staying optimistic despite adversities.

  Imagine also that your immediate neighbour is PK. PK is poorer and less educated. PK doesn’t run his house democratically, but rules with a stick. PK doesn’t like to change.

  PK watches you rise and sees that you have an even better future ahead of you. He notices that you now have a couple of cars in your garage. PK doesn’t have any. Rather than emulate your progress, PK decides to do something else.

  Regularly, he sneaks into your garage and deflates the tyres, smashes the glass or scratches the cars. PK does this at night, and then disappears. He then goes home, turns on his set-top box and watches TV, the only joy he has.

  Since you are a respected, peace-loving member of the community, you try to deal with the situation in a decent manner. You request him not to do it. He doesn’t listen. You invite him over for tea several times. He enjoys the tea, shakes hands, and continues his bad behaviour.

  You go to his house with flowers to wish him on his birthday. He asks you in but damages your cars again the next day. You complain at the colony society meetings, where everyone advises you to remain calm and maintain peace. They give PK the same advice, but PK refuses to listen. He’s even begun sending goons to scare you and your family.

  Meanwhile, you are advised by self-styled ‘experts’ and ‘secular pacifists’ in your family to continue to talk to PK. Their solutions, if at all they offer them, range from evaluating the damage to the car and keeping the car covered to selling the car. If anyone else in the family proposes an out-of-the-box solution, the experts bash him.

  The experts even say it is your fault. Why did you have to buy the car? Why did you make PK angry? Why didn’t you send more flowers? Why don’t you just give the car to him?

  Meanwhile, PK continues his mischief. What are you to do?

  In case you haven’t guessed already, the above analogy refers to the Kashmir problem. You are India, PK is Pakistan, and the colony society is the UN. This conflict has been going on since Independence. Leader after leader, think-tank after think-tank, expert after expert, has failed to solve it. Meanwhile, the Kashmiri people continue to suffer; they live in danger and have no future to speak of.

  The Indian Army has the tough job of keeping peace, sifting through the civilian population to apprehend militants. It gets a bad name every time it makes a mistake, and errors are inevitable with such an awful task. Our nation spend tens of thousands of crores every year just to keep Kashmir secure.

  Hence, on Independence Day, you tried a different solution. You went and cut off the wires of the satellite dish of PK’s set-top box. Every time he repaired it, you cut it off again. Frustrated, PK did not know what to do. After a while, you asked PK over for a chat. This time, he liste
ned.

  And this is what the PM did in his Independence Day speech. He expressed open support for the Balochistan movement. For our own sake, it is important for us Indians to understand the Baloch movement, understand why we are supporting it, and why we should back our government in doing so. This move will finally make our neighbour fall in line and listen to reason, accepting that one should not interfere in another country’s internal strife, and that peace is what will finally lead to progress.

  Balochistan is almost half the area of Pakistan, although, population-wise, it comprises less than 4 per cent of Pakistanis. Like Kashmiris—though the context and history are different—the Baloch people feel they were deprived of autonomy when the country was formed. They claim that Pakistan doesn’t treat them fairly, that the army is oppressive, and that the Baloch deserve complete independence.

  Make no mistake, the Baloch movement is violent and Pakistan identifies them as a terrorist group. However, one must also note that, in a country ruled with a gun, the opposition has to behave like a terrorist group too.

  India must not fall into the trap of funding or backing violent attacks on innocent Pakistani civilians. Our Baloch support is strategic; it is a tactic aimed at getting Pakistan to stop interfering in Kashmir. If ending the oppression of the Baloch becomes a by-product of this strategy, it is even better.

  India can help the Baloch give their cause global legitimacy, by extending political support and starting an anti-Pakistan PR campaign. Pakistan has a lot more to lose from Baloch independence than India would if it lost Kashmir (which India won’t). If Balochistan splits away, Pakistan is literally cut in half and becomes much weaker.

  If there is global consensus that (a) there is a humanitarian crisis in Balochistan and (b) Pakistan is a failed state that deserves to be split up to end global terrorism, nothing can stop the breakdown of Pakistan. Hence, it is in Pakistan’s interest now to finally listen and cooperate in solving the Kashmir problem. We, on the other hand, must back the Baloch but we also need to be clear about the nature of the support we give them.

  @chetan_bhagat

  Chetan Bhagat Retweeted Imran Khan

  Mr PM considering you wanted to be a beacon of peace, don’t you think you needed to be more patient than attacking the moment things didn’t go your way? Our people were killed, difficult to do a hugs session the day that happened isn’t it? Don’t give up if u r serious about peace

  144 replies/ 439 retweets/ 2,198 likes

  I NDIANOMICS

  M any felt having a stable government with a pro-business mindset in the centre would boost economic growth. However, this has not happened. The reasons behind this are analysed in ‘Don’t Let the 2014 Euphoria Turn into Despair’.

  The government has made two moves that were much talked: the implementation of GST and demonetisation. ‘Cracking the GST Puzzle’ talks about why GST needs to be simplified in order to be successful. ‘28 Per Cent GST? At this Rate, India’s Movie Biz Will Be a Flop Show’ talks about how this tax has affected the film industry. But there is a reason why, despite criticism of these moves, Modi has so much support, and this is explained in ‘The Three New I’s of Indian Politics’.

  ‘How to Tax with Love’ and ‘Suit-book Sarkar’ talk about why it’s important for the tax department not to treat taxpayers like criminals and why we need to stop seeing people who run businesses as criminals, and have a clear capitalistic policy.

  Two government-run services are reviewed: public hospitals and Air India. In the light of the tragedy at Gorakhpur, ‘The Government Is Bad At Running Hospitals, Let’s Have Modicare’ talks about how the Indian government can’t handle complex services well and should relieve excess pressure on the public healthcare system and improve medical insurance coverage. Regarding Air India, ‘Sell Air India for One Rupee’ suggests we sell it, even if it’s just for one rupee; in the long term, it will only save us a lot of money every year.

  ‘It’s Time to Analyse OROP with Our Heads, Not Our Hearts’ talks about how we need to look at OROP with more clarity and see what we can do in the context of what is possible and affordable.

  Lastly, the essay on Free Basics talks about how we should welcome it as a concept but also address the issues that it definitely has.

  28 Per Cent GST? At this Rate, India’s Movie Biz Will Be a Flop Show

  Current GST rates have delivered a crushing blow to the Indian film industry

  The Goods and Services Tax is finally here. It is a major reform that can streamline India’s complicated indirect taxation system. Instead of multiple sales, service, entertainment, VAT, excise and octroi-like taxes, there will be one GST which would make accounting easier and remove taxes on taxes.

  We also hope that the GST will reduce the impact of abrupt changes in industrial tax rates, which every budget so far has tinkered with. The expectation now is that, with a single GST, things will be more stable and, hence, more predictable.

  Except, there is no one GST. It should perhaps be called GST5. For even in its introductory stage, the GST has five different rates: 0 per cent, 5 per cent, 12 per cent, 18 per cent and 28 per cent. Then there are the goods that fall outside the purview of these rates. And in a few cases, local bodies such as municipal corporations can impose their taxes on certain items too.

  Hence, the GST5 is a halfway house to the final idea: to have, primarily, a single indirect tax rate for all goods and services in the country. Since that hasn’t happened yet, various items have at present been placed in one of the five buckets.

  The decision to do so is based on a mixture of common sense and the morality that we Indians love to bring to everything, including our tax rates. Hence, sinful items such as liquor and cigarettes are taxed higher. Fresh milk won’t be taxed. However, UHT milk or milk sold in cartons will carry a tax of 5 per cent. Condensed milk will be taxed at 18 per cent.

  The reasoning behind GST5 could be to ensure that the transition to a single GST rate is smooth and gradual. If one rate was decided on, it would lead to big changes in the prices of some items that were taxed at very different rates earlier. GST5 helps find rates that are close to those of the pre-GST era.

  However, GST5 also poses problems. It leaves scope for a degree of arbitrariness in assigning rates to different items. And that creates scope for industry to lobby politicians to place their items in a lower tax bucket. It also makes certain industries uncompetitive. One such example is the film industry.

  For some strange historical reason, watching movies in a theatre is seen as a luxury, a hedonistic pleasure that borders on sin. Little wonder, we have entertainment taxes as high as 100 per cent on movie ticket sales in some states.

  These laws were made well before the era of television, let alone internet or digital entertainment. The current GST rate for cinema tickets is 28 per cent, on par with gambling. Moreover, local bodies can further tax cinemas, increasing the burden on ticket buyers. Meanwhile, your set-top box subscription will be taxed at 18 per cent. So for some bizarre reason, the government wants to charge you more if you watch a movie in a theatre than on your TV at home. And, of course, many who watch pirated content pay absolutely nothing.

  In this scenario, the film industry is the one that’s getting penalised above all. There are no logical reasons for this, only flimsy ones such as: (a) these filmi types are so rich anyway (not true: wages across the industry are meagre, barring a few powerful people); (b) films make so much money, look at Baahubali (not true: only 10 per cent of the films released in India are hits); and (c) why should we care about such an unnecessary industry anyway (we should, because it has a huge impact on our economy and around the world).

  Due to such unreasonable biases, we have hit the industry with a tax rate that will render it uncompetitive. For every ticket sold, a high GST would be deducted. And nearly half of what remains will go to the theatre owner. After that, there will be a distributor margin of 10–20 per cent. Whatever is left (say, 25–30 per cent) will go to
the makers of the film. TV and subscribed digital content have neither such high taxes nor so many middlemen. Also, compared to TV, piracy is more common in films.

  In other words, this current structure can only mean one thing—the eventual decline of India’s film industry, whether in terms of overall profitability, volume of output, or revenues.

  As content becomes more easily available on your phone or TV, the incentive to go to the theatre to watch movies will no doubt be drastically reduced. And even if people do go, most of what they pay will be eaten up by taxes and middlemen.

  This doesn’t leave filmmakers with much business. Sure, there will be the occasional superstar movie that does wonders at the box office. But exceptions do not make an industry. A healthy, regular output does. The film industry drives our country’s economy in a big way. When people come to theatres, they step out of their homes and do more retail shopping. Films also drive our music industry. Finally, they represent a key part of Brand India to the world.

  Overall, the bigger issue is to move GST5 to GST1. We need one reasonable GST rate that covers every good and service in the country. Until that happens, the government would do well to move the film industry to a lower tax bucket, so that it remains competitive and continues to entertain us for years to come.

  * * *

  Post this article, the tax rate for movie tickets above ₹100 was brought down to 18 per cent.

  Don’t Let the 2014 Euphoria Turn into Despair

  While cleaning up India’s economy, the government would do well to opt for smooth transitions rather than strict penalties

  GDP growth data is like a grade in the government’s report card, at least in intellectual circles. This grade is for a core subject: the economy. The Narendra Modi government is being subjected to a particularly harsh assessment on this test. After all, many saw this government as a compromise on secularism, the price we needed to pay for strong economic growth.