PV Narasimha Rao, the late Prime Minister, was a very shrewd person. He appointed Manmohan Singh, then the RBI Governor, as the Finance Minister. Together, the duo reversed the socialist policies of Indira and Rajiv Gandhi and unleashed the biggest reforms that the Country has seen. The globalization of India, that is the buzzword today, and the trillions of dollars that flowed in from foreign countries, was because of the dynamism of PV and MMS.
One of the criticisms levelled against Narasimha Rao was that he was “not decisive” and was content to let things be. After his retirement, Narasimha Rao explained that the so-called “indecisiveness” was a deliberate strategy. “Not taking a decision is also a decision” he famously quipped.
The important strategy lesson that one can learn from Narasimha Rao is that not everything requires a reaction. Sometimes, it is best to ignore. By being proactive and reacting to every random thing that happens in the Country, there is a risk of adding fuel to fire and worsening the situation.
The JNU crisis is a textbook example of this. What was only a motley group of over-age students shouting slogans about some obscure issue has snowballed into a major nation-wide controversy, giving all opposition parties prime time on TV to blast NAMO and his policies.
Smriti Irani, the HRD Minister, is responsible for this sorry state of affairs. She went hysterical and ballistic about how “Nation won’t tolerate insults to Mother India” and ordered the police to charge the student protesters with the charge of “sedition”, the gravest possible charge under section 124A of the IPC.
This was like manna from heaven for journalists like Rajdeep Sardesai and Barkha Dutt who thrive on Anti-NAMO rhetoric. Everyone from Rahul Gandhi to Arvind Kejriwal to the Left parties has ganged up to attack NAMO.
This is a tragedy because NAMO’s achievements under the “Make for India” scheme, and the positivity that he sought to unleash in the Country, have been completely overshadowed.
Worse, the Government does not appear to be on a strong legal footing if you go by the opinion of Fali S. Nariman, one of the foremost constitutional law experts in the Country. In an article in the Indian Express, Fali Nariman explained that “to be “anti-Indian” is not a criminal offence, and it is definitely not “sedition”. Nariman also grimly stated that “we cannot possibly countenance – we simply cannot live under – a regime that expresses like sentiments”, a clear vote of no-confidence against NAMO.
Even the foreign press is regarding the JNU controversy as a “debate against free speech”, implying that NAMO is seeking to throttle the citizens’ constitutional right to free speech.
Now, if only Smriti Irani had taken a cue from Narasimha Rao and not reacted in the manner in which she did. Today, nobody would have remembered JNU or what the sloganeering by the students was all about.
The Vodafone tax controversy is also a textbook example of bungling. NAMO came into power by cleverly promising that he would end the “tax terrorism” propagated by Chidu and Pranabda in the form of a retrospective amendment to recover Rs. 14,500 crore from Vodafone and several other foreign investors. However, thereafter, when he was expected to repeal the retrospective amendment, Arun Jaitley turned saintly and said that the matter would have to run its course in the Courts.
Worse, now Arun Jaitley has done a complete somersault and sent Vodafone a notice demanding that the sum of Rs. 14,500 crore be paid “within a week” and threatening that Vodafone’s “assets would be attached” to recover the dues.
Vodafone reacted in a belligerent fashion and attacked NAMO by stating “In a week when PM Modi is promoting a tax-friendly environment for foreign investors, this seems a complete disconnect between government and tax department”.
After the stuff hit the fan and the move was severely condemned by foreign investors, Hasmukh Adhia, the Revenue Secretary, surfaced on twitter to state that the notice to Vodafone was a “routine exercise of sending collection notice to all those whose dues are not stayed by any court”.
Needless to say, this clumsy manner of dealing with a sensitive issue has also been slammed by experts. (See No Sir, Vodafone tax notice is not a ‘routine exercise’)
Several other big-ticket tax controversies including the Rs. 10,247 crore assessment of Cairn India (which is also a legacy of the previous government) are still hanging fire. This is prompting experts to ask whether there is any difference at all between the old regime and the new regime.
Now, in the wake of such buffoonery by the Government, investors are plagued with fear as to what fate holds for them in the Budget. Arun Jaitley has already dropped hints that he is actively considering abolishing the exemption from tax on long-term capital gains even though the revenue collection on that score will be petty. If that happens, investors’ sentiments, which is already fragile, will be shattered!