May 26, 2017

Is Surpanakha violently punished for acting on her sexual desire?

Wrapped in the sweet simplicity of white lungi and an airy banyan,  heaving hundreds of sighs as the heat wave of Rohini karthi’s —traditionally, the hottest fortnight of the year—morning with Hindu in one hand and a coffee tumbler in the other, managed to drop myself into the chair at the threshold. Weaving the towel across the face peeped into the main pages of Hindu… Once finished it, picked up Friday review…and as I lazily turned the pages my eyes, caught by the caption: ‘Feminine Mythique: Of Sexual Desires and Women Scorned”, suddenly brightened… Fancied by the author’s name, Arshia Sattar and her academic status, I ran through the column with interest.
As I reached the fifth para, all that languor of the summer morning vanquished by the lines:
“In the Ramayana, Surpanakha declares that she is attracted to Rama, a man who is not her husband. This is something that rakshasa women are allowed to do (as are apsaras), but Surpanakha is horribly and violently mutilated as a consequence of her candour. She is punished for acting on the sexual desire that she feels.”  
Stirred by this ‘oversimplification’ I ran to the shelf and pulled out the Gorakhpurwala’s Valmiki Ramayana and rushed to the Aranyakanda, particularly that Sarga where this episode is narrated. It reads as under:
As the long-armed Rama, appearing like the Moon in conjunction with constellation Chitra, seated with Sita in the cottage deeply engrossed in conversation, there appears a demoness. The ogress, known as Surpanakha, with an ugly face, large belly, deformed eyes and coppery hair, looking monstrous and overridden by passion, asks Rama in a frightful voice: “Who are you to be here in our region? This is the jurisdiction of my brother. What is the objective of your visit? Tell me the truth” (3.17. 5-13).  
Being a straightforward man, Rama reveals thus his identity unhesitatingly and truthfully: “There is a king named Dasaratha. I am his eldest son known among the people by the name of Rama. He is my younger brother, Laksmana. She is my wife, the princess of Videha, known by the name of Sita. Bound by the command of my father, the king, and my mother and seeking to discharge my sacred obligation to them I have come to stay in this forest. I now want to know of you: Whose daughter are you? What is your name and whose wife are you? Tell me truly what for you have come here” (3.17.16 - 20).
Surpanakha then replies: “I am an ogress. Surpanakha by name, and capable of assuming any form at will. I haunt this forest alone. I have a brother called Ravana, the valiant son of Visrava. The very mighty Kumbhakarna too is my brother. Vibhisana is my third brother. He has of course none of the activities of an ogre. My other two brothers, Khara and Dushana, are well-known for their valor on the battlefield. I definitely surpass them all in point of valor.” She concludes her immodest speech by making horrid advances: “O Rama! Ever since I saw you, I am struck with your beauty and wish to have you as my husband. I am richly endowed with power. What can you accomplish with Sita? Being frail and ugly too, she is not worthy of you. I alone stand as a match for you. I will gobble up your brother along with this ugly, vile, hideous human lady with a sunken belly, Sita. Freed from these impediments, you and I can wander forth in the forest—beholding the peaks of mountains—and enjoy ourselves to our heart’s content.” (3.17. 22-29)
Rama, of course surprisingly, much against his known value system, perhaps, to have a little fun out of this stupid lady, Surpanakha, says something which is quite against his known character: “O lady, I am already married. Here is my beloved wife. For ladies like you, the presence of a co-wife is most painful. Of course, here is Laksmana, my younger brother. He is anuja tu ea me bhrātā śīlavān priya darśana / śrīmān akta dāra ca lakmao nāma vīryavān (3-18:3).  He is seelavan—man of good conduct. He is priya darśanagood-looking. He is akrutdaar—unmarried. He will prove to be a anurūpa bhartā (3-18:4)husband worthy of your beauty. He will be a fitting husband for such a one as you. Take to him. Don’t bother me” (3.18.2-5).

Hearing what Rama said, Surpanakha—deluded as she was with lust—suddenly turns to Laksmana and says: “Possessing as I do an excellent complexion, I shall be a wife worthy of this comely form of yours. You will happily wander through the entire range of the Dandaka forest with me.” Then Laksmana smilingly replies to Surpanakha: “That gentleman is my master. I am his servant. So, if you marry me, you will have to be the servant of a servant and also be the servant of Sita too. So, O large-eyed lady, be a happy younger wife of my elder brother, who is fully endowed with all riches. enām virūpām asatīm karālām nirata udarīm / bhāryām vddhām parityajya tvām eva ea bhajiyati (3-18:11)—Why should he be tied down to a deformed, vile, hideous and aged wife with a sunken belly? He will abandon her and take you.” This is again unusual for Laksmana to speak thus.
The hideous woman, however, not being able to understand that they are making fun of her and in her infatuation, goes to Rama saying, “Now look here. I am going to marry you. If you think this vile, hideous and aged wife is an obstacle, I shall devour her right now while you are looking on”(3.18.16).
Saying so, as she with eyes flaming amber ran to the fawn-eyed Sita in great anger like a giant meteor (3.18.17),Rama, restraining Surpanakha, who was falling upon Sita like the noose of death (3.18.18), angrily tells Laksmana: “You should in no case jest with cruel and unworthy people. See how Sita narrowly escaped from being devoured by the ogress” (3.18.19), and commands Laksmana “to deform the ugly, vile, highly wanton and big-bellied woman” (3.18.20).
Hearing Rama, the angry Laksmana drawing his sword, chops off her ears and nose (3.18.21) while Rama looks on. Roaring in a hoarse voice, Surpanakha runs away into the forest (3.18.22).
Having read the original, I felt all the more difficult to put up with this ‘over-simplification’. At the same time it is hard to believe that this hard core academician could ever be erring in drawing conclusions! This dilemma reminds me of Flaubert’s advice to a fellow writer: “Everything which one desires to express must be looked at with sufficient attention, and during sufficiently long time…” And this need is perhaps, all the more high when writing about epics that stood the test of time!

May 17, 2017

Taxing Farm Income

In order to expand the tax base of personal income tax, Bibek Debroy, a Niti Aayog member, proposed at a press conference that besides removing tax-exemptions, we can also “tax the rural sector including agricultural income above a certain threshold.” Incidentally, even the economic survey report of 2016 opined that by taxing agriculturists the tax base can be increased significantly.
However, looking at the political sensitivity of the proposal, the Finance Minister, Arun Jaitley has been quite quick in categorically stating that the government has no plans to tax farmers. Intriguingly, he also said, “As per the constitutional allocation of powers, the central government has no jurisdiction to impose tax on agricultural income.”
For quite some time, it is being argued that excluding farm income that accounts for about 15% of India’s GDP of around $2.2 tn is what indeed compelling the government to keep personal income tax rates high. That aside, tax department often alleges that agricultural income is used as a conduit to avoid taxes by the rich, including corporates. According to the Finance Ministry reports, between 2007-08 and 2015-16, 2,746 entities and individuals declared agricultural income of above Rs. 1 cr. And no wonder if this led to heart burn among the urban-based salaried class of tax-payers, for they feel that “a large number of rich farmers, who earn more than salaried employees, get away with by paying no tax at all.”
Against this backdrop, Debroy’s/Niti Aayog’s proposal to tax farmers assumes significance, calling for a cautious examination of the proposal. First things first: Given the intrinsic vulnerability of agriculture to exogenous shocks, it is a herculean task to compute the cost of cultivation of different crops, that too, in different geographies of the country and arrive at the profits. In absence of a set criteria to define the influence of variables such as rainfall, soil type, average temperatures, incidence of pests and diseases, means of irrigation, etc., on the ultimate crop yield, it becomes difficult to arrive at an objective assessment of costs and profits.  Secondly, majority of the farmers use cattle-drawn agricultural implements in cultivating crops. Provision of depreciation under agricultural implements and cattle is a tricky proposition. Over it, bulk of the Indian farmers falling  under the category of small and marginal farmers category are not known to maintain books of accounts, nor do they carry out their transactions through banking channels.
All this obviously creates an insurmountable information-vacuum. Collection of information in such a syndrome becomes costly. And assessing taxable income sans reliable information means relying on the declarations made by the farmers and this would simply become arbitrary. This arbitrariness gives ample room for disputes/appeals and granting discretionary powers to the bureaucracy means affording scope for corruption.   
That aside, farmers in India, though not taxed directly—except of course, Tea, Coffee and Rubber Plantations where certain percentage of income generated from these sources are subjected to income tax—do face many kinds of implicit taxes:  Controls on exports, that too, when international prices are soaring high,  imposition of stock limits by local governments and restrictions on free movement of agricultural produce across the state boundaries  are all known to suppress farm gate prices, land ceiling, and importantly, the endless exploitation of farmers by greedy traders and commission agents at the mandis by offering such prices which do not cover even production costs, are all implicit taxes that the farming community pays today.
Factors such as highly fragmented holdings across the nation, which offer little scope for modernization of agricultural practices, poor irrigational facilities, little or no scope for capital outlay resulting in stagnation of yields, and the poor bargaining power of the farmers (for getting better prices) hardly leave much with the farmers that could be taxed. Against this backdrop, any attempt to tax farm income may not prove economical vis-a-vis meagre revenue for the exchequer.
To be precise, agriculture is a hard-to-tax sector, and therefore any move in this direction calls for careful calibrations.
















May 11, 2017

Appreciating Rupee : What It Means

It is, no doubt a great surprise that after sliding from 58.9 to a dollar in May 2014 to 68.7 in November 2016, the rupee has appreciated to a high of 63.93 last week—an appreciation of about 5.6% vis-à-vis dollar, all in just the last four months. And, not only is this the sharpest spell of appreciation of Rupee but it has also outperformed its peers from the emerging markets despite a spell of sea-changes—pound sterling suffering a worst hit of about 20% against dollar after Brexit polls, dollar index breaking the psychological level of 100 after Donald Trump’s victory—in the global markets.
Indeed, a few from the government are feeling elated by the strengthening rupee, for they believe it is due to ‘strong fundamentals’: good growth, low inflation, fiscal consolidation, and low current account deficits. There is of course, certain merit in this observation, but one cannot get carried away by it for there are also other factors that contributed to this sudden appreciation, such as: Foreign Portfolio Investors’ funds—during March they put $3.92 bn and in April 3 billion that cumulatively exceeds the 7.4 billion received during the whole of the calendar year, 2015—into Indian debt market that was triggered in the second week of March by the ruling party’s victories in the State elections, of course, duly supported by the passing of GST bill by the Parliament.
The inflows into the Indian equity market too are significant: an amount of $6.38 bn has been received as against $3.19 and $43.18 bn during 2015 and 2016 respectively. This has lifted Nifty above 9,000 and Sensex above 30,000, simply outpacing the global indices, besides of course, strengthening rupee further. And, all this has happened as Trump’s remark that dollar is extremely strong exerting pressure on dollar, and the RBI unusually remaining reluctant to intervene in the market. Now the big question is: Is this appreciation spree of rupee good or bad? Of course, there is no ‘the’ answer to this question, for analysts are divided in their understanding of this whole phenomenon.
Nevertheless, it is true that rupee is overvalued in nominal and more so in terms Real Effective Exchange Rate (REER) against the currencies of our major trading partners. The six-currency trade weighted REER reported to be over valued around 30% in March. Any further appreciation is sure to erode the competitiveness of rupee in the international market. And this is what of course, would have prompted RBI to intervene in the currency market on Wednesday April 26th to tame rupee as it is surging to the top of currency charts. As most of our exports are of non-differentiated, commodity-kind of goods such as apparels, which are bought in the global markets mostly based on competitive price, an appreciating rupee means buyers switching over to imports from countries such as Bangladesh and Vietnam. Coming to IT firms which are already hit by the toughest visa restrictions in the US, an appreciating rupee means further erosion in their profit margins. Cumulatively, it is estimated that an appreciating rupee means shaving 4% off the earnings of companies such as IT firms, car makers, pharmaceuticals and textile firms that are dependent on exports during FY18. On the other hand, when it comes to the rest of India Inc. which uses imports for domestic operations will stand to gain from a strong rupee.
There is however a positive side to the appreciating rupee: it affords savings on imports. For instance, during FY17 India imported merchandise worth $380 bn. At an exchange rate of 68 a dollar this involves an outgo of Rs. 25.8 lakh cr. As against this at today’s exchange rate of 64 a dollar, the outgo would come down to Rs. 24.3 lakh cr, which means a neat saving of Rs. 1.5 lakh cr for the year. One may however perceive a downside to this: wouldn’t a stronger rupee make Indians crave more for imported products? Perhaps, not, for most our current imports are confine to industrial commodities and capital goods whose domestic demand is more dependent on economic activity than the exchange rate. That aside, an appreciating rupee also helps the nation in keeping the inflation at lower levels.
Over and above all this, an appreciating rupee would ease the burden of debt servicing by the corporates who have heavily borrowed from the global financial markets. According to one report, Indian banks and financial institutions had an outstanding debt of $159 bn in foreign currency while corporates had another $150 bn dues. And in their anxiety to keep their cost of loans minimal, left their foreign currency loans un-hedged. An appreciating rupee is therefore a bonanza to such corporates.
Although India’s exports are showing signs of recovery since September last year, there remains a disturbing trend:  trade deficit is not narrowing down. Which means, if imports continue to grow while exports shrink due to appreciating rupee, the trade deficit can widen further. This is certainly a negative for rupee. Yet, if FIIs continue with their honeymoon with Indian debt and stock markets, it can set off a virtuous cycle where a strong rupee attracting more inflow of foreign currency and more inflows further propping up the rupee further encouraging fresh inflows and so on….
Should this happen, rupee gets overvalued in terms of REER. This is certainly no good for the nation. For, a strong currency hurts domestic growth. Theory indicates that appreciating currency subsidises imports and taxes exports while it is the exports which create employment. On the other hand, depreciating currency functions as a kind of tariff on imports of goods and services which to that extent hurts employment domestically. So, in the long run, a strong currency may prove no good for the development of the nation.

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