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Thursday, February 20, 2020

CAA Video series

A short video series explaining CAA. I wanted to keep the videos less than 5 mins so that easy to view.






Rahul Prakash Deodhar, Advocate, Bombay High Court is also a private investor. He can be reached at rahuldeodhar@gmail.com, on twitter at @rahuldeodhar or at his website www.rahuldeodhar.com.

Buy my books "Subverting Capitalism & Democracy" and "Understanding Firms"

Wednesday, January 29, 2020

Citizenship Amendment Act

Even those living under a rock have heard about CAA – The Citizenship Amendment Act. 2019. They have heard vocal and emotional arguments, protest and all sorts of confusing messages. In general, Indian citizens have nothing to do with CAA. The question is therefore what about CAA has evoked the protests? Is the government really discriminating against Muslims? Is the government allowed to discriminate? What about Article 14 – equality before the law? Let us answer these legally and logically. 

How to get Indian citizenship?

Indian Citizenship Act allows for 5 categories of citizenship –
  1. Citizenship at the time of independence, simply put, was given to all people living in undivided India who chose to remain in India.
  2. Citizenship by birth is not that easy. From January 26, 1950, up to July 1, 1987 people born in India became citizens of India. Those born between July 2, 1987, but before December 3, 2004, became citizens only if either parent was a citizen of India. A person born on or after December 3, 2004, is a citizen only if both parents are citizens OR one is a citizen and other is not an illegal immigrant at the time of birth.
  3. Citizenship by descent can be claimed by people born outside India. A person born outside India before December 10, 1992, can claim citizenship by descent, only if his father is an Indian citizen. If a person is born outside India, between December 10, 1992, and December 3, 2004, can claim citizenship if either parent is a citizen of India. After December 3, 2004, if you are born outside India, you can only claim citizenship by descent by registering at the Indian embassy/consulate.
  4. Citizenship by registration is available to those people who qualify in the first 3 categories but are not Indian citizens because they are citizens of other countries. These people MUST renounce their citizenship before they become eligible to become Indian Citizens.
  5. Citizenship by naturalization is a category open for everyone else provided they are not illegal immigrants or descendants of illegal immigrants. In other words, illegal immigrants or their children CANNOT ever become Indian Citizens after 2003. Even if illegal migrants marry an Indian citizen their children cannot become Indian citizens.
  6. Citizenship by incorporation of a territory is when a state or country joins India, its citizens will automatically become citizens of India on the date of incorporation of the territory. These citizens do not have do clear any hurdles to acquire citizenship. This was primarily used for accession of princly states into India.

Is getting citizenship a right of non-citizens?

Simply put, only people born in India (category II) and people of Indian descent (Category III) but with restrictions described above have a RIGHT to be granted citizenship. They can demand to become citizens.

Others can apply for citizenship, whether to grant them or not is the discretion of the government. Citizenship by registration which applies to those born in India or are descendants of Indians but are not Indian citizens cannot claim a right to be given citizenship. Whether to give them citizenship is at the discretion of the government officials. The same is the case with citizenship by naturalization. Just because you lived in India for more than 12 years does not give you a right to be granted citizenship.

Illegal migrants, their children and even those children of illegal migrants whose spouse is an Indian, all, are specifically disqualified from getting citizenship.

Law relating to migrants and refugees

When it comes to migrants and refugees the laws applicable to them are derived from India’s commitment to the United Nations Charter of Human Rights read along with Indian laws (i.e. Constitution, Indian citizenship Act, Foreigners Act etc.).

In turn, UN Human Rights are centered around (1) Declaration on the Human Rights of Individuals who are not nationals of the country in which they live - Adopted by General Assembly resolution 40/144 of 13 December 1985; (2) 1951 Convention Relating to the Status of Refugees along with 1967 Protocol Relating to the Status of Refugees and along with Resolution 2198 (XXI) adopted by the United Nations General Assembly. These are also summarised in the 2006 publication of Office of the United Nations High Commissioner for Human Rights titled The Rights of Non-citizens.

In common language, legal migrants and refugees have a revocable right to residency. However, they have no right to get citizenship. Whether to give them citizenship or not is up to the government.
Are migrants entitled to Article 14 -equality before the law?

Many commentators have unequivocally stated that Article 14 applies to migrants as well. However, it is not a clear case. Based on a reading of all the documents, migrants are required to be treated equally before a court of law. They have some fundamental rights, chiefly right to life and property (subject to restrictions), etc. The UN High Commissioner’s publication mentions that State may discriminate for legitimate reasons and further allows states permits States to draw distinctions between citizens and non-citizens with respect to two categories of rights: political rights explicitly guaranteed to citizens (but not to migrants) and freedom of movement (not granted to illegal migrants).

Further, migrants, legal or illegal, cannot claim a right to be citizens. In fact, illegal migrants or refugees cannot become citizens of India. The Citizenship Act actively forbids them from becoming citizens.

Then what happens to illegal migrants?


There is no provision to give citizenship to any illegal migrant whatever be their religion. In fact, once you are established as an illegal migrant you are disqualified from getting citizenship. In fact, even if illegal migrant marries an Indian, s/he cannot be given citizenship. Their children can NEVER become citizens of India.

When the laws are read with UN HR resolutions and the Foreigners Act, India is required to deport illegal migrants to the country of their origin. They can also be deported to other countries provided they will be safe in those countries and that country is willing to accept them. Law allows for keeping illegal immigrants in detention centers or they may even be prosecuted in accordance with the Foreigners Act.

India can only deport all non-persecuted illegal migrants. Those facing persecution cannot be deported to their country of origin. All illegal migrants have a right that prevents the host government to deport them to a country where they will face persecution or abuse.

The net effect is that the persecuted illegal migrants cannot become citizens (because of the law) and cannot be deported. It implies that persecuted illegal migrants cannot be deported because of our commitment to UN human rights.

However, UN Human rights resolutions and Indian law require the government to deport illegal migrants who are not persecuted. Alternatively, they can be prosecuted under the Foreigners Act or detained.

In all these aspects the religion of the illegal immigrant is immaterial, Indian laws do not differentiate between illegal migrants based on religion.

Enter the CAA


The CAA grants a right to illegal migrants who are facing religious persecution only in 3 Islamic countries, Pakistan, Bangladesh and Afghanistan, to claim citizenship provided they have entered India before 2014. The act creates a right in favor of those who are persecuted that they may seek citizenship.

The act is a manifestation of promises made in 1947 to the minorities of undivided India. To be clear, the understanding was that Pakistan would give citizenship to persecuted Muslims of India and India will give citizenship to all persecuted minorities (at that time this group was primarily Sikhs, Jains, and Hindus – Christians were persecuted later).

Why not make minority migrants citizens under current law?


This question has to be answered in two parts.

For illegal migrants, before CAA, there is no provision in current law to give citizenship to them or their descendants from any community. If they are not persecuted, they have to be deported. If they are persecuted, they stay here as migrants. After CAA, only the persecuted illegal migrants from 3 countries who are already in India before 2014 get to apply for citizenship. Since they could not be granted citizenship, an act of parliament was required.

For legal migrants, all religions can apply. In this case, CAA merely lowers the bar for these migrants provided they are persecuted in their country of origin. This provision is simply like setting up a separate queue for wheelchair or persons with disabilities, mothers with infants etc. However, even this part, since it concerns citizenship could not have been done without an act of parliament.


Why not include Ahmadiyyas etc. who are facing persecution?

This is a complex issue and relates to all persecuted minorities - Ahmaddiyas, Baloch, Sindhis, Tibetians, etc. There are diverse categories of reasons for this, some arise from the legal aspect of partition itself, others are emotional, some are fundamental, some are practical. I am listing only the logical ones here. When you read the description below, you may not agree with a few and agree with others. But taken together, it is not possible to accept them.

First, at any point, in any country, a lot of classes of people claim to be persecuted. Landlords have been persecuted, landless have been persecuted, some are persecuted based on their sect, others because they support some political party etc. In the three countries, too many classes of people are facing persecution. Ahmadiyya, Tribals in Bangladesh, Baloch, Mohajirs, Sindhis, liberal Muslims in Taliban held areas, etc. are known to be persecuted. Only some of these are illegal immigrants. Can India accommodate all of them?

Second, legal recognition of persecution differs from actual persecution. If the law of other countries discriminates clearly then you can recognize it. However, if the law does not discriminate but provides for a remedy for any discrimination then another state cannot take cognizance of it even if in reality there is discrimination. Such recognition will become interfering in other countries' affairs. Thus, if Pakistan, Bangladesh, and Afghanistan had not amended their constitutions to become theocratic Islamic states there would not have been a legal basis to enact this law. Even today, there is no legal justification to provide for Sri Lankan Hindus, Tibetans, or Rohingyas. If, however, China or Sri Lanka were to pass a law against Tibetan Buddhists or Sri Lankan Hindus, there will be an argument for seeking a CAA for accommodating these refugees.

Third, the law does not drive the persecution of many of these groups. These groups are persecuted DESPITE the protection of the law. However, non-Muslim migrants will have no such future possibility since the constitution of these countries does not protect these minorities. These religious minorities are therefore condemned BY their law - by their constitution itself.

Fourth, the basis of partition was not a referendum* but it was premised on separation of areas of population-based on religion. The partition was negotiated by Congress, Muslim League and the British, there were several ambiguities. However, there was one clear representation on which partition was founded – that Muslims do not identify themselves through sects and regions but only through religion and that is why they want separate land. The Ahmadiyyas, in particular, were instigators of partition and actively supported the partition of India and UN resolution on Kashmir against India. Similarly, Rohingyas were keen to separate from then Burma and join East Pakistan. This peculiarity prevents India from acknowledging separate sects including Ahmadiyyas (and further within Ahmaddiyas) within Pakistan, Bangladesh or Myanmar.

Fifth, giving citizenship to persecuted citizens under various classes within former undivided India opens pandora’s box. Will we give citizenship to Baloch? Sindhis? This has the potential to unravel the partition itself. In my opinion, if we get land along with the people, India should have no problem accepting these LEGAL migrants as citizens in the future.

Sixth, you have to also consider how many persecuted people exist illegally in India. As of now, there are no data on illegal Ahmaddiyas in India. Most Pakistani illegal migrants are Hindus and Sikhs. So the Ahmaddiyas in India are legal migrants and they have a regular mechanism to be assimilated into Indian citizenship.

Finally, you cannot promise citizenship in the future to any group of persecuted minorities coming in illegally in the future after 2014 - Ahmaddiyas or even Hindu, Sikh, Jain, etc. All of them including Hindus etc. will not be given citizenship. This is done so as not to encourage persecution of these minorities in their respective countries.

In Sum

The CAA is a mechanism to handle the status of part of the ILLEGAL immigrants. It refers to those illegal migrants (the minorities) who cannot be repatriated (UN laws) and are condemned to live in India forever. CAA makes these persecuted ILLEGAL migrants only from 3 countries into LEGAL persecuted migrants.

LEGAL migrants from all over the world can apply for Indian citizenship under category V. There is no restriction on religion – ALL religions and categories (LGBTQ, etc.) and can be granted citizenship. They have to wait for 11 years before they can apply. For LEGAL persecuted migrants from 3 countries CAA reduces the waiting time to only 5 years.

Thus, CAA has nothing to do with LEGAL migrants and ABSOLUTELY nothing to do with Indian citizens. It also does not encourage illegal migration as a clear cut deadline (past deadline) means no future illegal migrants will be granted citizenship.

* The vote in favour of Muslim League was interpreted as a referendum. However, Muslim League and Jinnah himself were vocal about separate land. Also, Referendum was held in Sylhet and North-West Frontier Province. Both created enormous problems. But that is separate history lesson.

References:

[Updated with references]


Rahul Prakash Deodhar, Advocate, Bombay High Court is also a private investor. He can be reached at rahuldeodhar@gmail.com, on twitter at @rahuldeodhar or at his website www.rahuldeodhar.com.

Buy my books "Subverting Capitalism & Democracy" and "Understanding Firms"




Wednesday, May 22, 2019

India Growth Model 03: Fix-Contest-Leapfrog-Prepare Growth Model for India

Indian growth model must have various components addressing local AND global demand. The window of opportunity is short, we need to develop faster. The growth needs to come from both public and private sector and must utilize the Indian human resources. I propose a four-way Fix-Contest-Leapfrog-Prepare model for growth.

Fix

For basic infrastructure and basic capacity building there is enough capital available globally and that capital is seeking low returns which is good.

We need to continue to fix basic infrastructure, from ports, roads, power, housing, etc. to law and legal systems, education, defense to modern infrastructure like telecom and digital infrastructure etc.

We need to continue the cleanup that began in 2014 which mean reformative laws need to be cleaned and reworked for example, Insolvency and Bankruptcy Code, GST Act, etc. needs to be shepherded through the legal institutions that are trying to muzzle it.

However, the most important part of this strategy is to create a proper social security framework. What demographic dividend we envisage, will turn into a demographic nightmare in about 40 years. The problems faced by pensions, medical insurance, health insurance etc. In the developed countries like US, Japan, Europe etc. Signal potential pitfalls for the Indian economy.

The Fix strategy focusses mostly on government action. While there is ample scope for Public-private participation or for divesting government created infrastructure to investment vehicles, the central focus of this strategy will be driven by government. It requires high quality last mile delivery. The strategy will depend on known and innovative models of government action.

Contest

The Contest strategy is relevant for industries operating currently. The catch-up will involve penetration, locally by global companies and globally by Indian companies, of known business models. It is spread of McDonalds and Sushi across the Indian hinterland. It is also the spread of Vada Pav and Fish curry across the remote corners of the world.

This strategy portends that we will liberalise and open the economy. At the time when trade wars are looming large, this will mean global corporates will focus on India intensifying the competition in the domestic space. This will be quick win for consumers and job creation but a difficult time for domestic industry. However, it is not all bad, things will improve for domestic industry also. Something similar to what we say between 1992-1994 and between 2002-2005 we can hope to achieve. This is domestic battle. Battle for Indian consumers by Indian and global companies.

However, we need to prevent the mistakes and learn from the experience of the world when we liberalise. Thus, we may want to regulate the propogation of Genetic modified foods, or hormonally treated meats etc.

The contest strategy focusses on private players and known business models. The role of government shall remain limited to regulation and monitoring. Coordinated export development strategy is required. This means industrial policy will be as important as Fiscal policy.

Leapfrog

Generating, lasting, fast paced private growth is quite difficult. Particularly at the time when trade wars are looming large where economies will try to protect their jobs and therefore their markets. It will come from those industries where we India can deliver susbtantive and impossible to replicate advantage that will remain exclusively tied to India. This will be the focus of the Leapfrog strategy.

The Leapfrog strategy will focus on IT/ITES, Food, Fashion, Jewellery, Movies, Music, Entertainment, Culture, medicine, among other sectors.

Leapfrog strategy will be driven by innovative private players. The role of government will be limited but innovative interventions. We also need champions for each of the industry clusters working in this area. Dewang Mehta is the name that immediately comes to mind.

Prepare

At the time we are developing this strategy, we need to keep an eye on emerging trends in distributed manufacturing, robotics, artificial intelligence, advances in biology, etc.

These opportunities are for the private sector. In this report we focus on what private sector can do to address these opportunities in the economy and market place and create value. This participation by the private sector will entail some innovative groundwork by the government. We highlight that in later section.

Model in summary

The Fix-Contest-Leapfrog-Prepare Model is meant to limit the role of the Government. It also recognizes that Government is also necessary and required to deliver certain services. Thus, the model is centrist in terms of economic leanings. It is meant to clarify the necessary reform that government needs to undertake and to underline its urgency.

It is also the aim of this model to enumerate some of the many opportunities open for private sector in India. It is the private sector that will create those jobs. The model is meant as a treasure map that hopes to inspire many private sector treasure hunters to go forth and seek this treasure of growth and prosperity for the economy.

It is also important for this model to highlight the nature and extent of coordination that will be required between government and private sector. Both these entities will be required to complement each other so that India can address these opportunities before us. Coordination is more important because, unlike between 2002-2007, the macro environment is volatile.

The Fix-Contest-Leapfrog-Prepare Model will be explained in detail in subsequent sections.

Thursday, May 16, 2019

India Growth Model 02: India needs a new Growth Model

India needs growth at a time when global growth is sluggish, globalization of trade and supply chains has plateaued and is likely to reverse. These headwinds are challenging for any economy. Therefore, the Indian model of growth has to be substantially different.

Proven business models are broken

Across times countries have deployed similar models for growth. They are based on trade to places that have demand for goods / skills available in your economy. This demand emanates from cost arbitrage or availability arbitrage. 

Early Europeans were seeking spices available only in the tropical Asia. At that point in history they did not have much to trade with Asia but Industrial Revolution changed all that. With use of force they were able to maintain demand side and supply side in control and make neat profits. This enrichment of Europe came at the expense of Asia and Africa. The armed control over markets and suppliers allowed Europeans to run a level of protectionism that is unparalleled and hopefully will never be repeated. Nevertheless it represents one model of growth.

In the pre-war era, America developed exporting to war torn Europe. Taking advantage of wage differential, higher risk tolerance thanks to innovative risk mitigation mechanisms, and a healthy domestic demand augmented by immigration, Americans were able to enrich themselves both at the expense of Europe in some cases and also in cooperation with Europe in others. American protectionism was more from the cost side. Using slave labor and forcibly usurping the land and other resources Americans were able to create value. The American growth model was thus based on military industrial complex.

The Post World War II development of Europe was entirely based on exploiting American demand augmented by domestic demand from rebuilding initiatives supported by low cost capital. This time, Europe was not able to run the kind of protectionism that had benefited them earlier. However, they benefited from twin protectionism. Europe enjoyed fortuitous financial protectionism based on low cost of capital thanks to Marshall Plan. It also engaged in currency management to help sustain the development. There were other factors allowing faster growth in Europe - lower population in all of West, new technologies from war for productivity enhancement and solid demand from rebuilding.

The Japanese growth which partly overlaps with European growth was also based on the same premise. Japanese fine-tuned this strategy by self-deprivation and focusing on exports to the West turning it into a protectionist advantage. Japan had another advantage, it did not need to spend on military and defense.

However, this dependency of Japan and Western Europe became unbearable for United States which was operating under the Gold Standard. It lead to abolishing of Gold Standard and start of modern finance driven development era. This is the time when John Connally made his two famous statements - “Dollar is our currency and your problem” and the ever prescient and my favourite “My philosophy is that all foreigners are out to screw us and it’s our job to screw them first.”

East Asian tigers and then China were the first to take advantage of the growth unleashed in this period. Using essentially the same model, these countries relied on pegged exchange rates and export demand to move out of poverty. By the time India joined the party in 1991, this model was quite well understood. The initial quirks were exposed during the South East Asian Crisis. The crisis led to refinement rather than correction of the model.

By 2002-03 this model became so well understood that most of the developing countries started using this model. Over-reliance on consumers from developed world and excessive constraints on domestic demand were norms of the day. This old model of development has finally broken or is in the process of breaking. In effect we will need a new model for growth.

Indian model of growth has to be substantially different. It has to withstand competitive forces right from the word go. India will not have any advantage of protectionism except what naturally accrues to it. Indian model must take advantage of the uniqueness of Indian demand in comparison with other countries. Given that Indian markets are not exactly uniform, India can become the hotbed for innovations that can be exported to the whole world.

The future is hypercompetitive

In the next phase of globalization, we are likely to encounter countries defending their domestic consumer. India has to withstand competitive forces right from the word go. India will face stiff competition winning in the markets outside India. India will not have any advantage of advantages except what naturally accrues to it.


Thus, India will have to fight for the global consumer,  some times on unfavorable terms, other times with entrenched players. India will face technological gridlock making innovation costly and product development long drawn. India will also have to face adverse tacit protectionism in the form of unreasonably demanding product/service quality or unreasonable punitive damages from product/service failure.

Within Indian markets too there will be intense competition. There is shortage of consumer demand globally. All the top companies will look to gain from addressing the Indian demand. This competition will be both - an opportunity and a threat. If this competition for domestic market creates jobless profitability then it is threat. If it creates vibrant ecosystem then it is an opportunity. Indian model must take advantage of the uniqueness of Indian demand in comparison with other countries. Given that Indian markets are not exactly uniform, India can become the hotbed for innovations that can be exported to the whole world. Thus, the ecosystem will create competency to win across the world.

In short, while other countries grew by looking outwards, India should grow looking inwards AND outwards. But, how will India grow? 

India Growth Model 01: Introduction

Two forces help the arduous journey of a nation towards progress. The How force makes us confident to embark on the journey and reduces the risks associated with it through sheer details. The second force is the Where force. It is the lure of the dream of a new tomorrow. That dream makes us turn, it gives us energy, carries us through the tough times and gives our life meaning. A nation that knows its WHERE can bear with any HOW! (1)

I was a bit disappointed with the Niti Ayog released their report titled “Strategy for New India @75”. [Here is the the accompanying presentation.] It was a very detailed HOW. The WHERE is missing - not just from the report but even from discussions, research papers, media. It is as if our WHERE has not been conceived. And that is a problem as the “how” depends on WHERE you are and WHERE you want to go. Without the WHERE, everything seems important and when everything is important, nothing is.

Even now the Where is missing. What does this India of 2050 look like? What do people do in this developed India? Where do they work? Where do they live? What do they wear? What things do they buy? What is their relationship with their government? What is their relationship with other countries? What are they worried about? How are the cities? How is the countryside? We can imagine many questions and paint a picture of India at 2050. It is here we want to go. This is our WHERE.

When we know the WHERE, our entrepreneurs will start gearing up for the challenge. When we know the WHERE, we will know what to prioritise, what to speed up, where can we go easy.

In my mind, I have a WHERE and hence my HOW is a little different. So this effort is to paint a detailed picture of the WHERE and augment the picture of the HOW we have already seen.

This series of posts details my thoughts on vision of new India and how to get there. These thoughts I will compile into a report at the end. At present time, the thoughts come from a broad based thinking on the topic, the final report will differ from this but hopefully not by much.


Notes:
  1. Alluding to the quote “Those who have a 'why' to live, can bear with almost any 'how'.” ― Viktor E. Frankl, Man's Search for Meaning