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Myths about JK’s special status and fiscal autonomy

Published at July 18, 2017 01:52 AM 1Comment(s)10047views

Myths about JK’s special status and fiscal autonomy

K B Jandial

Nearly a month long theatrics in J&K over extension of GST regime is over after it was rolled out eight days later than rest of India. Now, it is a time for the PDP-BJP coalition Govt to pat itself  for “safeguarding the special status and fiscal autonomy” of the State on one hand and on the other, the NC is discrediting  Mehbooba Govt for “surrendering” J&K’s special status accusing her of “deceitful and questionable collaboration in facilitating the erosion of J&K’s Autonomy”.

NC’s former ally Congress too joined NC’s bandwagon on this issue. While Mehbooba has won the GST war but the skirmishes may continue in the post-GST era with teething hiccups  providing opportunities to the opposition to exploit, more so when there exist huge hiatus in the perception of erosion of special status in Kashmir, Jammu & Ladakh.

During this period, Kashmir (not J&K) was put into turmoil, not as much on account of rolling out GST in J&K like rest of the country, but more of the political issue of “dilution of special status and fiscal autonomy”. And in the fore front of this battle were the traders of Kashmir who got Srinagar shut down for a day on this issue with two grand old parties, NC of the State and Congress of India and the Hurriyat supporting it even though the issue has nothing to do with the sentiments of “Azadi”, establishment of “caliphate”, alleged violation of human rights, withdrawal of AFSPA or killing of top militants.

While the political parties are entitled to make a political issue of every move of the Govt but how come traders are spearheading the protest on fiscal autonomy rather than seeking simplification of the tax regime or subsidies etc. What fiscal autonomy has to do with Traders and how they or for that matter common man is benefitted from autonomy.

It is unnecessary assertion special status and public display of fiscal autonomy that the State Govt is continuing with Toll Tax on vehicles and goods when it is abolished in rest of the country. Where was the need to burden the consumers of the State with this unwanted tax when the Govt of India has made a separate law to levy Cess on selected goods to make up for a kitty to compensate States for any loss in revenue for five years?

This law- The GST (Compensation to States) Act extends to the whole of India including Jammu and Kashmir.

In a new twist in Kashmir’s political narratives, the traders, civil society and the separatists who have been on the war path against Delhi for “resolution of Kashmir issue” with underline objective of “azadi”, attempted to stall the tax reforms which was hailed even by President Trump.

Failure to even introduce a resolution for extension of the comprehensive Constitution (101st Amendment) Act, 2016 to J&K, popularly known GST regime in a special session of State Legislature summoned on 18th June for this business, the under pressure State Govt re-summoned the session 17 days later with full preparation and took the “sense of the House” through a resolution which was adopted as the coalition has absolute majority. There was also a realisation that J&K cannot remain in isolation for long in the matter of trade and business.

The State Govt took recourse of Article 370 and gave concurrence to the GOI facilitating issuance of the Presidential order - The Constitution (Application to Jammu & Kashmir) Amendment Order on 7th July, 2017. To deprive the opposition to get some brownie points on GST, the Presidential order, incorporated some modifications and exceptions in the amended Articles 246A, 268, 270,271,279A, 286, 366, 368 while extending these to J&K.

The Presidential Order does specifically mention protection of Section 5 of J&K Constitution. Two days later J&K GST Bill too was passed and the GST was finally rolled out on the midnight of 8th July, 2017.

For one month there has been lot of uncertainties with usual Delhi bashing, the Hurriyat’s ‘trimurti’-Syed Ali Geelani, Mirwaiz Farooq and Yasin Malik termed GST regime in J&K as a “latest assault” on state’s special status. The NC refused to get convinced on the Govt arguments and revelations, some are startling ones, made by Finance Minister Hasib Drabu within and outside the legislature.

The unmoved NC continued to harp that extension of GST is dilution of Article 370 and Section 5 of the J&K Constitution and these are “reduced to husks.” The Congress too opposed the resolution for diluting the special status of J&K.

Surprisingly, both parties had hugely contributed to the evolution of GST regime at the national level; Congress being the initiator of reforms while NC’s veteran leader Rahim Rather was the Chairman of the Empowered Committee of Finance Ministers for three years. Morally, they should not have opposed it. But then, politicians are politicians and they have no inhibition in changing their stance with change in their role.

The whole episode which Omar described it as theatric, has unraveled many “secrets” that expose political hypocrisy of those who cry hoarse over the “erosion” of special status to hoodwink gullible Kashmiris. This has been going on for the last 67 years and will continue, thanks to pandering to the anti-India sentiments and adverse public perception on many issues including Article 370.

All Kashmir centric political parties carefully strategize their actions to manage the perception of ‘J&K being is a separate territory’ where writ of India should not freely run.

One of the bold admissions about Article 370 and technically right also, was made by Finance Minister Hasib Drabu when he said in Assembly: “Article 370 has been used as an obstruction.”

He feels that Article 370 is “very good” provision but “we have been using it as an obstruction. We should use it constructively for development of J&K.” Indeed, quite truthful and bold unlike career politicians!

Whether Article 370 has been deliberately or inadvertently used as an “obstruction”, it is important for every enlightened citizen to know what this Article 370 is. To what extent the charge of erosion or dilution is sustainable? To understand autonomy, it is essential to appreciate the spirit of Article 370.

Article 370: Temporary provisions with respect to the State of J&K:

(1) Notwithstanding anything in this Constitution

(a) xxxxxx (Art 238 was repealed on 1-11-1956)

(b) The power of Parliament to make laws for the said State shall be limited to

(i) Those matters in the Union List and the Concurrent List which, in consultation with the Government of the State, are declared by the President to correspond to matters specified in the Instrument of Accession governing the accession of the State to the Dominion of India as the matters with respect to which the Dominion Legislature may make laws for that State; and

(ii) Such other matters in the said Lists as, with the concurrence of the Government of the State, the President may by order specify.

Explanation – xxxxx (not relevant to the present issue)

(c) The provisions of Article 1 and of this article shall apply in relation to that State;

(d) Such of the other provisions of this Constitution shall apply in relation to that State subject to such exceptions and modifications as the President may by order specify:

Provided that no such order which relates to the matters specified in the Instrument of Accession of the State referred to in paragraph (i) of sub-clause (b) shall be issued except in consultation with the Government of the State:

Provided further that no such order which relates to matters other than those referred to in the last preceding proviso shall be issued except with the concurrence of that Government.

(2) xxxxx (not relevant to the present issue)

(3) xxxxx (not relevant to the present issue)

One doesn’t have to be a legal luminary to appreciate Article 370 as its plain reading unfolds the reality of autonomy.

Firstly, it is related to the legislative powers of the Parliament which its first part restricts to three subjects. The people remember only this part of the Article but it is not the entire Art 370.  Its subsequent clauses provide constitutional mechanism (clause (1) sub cl b (ii) and sub cl (d)) for extension of other provisions of the Constitution of India as the framers of this unique constitutional provision including the founder of NC, Sheikh Abdullah were not oblivion to the futuristic requirements of the State and the interests of its people.

They didn’t wish to restrict Parliament’s power to three subjects permanently and thus provided a mechanism for extension of other provisions at later stage to benefit the people. Otherwise why should they keep other provisions in the Article? It was under these clauses of Article 370 that other constitutional provisions were extended to J&K over the years which are now claimed to have “diluted” Article 370 or autonomy granted under it. This is misleading and motivated that has created psychological barriers to the disadvantage of all.

The new course - seeking State Legislature permission to extend central provisions, adopted by Mehbooba headed PDP-BJP Govt is unprecedented and in away enlarged the mandate of Article 370. This precedent has serious dimensions in future extension of more central provisions.

But PDP being cornered from all sides used this course thought fully to earn brownie points in its political fight against NC on “safeguarding special status of J&K” but BJP is the loser in perception management over “strengthening” the special status (going beyond the spirit of Article 370 and even Agenda of Governance where status quo was committed). 

But it did not miss the opportunity to claim credit for integrating J&K with rest of India economically through GST. This claim too can be challenged by referring to fifties era when Excise Tax (1954), Income Tax, Central Sales Tax (1956), Planning Commission’s jurisdiction for grants and devolution of taxes were brought in. The GST regime at best covered yet another milestone on the road to financial integration.

Another debatable issue is the fiscal autonomy. Reference is made to section 5 of J&K Constitution in debates and prominently mentioned in Presidential order as well. 

Section 5 says, “The executive and legislative power of the State extends to all matters except those with respect to which Parliament has power to make laws for the State under the provisions of the Constitution of India”. 

This doesn’t mean that Parliament’s powers are restricted to only three subjects as reflected in clause 1 sub cl (b) (i) of Article 370, as other provisions too have been extended to the State over the years under the subsequent clauses of the Article for the betterment of the State.

The fact is that out of 97 entries in Union list, 94 entries have been made applicable to J&K under Article 370. It is not a bad thing as the laws made by the Parliament where State’s six representatives (MPs) participate and contribute in the law making process and such laws had to be good for the people of J&K also.

Politicians are making big issue of passing its own GST Bill, saying they have retained State’s power under Section 5 of the State constitution. The only difference is that J&K which has its own Constitution and enacted the GST law under its Section 5 while other States did it under Article 246 of the Constitution of India.

Drabu rightly debunked NC’s public concern on State’s fiscal autonomy when he said, “The State failed to enact its own law on Service Tax in the past 60 years. We are levying Service Tax under General Sales Tax by notifying the services as deemed goods.”

One thing he did not say that a  State that could not mop up enough fiscal resources in these years even to pay the wage bill in full  is talking about fiscal autonomy. Are not people entitled to know the reality? No one has so far explained the benefit of fiscal autonomy to an ordinary resident? Burdening the people with additional or higher taxes is the real gain of special status?

Retention of Toll Tax in J&K in violation of the national principal is the testimony of our fiscal autonomy. But retention of Toll Tax in J&K has put a question mark on big ticket slogan of one nation one tax.

Drabu dropped a bombshell when said, “When you have a track record of complete deceit exemplified by 1975 amendment order, which was not seen by anybody and had been suddenly discovered by somebody, where barriers were put on even amending the State’s own constitution, it is hard to believe them,” he said.

The 1979 and the 1986 amendment orders virtually removed the residuary powers of Jammu &Kashmir and the President of India on July 30, 1986 issued an order saying Union can legislate on matters of State list and now they are talking of residuary powers.

The Govt must make these concealed orders public to expose duplicity of leaders who had always misled the people.



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