Pakistan’s vulnerability to US­led sanctions is apparent from its struggle to stave off a default
Debt-ridden Pakistan is very vulnerable to Western sanctions, yet it is unclear whether US President Donald Trump’s administration is willing to squeeze it financially in a way that could help reform its behaviour. Washington also seems reluctant to strip Pakistan of its status as a Major Non-NATO Ally (MNNA) or target its military for creating transnational terrorists.

The main driver of Pakistan’s nexus with terrorists is its powerful military, whose generals hold decisive power and dictate terms to a largely helpless government. With the military’s rogue Inter-Services Intelligence (ISI) rearing terrorists, Pakistan has long played a double game, pretending to be America’s ally while aiding its most deadly foes that have killed or maimed thousands of US soldiers in Afghanistan. Pakistani forces only target terrorists that fall out of line or threaten Pakistan itself.

The recent media attention on the multilateral Financial Action Task Force’s planned action against Pakistan obscured that country’s success in preserving its status for another two years under the European Union’s preferential trading (GSP+) programme. Pakistan is the number one beneficiary of the GSP+ programme, which grants Pakistani exporters, especially of textiles, tariff-free access to the EU market in exchange for the country improving its human rights and governance. In effect, GSP+ rewards a sponsor of terror whose human-rights record has only worsened.

Trump’s suspension of most military aid to Pakistan is unlikely by itself to force a change in the behaviour of a country that counts China and Saudi Arabia as its benefactors. Only escalating American pressure through graduated sanctions can make Pakistan alter its cost-benefit calculation in propping up militant groups that have helped turn Afghanistan into a virtually failed state, where the US is stuck in the longest and most expensive war in its history. The US failure to take the war into Pakistan’s territory has resulted in even Kabul coming under siege.

Yet, swayed by geopolitical considerations, the US has long been reluctant to hold the Pakistani generals accountable for the American blood on their hands. Indeed, Washington for years funded the Pakistani military and turned Pakistan into one of its largest aid recipients.

Even when the US, after a 10-year hunt, found Osama bin Laden holed up in a compound next to Pakistan’s main military academy, it did not abandon its carrots-only strategy. Such an approach has only helped the military tighten its grip on Pakistan, thwarting any movement toward a genuine democratic transition.

Worse still, the US has dissuaded India from imposing any sanctions on Pakistan. If anything, India has been pressured to stay engaged with Pakistan, which explains the secret meetings the national security adviser has had with his Pakistani counterpart in Bangkok and elsewhere. The recent launch, with US backing, of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project illustrates why it is difficult for India to impose even diplomatic sanctions on Pakistan.

To be sure, the Trump administration is searching for a new strategy on Pakistan. Yet it is an open question whether it will go beyond the security aid suspension, which excludes economic assistance and military training. Aid suspension in the past has failed to change Pakistan’s behaviour.

With Washington loath to label Pakistan a state sponsor of terrorism, it must at least strip that country of its MNNA status, an action that will end its preferential access to US weapons and technologies and deny it the financial and diplomatic benefits associated with that designation.

To force Pakistani generals to cut their nexus with terrorists, American sanctions should target some of them, including debarring them and their family members from the US and freezing their assets. Among the half a million Pakistanis living in the US are the sons and daughters of many senior Pakistani military officers.

Pakistan’s vulnerability to potential US-led sanctions is apparent from its ongoing struggle to stave off a default. Despite China’s strategic penetration of Pakistan, the United States is still the biggest importer of Pakistani goods and services.

US financial and trade sanctions extending to multilateral lending, as well as suspension of military spare parts, can force Pakistan to clean up its act.
To end Pakistan’s double game on terrorism, Washington will have to halt its own double game of rewarding or subsidising a country that, in Trump’s own words, has given the United States “nothing but lies and deceit”. To address a self-made problem, it is high time for US policymakers to put their money where their mouths are.

Satya Prakash

Tribune News Service

New Delhi, March 13

The Supreme Court  today extended the March 31 deadline for mandatory linking of Aadhaar with bank accounts, mobile phone numbers and various services/welfare schemes till its Constitution Bench delivered its verdict on the validity of the Aadhaar Act and the 12-digit unique biometric identification number.The top court had on December 15, 2017, extended the deadline for linking of Aadhaar with mobile phones and opening of new bank accounts to March 31. The deadline is also applicable to Central and state government schemes.(Follow The Tribune on Facebook; and Twitter @thetribunechd)On Tuesday, the Bench also ordered that the government cannot insist on production of Aadhaar number for issuance of passports under the Tatkal scheme.The five-judge Constitution Bench, headed by Chief Justice of India Dipak Misra, is hearing petitions challenging the constitutional validity of the Aadhaar Act. Last week, it indicated that it would extend the deadline in view of confusion in banks and financial market at the end of the financial year.The Centre, too, had said it was ready to extend the March 31 deadline but wanted the court to wait further. Last week, the top court had ordered the Central Board of Secondary Education (CBSE) not to make Aadhaar mandatory for enrolment of students appearing in NEET 2018 and other all-India examinations. 

Adviser to Delhi CM quitsNew Delhi: VK Jain, Adviser to Delhi Chief Minister Arvind Kejriwal, has resigned citing personal reasons and family commitments. The move came days after he was questioned by the police in connection with the alleged assault on Chief Secretary Anshu Prakash. Jain was present when the alleged incident took place. PTI

Incendiary remarks by political and RSS leaders harm the Army’s secular traditions. We have regiments where soldiers of all faiths live and fight together. The leaders are ignorant of military ethos.

Gearing up: RSS men take part in a Path-Sanchalan in Ahmedabad recently. Reuters

The RSS is the BJP’s standing army, mobilised to win elections and bulldoze the opposition. While it might have requisitioned Ritu Beri to modernise RSS’s battle apparel, it is far from being a fighting force. Instead, it distorts the image of the Army. Take the several mindless statements, including an incendiary one, made by national leaders which have undermined the idea of India, image and integrity of the Army and even politicised it. Mohan Bhagwat, the RSS chief and Prime Minister Modi’s mentor, said that while the Army takes six to seven months to mobilise, the swayamsevaks are ready to go in three to four days. There were other insinuations in his statement: RSS could be a volunteer army in six to seven months to “help” the regular Army. Being a non-secular Hindu civilian organisation, such a force can have no place in the Indian Army. Rather, it better stick to its forte of helping the BJP win elections. Lt-Gen Danbu, Chief of Northern Command in Kashmir, said the Army does not recognise a soldier by his religion.The Indian Army is stitched together as a fighting force because it is professional, apolitical, secular and under civilian political control and, therefore, the last bastion of our Constitution and democracy. The most outstanding trait of the Army is that it is secular and derives its soul from the secular composition of the country. In regiments, soldiers take their oath of allegiance putting their hand on the Tricolour, Gita, Guru Granth Sahib, Quran and Bible. In all-India regiments under one roof or a tent, are a temple, gurdwara, mosque or church. You will not find this conjugation of religions anywhere in the world. So what the RSS can learn from the Army is that while one can be a blue-blooded Hindu and nationalist, one can also be a secular patriot. This is what will make the RSS truly all-India.On Muslims, the statement made by BJP MP Vinay Katiyar, which has not been contradicted so far, says: “Muslims should not live in India and should either go to Pakistan or Bangladesh.” Such statements do immeasurable harm to the Army’s secular traditions because there are regiments where Muslims, Hindus and other faiths live and fight together.  While polarisation may win votes for the parties, it will severely politicise the Army and damage its organisational cohesiveness, not to mention the fatal damage it will do to the internal security of the country.The redoubtable Praveen Togadia, chief of the Vishwa Hindu Parishad, once very close to PM Modi when he was Chief Minister of Gujarat, is reported to have said that stone-pelters in J&K should be “bombarded”. This would imply carpet-bombing. He advocated the breakup of Pakistan into five parts. Neither idea has an iota of prudence or sense: both are urgings neither feasible nor implementable. India is facing considerable difficulty keeping together J&K in our possession as we have lost the local support of people. Stirring the pot across the border in PoK with an army of RSS volunteers which can be transformed into soldiers in six months, as claimed, will not be easy. But the idea first came from RSS pracharak, former Defence Minister Manohar Parrikar, famous for his remarks after the surgical srikes that it was he who instilled the Hanuman spirit into the Army. Can he do it with the RSS? Though, his original idea was different — to catch a terrorist, use a terrorist.Thus, it is clear that our political leaders and those from social organisations like the RSS do not comprehend the changing nature of war, especially cross-border terrorism which our soldiers confront 24×7. Pakistan got a bloody nose in the three and a half wars it has fought, so now it is using a low-cost, high-yield proxy war to compensate for its inferiority in conventional military strength compared to India. When Bhagwat, Togadia, Katiyar, Owaisi etc make absurd comments about the Army and the country, it is time to educate them about military ethos, war and deterrence on the one hand and the idea of India on the other.The National Defence College’s central theme is the general education of defence, diplomacy and conflict avoidance. A decade ago, a special capsule run for Members of Parliament was strangely discontinued. It should be resumed immediately. Besides visiting forward areas, elected representatives of the Parliament should spend 24 hours at or near a forward post on the LoC to gauge the heat and living conditions of our soldiers. Representation of the military in the Parliament is miniscule. Instead of wasting nominated seats on filmstars and cricketers who skip the Parliament in any case, professional veterans from the services, instead, will bring the realism of LoC into the House. Bhagwat is spot-on about one thing, though: that the Army is not combat-ready. And, it is underequipped as per the report of BJP’s Gen BC Khanduri’s Parliamentary Standing Committee on Defence. Bhagwat is Modi’s mentor. He can tell him that the military in the defence budget in 2018-19 has got a raw deal — the lowest ever as percentage of GDP (1.49) when China has four times as much. This year, that is why after the defence budget, talk in South Block was that Modi’s priority had altered from Jai Jawan Jai Kisan to just Jai Kisan.‘Five of seven soldiers killed in Sanjuwan were Muslims’Take the case of the recent Sanjuwan terror attack on a battalion of the Jammu and Kashmir Light Infantry in Jammu which bore the brunt of the terrorist attack. “Five of the seven soldiers killed in the attack were Muslims. No one is pointing this out. While Muslims are being called Pakistanis, and their loyalty doubted, we are also sacrificing lives,” said All-India Majlis e Ittahadul Muslimeen chief and Member of Parliament Asaduddin Owaisi.

Just do it: The Captain has got a shot at fixing things, he must seize it.

Nirmal Sandhu

It is budget time and also the time to question old certainties and make an honest effort to retrieve Punjab’s sinking economy. One year is enough for making political noises about past blunders. Now is the time to correct them. The state can do without another business-as-usual budget. The Punjab leadership keeps knocking at the door of the Centre for help. The easiest thing to do is to fling all the blame towards the Centre. Parkash Singh Badal has been doing that for years and politically profiting from “Central discrimination” before inviting a humiliating defeat by tying the state to an unreasonable Rs 31,000-crore loan on the Centre’s terms. A Central bailout is unlikely because of Punjab’s limited relevance in the political calculations of Narendra Modi and Amit Shah. During his recent Chandigarh visit, Niti Aayog’s Dr Rajiv Kumar reiterated Delhi’s message — clearly, bluntly and publicly: stop asking for funds. “You can leave the country’s food security to us”. There is a message in the snub.  Every budget presents the leadership a choice: use the taxpayers’ money to bribe voters in the hope of a favourable verdict in the next election or take hard, unpleasant decisions for long-term gain. Both Badal and Capt Amarinder Singh have so far chosen the path that suits them more than the state. They seem to be in politics to leverage power, not to unsettle a beneficial arrangement. The result is they have continued with absurdities experts disapprove of. Free power is the single big blunder that has (1) hurt Punjab’s agriculture, (2) depleted Punjab’s water resources by encouraging paddy cultivation, (3) added to farmers’ production cost by forcing installation of submersible pumps, (4) drove the state to rely on private power companies which dictated own terms, (5) curtailed industrial activity during the paddy season and (6) consumed resources that could have been used to modernise power plants and enhance generation capacity, and thus save jobs lost in shutting down unviable plants. Abandoning the age-old wisdom — teach fishing to a man instead of giving him a fish — they have made Punjabis freebies dependent.The damage caused by state neglect, diversion of resources to meet demands of vote politics and patronage of the private sector is not limited to power. It extends to public transport, education, health and highways with consequences of public sector jobs shrinking or disappearing and costs rising for all. Waiting for a waiver, farmers have stopped repaying loans. The Congress can take credit for adding cooperative societies and banks to the list of institutions turned dysfunctional by politics of appeasement.Every economic pundit has said a loan waiver is no solution to farmer distress. Yet this government, which has raised a battalion of advisers, has ignored this sane advice. There is no effort to look beyond the set framework. In recent years, Punjab has not thrown up a single big idea to solve any of its serious problems. Haryana is promoting sports and offering secured price for vegetable growers. Himachal Pradesh is known for its single-minded devotion to human development. Madhya Pradesh gives deficiency payments to farmers selling produce below the MSP. Telangana pays a flat subsidy of Rs 4,000 per acre every sowing season. There is little hope the coming budget will be any different. We have policy-makers who tend to shut the door when an opportunity arrives. The Chief Minister can go to Mumbai to woo private investment, but when Canada’s Prime Minister, with all the goodwill for Punjabis arrived, he had no economic agenda to talk of. Instead, he produced a list of nine wanted men and revived a dead issue called Khalistan. He could not get over the slight Canada dealt him by denying a visa.  North India in general and Punjab in particular can benefit from increased trade with Pakistan and countries beyond, but none of the Punjab leaders have cared to counter war-mongering by BJP foot soldiers. Trade is the best answer to terror and that requires greater opening up to Pakistan. But the Captain seems busy figuring out how on earth he tied himself in knots with those outrageous election-time promises on the advice of a clever poll strategist.“Politics is about promising, disappointing and managing disappointment,” says Prof Stephen Holmes of New York University. Holmes may not have heard of Capt Amarinder Singh but what he says sums up the Punjab CM’s practice of democracy. The Captain has spent one year reminding people how big a mess the Badals have left behind. The Chief Minister’s sense of surprise at the state’s Rs 2.08 lakh crore debt seems manufactured since all state debt figures, including Uday bonds, state guarantees and loans of public sector enterprises, have been in the public domain. In a TOI interview (February 27) he said: “The growth rate of the state in 2006-07 (when he was the CM) was 10.18%, which was higher than the all India average of 9.57%. By 2016-17, it had fallen to 4.20% of all India average of 7.5 per cent”. The Hindu report “No fresh taxes in Punjab Budget” (March 8, 2006) mentions Punjab’s likely growth rate at 5.5 per cent — almost half of what the Captain claims. This reminds one of what American politician-diplomat Daniel Patrick Moynihan has said: “Everyone is entitled to his own opinion but not to his own facts”.Cost-cutting has started in Punjab but at the wrong end: closure of rural schools, bare minimum fixed salary for teachers, winding up of “suvidha kendra” and shutting down of power plants. Taxes, power tariffs and bus fares have gone up. There has been little sacrifice at the top. Hoping for a cut in wasteful government expenditure is like expecting a royal to live like Gandhi.Capt Amarinder Singh says he will retire once Punjab’s finances are put in order. That means no getting away from the lure of power. Why would he make himself politically redundant by seriously working for fiscal improvement? He praises Badal for memorials while his Finance Minister points to the absurdity of spending Rs 2,000 crore on memorials and denying Rs 20 crore to Panjab University.The budget offers a chance to the ruling political operatives to change the perception of being anti-change. It is time to go back to the basics: water, air, soil, education and health. The declining quality of water, air and soil has enormous ramifications for human health and family budgets. Substandard education has made youth unemployable. The budget can fund a credible rescue plan for each of these areas. It is time to move from extravagance to productive use of resources.

nirmalssandhu@gmail.com

Smoke billows from the hills after shelling by Pakistan in Rajouri. File photo

Amir Karim Tantray

Tribune News Service

Jammu, March 6

In all, 10 soldiers and a Border Security Force (BSF) jawan have been martyred along the Line of Control (LoC) in J&K since January 1 this year.Also, Pakistan violated the ceasefire agreement over 400 times. In two months, three more BSF jawans were also martyred along the 198-km-long International Border, which falls only in the Jammu region.The violence has spread from the Akhnoor sector of Jammu district to the Tangdhar sector of Kupwara district, thus involving a major portion of the LoC, which has caused great inconvenience to the people living nearby.Though the month of January and first two weeks of February witnessed shelling and firing on the LoC in the Jammu region only, but thereafter places such as Uri and Tangdhar falling on north of Pir Panjal in the Kashmir valley also witnessed exchange of heavy artillery.Meanwhile, the Pakistan army targeted particularly Akhnoor, Sunderbani, Nowshera, Bhimber Gali, Krishna Ghati and Poonch sectors along the LoC in the Jammu region and Uri and Tangdhar sectors of the Kashmir valley.The Army has been claiming that Pakistan army resorts to unprovoked ceasefire violations along the LoC every time, which most of the times is aimed at facilitating infiltration and at times giving cover fire to their Border Action Team members. However, the Army has responded to the violations and has caused extensive damage to the Pakistan army.

official data reveals…

• According to the government, the Pakistan army violated the truce agreement 351 times till February 21 this year
• After February 21, the Pakistan army continuously violated the agreement and the number has gone beyond 400
• Three more BSF jawans were martyred along the 198-km-long International Border, which falls only in the Jammu region

Vijay Mohan

Tribune News Service

Chandigarh, March 5

Dashing hopes of ex-servicemen embroiled in legal battles over disability benefits, the Ministry of Defence (MoD) today stated in Parliament that it would not withdraw appeals pending in such cases before the Supreme Court.In June last year, the MoD had issued orders to the defence services headquarters restricting the filing of fresh appeals against the orders of the Armed Forces Tribunal (AFT) or the high court in cases where the law has been settled.In a large number of cases where illness, disability or death was initially held “neither attributable to nor aggravated by military service (NANA)” by the sanctioning executive authority, the AFT or the HCs had granted relief to the affected individuals. Many of such orders were also upheld by the Supreme Court, but the MoD continued to file appeals against such judgments even on issues where the point of law has been well settled. There are thousands of cases pending before the apex court as well as the HCs and the AFT that pertain to disability.“The Ministry of Defence do not propose to withdraw such pending appeals in the Supreme Court….It is the considered view of the ministry to await the orders of the Court in Civil Appeals filed in ‘NANA’ cases,” the Minister of State for Defence, Dr Subhash Bhamre, said in the Rajya Sabha today while replying to a question by Rajeev Chandrasekhar, an MP from Kerala.Service and legal experts said the MoD’s statement contradicts the spirit of the national policy of reducing litigation and PM’s statements on excessive litigation.

New Delhi, February 10

The Defence Ministry has sanctioned Rs 1,487 crore to the Army to fortify its bases in Jammu and Kashmir, NorthEast and several other places to plug gaps and protect them from terror attacks.Clearing the project, Defence Minister Nirmala Sitharaman has set a deadline of 10 months for the Army to carry it out. The Army headquarters has been told to monitor implementation.(Follow The Tribune on Facebook; and Twitter @thetribunechd)
Perimeter security will be strengthened at Army bases under six commands. A security audit of military bases was carried out on the recommendation of a committee headed by Lt Gen Philip Campose, set up after the daring terror attack on the Pathankot Air Force base in 2016.Following the audit, revised standard operating procedures were sent to the commands of the three services.A total of 3,000 sensitive bases, including 600 highly sensitive installations, of the Army, Navy and Air Force, were identified. Last year, the government delegated financial powers to the Army, Navy and IAF to strengthen perimeter security. — TNS

File photo of Rafale fighter jet.

New Delhi, February 9

Congress president Rahul Gandhi on Friday accused Finance Minister Arun Jaitley of speaking a “lie” about UPA Defence Ministers not having disclosed cost of defence purchases, and demanded the government disclose the price of each Rafale fighter plane.G

Dear Mr Jaitlie,

You said the UPA never released prices of Defence purchases?

To nail your lie, here are 3 Parliamentary replies by the UPA with full transparency on pricing.

Now do ask our Raksha Mantri to tell India how much each RAFALE jet cost.

Gandhi, in a tweet in which he addressed Jaitley as “Jaitlie”, posted three written answers given by former Defence Minister A.K. Antony in which he gave acquisition cost of 42 Sukhoi-30 MKI aircraft, the upgrade cost of Mirage 2000 and acquisition cost of Admiral Gorshkov (now INS Vikramaditya).

“Dear Mr Jaitlie, you said the UPA never released prices of Defence purchases? To nail your lie, here are 3 Parliamentary replies by the UPA with full transparency on pricing. Now do ask our Raksha Mantri to tell India how much each Rafale jet cost,” he said.

Jaitley had on Thursday slammed the Congress for “manufacturing” corruption charges against the government in questioning the deal to purchase Rafale fighter jets from France.

In his reply to the debate on the Budget, he had also said he had with him responses from Defence Ministers of previous United Progressive Alliance governments who had not shared details of armament purchases due to security concerns.

Congress lists questions on Rafale for govt, says India demands answers

Meanwhile, Congress communications in-charge Randeep Surjewala also accused the government of “doublespeak” and “sacrificing” national interests.

He cited instances during the previous UPA government when details of every defence deal were made public and placed before Parliament.

“As the Modi government stumbles and fumbles, hides and conceals, indulges in doublespeak, sacrifices national interest and refuses to answer on loss to public exchequer, India will continue to demand answers,” he told reporters.

He listed a series of questions for the government, including on the price, the secrecy surrounding the deal, the government’s silence on the issue and alleging that prior permission of the Cabinet Committee on Security was not taken.

“What is the price per aircraft of the 36 Rafale aircrafts being purchased by the Modi government? Did Raksha Mantri Nirmala Sitharaman not agree to share the price of Rafale aircrafts in a press conference at the Raksha Bhawan on November 17, 2017? Why are the Prime Minister, Defence Minister and Finance Minister hiding the ‘purchase price’?” he asked.

According to Surjewala, while Sitharaman refused to disclose the price on grounds of a “secrecy agreement”, Jaitley did not do so for reasons of “national security”.

“Isn’t a full disclosure of price of Rafale aircrafts in national interest? Why are two ministers of the government speaking in two different voices? Who are they trying to shield? Why is the price of aircrafts shrouded in secrecy and cover-up?” he asked.

Surjewala wanted to know whether the per aircraft price of Rafale, according to international bids opened on December 12, 2012, comes to USD 80.95 million (Rs 526.1 crore) as against the Modi government’s per aircraft negotiated price of USD 241.66 million (Rs 1,570.8 crore) as per current exchange rates.

He also asked whether Qatar had purchased 12 Rafale fighter jets in November 2017 for USD 108.33 million per aircraft (Rs 694.80 crore), according to current exchange rates.

“If this is correct, why has the Modi government paid such an astronomically higher price for Rafale aircrafts?” According to Surjewala, Rafale and Eurofighter Typhoon aircrafts were found equal on all technical requirements by the Indian Air Force.

Did Eurofighter Typhoon give a written offer to then Defence Minister Arun Jaitley on July 4, 2014, offering to reduce prices by 20 per cent, he asked.

“Why did PM Modi and Defence Minister then not ask both the companies to submit fresh bids through the ‘inter-governmental agreement route’ so as to get the lowest price in favour of India’s public exchequer?”

“Why was no prior permission of the Cabinet Committee on Security taken by PM Modi? Why was the Defence Procurement Procedure violated with impunity? Why are the Prime Minister, Defence Minister and Finance Minister completely silent on this issue?” he went on to pose.

The Congress leader also questioned the government on why Hindustan Aeronautics Ltd, a government PSU, was superseded for a Rs 30,000 crore ‘offset contract’ in favour of a private company.

This was despite the fact that HAL had already signed a ‘work share agreement’ on March 13, 2014 with Dassault Aviation, he said.

The government has denied the Congress charge that there is a huge scam in the procurement of 36 Rafale fighter jets from France. PTI

File photo of the Bofors Howitzer gun. AFP

New Delhi, February 4

A parliamentary panel looking into the Bofors gun deal for almost 27 years is likely to finalise its report on the issue in the current Budget Session, members said.

The CAG report on Bofors is the oldest “pending” matter before the Public Accounts Committee (PAC).

The main function of PAC is to examine an audit report of the Comptroller and Auditor General of India after it has been placed in Parliament.

The six-member PAC sub-committee on defence is looking into the non-compliance of certain aspects of the CAG report of 1989 and 1990 on the Bofors Howitzer gun deal.

The report has been delayed as action taken notes were not submitted before the panel by the ministry concerned and government organisations, said a member of the sub-committee, chaired by the BJD’s Bhartruhari Mahtab.

While deliberating over the defence deal, the panel had asked several top government officials to appear before it and to brief the members about the matter.

The drafting of the report has been initiated and is likely to be finalised during the Budget Session, said another PAC member, who added that the report would be comprehensive and clear misconceptions about the deal.

After the report is finalised by the PAC’s sub-committee it will go to the main committee for its approval, where, a member said, Congress MPs may oppose portions of the report.

The main committee is headed by Mallikarjun Kharge of the Congress.

The Bofors scandal, relating to the alleged payment of kickbacks in the procurement of Howitzer artillery guns, had triggered a massive political storm and is believed to have led to the fall of the Rajiv Gandhi government in 1989.

Recently, the CBI filed a petition in the Supreme Court challenging a 2005 order of the Delhi High Court quashing all charges against those accused in the politically-sensitive pay-off case.

The filing of the appeal assumes significance as Attorney-General K K Venugopal had recently advised the agency against moving a petition 12 years after the high court’s verdict. PTI

New Delhi, February 1

Giving relief to the salaried class, Finance Minister Arun Jaitley today proposed a standard deduction of Rs 40,000 in lieu of transport allowance and medical reimbursement entailing a revenue sacrifice of Rs 8,000 crore. The minister, however, did not propose any change in the tax slabs or rates for individual taxpayers.“In order to provide relief to salaried taxpayers, I propose to allow a standard deduction of Rs 40,000 in lieu of the present exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses,” Jaitley said while presenting the Budget 2018-19 in Parliament today.The standard deduction, which is provided to salary earners, was discontinued from the assessment year 2006-07. However, it will provide little relief to salaried class as benefits under the proposed Rs 40,000 standard deduction will be neutralised to a large extent by inclusion of transport and medical allowances and 1 per cent hike in health and education cess.Already the individual tax payer was getting benefit of Rs 19,200 under transport allowance and Rs 15,000 crore under the medical allowance. Both these components add to the tax benefit of Rs 34,200 crore per annum.So, the effective tax gain is to the tune of Rs 5,800 per annum with the introduction of standard deduction.According to Parizad Sirwalla, partner (tax), KPMG, the withdrawal of annual tax free transport allowance and medical reimbursements has squared off the benefit on account of standard deduction.“An annual incremental net reduction of Rs 5,800 in income results into tax savings of Rs 302 and Rs 2,081,” Sirwalla said.At the same time, Sirwalla said, maximum tax rate overall has increased to 35.88 per cent from existing 35.53 per cent taking into account 1 per cent increase in education cess.“In order to provide relief to salaried taxpayers, I propose to allow a standard deduction of Rs 40,000 in lieu of the present exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses,” Jaitley said in his Budget speech.This decision to allow standard deduction shall significantly benefit the pensioners also, who normally do not enjoy any allowance on account of transport and medical expenses, he said.Jaitley also noted that there is a general perception in society that individual business persons have better income as compared to salaried class. However, income tax data analysis suggests that major portion of personal income-tax collection comes from the salaried class, he observed.The total number of salaried employees and pensioners who will benefit from this decision is around 2.5 crores. — PTI

Experts opine

Reintroduction of standard deduction will help salaried employees get some parity with respect to businessmen and other self-employed professionals, who can claim a number of expenses such as rent, staff expenses and driver’s salary etc. as business expenditure and reduce tax burden.No change in income tax slabsThe Finance Minister did not propose any change in the tax slabs or rates for individual taxpayers. He said the government had made many positive changes in the personal income-tax rate applicable to individuals in the last three years. “Therefore, I do not propose to make any further change in the structure of the income tax rates,” he said.Investment limit up in vaya yojanaIt is proposed to extend the Pradhanmantri Vaya Vandana Yojana (PMVVY) scheme till March 2020. It has also proposed to increase the current investment limit to Rs 15 lakh from the existing limit of Rs 7.5 lakh per senior citizen.  PMVVY was launched on May 4, 2017, and was initially meant to be available for one year from the launch.Team-based scrutiny of I-T returnsIn order to bring in greater transparency and accountability, the Budget proposed to introduce team-based assessment to determine tax payable or refunds to be issued to an assessee from April 1. An e-assessment of tax returns was introduced on pilot basis in 2017 and extended to 102 cities later.No bills required to claim deduction

• Salaried taxpayers and pensioners need not have to furnish any bills or documents to claim the standard deduction of Rs 40,000, according to CBDT chief Sushil Chandra
• Till now, this category of taxpayers had to furnish medical bills and an undertaking for conveyance expenses to get benefit of Rs 19,200 under transport allowance and Rs 15,000 crore under the medical allowance
• Chandra said the new measure will benefit all salaried employees, without the hassle of filing supporting documents or bills. The Central Board of Direct Taxes (CBDT) is the policy-making body of the Income Tax Department