The India Cable: Hathras Crisis Escalates and Concerns Over Flight of Capital

From the founding editors of The Wire — MK Venu, Siddharth Varadarajan and Sidharth Bhatia—and journalists-writers Seema Chishti, Sushant Singh and Tanweer Alam.
Editor: Pratik Kanjilal

Portrait of the Day
October 2, 2020 

Pratik Kanjilal

On the eve of the birth anniversary of Mahatma Gandhi, the original man on the march, the UP Police gave steadfast marcher Rahul Gandhi his defining moment simply by stopping him in Greater Noida, a location which does not quite have the resonance of Dandi. The confrontation helped to focus institutional attention on the Hathras caste outrage, and now a scandalised high court has called the dramatis personae ― administrators and the police ― to account. They have a lot to explain, such as the contention that there was no rape, which is a waypoint to claiming that there was no victim. Even in the native country of the victimless crime, this would be outrageous. 

In other news, those interested in seeing more state spending ― and therefore more state borrowing ― to prime the pump are upset because despite the finance minister’s breezy talk of a fresh stimulus, the almost-pre-Covid borrowing projection of May is being maintained. And meanwhile, the imposition of a punitive 5% tax on outflows through the liberalised remittance scheme has kicked in on October 1, to contain increasing outflows to education costs, and overseas investments in stocks and property. The amounts are nugatory in macro terms, but there could be a political fallout. When governments tell elites how not to spend their money, consequences are inevitable.  

In other news, the Supreme Court has shot down Gujarat’s attempt to play fast and loose with workers’ rights, citing the pandemic as a public emergency, and it has granted bail to a man wrongly incarcerated for over six years under the UAPA. And the National Crime Records Bureau finds that the Rs 2,000 notes introduced after demonetisation are the most liable to be counterfeited (fiscal prudence!), despite their celebrated security features, which did not include an embedded microchip, which was just a new jungle saying. Yet another case of throwing bad money after good…  


Macro lens:

Hathras crisis escalates: Allahabad HC questions UP Police, police question rape claim

The police in Uttar Pradesh may have assumed the hurried cremation of the Hathras gang-rape victim’s body would put a lid on the spiralling controversy surrounding the state government’s handling of the horrific crime, but that is not happening. Here’s what you need to know about the latest developments in the matter:

‘Shocked our conscience’: Allahabad High Court summons UP officials in Hathras gang-rape case, says, “‘Surprisingly and painfully enough’, the body was not handed over to the family members for the funeral.” Taking suo motu cognisance of the case, Justices Jaspreet Singh and Rajan Roy ordered the state government to make sure that “no coercion, influence or pressure is exerted upon the family members of the deceased in any manner, by anyone” and has summoned senior officials to render account on October 12.

Headquarters of Uttar Pradesh Police, Lucknow. Credit: Wikimedia

Video shared to make misleading claim that Hathras victim’s family did her last rites.

The police has denied that the Dalit woman’s last rites were performed without her family’s permission. A video has been pushed on social media to support the police claim, which BJP leaders have been tweeting.

In fact, India Today’s Tanushree Pandey live-tweeted a video where villagers and family members are seen blocking the ambulance carrying her body and begging the police to let them take their daughter home. NDTV spoke to relatives who said they were locked inside their houses ― neither did they consent to the funeral, nor was the victim’s body handed over.

Alt News concludes: “Initial reports from the ground do not support the UP Police and state administration’s claim that the funeral was not conducted forcibly. Scenes from early hours of September 30 show a distraught family begging cops to let them take their deceased daughter home one last time. Their pleas were met with coercion. Family members were locked inside their homes while the police formed a human chain around the funeral ground where the alleged rape victim’s body burned without her parents in sight. A video of a frail, elderly man tossing logs of wood in the pyre was used to claim that her family performed the last rites. The man, however, was not a part of the victim’s immediate family.”

UP Police Now Claims Hathras Victim Wasn’t Raped, Matter ‘Twisted’ to ‘Stir Caste Tension’.

The rushed cremation of the body without letting the family decide how to proceed ensured there could be no second autopsy. This is significant because the police have now made public an earlier medical report which claims the woman was not raped. “According to the postmortem report, the victim died due to the trauma of her neck injury. The FSL report also clearly shows that sperm was not found in the collected samples. It suggests that some people twisted the matter to stir caste-based tension,” a senior UP police officer said.

Given that the woman was murdered, besides being gang-raped (as her family have said), it is not clear why the police believe the rape charge alone is intended to stir ‘caste-based tension’.

In any case, as NC Asthana, retired IPS officer and former DGP Kerala, told The Wire, that discounting rape in this case is wrong. “According to the definition of rape as amended by the Criminal Law (Amendment) Act, 2013, penetration of the vagina by the penis in the conventional sense of intercourse is not at all necessary to constitute the offence of rape. Police officers and doctors who are looking for signs of conventional penile and full penetrative vaginal intercourse to infer whether rape was committed or not do not seem to have understood the amended law properly,” he said. The medical report is yet to be shared with the family.

Legal experts junk claim of UP police, forensic report, which says Hathras woman not raped

Senior advocates Rebecca John and Vikas Pahwa told PTI that absence of semen on the body of alleged gang rape victim as claimed by the police in the forensic report was of no consequence for the prosecution of accused persons as there was a dying declaration that cannot be discredited. Agreeing with her, Pahwa said the presence of semen was not an essential ingredient, and among the essential ingredients to establish that she was gang-raped were the victim’s oral statements and injuries on her body etc.

“Body can be washed, cleaned. It depends. It is also to be seen how much time difference was there between the offence and the medical examination. If the medical examination was conducted immediately after the rape, there would be presence of semen, otherwise not,” he said.

The Centre’s disdain for constitutional bodies like the National Commission for Scheduled Castes (NCSC) and National Commission for Scheduled Tribes (NCST) is likely to change after the national outrage over the Hathras rape case and the UP government’s mishandling of it. NCSC and NCST are constitutional bodies while the National Commission for Safai Karamcharis (NCSK) is a statutory body, and they have been headless for months. These offices are likely to be filled now

UP under Mr Bisht, aka Adityanath, accounted for one-fourth of all crimes against Scheduled Castes in 2019, and the pendency of cases across India in which victims were from marginalised castes was nearly 94%, showed a report.


Right to life, right to wage

A three-judge bench of the Supreme Court comprising Justices DY Chandrachud, KM Joseph and Indu Malhotra has ruled that a worker’s right to life cannot be deemed to be conditional on the mercy of the employer or the government. Their order struck down the Gujarat government’s decision to exempt industries from paying overtime wages and increasing the working hours of employees at regular rates by citing the public emergency and economic downturn caused by the Covid-19 pandemic and the subsequent lockdown. In this context, the bench has stated that the pandemic is not a “public emergency” within the meaning of Section 5 of the Factories Act, threatening the security of the country.


Home fires burn MEA

India’s Foreign Ministry should be nicknamed the fire brigade, as it has its hands full fighting fires caused by the Modi government’s domestic policies. It has blamed the Pakistani authorities for exploiting the death of 11 Pakistani Hindus in India in August, who were allegedly fed a toxic substance. The Pakistan Foreign Office had summoned the Indian Acting High Commissioner and Pakistan Hindu Council president, and a parliamentarian from Sindh, Ramesh Kumar Vankwani had led the demonstration outside the Indian High Commission, demanding that India provide access for a probe team from Pakistan. 

The MEA has been busy warding off the US, UK and the European Union after they expressed concern at the closure of Amnesty International India, following what the organisation called a “witch hunt” by the government. While the UK and the EU have taken up the matter with the MEA through diplomatic channels in New Delhi, a US State Department official told reporters in Washington on Wednesday that the issue had “received attention at the highest levels of our government”. 

Meanwhile, China has asserted the 1959 LAC as final ― it hasn’t forgotten that a pre-COVID Amit Shah had vowed to take back Aksai Chin at any cost ― giving Beijing the flexibility to further expand its territorial claims in Ladakh. And a former northern army commander says that the army can stay through the winters in Ladakh but “the troops on the ground and the people must know with what aim have we deployed for battle.” 


Punjab farmers’ stir grows

Farmers have resumed their stir over the controversial farm bills and brought the state of Punjab to a halt. Sukhbir Badal and his wife Harsimrat Kaur Badal, who had resigned as a union minister as SAD moved out of the NDA over these laws, were briefly detained by the police.  Meanwhile, Defence Minister Rajnath Singh is not content with talking to China about taking back the 1,000 sq km grabbed by the PLA and wants to talk to farmers to “allay their fears” over the three laws. All this comes on the birth anniversary of Lal Bahadur Shastri, the man who gave the the nation the enduring slogan of ‘Jai Jawan, Jai Kisan’.


Bihar strikes its alliances, RJD fears breach of promise

The Bihar polls will be held from October 28 in three phases, but the alliances and seat shares are still far from sorted. The Times of India reports that Ram Vilas Paswan’s Lok Janshakti Party (LJP), is eying “(Amit) Shah mediation” and that MP Chirag Paswan met Shah and BJP President JP Nadda in Delhi yesterday. The Indian Express reports the NDA formula to be “almost final”. Hanging in the air is the Opposition alliance between Lalu Prasad’s Rashtriya Janta Dal (RJD) and Congress with newspapers reporting that Lalu is playing hardball, offering Congress not more than “60 or 61 seats”, while the Congress wants 71. The Indian Express says that the RJD is wary of alliance partners running away after contesting on its shoulders, and of a post-poll understanding between JD(U) and Congress this time. RJD has reportedly issued a “loyalty warning” to the Congress, saying that it had let go of RLSP’s Upendra Kushwaha as it doubted his loyalty to the Grand Alliance.


The other line, out of control

Three Indian soldiers were killed and five injured in separate incidents during shelling by Pakistan along the LoC in Jammu and Kashmir. The Indian troops gave a “befitting” response, a defence spokesperson has said, in what is seen as an escalation after both the sides opened fire with artillery. The shelling, which had picked up after the flare-up on the Line of Actual Control with China, has intensified in the past two days, bringing alive the challenge of an active two-front threat for India.


Flying returns

The saga of airline ticket refunds finally came to an end on Thursday with the Supreme Court signing off on the Central government’s proposal of airlines refunding money within three weeks for tickets booked during the lockdown, and either within 15 days or through passenger credit valid till March 31 next year for tickets booked before the lockdown. 


Maharashtra to eat out

The restaurant business is among the sectors hit hardest during the six-month lockdown in India. Not just employees, but also owners have struggled to somehow keep afloat, in the absence of customers and, till recently, restrictions on even home deliveries and takeaway. The business depends on cash flow and runs on the takings of the day. During the lockdown, with no income, owners still had to shell out high commercial rents, salaries and taxes.

Now, under the fancifully named ‘Mission Open Again’, 40,000 restaurants, eating joints and bars, small and big, in Maharashtra have been given permission to start operations from October 5. Many other venues like swimming pools and cinema halls will remain closed at least till October 31. There are caveats, of course ― only 50 percent seating would be allowed, equipment and cutlery would  have to be sanitized and all other hygiene-related measures would have to be taken. Still, some income will be generated. Now it is up to the customers.


But no show

Many states have declared that cinemas can open from October 15, again at reduced capacity, and with staggered timings, so that no two film screenings in a multiplex begin and end at the same time. Ironically, in Mumbai, which is the birthplace and home of the Hindi film industry, and in the rest of Maharashtra, cinema halls will remain shut till the end of the month. Producers and distributors are protesting against this anomaly and have appealed to the state government, which is considering the matter. Billions of rupees are locked up in unreleased films, and many of them have been released on online platforms like Netflix and Amazon. It’s not exactly the magic of going to the movies.


Flight of capital

MK Venu

The Finance Ministry had decided in the 2020-21 budget to impose a 5% tax at source (TAC) on the money taken out of the country by resident Indians under the Liberalised Remittance Scheme(LRS). This scheme allows individuals to take upto $250,000 out of the country in one year.

The tax of 5% , though announced earlier, kicked in from 1 October, on amounts above Rs 7 lakh per year remitted by individuals. So if you take a holiday which costs less than Rs 7 lakhs, you're safe. Anything above that would attract the 5% tax.

Evidently, this intervention is not targeted at middle class spenders who want to take cheap holidays abroad. This will affect the upper middle class and rich segments which make heavy remittances for education in universities abroad, investment in markets, business operations and buying property overseas. 

This would also impact a large number of dollar millionaires who have been steadily leaving the country since 2014 due to various reasons, including harassment by Indian tax and other agencies, and the general unease of doing business. Data shows that the number of dollar millionaires leaving the country increased by 50% in the last four years. Partly, the tax could help curb the flight of capital via such remittances, which increased from less than $2 billion in 2014-15 to $13.8 billion in 2018-19.

The government was certainly worried by this massive six-fold increase in outward remittance under LRS since 2015. This year, there shouldn’t be much worry over net capital inflows because India faces the lowest current account deficit ― about 0.6% GDP ― in recent times, simply because imports have collapsed due to negative economic growth. There are adequate foreign capital inflows via FDI and from FIIs.

The key worry remains economic recovery to pre-Covid levels, and key advisors to PM Modi have been asking for the much-delayed second round fiscal stimulus to boost demand and economic activity. The finance minister has said that the second stimulus would come, but there are absolutely no details. Meanwhile, the government expressed satisfaction that GST collections have improved and grown at 3.9 % (year on year) in September. This is being read as a sign that the economy may be slowly coming back to pre-Covid levels.

No cause for celebration yet, though, because GST was expected to grow at 14% every year since mid-2017, when it was implemented. But overall, GST growth has been largely stagnant since then, putting immense strain in Centre-state finances. Essentially, this is a pre-Covid problem which has worsened post-Covid.


Significant opeds:

The first editorial of the The Economic Times headlined ‘Not the time for fiscal timidity’ is aghast at the finance minister’s decision to stick to the borrowing figure set in May, of Rs 12 lakh crore, despite her saying earlier this week that she was open to another stimulus: “This might cheer the cold-blooded heart of some deficit hawk who has time-travelled from the 1990s, but is a terrible disappointment to those looking to additional government spending…” Strong stuff, accusing the government of being “demure”.

While also urging the government to borrow more to spend more, The Indian Express has also carried a blow-by-blow account by CPI(M) MP KK Ragesh, who had demanded a division vote on the farm bills in the Rajya Sabha, in the course of their passage by force by the government, and was suspended in the fracas which ensued. 


Birthday card:

Following Hathras and several atrocities in Ram Rajya UP, the black joke on social media is that the ‘Beti bachao’ slogan was actually a threat. Cartoonist Satish Acharya’s birthday card to the Father of the Nation and Lal Bahadur Shastri is just as dark. Keep a torch handy while viewing, at least in the mind.  

That’s it for today. We’ll be with you again tomorrow, on a device near you. If India Index was forwarded to you by a friend (perhaps a common friend!) you can get up close and personal by SUBSCRIBING HERE.