After nearly three-decades of the Indra Sawhney judgment, the Supreme Court on Monday said the 50 per cent cap on reservation laid down by a 9-judge bench in 1992, could be re-examined in view of subsequent constitutional amendments and the socio-economic changes that has followed.
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]
A bench headed by Justice Ashok Bhushan issued notice to all state governments and Union Territories whether reservation could be allowed to breach the existing 50 per cent limit, and also sought the Centre’s Economically Weaker Section (EWS) quota amendment.
The bench also comprising Justices L. Nageswara Rao, S. Abdul Nazeer, Hemant Gupta and S. Ravindra Bhat said: “States have to be given opportunity to have their say.”The observation came while the apex court was hearing a batch of petitions challenging the validity of the Maratha reservation.
The top court said this matter is not limited to just one state, therefore it is important to hear other states too, as its decision in the matter would have wider ramification. The top court will also examine the possibility of referring to Indra Sawhney’s judgment to a larger bench and it will begin day-to-day hearing in the matter on March 15.
“We are of the view that looking into the issues raised in this appeal and the consequences to the followed, it is necessary that final hearing of this appeal be completed as early as possible. One of the issues before this Constitution Bench being interpretation of Constitution (One Hundred-Second Amendment) Act, 2018,” said the top court.
The petitioners have challenged the Bombay High Court judgement passed in June 2019. They have contended that the Act, which provides for 12 per cent and 13 per cent quota to Maratha community in education and jobs violates the principle laid in the 9-judge bench judgement of the apex court in 1992, which capped the reservation at 50 per cent.
The High Court had upheld the Maratha quota, where it ruled that reservation should be 12 per cent in jobs and 13 per cent in education.
Haryana’s jobs-for-locals law is legally and economically unsound
Haryana might just have jeopardised its future as one of India’s leading States by enacting the Haryana State Employment of Local Candidates Act, 2020, which reserves 75 per cent of private jobs with a salary of below ₹50,000 for ‘sons-of-the-soil’. Like the jobs-for-locals law passed by Andhra Pradesh in 2019, which its High Court said ‘may be unconstitutional’, the Haryana law too is open to legal challenge.
It runs the risk of being struck down for being violative of Article 14 (right to equality), Article 16 (equality of opportunity in employment) and Article 19 (the clause pertaining to freedom of movement). The 2017 Report of the Working Group on Migration cites the Supreme Court ruling in Charu Khurana vs Union of India and others (2014) to observe that “restrictions based on residence for the purposes of employment (are) unconstitutional”.
What’s disturbing is that Maharashtra, Karnataka, Telangana and Madhya Pradesh have expressed similar intentions. Karnataka seems to have developed second thoughts; in Maharashtra, sons-of-the-soil politics has been around for decades. Telangana has so far refrained from passing a law. It has instead suggested a coordinated approach with industry to create local skilling capacities.
It is hardly surprising that industry is worried about the impact of Haryana’s labour rules on the IT and automobile sectors in Gurugram and Manesar, besides the industrial hubs of Rewari and Bahadurgarh. Ironically, industry was desperately praying for the return of migrant workers from Uttar Pradesh, Bihar and Odisha after the lockdown was lifted. It is obvious that the local labour market cannot close the gap.
Economic productivity depends on the free and efficient allocation of labour and capital. It is inexplicable that governments should focus on ease of mobility with respect to allocation of capital — making clearances simpler, rolling out tax incentives, easing availability of finance, smoothening bankruptcy procedures — but impose shackles on labour. Indeed, the jobs-for-locals law may give rise to new labour inspector raj. It will lead to labour shortages in some regions and unemployment in others, creating distress in regions where families depend on remittance incomes. An economy struggling to shake off the pandemic can do without these shocks.
To be sure, States are responding to a political economy problem — the impact of rapid development of places such as Gurugram or Bengaluru on displaced agrarian populations, who feel excluded from the process. But for inclusive development, the capacities of these populations need to be scaled up, with the States and industries investing in their education and training. Labour market nativism cannot be justified, in law or in economic terms.
Recent Posts
Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.
Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.
Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.
In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.
Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.
“Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.
India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.
With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.
They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.
India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.
As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices
The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).
The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.
Here is an approximate break-up (in Rs):
a)Base Price | 39 |
b)Freight | 0.34 |
c) Price Charged to Dealers = (a+b) | 39.34 |
d) Excise Duty | 40.17 |
e) Dealer Commission | 4.68 |
f) VAT | 25.35 |
g) Retail Selling Price | 109.54 |
Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.
So the question is why government is not reducing the prices ?
India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.
However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.
That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.
Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.
Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.
But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.