Analysis: Plenty of questions to answer

Last week, I wrote on the Cauveri dispute and of how Karnataka's truculent attitude threatened to strike at the very roots of the federal Union and cast questions on the 'supremacy' of the Supreme Court. (May I say how glad I am that the Karnataka ministry has seen the light, agreeing to supply neighbouring Tamil Nadu with the water that its farmers require. I hope nobody in Karnataka tries to take advantage of the situation, seeking to embarrass the Congress government by accusing it of 'cowardice'; what bravery is there in persisting with folly?)

But, to return to this week's theme, it is once again a seemingly limited issue which actually has larger, constitutional, implications. And this one is the theory of 'collective responsibility' which governs ministries.

As readers may recall, a few weeks ago I wrote of a rumour I had picked up in Singapore about India trying to strike a deal with Taiwan. Well, a rumour is nothing but a rumour until it is substantiated - which is precisely what I sought to do once I was back home. To cut a long story short, I found that the Singaporeans had got it right in every detail but one. India and Taiwan were not exploring the possibility of a deal over taxation, they were on the threshold of clinching such a deal. And that is precisely what happened - on October 17, 2002, India broke a long-standing policy and inked an agreement with Taiwan.

Strictly speaking, given the embarrassing fact that India does not officially recognise the existence of an independent nation called Taiwan, the treaty is not between two sovereign nations. No, it is between two non-governmental organisations. Nobody, however, has managed to explain how a "non-governmental" body can negotiate a treaty on the "avoidance of double taxation" with another such organisation. After all, the power to tax is fundamental to the concept of governance, a right that cannot be assigned to a private unit.

As I said, the treaty was signed on October 17. But can anyone remember reading about it in the newspapers or the Internet, or hearing of it on radio or television? As it turns out, you and I were not the only ones kept in the dark about this novel turn in Indian foreign policy; if I have understood the situation correctly, even the union cabinet was not consulted. Not just the cabinet as a whole, but even the ministry most directly concerned, the Ministry of Finance!

The decision to negotiate with Taiwan, the decision to accept the terms, the decision to sign the treaty, and the decision to offer this agreement official recognition were all the work of a single ministry - the Ministry of External Affairs. "Official recognition"? Yes, that too is now a matter of record.

Half an hour before the agreement was inked in New Delhi, the ministry hastily called the Number Two man in our embassy in Beijing. He was asked to call his Chinese counterparts, informing them of what was about to happen. (One wonders, of course, whether a similar 'courtesy' was conferred on members of the union cabinet in Delhi!)

As far as the mandarins in the Foreign Office are concerned, the treaty is now in effect and they have affirmed as much to the Taiwanese. Pending, one hopes, the small matter of ratification by the Home Ministry, the Ministry of Finance, the union cabinet, and, one hopes, some measure of debate in Parliament.

When probed, the Foreign Office seems a bit uncomfortable with both the treaty and the manner in which it was negotiated. Some officers are now trying to weasel out by claiming that the process was initiated when Jaswant Singh was the external affairs minister. This has been indignantly denied by sources close to the minister. In fact, it turns out that both Jaswant Singh (now India's finance minister) and his ministry have serious reservations about the need for any such agreement.

They are right to be suspicious. India and Mauritius once had a treaty on double taxation. Some people took advantage of this to India's cost. A study of 13 Overseas Corporate Bodies (OCBs) shows that the policy cost India Rs38,500 million between April 1999 and March 2001. It didn't happen without protest from many interested quarters, including the Income Tax authorities in Mumbai. But any and all objections were overruled until it was too late. The Reserve Bank had to step in finally to curb the activities of certain banks which operated, nominally, out of Mauritius. Now, here we are once again trying to commit the same mistake.

Nor is the Defence Ministry terribly impressed. Taiwan, say officers, is too weak to defend itself. It depends on the United States both for weapons technology and actual protection. A few years ago, when China made threatening sounds, the United States Navy conspicuously sailed into the narrow straits separating Taiwan from the Chinese mainland. So, please don't try to pass this off as the first step in a great strategic manoeuvre.

Finally, the timing is curious. The prime minister has accepted an invitation to visit China. Why is the Indian Foreign Office trying to hang the treaty with Taiwan around his neck?

Under the doctrine of collective responsibility, the union council of ministers must answer as a unit for the actions taken by an individual member. But isn't there an equal and opposite responsibility on the part of ministers to keep their colleagues informed? I put it to you that the External Affairs Ministry has been lax in this regard to put it as mildly as possible.

We have already seen the ill effects of ministers speaking in different voices over disinvestment. Is it necessary to make the same error in foreign policy as well? Shouldn't matters of such importance be discussed by the union cabinet before they are implemented in such unseemly haste? The External Affairs Ministry has many questions to answer.

(T.V.R. Shenoy is a well-known political analyst.)