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‘Indians holding dual citizenship must have tax obligations in India’

By IANS,

New Delhi : Indians living abroad and holding dual citizenship should accept tax obligations from their mother country just as they seek and often get many privileges and benefits that go to Indians living and working at home, according to eminent economist and professor of Columbia University Jagdish Bhagwati.

“…Alongside… improved rights, we in the diaspora need to recognise obligations,” Bhagwati said while delivering the first of the Distinguished Global Indian Oration Series, titled ‘The Role of the Diaspora’, at the Pravasi Bharatiya Divas (PBD) 2010, the annual conclave of the Indian diaspora, here Friday.

“Does it make sense for us, for instance not to accept any tax obligations while we seek, and often get, many of the same privileges that go to Indians working and living at home,” he asked.

Citing the US example, Bhagwati said citizenship and its benefits must be associated with tax obligations.

“Just as the ‘small’ Tobin Tax (in the US) on capital inflows is associated with the name of Professor James Tobin, there should also therefore be a Bhagwati Tax which is to be collected, as a ‘small’ surcharge on the taxable income of Indian citizens working and living abroad,” the professor advocated.

He added that this tax was not to be paid by the host country where the Indian citizen lives “but by us ourselves as our own contribution to the revenues and welfare of the country from where we came and whose citizenship we continue to hold”.

At the same time, he advocated the diaspora’s right to vote, saying having full rights of citizenship would bring the diaspora much closer to the kind of loyalty and identification of their interests those in India have.

“We must open up ways in which the diaspora’s right to vote is made possible,” Bhagwati said.

“There are several ways in which this can be done, e.g., providing a limited number of seats in the Lok Sabha which all NRIs can vote for as a bloc; or by allowing NRIs to register to vote in the states (in India) from which they originate,” he added.

Dwelling on remittances from Indians abroad, he said that, apart from money sent by affluent Indians to advance social causes, funds simply remitted by Indians abroad to their families back home also contribute to India’s well-being.

“The remittances home, even when sent to families, have turned out to be an important element of the benefits from globalisation for the developing countries, and indeed for India where they were as large as $41 billion in 2007-08, having risen twenty-fold in less than two decades,” the Padma Vibhushan-recipient said.

In the course of his speech, he also dwelt on issue like the diaspora as a contributor to Indian reforms, India’s build-up by way of diaspora achievements and interactivity in scientific research.

Professor Bhagwati’s speech was the inaugural one of the oration series introduced for the first time in this annual event, organised by the Ministry of Overseas Indian Affairs, this time in partnership with the government of the National Capital Territory of Delhi and the Confederation of Indian Industry.