Nokia India has got itself into a terrible mess over alleged failure to deduct TDS on royalty payments to its parent company. What would have ended with a mere 10% tax rate has now morphed into a horrendous tax liability. Nokia is now desperate to sell its assets but the Income-tax department has a strangle-hold over it and is calling all the shots. It will take all of Harish Salve’s wizardry to pull Nokia out from the deep hole it is in. Can he do it?
Anybody dealing with multinational conglomerates will tell you that their biggest problem is one of overconfidence and lack of accountability, especially when dealing with poverty-stricken third World countries. Deals worth billions of dollars are put through by some expatriate executive, high on adrenalin, sitting in an exotic location like New York, London or wherever, without a second’s thought for the legal and tax implications in the dusty by-lanes of the Third World Country where the deal is to be implemented.
Somehow, a feeling seems to have developed amongst the MNCs that because these Third World countries need foreign capital so desperately, the MNCs can do what they want and get away with it, with nobody to pull them up.
We saw how this attitude got Rolls Royce, the so-called torch bearer for good corporate governance, into serious trouble with the Indian tax authorities. The Tribunal expressed unhappiness that Rolls Royce concealed the true facts as to its taxable transactions and this finding was upheld by the High Court.
Nokia seems to be a victim of the same “Devil may care” attitude. It set up a subsidiary in India, Nokia India Pvt. Ltd, to manufacture mobile phones. It invested over $300 million at the 210-acre plant in Sriperumbudur, near Chennai, and produced 500 million units in six years. Nokia agreed with the Indian subsidiary to provide it with the technology and technical know-how required for this purpose and in return, the subsidiary had to pay it royalty.
What is astonishing is that while royalty of about Rs. 25,000 crore was paid by Nokia India to its parent over the financial years 2006-07 to 2011-12, nobody appears to have bothered to ask whether the said royalty was chargeable to tax in India, in the hands of the parent, under section 9(1)(vi) of the Act or Article 12 of the India-Finland DTAA and whether the Indian subsidiary was liable to withhold tax at source under section 195 of the Act. The huge royalty was merrily paid to the Finnish parent and a deduction thereof was claimed by the Indian subsidiary, without a care in the World for the Indian tax implications.
Now, whatever may be said of the sloth and inefficiency of the rank and file of the income-tax department, its top brass is very agile, especially when it comes to big-ticket matters. When the top brass smells big money, it pulls out all the stops and comes out with all guns blazing against the alleged defaulter.
We saw this in the Vodafone share transfer matter where the department set up a high-level think-tank to monitor and guide the litigation, with direct access to the Revenue Secretary and the Finance Minister. It is this perseverance that got them victory two times in the High Court against Vodafone though Harish Salve’s wizardry proved to be their undoing in the Supreme Court. Even in the other heavy duty transfer pricing matters of Vodafone (1) & (2), the department is taking no chances. It has deployed heavy artillery in the form of Solicitor General, Mohan Parasaran. He is firing on all cylinders at the moment and has managed to check-mate Harish Salve so far.
In the Nokia matter, as soon as the department became aware that something was amiss, it conducted an instant survey, impounded all the relevant documents and, with remarkable alacrity, treated the Indian subsidiary as a defaulter u/s 201 for failure to deduct tax at source and also disallowed its claim for deduction of the royalty expenditure u/s 40(a)(i) of the Act.
Now, this is a double whammy for Nokia India because for the default of non-deduction of TDS, not only is it being asked to pay the tax (with interest), but the deduction for the expenditure is also disallowed. But that, unfortunately for it, is the law of the land and it cannot be helped.
The result: A whopping demand for tax and interest of nearly Rs. 6,000 crore or thereabouts.
Nokia arrived at an understanding with the department pursuant to which an order dated 21.6.2013 was passed under which it agreed to make payment of Rs.700 crore in installments. Nokia did pay three installments of Rs.50 crores each but the department got jittery when it learnt that Nokia India suddenly remitted Rs. 3500 crore (the accumulated earnings for the past several years) to its parent company and also entered into an agreement with Microsoft to sell off the Chennai plant (as part of a global $8 billion deal).
The departmental officials summoned Nokia’s top brass, Lari Hintsanen, World Head of Taxation, for clarification as to its intent. When the department asked for a copy of Nokia’s agreement with Microsoft, they were told that it could not be given on the grounds of secrecy. When they asked for details of the transaction, they were told that the nuances were not known. When the department asked whether Microsoft, as successor to the business of Nokia India, would bear the tax liability, the answer was apparently evasive. That’s when the department seems to have feared that the bird is going to fly the coop. They swooped down and attached all 15 of Nokia’s bank accounts and debtors u/s 226(3) of the Act and also passed provisional attachment orders u/s 281B of the Act in respect of the expected demands for the on-going assessment years.
This paralyzed Nokia India’s business and brought it to a grinding halt.
At this stage you have to pause and compliment the department for its speedy reaction because if it hadn’t moved as fast as it did, Nokia India would probably have quietly sold off all of its assets in India, repatriated all of its’ funds to Finland and cocked a snook at the department.
In the High Court, on 26.09.2013, Nokia’s counsel, Dr. Abhishek Manu Singhvi, stated that Nokia has no intention to close its operations in India despite the sale of the Chennai plant to Microsoft. On that basis, the Court ordered the release of the bank accounts but on strict conditions. Nokia was directed to continue to pay as per the installments stipulated in the order dated 21.6.2013. It has been restrained from alienating its immovable and movable assets. It needs to inform the AO in advance if it intends to repatriate funds abroad and if the AO feels the purpose is questionable, he can approach the court for appropriate orders. Payment of dividend to the Finnish parent is prohibited without permission of the Court. In addition, Nokia has been asked to explore whether any declaration can be furnished by the foreign parent or a third party to protect the interests of the revenue in case there is any shortfall or failure to pay tax arrears.
Now, Nokia’s immediate problem is that it cannot wait for the appeal process in the Tribunal to take its tortuous course because the $8 Billion global sale deal with Microsoft is hanging fire and Microsoft is breathing down its neck. It needs permission from the Court to sell the Chennai plant to Microsoft and the Court will probably not give the permission if the present and potential dues of the department aggregating about Rs. 6000+ crore are not paid or secured.
That is why the department is in a position where it is calling the shots. At the hearing on 2nd December, Nokia offered to pay Rs. 2,500 crore against the demand and that was rejected outright and contemptuously by the department. The Court also does not appear to have been impressed by the offer because the Judges are reported to have commented to Harish Salve that you are “offering nothing”.
In reply, Harish Salve shot back saying “we are not in a position to offer more“, suggesting that the Chennai plant is itself not worth more than that sum.
The Court also appeared to be irked by the sudden repatriation of dividend by Nokia India of the accumulated earnings of the past 18 years. It took a stern stand and demanded to know “Why did you transfer Rs.3,500 crore abroad? Was it not your intention not to keep liquid assets here? You had Rs. 4,100 crore cash here (the dividend + tax thereon). You repatriate it back to India” the Judges are reported to have said.
The Court also appeared to be unhappy with the fact that while Abhishek Singhvi had stated at the hearing of 26.09.2013 that Nokia “has no intention to close their operations in India”, it had now changed its stand and stated that the Indian operations would be wound up. “When they (IT department) attach your bank accounts, you come here. That time you were categorical that manufacturing (here) will go on. Now, there is a change in your stand. So shouldn’t the amount (that was repatriated) be brought back to India?” the Bench is reported to have said.
So, that is where the situation stands today. Nokia’s options are either to bring in Rs. 6,000+ crore to secure the department but that may not be worth it if the Chennai plant is itself worth not more than Rs. 2500 crore. The option of getting Microsoft to handle the liability is also probably a non-starter because who would want to get involved in a mess like this. The other option is to take the Chennai plant out of the Microsoft sale deal and to use it for contract manufacturing for Microsoft, till the merits is decided one way or the other. What happens if, God forbid, the merits go against Nokia is not something one should contemplate at this stage though the simple solution for Nokia would be to hand over the Plant for whatever it is worth to the department and wind up the subsidiary. Thanks to the doctrine of limited liability, the Parent will not be liable for the deficit arrears.
The other strategic solution that Nokia is exploring is a political one by dropping hints that the tax department’s move will render nearly 30,000 people unemployed. Finland’s Foreign Minister, Erkki Tuomioja, is reported to have said that if the attachment of the Chennai factory was not vacated by 12th December, the factory would be left out of the Microsoft deal and closed down, jeopardizing the future of thousands of workers and sub-contractors.
Anyway, now all eyes are on Harish Salve to see if he can pull out some other workable solution from his hat to bail out Nokia and save thousands of Indian jobs when the matter comes up for hearing in the Court on 9th December.
Excellent presentation. We will pray God that he will prevail upon the judges to show leniencey and vacate the stay.Nokia was the first mobile MNC to start operations in Chennai SriPerumbudaur Estate.Thanks to Dayanidhi Maran.
One side, we invite MNCs to do business in India and on the other side, we drive them away by doing all these. Contradictory approach:( At least in the interest of 30,000+ people losing their job, tax department and Nokia should find out amicable settlement methods.
It seems to be a difficult situation for the legal luminary to bale out Nokia from the tax dues. Income tax law is fairly clear on the issue of TDS and disallowance of expenditure.
Hats off to IT Deptt !
this shows the carelessness of such MNCs and extreme shrewdness as far business approach and compliance of local laws of third world.
This tells upon the poor economic policies of
our government. Inviting foreign trade and commerce and
paralyze their ambition to improve the economy of our country.
The government should avoid such attitude of betrayal.
Hats off to Income Tax Department..
Clearly carelessness on the part of MNC like NOKIA is not acceptable but Indian Govt. must think of about 30000 people and small vendors of the company although law is very clear and fair on the issue of TDS and disallowance of expenditure.
Nokia agreed to pay 700 crores against 6000 crores due. Moreover the payment is in installments. This shows that the IT Dept is very kind to MNC. What more required for a willful defaulter? I wonder how a MNC can forget TDS provisions and how it has escaped the attention of their Auditors. MNCs should know that they can make profit in a developing nation but not at the cost of it.This is not a harassment.This is how they should be trated. They can not go scot free because the are MNCs. I appreciate the stand taken by the Income Tax Department.
well done the Indian i.t.dept. by catching big fish at right time.
Nokia agreed to pay 700 crores against 6000 crores due. Moreover the payment is in installments. This shows that the IT Dept is very kind to MNC. I appreciate the stand taken by the Income Tax Department.
WELL DONE INDIAN I.T. DEPTT.
This is extremely wonderful and interesting insight of the Nokia case. Thank you so much Sir for your great efforts.
The action taken by Department goes in line with Mr. Pranab Mukherjee’s repeated statement that he cannot allow India to be a tax heaven country!
Author correctly and rightly so points out the MNCs approach and attitude towards ‘Third World Countries’. It is common sense that if Nokia was actually intending to cooperate with Department, it wouldnt in wildest dream transfer 3.5k cr abroad. It is high time that MNCs take India seriously and pay due tax. The card played about thousands of unemployment on emotional ground shouldnt sustain. Another arrangement which can be made is transfer to department regular installments while keeping the factory running making such clause in sale agreement
what the income tax department was doing all along.
Why the royalty payment is not reported by the Statutory Auditor or Tax Auditor.
My utmost regards for the AO ( and his seniors for supporting him) in making this MNC gaint to cough out the money earned by it from indian public.
Indian tax authorities should not allow any relief to nokia on any ground including unemployment of 30000 people and small vendors of the company, instead it should launch prosectuting proceedings against the foreign directors and then see how the money comes back from the holding company in Finland.
It is the hard earned money of the Indian public that they have remitted to its holding company without payment of tax.
The high handedness of the department has been tolerated by us too long. The Nokia case is an example.even in smaller cases as a tax practitioner I have found that soft targets are screwed most by the department. In a case of mine 20 crores of expenditure has been disallowed and demand created when no such expenditure had been claimed (surprising) and when an apication u/s has been given it is being rejected !!!!!!!!
It’s a magic and avalanche effect of Section 40[a][i] of the Income Tax Act. It generates revenue to the Government but loss to the assessee. You don’t need to be a genius just to check whether tax is not withheld by the payer disallow the expenditure. The only remedy is to pay tax and interest and shut down the business. I would suggest that the Finance Minister should consider income likely to be generated by various “deeming provisions” of Income Tax Act while working out its” budget estimates”
This is a strange poisition.The MNC are coming in india,violating the provisions and going back.One side in a small violation of provisions of The Income Tax Act the assessee is harressed whereas for last seven to eight years the violation are done what was doing auditor.What was doing the department.The stringent action should be taken against auditor,Tax consultant and department officials.
To me it seems that wizard Harish Salve will be able to bring out positive results.
According to my understanding, section 201 of Income Tax Act, 1961 does not provide for recovery of tax from the deductor, which has not been deducted by the deductor. Such a deductor may be held as ‘assessee in default’ who has not deducted the tax but from whom at best only the interest componet can be recovered. Sub-section (2) provides for recovery of tax when tax has been deducted but not deposited.
Further, with the most recent development of challenge on the constitutional validity of section 40(a)(ia) in the case of Marithu Tubes [2013] 217 Taxman 329 (SC) would come handy for the Wizard to tackle the Nokia case with positive assertions.
I wish Mr. Salve is reading these comments.
why was the IT Dept asleep fr 6 years ..!! why wasn’t it pointed bh them earlier .. we find some ppl appreciating IT’s stand .. bt it also shows the lethargic approach, corruption n red tapism in d departmt … they create a mess only when it way too big and they locking horns for praise n not for the sake of revenue to country .!!! Good luck Mr.Harish… Thumbs Down Department ..!!!
in any country of the world there is a constant fight going between tax planning and tax evation each tax payer wants the tax authority to accept their tax evation under.the cover of tax planning as they have received the advice from tax consultant in my view if every body start paying taxes honestly and legetimate lay it will be a win win situation for all of us
Very surprising to see some of our professional brothers supporting Nokia in this case. This case is extremely clear. Nokia was being extremely and blatantly disrespectful with the Indian laws. This had to happen. On top of that, it had the guts to send Rs. 4100 crores.
Things will be like this so long as the big 4 audit the MNCs. Big 4 will hide such things from everybody and cover it with the paid media. Let the department initiate the proceedings against the erring auditors. 10% of the tax demand will take care of the compensation payable to the workmen. compare the investment and the return they had. is it not looting?. the MNC should not be allowed to do black mailing. East india company is still here. let us be tough. if we yield, then we are spineless. so long as there is weak government and the clout of the the ruling party legal brains continue, MNCs think they can buy anything. our judges are great and right in telling the advocates that nothing is offered. thanks to the assessing officer and his team. 600 million plastics junk who will clear?
It is very evident that Nokia’s intention was not good when it transferred Rs.3500 croes when this TDS case is heating up. Kudos to the IT department. They have done wonderful job. If TDS is not deducted for many years the department shoulfd have acted tough in the first few instances itself. How come the auditors did not advise the client properly. It looks like a conspiracy by the company, auditors and some of the staff in the department. This is nothing but “Gang Rape'” of Indian System and sheer evident of “East India Company ” attitude towards India and some Indians support such cause.
I think it was the failure on the part of Statutory auditors and the the internal auditors, who should have taken the “blow horn job ” in order to comply with TDS rules in india.
The I.T department should have a more control on the foreign transactions and should try to make them comply within a year from the date of default.
It would be huge to any business firm to pay such huge defaulted amount, It indirectly shows its effect on the indian market and confidence of the foreign market on INDIA.
So there should be collective work to avoid these kind of situation only when there are Right Persons at Right JOB
Funny article.
You say “Nokia India would probably have quietly sold off all of its assets in India”
Why would Nokia do such a thing ?
Nokia is one of those multinational companies, that did the most for India. Without Nokia there would be no cell phones in India today. Nokia build the whole market spending 15 year and a lot of money.
And frankly – getting money from a company like Nokia is very easy – as long as you have a legitimate title.
And that’s where the problem begins.
As far as I know the reason for the penalty is a retroactive law. But normally lex retro non agit. Apparantly the tax department is so desparate to get funds, it doesn’t care about the rule of law. It is not the first time, but one of many, that the law is not respected by the tax department.
Just look at their settlement proposition – the agreed to 600 croes, this shows they don’t expect to gain more.
Your article in marketing stuff for the tax department, but the truth is well known to people in India. It is common knowledge how bad the tax department is treating any enterpreneur, not only multinationatioln. Thousands of companies have failed because of wrong penalties.
This is just such a case. Make no mistake, in the end, there will be no money for the IT department.
And why did Nokia transfer Rs.3500 croes abroad ?
This one is easy, isn’t it ?
Nokia sold phones division to Microsoft. But the money wasn’t sold. So in was transfered.
It is an obvious reason.
Please don’t tell me Nokia selling its phone division has anything to do with taxes in India. If you think so, you have no idea about what is going on.
Its good to see that the Indian Revenue System is being proactive in catching hold of these big fish one after the another, as now Nokia is being caught in the loop after Vodafone. Nokia should think twice before putting forward lame arguments where they have contended that if the ruling goes against them, nearly 30,000 people will be paralyzed by loosing their livelihood. But did they ever ponder on how the Indian economy will get affected on this sudden outsource of 600 crores??????? Had the company being Tax compliant, the amount could have been used for developmental purposes thus automatically generating further employment opportunities.
Now the question that arises from here on is where should NOKIA lie in the list of CSR ( Corporate Social Responsibility) complaint companies?????
Its called, “The Great Indian Robbery”.
European countries ruled India for 200 years and robbed us till last pie however forget that knowledge and wisdom can not be looted.
After Independence, we read lot of news of MNC’s taking away all big monies outside India thru Royalty, Dividend or in the name of FTS. But unluckily, this time it got caught and non other than “NOKIA” !!
Now the real question is, will Govt do away with the case just because 30,000 employees are at stake or will create new employment opportunities with 6000 crs in pocket for 3 lakh workers.
Look for alternative solutions so that monies also get pocketed and workers also remain in bench.
This is bullshit! So many companies have no problem with tax until all of them arrived in India. Most of the money will probably be corrupted away and never reach the hands of the million poor.
While the IT department has acted fast, that is not enough, since this has been going on for a few years. The Banks (through whom these remittances are made) have also to follow the procedure of filing mandatory forms 15CA & 15CB. Has that been done by them? If yes why in IT department / RBI no body cared to have a closer scrutiny of the same? and If not, do these banks understand they are also responsible at least in part for this mess?
Dear Author of the Article,
Hat’s off to you for having published a true and correct account of what happened in the past with Nokia in remitting money as Royalty and the current issue that they are facing with the freezing of the assets. This company from Finland always claims that they are above board and compliant with the laws of the land they operate in. Why are they bargaining with the govt now. poor salaried class. We pay tax on our income and have no choice. The IT department to is asking the same from company that has earned millions in revenue and profit from this country. There are varioous forms of rape, Political, Economic, Physical and Social. What we always object to is physical rape where a physically more powerful person rapes a less physically powerful person either by enticing that person or by sedating the victim or by employing various dubious methods. Here in the current context of Nokia, I call it economic rape. Nokian’s from Finland arrived in India and set up a plant in 2006 timeframe. Hired 10,000 to 12,000 workers mostly women from in and around the suburbs of Chennai and produced more that 800 million phones from 2006 to 2012. In the process they also generated revenue and carted it all to their country leaving behind nothing here. They have economically raped the country of its resources and have exploited it to the hilt. The reason why they set up a factory in India was not to develop India but to exploit India. If punishment of the perpetrator of the crime is the judgement for physical rape then logically and rationally it should be the same for economic rape i.e asking Nokia to pay tax on the money that they have earned in India. I cannot for a moment think of a different alternative unless any of you have one.
This is high time that the assessing officers at field level should keep their eyes open when ever a big enterprise start operation at their jurisdiction to avoid such last minute mess.
Kindly concentrate in nokia employees life also, there are 30000 employees here…they are from middle segment family only, so pls consider with mercy while focusing this case but we are not against for Indian Govt & IT
We are already scrwed by Nokia/Microsoft…..we lost precious time….I mean it dept…….niw I think the best solution is to collect Rs 2500 crore and save the jobs of 30000 indians…then make new relationship with Microsot,…..these buggers need our large market we will loose these jobs atnleast many of them,,, and from now on keep a hawk eye on thier transactions in future….dont get scewed twice..thanks
I think saving of 30000 jobs will be illusion till Microsoft gives an undertaking not to retrench any staff post acquisition of Nokia’s factory in India. So the first thing would be to obtain an undertaking to this effect.
Secondly, provisions of the India-Finland DTAA should be invoked which provides for assistance in collection of taxes.
Thirdly, Nokia should be asked to furnish guarantee for payment of Rs. 6,000 crore subject to final outcome by judicial decisions.
Each foreign exchange remittance requires certification in Form 15CB from a practicing CA, confirming whether compliances in respect of withholding tax have been duly fulfilled or not… Deptt should ask remitting banks to provide ALL such certificates .. we would find more ppl conniving – the CA who gave the certificates, the bank who remitted the funds and so on… These are top global MNC’s… they cant expected to have their internal taxation heads to be laymen… they hire highly paid professionals. So this is a clear case of connivance. Who was the CFO of the Indian subsi? He must also be a CA, well aware of the law… So now we have a list of conniving parties :
1) the accounts department head – prob a CA
2) the finance head – prob a CA
3) the CFO – prob a CA
4) Internal Auditors – prob a CA Firm
5) Stat Auditors – definitely a CA Firm
6) Tax Auditors – definitely a CA Firm
7) Professionals issuing 15CB cerificates – definitely CA/CA Firm
How come a complete set of professionals missed out on this one? Smell foul play…
No, this is not the game that MNC is playing with indian revenue authorities, whether their management did not know about Indian Tax Law. Nokia should pay whole Tax.
@ Mr Munish : what I am saying is that proceedings shall also be initiated against these conniving parties in addition to Nokia as they are equally at fault… they failed in performing their professional duties…. therefore while money should be recovered from Nokia, these ppl should also be held accountable and any shortfall should be recovered from them…. the way they performed their duties is obviously anti -India… so they are also traitors…
You really should read carefully what this is about.
Some citations:
“Vodafone Group VOD PLC struck back against India’s proposal to impose a retroactive tax on some international mergers, saying the measure would violate the company’s rights under an investment treaty between Netherlands and India.”
“The slew of retroactive proposals in India’s Budget 2012 has shaken the global investor community. When the UK Chancellor of the Exchequer expressed his concerns over the proposal to retroactively tax offshore M&As, the Indian finance minister is reported to have said, “If UK can introduce retroactive legislation, why can’t we?””
“The letter said that the “political risk” in India was increasing due to tax claims from the government. India’s passage in March of a retroactive income tax violates a bilateral treaty between India and Nokia’s native Finland, Nokia says.”
IT IS ABOUT RETROACTIVE TAX !!!
WOW!!
What is this ?
Well to explain:
1. Let’s say you are a foreigner – like Nokia.
2. Yesterday you were allowed to use the bus – its was legal.
3. Today India says – using the bus by foreigners was illigal yesterday – you go to prison for one year.
4. Now Nokia says: “Hello, but it was legal. I won’t go to prison.”
5. India says: “You don’t want to go to prison for one year. Ok, than you will go to prison for 5 years.
WELCOME TO INDIA
Its a beautiful article. keep it up
Thoughts…
– Let’s assume the IT recovers all of this from Nokia.
– Wonder where all of that money will go – are there others who are being penalized – or is every other MNC conducting their business in India doing business the clean and legal way.
– Interesting that this has popped up at a time that the Nokia/Microsoft deal was happening
facts of the case are described very clearly.Its really an immature statement though i am an beginner but despite this fact i would like to say the Mr. Singhvi being a Learned Senior counsel have made the destiny more unpleasant for nokia and my mentor Mr.Salve. from this verdict “When they (IT department) attach your bank accounts, you come here. That time you were categorical that manufacturing (here) will go on. Now, there is a change in your stand. So shouldn’t the amount (that was repatriated) be brought back to India?”
Great Article!!! thank you for bringing out the issue with court conversations…
problem is lacune in laws that are the product of the parliament. why we need blame salve, after all lawyers are to take care of any client, for they could not throw away any client. salve doesn’t charge high fees is a world known fact.
there is always nexus either with politicians or executives that only promote a lot of nefarious activities, by the promoters of any enterprises locally or globally, globalization works on Nash game theories of advantages, who bothers about poor or other but only want profits at all costs, why even revenue officials tax consultants do work in tandem t dupe the country, but when not satisfactory greasing does not take place besides loop holes in sections of tax laws in a proper link with finance bills of the relevant year which is a great defective mechanism for it never allows any steady tax legal system in india naturally that gives opportunities to all bad characters, that has become very pronounced under great globalization and great economic development ideas which are some ransom on the country that such ransom is advantageous to competitive strategies and comparative advantages which powerful play much better than poor countries just because level playing field is not there but one weak succumbs to the other powerful pressure group. see same would happen with china too sooner or later, for govt might say , it has to compromise like in J&K WHAT mufti coalition with BJP is now doing whentackling with geelani .
so all things do not seem probably working fine in india,yea fact real time situation is every one loots india both internally or externally is the great fact.