Everyone likes a good narrative.

Leaders of nations should enunciate a narrative of public policy which creates a shared identity for all citizens, writes a professor. Liberals do not like to create a collective identity because that can lead to great crimes. For instance, Pakistan's identity and hence its sole reason for existence is the destruction of ' Hindu ' India and that is why it supports the killing of innocent people through support of terrorists. But unless a narrative is clearly explained public policy becomes drowned in a cacophony of protests as is the amendment to the Land Acquisition Act, which is seen by farmers as the loss of the only assets they possess. It has been presented as necessary for building infrastructure but should be explained as an opportunity for farmers to escape from a miserable life of poverty, dependent on caprices of weather. The lurid headlines about tax terrorism against the government shows an absolute lack of any narrative of public policy. The row is about a demand for Minimum Alternative Tax of Rs 400 billion on Foreign Institutional Investors, which has been labeled as ' retrospective taxation '. But what is ' retrospective taxation '? If tax laws are enacted to tax profits made in the past, according to laws prevalent at the time, then that is wrong. The General Anti Avoidance Rules, or GAAR, passed by the Congress was seen as such. GAAR was seen as an attempt by the Congress to overturn a Supreme Court verdict on a demand of Rs 110 billion tax on Vodafone, on its acquisition of Essar Hutchison in 2007 for $11 billion. A bigger question is why did the government lose the case in Supreme Court? Are tax laws defective and if so, why? If a law is clear and a foreign business has deliberately avoided paying tax on its profits made in India surely it must be made to pay tax, with penalties, just as Indians have to pay. And since any crime is always in the past the tax demand has to be ' retrospective '. Why do foreigners scream about leaving India if they are taxed? Deutsche Bank has just paid a fine of $2.15 billion in the US and the UK for manipulating Libor rates in 2012-13. HSBC Bank had to pay a fine of $1.92 billion in the US for allowing money laundering through its branches in Mexico in 2008. Not a peep about retrospective action or withdrawing from the US. So, why do foreigners have the guts to ridicule our government and our laws? Because of the lack of a clear narrative. On one day our Finance Minister declares sternly that India is not a tax haven and on another day he is most soothing when he says that tax laws will be non-adversarial, to attract foreign investment. The solution is simple. Stop changing laws every year. Even better, stop the annual circus called ' the budget '. Write clear tax laws which will remain the same into the future. But then how will lawyers milk the system?