It all started because the Indian government, reeling from the Great Fiscal Crisis of 2014, decided to tax the foreign income of Indian nationals. All Indian citizens--from the rich taxi driver in Sydney to the poor investment banker on Wall Street--were told to get their PAN numbers forthwith and start paying taxes. The Non-Resident Indian income tax rate was set at 15% and to increase to 22% over the next five years. It was decided to impose severe penalties on non-payment, at the time of passport renewal. Passports would be valid for no more than five years. The legislation effecting this change sailed through parliament, without any debate, within seconds, surprising and infuriating the global community of pravasi bharatiyas and their deshvasi families.
It was Jagmohan Mehta, a bright spark from Navi Pune (then called Boston) who first raised the famous slogan, "No Taxation Without Representation!" If the Indian government wanted to tax NRIs, he argued, it must also give them the right to vote, and seats in the Indian Parliament. Such was the simple force of this argument that in less than a week, it was a ubiquitous banner on the blogs (a quaint early twenty-first century form of self-indulgence) of NRIs around the world. In sympathy, activists fighting for the independent sovereign Liberal Republic of Bombay suspended their agitation and lit their perfumed candles for the NRI Cause instead. Members of New Delhi's civil society--some say as many as fifty--turned up in large numbers to express support for India's growth to be inclusive of NRI taxes. The third United Progressive Alliance (UPA 3) government, under Prime Minister Kapil Sibal, immediately constituted a Empowered Group of Ministers with Civil Society Participation (EGOM) to study the demands and propose recommendations in a time bound manner.
The EGOM supported the idea of creating a new type of political unit called the Extra-territorial State of India. It was a remarkable idea: the Extra-territorial State need not be part of the sovereign territory of the Union of India. It could be just about anywhere. As long as there were sufficient numbers of NRIs located in any geographical region anywhere in the world, that region qualified to be an Extra-territorial State of India. It was decided, over a particularly animated tea-break, that a sufficient number of NRIs for this purpose was 96,580.
It was decided that Extra-territorial States would be treated on par with territorial States in every way. They would form their own governments, have past-their-prime-but-loyal-to-party politicians as Governors, the authority to legislate over subjects in the State and Concurrent lists and participate in Ranji and Duleep trophy tournaments. (IPL, as you know, follows a different process of admitting teams). They would get funds from the Centre to implement programmes named after Nehru and various Gandhis, including NREGA. They would also elect representatives to the Lok Sabha based on the population, with one Lok Sabha MP for every 96,580 persons. Rajya Sabha seats were calculated by some weird logic no one really understood, but since each Extra-territorial State would get at least one Rajya Sabha seat, no one really complained.
Thus was created the first modern global nation-state of which there are so many today. But in the early 21st century it was a novel experiment. Most people agreed it would collapse within a decade. How could a nation with so much diversity and so vast a spread hold together? Little did they know how wrong they would be.
The first five Extra-territorial States thus created were Puthiya Keralam, New Jullundur, Jersey Pradesh, Paschima Kannada and Kizhakku Tamilnad.
Puthiya Keralam, on the southern side of the Persian Gulf, chose New Kottayam--located between the 120th-150th floors of Burj Khalifa--as its capital.
The state of New Jullundur had to let London and Birmingham take turns to be capital. There was a demand for trifurcation of this state, with both the Gujjuland Mukti Morcha and Sindhi Samaj calling for separate feasts until death, causing intense speculation in the prices of flour, onions and potatoes. However, a political crisis was averted when eleventh-hour negotiations succeeded in creating autonomous district councils for each NRI community with more than 50,000 members.
Jersey Pradesh was born in controversy too. A strong and vocal segment of NRIs wanted to name it West Andhra but were outvoted in the internet poll--people suspect that this was due to the Telangana factor. To assuage these raw feelings, its capital, located a few miles south of Newark, was named Entiarnagar.
Surprisingly, Paschima Kannada was not only set up peacefully, but decided to retain Sacramento as its capital. It even purchased much of the Sacramento capitol district, which actually went down well with local Californians who were grateful that someone bailed their bankrupt state out---"not at all a bad exit, given the P/E ratio."
Kizhakku Tamilnad is still the only Extra-territorial State east of the Indian mainland. Its bustling 24X7 capital, as you know, is located inside Mustafa Centre, which at that time was the only building in the world with its own rooftop airport.
So, dear children, this was how our great Republic was forged. Today we have more Extra-territorial States than territorial States, with unrestricted flow of people, money and ideas among them. But don't take for granted the unprecedented ease with which you hop continents while still remaining in India. It might not even have happened if not for our ability to turn a crisis into opportunity.