M D Nalapat
Several bureaucrats in prominent positions during the Manmohan decade were interested, post the UPA defeat, only in covering up evidence of their own active participation in UPA-era misdeeds.
Recent byelections showed that many pro-Narendra Modi voters stayed home rather than come out to vote for the BJP. While the party is seeking to improve its organisational efforts in a bid to rectify such a trend, the responsibility for the abstentions vests more with the functioning of parts of the Government of India, specifically the slow pace of the agencies involved in the anti-corruption drive launched amidst a volley of promises by Prime Minister Narendra D. Modi on 26 May 2014. Although much was made by the new government of the Special Investigating Team (SIT) speedily set up by the incoming government, while several sittings of the SIT have indeed taken place, its overall success in curbing or uncovering graft has been negligible. Following on from his practice as Chief Minister of Gujarat, once he became Prime Minister, Narendra Modi seems to have placed his faith and confidence fully in the existing rungs of the bureaucratic ladder to carry out both a policy of economic growth and a much-anticipated cleansing of the administrative stables, the tasks for which his party had been given a Lok Sabha majority. Unfortunately for the BJP, several of the bureaucrats in prominent positions during the Manmohan Decade (2004-2014) were interested, post the UPA defeat, only in covering up evidence of their own active and pervasive participation in UPA-era misdeeds. The result has been the conversion of the policy of Zero Tolerance for Corruption announced by Modi to close to Zero Results in his campaign against VVIP corruption. Thus far, the truly big names have remained untouched even while a small number of lesser fry, especially in some state governments, have been booked. At the same time, disclosures under RTI have been heading sharply downwards because of the lack of response to queries made to the bureaucrats manning RTI boards, thereby severely impacting the anti-corruption drive. The lack of tangible action against VVIP corruption by agencies under the Modi government has resulted in the Congress party confidently claiming that BJP allegations of large-scale corruption during the UPA days were just a “chunavi jumla” of the rival party Thus far, even biggies such as P. Chidambaram, Praful Patel and Robert Vadra remain free to globetrot, while the only extant case against the First Family of the Congress is a private proceeding of Subramanian Swamy, who at the time he initiated action was not even a member of the BJP.
MODI’S ACHILLES HEEL
The public perception of lack of success in dealing with high level political and bureaucratic corruption has become the Achilles heel of the Modi government. To this must be added the fact that doubtful officers still in high positions appear to have slowed down progress in reform, so that the rate of economic growth under NDA-II is less than that under the UPA, especially if the changes in accounting introduced in the recent past (and which boost growth estimates) get taken into consideration. Given the Lok Sabha election calendar, Prime Minister Modi has less than seven months to turn matters around, a task that needs to be fulfilled if the BJP is to cross the safe boundary of 240 seats in the next Lok Sabha. It cannot be forgotten that from around 2011 onwards, a growing number of individuals and associations who regarded UPA Chairperson Sonia Gandhi’s approach to governance and society to be toxic for the future of India gravitated to Gujarat Chief Minister Narendra Modi as the answer to their quest for a leader who would take on and vanquish Sonia electorally and the “Sonia System” subsequently. Given the pre-election rhetoric of Narendra Modi about the circle around Sonia Gandhi, it was considered a certainty that his government would take immediate action to ensure accountability for the misdeeds committed by those close to the de facto Head of Government during 2004-2014. Forty-nine months after Modi was sworn in as Prime Minister, such early supporters of Modi are still waiting for their expectations to be fulfilled. Thus far, while there have been several—and severe—verbal sallies against the 10 Janpath coterie, actual moves against UPA grandees have been difficult to discern. In the case of both D. Raja and even Dayanidhi Maran, both are globetrotting sans any fear of legal action, with the only steps initiated against them having been made not by the present but by the previous Manmohan Singh government.
There was a flurry of credible pre-Lok Sabha election reports about inter alia (1) the systematic manner in which Air India and other public enterprises were crippled, some clearly terminally; (2) the way purchases of petroproducts and defence equipment got negotiated and payments made; (3) the reckless manner in which agricultural commodities were subject to deep-pocketed speculators who caused immense spikes in prices without benefitting the farmer; (4) stock exchanges got systematically converted into illicit money-making and money-laundering devices; (5) land and resources were handed over to cronies for derisory sums and in an opaque manner; and (6) crony capitalists were assisted in defrauding the banking system and who later transferred such loans to overseas destinations. Thus far, action on such matters has been infrequent, and often of a transient and token nature that allows the depredators to escape justice, as seems to be the recent case of Nirav Modi and Mehul Choksi, and earlier of Lalit Modi. In the case of Vijay Mallya, action seems to have been more vigorous, although it is too early to judge the result of the moves by the ED, CBDT, DRI and CBI to claw back from the fugitive businessman the wealth he took away from the banking system. At great political cost to itself, the Modi government has written off billions of dollars of bad bank debts while channelling a huge amount of the profits made by enhanced taxes during 2014-2018 on petroproducts to banks stressed by acts of negligence on the part of those entrusted with their management, actions that have almost wholly escaped punishment.
UPA BUREAUCRATS CONTINUE
Those who regarded the Modi government as being a reliable enforcer of accountability towards the misdeeds of the previous government have reason to be disappointed but not surprised. From May-June 2014 onwards, when the composition of the Modi government became known, it was obvious that action on previous decisions would be both few and slow to be actualised. Much of the top tier of the UPA official structure got transplanted into the bureaucratic team chosen by Prime Minister Modi, because of the faith that officials who had assisted UPA ministers in questionable actions would atone for their previous conduct by energetically working for the public weal under his leadership. The risk that they would instead work hardest at covering up evidence of their own involvement in UPA-era misdeeds was apparently not taken seriously by the new government. To the surprise of those who had backed Narendra Modi consistently and in difficult circumstances over several years in the belief that he was the only individual certain to enforce accountability for the past, several of the officials close to UPA-era VVIPs were chosen to hold positions of high responsibility in the Modi government. Action against UPA grandees would entail the risk of discovery of the extensive personal and business linkages between such entrants into the Modi government. Fortunately for them, the investigating agencies have lived up to the public expectation that they are better at covering up rather than uncovering graft, and even in major cases, action taken has been at a level far below that which was expected of the new government. It is therefore no surprise that many of those who worked hard for the success of the BJP in 2014 are likely in 2019 to sit at home rather than vote again for a party that seems to have done so little in fulfilling its campaign pledge to bring the guilty to book in cases of VVIP corruption. Ancient cases against Lalu Yadav or such political minnows as Chhagan Bhujbal have not succeeded in compensating for the fact that even in the much-reported case of former Finance Minister P. Chidambaram, thus far action has been on a microscopic scale, while against his son Karti, known across four continents as a high flyer, the only case being pursued is a matter involving the (for him) derisory sum of $1 million. And although BJP spokespersons talk long and loudly about the National Herald case, they omit to mention that this is being pursued not by the government but by Subramanian Swamy, an individual who at the time of filing the case was not even a member of the BJP. Even Robert Vadra seems to have remained unscathed despite 49 months of the Modi government. The many investigative agencies of the Union Government as well as several BJP-controlled state governments seemingly have yet to discover material against Vadra sufficient for prosecution. The BJP’s talk of VVIP UPA-era corruption, including during the 2010 Commonwealth Games or cricket shenanigans looks to many voters in 2018 to be just that, talk.
It would take a book to examine in any detail the web of contacts that 10 Janpath (in the hugely influential person of Sonia Gandhi) has within the bureaucracy, including with several of those given important responsibilities by Prime Minister Modi. It is a simpler task to examine the situation concerning P. Chidambaram, a UPA grandee who was discussed in Washington and London as a possible Prime Minister in 2011, and who may yet assume either that office or get his previous job back in the Central government were the Congress to secure 150-plus Lok Sabha seats in 2019. This is not an impossibility if a viable alliance system gets worked out by Congress president Rahul Gandhi and the team he is assembling around himself and his charismatic sister Priyanka. The star of the UPA, Palaniappan Chidambaram, for four decades, has held frontline positions in successive Central governments. Chidambaram is a brilliant navigator of the Lutyens maze, who uses the media, officers and businesspersons through “shaam, daam, dand and bhed”. The foreign financial entities that are given so much respect and credibility with the Modi government regard Chidambaram very highly, although the allegation that this is because of tens of billions of dollars parked within them is as yet unproven, at least on record by the investigative agencies. It must be admitted, though, that several of those agencies are riddled with officers who are admirers of Chidambaram and beneficiaries of his beneficence in the past. During the period that the UPA was in power (2004-2014), Finance (and later Home) Minister Chidambaram succeeded in getting officers of his choice posted inter alia within ED (DG Investigation), Member Investigation—CBDT, JS TRU and JS TPL, Chairman SEBI and IRDA, while he was an acquaintance of RBI Governor Raghuram Rajan, a nominee of Manmohan Singh.
The clout that Chidambaram exercised can be gauged from the fact that C. Bhave was made SEBI chief during his tenure as Finance Minister, even when there was a probe going on against his actions. Bhave was in constant touch with K.P. Krishnan, an officer exceptionally close to Chidambaram and also promoted by the present government. That several officers close to Chidambaram are still in sensitive positions may explain the unusual tardiness in investigation of the National Stock Exchange (NSE) colocation matter, in which the names of Chidambaram’s friends Ravi Narayanan, Chitra Ramakrishna, Ajay Shah, Sunitha Thomas and Suprabhat Lalla figure in the discourses about the subject. Brokers whose names are known, yet ignored by the agencies, managed to locate their servers besides NSE servers that were reportedly even linked to BSE servers through dark fibre. Those involved claim that the same dark fibre was used to link the servers of unscrupulous brokers with that of the NSE, thereby allowing huge insider profits to be made, besides gaining an ability to manipulate markets by taking positions based on secret knowledge. They made a multi-billion dollar killing at the expense of retail investors. After more than four years of a Zero Tolerance Prime Minister coming to power, those guilty in the NSE colocation imbroglio are still free and thereby able to ensure that the investigative agencies falter and fumble in probes against such a massive breach of trust of the investing public in the very institutions responsible for ensuring that the share markets run in an honest manner. Given the way in which SEBI has been functioning in such matters, it may need to change its name to SSEBI (for Sleeping SEBI). Insider trading is a poison that was rampant under the UPA, but yet remains unpunished even under the NDA. Stock market effects can devastate the BJP in 2019, the way the UTI scam affected the Vajpayee government in urban areas in 2004. However, this far, action against insider traders and scamsters, especially suspect brokers, has been derisory.
PSBS MADE TO SELL LOANS
Honest officials within North Block (and there are many) speak with disgust of how Public Sector Banks were made to sell their loans at deep discounts to private banks controlled by those close to the Finance Minister of the time. These private banks soon resold the loans at a huge profit. A Joint Secretary (DFS) of the period, Amitabh Varma, is reported to have been instrumental in ensuring that selected bank officers were given charge of public sector banks. Officials claim that many such nominations were made as a consequence of collateral consideration. However, the Modi government has yet to investigate the processes by which appointments to banks and their boards were made, despite massive NPAs accumulating as a consequence of decisions taken by the bank boards and managements of that period. While accusations against UPA—especially Congress party—grandees are freely resorted to by BJP leaders (especially during elections), ensuring accountability for past misdeeds seems to be in short supply even in this fifth year of Prime Minister Narendra Modi’s term.
HANDFUL CAREERS INTERRUPTED
Many believed that Modi by November 2014 would do what Mahathir Mohammad did recently in the very first days since his swearing in as Prime Minister of Malaysia, which was to take action against those VVIPs who had been credibly accused of corruption on an industrial scale. Such scams could not have taken place without the connivance of elements of the higher bureaucracy. However, thus far, so far as top officials are concerned, only a handful have had their careers interrupted. A senior official pointed out that Arvind Mayaram, a Chidambaram favourite, was reported to have postponed the inclusion of security features in high denomination currency notes for three years. Mayaram was also held by colleagues in the Home and Finance Ministries of having given permission to De LaRue, a company whose security clearance was revoked by the Home Ministry, to supply possibly compromised security thread unhindered for that period. The only “punishment” he suffered was an abrupt ending of his tenure rather than a comprehensive investigation followed by prosecution, as was expected of the Modi government by its backers. Hassan Ali was raided and thereafter placed in jail, but none of the VVIPs associated with him have thus far been prosecuted. Another case is that of Vodafone, especially the buying of Hutchison shares as part of the deal from 2000 onwards. Neither this nor some peculiar features of the subsequent sale of shares by major holders (at hugely different prices although conducted at the same time) to Vodafone UK seems to have been investigated, including by SEBI and the ED. Whose was the hidden hand that assisted Li Ka Shing to escape paying taxes on the huge profits he made on the sale of Hutchison shares to Vodafone? In particular, did Chidambaram have a Hong Kong connection that was instrumental in getting policies changed from 2004 onwards that facilitated the purchase by Vodafone UK of shares of the Indian company? Or indeed, what was the reason for the Finance Ministry to first impose export tax on iron ore when Sesa Goa was going to be sold, only to withdraw the tax once it was purchased by Vedanta? Who were those who made massive purchases of jewellery immediately after Nirav Modi made windfall profits after Chidambaram introduced the 80:20 scheme? Who were the officials who backed the scheme on paper and who were able to hold back its scrapping for months after “Zero Tolerance to Corruption” PM Modi took over? Or why Spicejet (once of Maran fame) was allowed by SEBI to do away with listing requirements and take in without any regulatory oversight Rs 600 crore from a tax haven? Whose was that cash? Chairman U.K. Sinha and his predecessors were never questioned about actions of SEBI that were contrary to the rules and practices of the institution. Such forbearance by the agencies has been despite PM Modi’s warning to them that all suspicious decisions should be rigorously examined. Several anomalies seem to have been ignored by investigating agencies despite Prime Minister Modi’s frequent exhortations to bring all suspicious transactions to light. Clearly, elements in the official machinery have ignored Modi’s orders, but without suffering the slightest blowback as a result. On the contrary, several officers involved in UPA-era shenanigans, and whose record in uncovering the guilty of that period has been zero, have repeatedly been promoted since 26 May 2014, to the surprise and stock of those who expected action against them. Zero Tolerance against the corrupt was in practice replaced with Zero Action against such depredators as a consequence of the stealthy assistance given by UPA favourites still holding important positions.
CHECK THE HOUSES
This has happened despite Prime Minister Modi being aware that success in fulfilling his vow of bringing to book VVIP depredators will be an important factor in the next Lok Sabha polls. A simple exercise of looking into the residences in Delhi built by retired (and some serving) officials will demonstrate their past, as for example a former Finance Ministry official now in a comfortable private sector job who has built a palatial house in Saket. Others have chosen other super-expensive locations for their own retirement homes, including the Vasant Vihar house built by former Principal Secretary to PM, Brajesh Mishra, whose fortunes rose dramatically after 1998 and remained high even after the UPA came to power in 2004. An official who was known in Chennai (a city where he operated in for years and which knows him well) to have tipped certain Tamil Nadu politicians about the impending demonetisation was recently given yet another promotion in an already highflying career. Chennai contacts say that a leading resident of that metropolis, Om Shakti Ramachandran, could be a fount of information about many matters that may be of interest to a Zero Tolerance regime, but as yet such a discussion has not taken place.
An example of how the honest get harassed is the experience of former Defence Minister Manohar Parrikar regarding his efforts at actualising the PM’s promise of ensuring One Rank One Pension (OROP) to ex-servicemen. Inspired by Prime Minister Modi, Parrikar sought to ensure that the same types of privileges were made available to a cadre prepared to sacrifice life for the nation, as was enjoyed by the civil service. Despite the importance of the issue, the fact that Parrikar was standing in the way of lucrative defence deals favoured by key arms merchants operating from London, Delhi and Dubai made the officials fed by them erect hurdle upon hurdle to Parrikar’s efforts to roll out of One Rank One Pension in the armed forces. The military and those associated with this noble institution had overwhelmingly voted for Narendra Modi in 2014. The intention of the dodgy officials was to damage the standing and credibility of the Defence Minister, but in the process, an important constituency (the armed forces serving and retired) started to become alienated from the BJP. Some of the officials who connived at creating hurdles to the implementation of OROP on the lines favoured by Defence Minister Parrikar were subsequently promoted on the recommendation of officials favourable to them. A senior official, on being told that a favourite of his should not be placed in a key slot in the Finance Ministry (because of suspicions regarding his role in questionable land deals in Chennai) argued that “just because dodgy activities were carried on in Chennai was no proof that the same would happen in Delhi”. Several cases of over-invoicing of hyper-expensive equipment indulged in by crony capitalists who were close to the UPA were dealt with by since 2014 by the newly promoted official, at immense cost to the exchequer. However, as yet a systematic audit of over-invoicing and subsequent interference (including by the high official in question) in the functioning of DRI investigations into multiple instances of over and under invoicing by crony capitalists very close to UPA VVIPs has yet to take place. Such lack of tangible action is contrary to Prime Minister Modi’s orders exhorting that every person guilty of cheating the exchequer of huge amounts of money get sent to jail. Such lack of punitive action is having political consequences for the BJP, whose primary attraction to voters is the image of incorruptibility and efficiency of Narendra Modi, an image that the Congress party and its allies have thus far failed to dent.
RAMESH ABHISHEK, T.S. VIJAYAN…
Several officials involved in tasks during the UPA days were given the same tasks once the new dispensation took office, an example being Vinod Rai. As Secretary DFS, Rai is regarded as having played a key role in bank appointments during the period when Chidambaram was Finance Minister, a task he was handed over even during the period when the NDA government was functioning. It must be added that Vinod Rai is an exception, in that as CAG, he released reports on 2G and Coal that seriously damaged the image of the UPA, thereby showing his independence of mind so far as political linkages are concerned. Another upwardly mobile official, Ramesh Abhishek, was placed in charge of the Forward Markets Commission while Chidambaram was running the Finance Ministry and was instrumental in ensuring that a competitor to NSE, the NSEL, was choked to death through executive action. He remains powerful in the new dispensation, which seems not to have investigated the contacts Abhishek had in the past with Kanti Singh, who is known to be known to former Union Minister Lalu Prasad Yadav. Another favourite of Chidambaram was T.S. Vijayan, former Chairman of LIC and Chairman of IRDA, who was mysteriously given a clean chit by the CBI. The LIC made extensive share purchases during his tenure in office, the prices of which subsequently (and predictably to those following the market and the speculative forces operating freely there) nosedived. Insider and illegal speculation in share markets has almost totally remained unexamined even by a government committed to transparency and honesty, even while the ED and other agencies fumble and stumble in efforts at ensuring that Chidambaram and his son Karti (whose record in success of business should be mandatory reading in business schools) face legal consequences for actions carried out during 2004-2014. Because of an apparent absence of serious intent on the part of agencies, courts have over and over again given Chidambaram the benefit of the doubt, thereby keeping alive his ambition of making a comeback in 2019, given the immense trust Sonia Gandhi has in him.
Now that Rahul Gandhi is hitting stride as the effective commander of the anti-Modi forces, the level of attack on the Zero Tolerance to Corruption Prime Minister is getting much fiercer. The effort is to strip the Teflon from Modi, who is the only electoral master card that the BJP has, as has been shown multiple times since 2014. A high success ratio in bringing to book VVIPs guilty of amassing wealth during 2004-2014 would have been of immense benefit to the BJP, just as the allegations of large-scale graft made by Modi during the last Lok Sabha campaign were. Although the Prime Minister has been working 16 hours a day in the enforcing of accountability, results have not been commensurate, because of the continued presence and prominence of several officials whose role during the UPA period bears investigation. In the short period that Prime Minister Modi has left before election season begins in earnest, he will need to make up lost ground at speed. This will be an uphill task in the face of what is likely to be an invigorated and ceaseless attack on his government by a Congress party that has been given a second chance at power by the lack of success of the Modi government in holding UPA VVIPs (rather than minnows) accountable for the multiple actions described in detail by BJP leaders themselves as corrupt during the 2014 election campaign. Retelling those UPA-era charges against the Congress party during the 2019 campaign will have little effect, given that the present government has been unable to take discernible action against perpetrators of such offences as serious as handing over billions of dollars of bank cash to crony capitalists, who promptly transferred such funds overseas, and who cheated the country in other ways as well, such as through over and under invoicing and in rigging share prices. What ought to be clear as sheer glass to the investigating agencies has thus far been largely ignored by them.