FOCUS

SCAMS 

UNDERGROUND-OVERGROUND

-OVERTHEGROUND

India is indeed a land of scams. Why? you would ask. Somebody deciphered SCAM, as representing - Scheming, Crafty, Aggressive, Malicious.

We, Indians, probably have some of the best brains on this earth, and some of them are in the Indian Administrative Service (IAS). To scheme, one needs good IQ, and these IAS have it in abundance. They are managers of our national resources. They are supposed to scheme for the nation, how to raise resources and how to deploy these resources for the greatest good of greatest number, that is Bahujan Hithaya Bhahujan Sukhaya. Of course the objective is ‘Sarve Jana Sukhino Bhavanthu’ of our sacred scriptures, or the Sarvodaya of Mahatma Gandhi. But somehow, being a vast country-geographically, socially and ethnically-the administrative apparatus, which is overseeing the re-distribution of our national resources, has for varieties of reasons, failed in fairer distribution of these resources. Could we say their SCHEMES have failed? The answer is Yes & No.

The answer is ‘Yes’, because, very early in the freshness of Rajeev Gandhi, the politician, he had famously observed “Only 15 paise in a rupee reaches the target, and 85 paise gets lost in transit”. This explains they are CRAFTY as well. It is the craftiness of officialdom in joining hands with politicians that have helped the combination in SCHEMING to plunder the national wealth for all these past years, for themselves, their friends and relatives. This has been happening for all the 65 years of post independent India.

No one can say with any amount of certainty that the word scam was derived from a British slang word scamp, which means swindler. But almost everyone will agree that India is giving the word an altogether new perspective. No longer is a scam limited to a few swindlers trying to loot a few crores. Scams in India have gained gigantic proportions with one after the other multi-billion Rupee scams tumbling out of the closet almost every month.

Starting with the UNDERGROUND, the latest in the series of scams, is the alleged wrong allocation of coal mines by the government. According to the draft report presented by the CAG, on the allocation of coal blocks to both private individuals and companies, so also to the public sector companies in the iron & steel and power generation industries, there have been major flaws. Report informs that the government had the legal authority to allocate coal blocks by auction rather than through the screening committee, but chose not to do so. Why? Did they have an agenda? As a result of this failure to auction, beneficiaries of this allocation got windfall gains of over Rs:10.67 lakh crores, with public sector companies getting the benefit of little over 50% and private companies the balance of little less than 50%.

Here SCHEMING & CRAFTYness were both in operation, for the simple reason, while coal mines are a national property, there are any number of private players who would like to make use of it for private gain. Thus while allocating these coal blocks to public sector companies, both the administrative apparatus and the political masters joined hands to allocate these national properties to private companies also. Of course they do have an explanation every time they deviate from the norms. This combination of Babudom & politicians took care to see that public sector companies were allotted more by 5% than the private companies. According to CAG draft report: the windfall gain by private companies in US $ terms was US $: 90.63 billion whereas by government companies gain was of the order of US $: 95.67 billion. This is a very very huge amount by any standard of comparison, when it comes to loss to national exchequer.

While gain by government companies may benefit these companies to some extent, even here, there is a great scope for private exploitation in connivance with the administrative apparatus and their political bosses. But with respect to private companies it is indeed a total loss for the nation. Besides these private companies also, many a time have political patronage and partial ownerships, so these allocation also leads to concealed loot by these politicians. As we have witnessed in the media, there were ministers involved in allocating these coal blocks to their preferred companies with their stake therein.

Of course, as usual, the Prime Minister Manmohan Singh chided the CAG for its ‘wrong’ reading of the law as well as its accounting of losses. The Finance Minister has, like his colleague Kapil Sibal in the past, also came up with ‘zero loss’ explanation saying, these coal blocks are not mined and hence no loss.

However, the government became suddenly alive to the awakening that CAG forced on it. Opposition across the political spectrum demanded that all allocation be cancelled forthwith. Government countered that there is a procedure to be followed for cancellation, forgetting that the same government had followed no procedure in allocating the coal blocks. An Inter Ministerial Group (IMG) was formed in a hurry. After it went into emergency meeting to save the face, in the midst of snowballing controversy all over the media, IMG acted, to recommend cancellation of these allotments to private companies. One by one they started cancelling the allocation of coal blocks and even encashed many bank guarantees, wherever mines were not developed within the stipulated time frames.

Of course, there were these 2009 mining scams of Orissa, where government lost some 7000 crores and the infamous Madhu Koda mining licence scam where he reportedly collected some 4000 crores from the allottees, also in 2009. This Madhu Koda is being chased by the investigation agencies, including Swiss Bank to track this money. This collection of such huge sum only after issuing license explodes on the face of P.Chidambaram, who cried hoarse with this ‘zero loss’ claim.

Then there is this Goa Mining Scam, where the Govt. lost power and the Union Secretary for Mines Vishwapathi Trivedi was shunted to a punishment posting for showing exemplary diligence in exposing the scam. 

Here, how can we forget the unceremonious exit of BS Yediyurappa, CM of Karnataka, post Bellary manganese ore mining imbroglio! Minister Janardhan Reddy is still languishing in prison, courtesy Andhra Pradesh government.

Another UNDERGROUND scam in the making, is the abrupt shifting of Union Petroleum Minister Jaipal Reddy, an honest and hardworking minister, in the recent reshuffle that took place. He, like one of his predecessor, Mani Shankar Iyer, too was shifted for resisting private sector pressures to do things favourable to these private players. Most of these private players want windfall profit or disproportionate profit. They have no concern when they deprive nation, its legitimate claim, they only believe in self aggrandisement. So any Babu or Minister doing a dutiful job for the nation, is a foul guy, and they want them removed from their SCHEME of things. Hence giving reasons of indecision, the Prime Minister and his coterie of advisors shift such honest people. This is only the beginning of another scam in the UNDERGROUND. We have to wait and see what coming days unravels.

There appears to be another huge UNDERGROUND scam in the making, if some print media stories are to be believed. Private companies, like it or not, most of the time, are interested in only themselves, let the country go to dogs. Until 2007, only public sector Indian Rare Earths Ltd was allowed to mine monazite, the thorium rich sand, from the beaches of Kerala, Tamil Nadu and Andhra Pradesh. According to one estimate this loss could make Coalgate and 2G Spectrum loss pale into insignificance. Figure spoken is close to Rs. 50 lakh crores. Reportedly a powerful mining cartel of Tamil Nadu has exported to China and Japan without government’s knowledge, some 2.1 million tones of this sand. This quantity had the ability to provide 50 years’ power need for the entire country, as a fuel to nuclear plants. Can this country be saved from the private sector and the inefficient/corrupt government? 

Coming to OVERGROUND, scams are innumerable. Almost along with the political freedom Indians, sort of, got freedom to loot the country. Cheating or making money illegitimately, could it be an Indian psyche?!

It was in 1948, there was this Jeep Purchase Scam. Reportedly country lost some Rs 80 lakhs, relatively not a small money those days. Then there were series of scams in the ‘50’s LIC-Haridas Mundhra scandal, due to which then Finance Minister TT Krishnamachari had to resign. Teja’s Bank Loan in 1959/60 to the tune of some Rs 22 crores was the biggest those days. (see box on pg no.12)

 In 1987, there were 2 infamous cases of Bofors (Rs 65 crores) and Howitzer Defence Purchase (HDW) – Rs. 20 crores. 1990s began with the Harshad Mehta securities scam involving thousands of crores of public sector bank funding which was lost to the exchequer. Indian Bank non performing questionable assets to the tune of Rs. 1500 crores was another major scam of 1992. Sugar import scandal of 1994 to the extent of Rs. 650 crores ‘Chara Ghotala’ of Bihar some 950 crores too was unearthed in 1996, so was Urea Deal of some 135 crores. Ketan Parikh and Stock Market scam of 2001, reportedly caused a loss of over one lakh crores. Telgi’s stamp paper scam involving Maharashtra politician was an unparalleled loot of the public money for years. This surfaced in 2003.

In 2005, it was the Scorpene Submarine scam which caused the loss to the nation of about Rs 20000 crores. In 2006, Hassan Ali, the horse breeder international cheat, reportedly owed to the government some Rs 100,000 crores in income tax due. But where and how did the income come from? For whatever reasons, the government has not gone after him with due diligence. Satyam Computers’-Asatyam Scam caused loss to all and sundry of thousands of crores of rupees.

Common Wealth Games, involving Suresh Kalmadi and his babudom coterie allegedly caused some 40000 crores loss to the nation, by acts of Omission and Commission. The high profile Kalmadi was jailed along with some of the other official conspirators. Irrigation scam involving some 70000 crores in Maharashtra has already taken the toll of Deputy CM of Maharashtra Ajith Pawar, with other possible ramifications. Then you have Adarsh scam, of residential property development scam on Defence land in South Mumbai. This whole scam is so representative of the rot in the system, where wholesale collusion of civil officials, army personnel along with the politicians apparently exploited the system, to their personal benefit. 

Then you have this Tatra All Terrain Army Truck scandal. Reportedly BEML, a public sector company, was purchasing it at around Rs 27 lakhs per truck and supplying it to the Army at about Rs 80 lakhs. Robert Vadra land buying and selling to DLF became another high point in the public perception of exploitation of the system for personal gain, by people connected with power. Vadra connected to Gandhi family, buying land from government at low prices and selling it to private developer at high prices does raise questions. More so, when amount of money involved is large. Former Union Minister Veerbhadra Singh’s exposure of receiving crores of rupees in cash from an industrial house is one of the continuing skeletons falling from the cupboard of the system. This industrial house, apparently had paid to the entire ‘who’s who’ in Union Ministries and its autonomous functionaries. One paper commented “Seems like entire govt was on the payroll of the Mittals.” According to report some Rs 100 crores was said to have been paid, by the company as bribe in about 3 years time, the period under scrutiny by the I.T. Deptt.

Coming to OVER THE GROUND scandals 2G Spectrum allocation scandal take the cake, besides Air India aircraft buying deal under the minister Praful Patel, a businessman politician.

It was the 2G spectrum scandal that really catapulted Comptroller & Auditor General of India, on the national scene as never before. When the news of CAG report hit the media headlines, it indeed overtook the anxiety of a nation caught in all kinds of financial wrongdoings to benefit some private pockets.

Although 2G Spectrum allocation losses were bandied about by most opposition parties in 2008 itself, it was only 2011, when CAG formally came up with their findings to tell the nation that it was Rs. 1,76,000 crores that country lost. Earlier opposition did not have the wherewithal of nation’s auditor to pointedly arrive at the loss figure, which speculated around Rs: 60000 crores. Thus the bombshell from CAG really unnerved the government with Supreme Court intervention, UPA II had no way to escape. Main player, A Raja, the telecom minister landed in Tihar Jail, along with DMK chief’s daughter Kanimozhi a Rajya Sabha MP for being a partner in the national loot. Even some of the babus were sent to these confinements for conniving with politicians to the detriment of the nation.

Of course what has been covered in these pages may not be exactly the tip of iceberg, but it has not covered a fair number of scams and financial misdeeds where country was forced to become poorer. According to some conservative estimate, during these past 65 years as a free nation, these scandals of mind boggling proportion has deprived the nation of about US $: 20 Trillion, or closure to Indian Rupees of over Rs: 900000000000000. Even if just 10% of this explosive figure was available to the planning commission to make the true difference on the ground, we would have already become the Super Power. We are low in literacy, low in sanitation, low in per capita income, low in safe drinking water availability, low in health parameters, low in overall human development index. But high in growing population, high in malnutrition, high in financial disparity, high in inequity in salaries and wages, high in unconcerned citizenry, high in hunger index, high in corruption index and many other dynamic parameters. Less corruption probably would have seen better India.

Yes Dr APJ Abdul Kalam’s dream of 2020 being the year by which time India can become a Super Power shall remain a dream until the above negatives are reversed. For which we need a government that performs and delivers. 

Long years ago, Singapore Prime Minister had observed India as a ‘floating land mass                                                               in the Indian Ocean’. Of course since those days, things have indeed changed, but its been very slow and tardy and nowhere near what Singapore is in HDI and other standards of development.

When shall India become a better state in the eyes of its own citizens, is a huge question that will continue to baffle generations of Indian. Only a newer and less corrupt governance can improve the lot of India and Indians. Will it happen?

J.Shriyan with inputs from Manasa Rao