The document appears to be a magazine containing various articles on political and governance issues in India, including a cover story on whether Rahul Gandhi's influence is waning, an exposé on taking action against Jignesh Shah, and a story on the real estate boom in Gurgaon, Haryana. Other articles discuss issues like the Devyani Khobragade case, the proposed nuclear power plant in Gorakhpur, tax evasion, and an IAS officer taking up stargazing. The magazine seems aimed at those interested in Indian politics and governance.
Nara Chandrababu Naidu's Visionary Policies For Andhra Pradesh's Development
Gfiles Jan 2014
1. 6
JIG
I
CA NES NSI
T H, GH
OF F T
AL ATT
L ES
p3 T
MG DEVASAHAYAM HOODA SELLING HARYANA
TO BUILDERS p26
January 5, 2014 `
VOL. 7, ISSUE 10
OM NARAIN VAID
STARGAZER
FIRST STIRRINGS
p42
gfilesindia.com
Fading
Halo
2.
3. From the Editor
W
vol. 7,
ISSUE 10 | JANUARY 2014
Anil Tyagi | editor
TR Ramachandran | executive editor
Niranjan Desai | roving editor
GS Sood | consulting business editor
Rakesh Bhardwaj | editorial consultant
Arvind Tiwari | director, business development
Naresh Minocha | associate editor
Neeraj Mahajan | associate editor
Alok Jain | coordinator (maharashtra)
Ajit Ujjainkar | bureau chief (mumbai)
Harishchandra Bhat | associate editor (bengaluru)
Venugopalan | bureau chief (bengaluru)
Kh Manglembi Devi | editorial coordinator
Mayank Awasthi | reporter
Pawan Kumar | production coordinator
Sumer Singh | assistant manager, logistics
Nipun Jain | finance
Gautam Das | legal consultant
Crossmedia Solutions | edit & design
Taran Tejpal Singh | Webmaster (Design)
advertising & marketing
adv@gfilesindia.com
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CONTACT — +91 9845730298
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+All information in gfiles is obtained from sources that the
management considers reliable, and is disseminated to readers
without any responsibility on our part. Any opinions or views
on any contemporary or past topics, issues or developments
expressed by third parties, whether in abstract or in interviews,
are not necessarily shared by us. Copyright exclusively with
Sarvashrestha Media Pvt. Ltd. All rights reserved throughout
the world. Reproduction of any material of this magazine in
whole, or in part(s), in any manner, without prior permission, is
totally prohibited. The publisher accepts no responsibility for
any material lost or damaged in transit. The publisher reserves
the right to refuse, withdraw or otherwise deal with any
advertisement without explanation. All advertisements must
comply with the Indian Advertisements Code. Published and
printed by Anil Tyagi on behalf of Sarvashrestha Media Pvt. Ltd
at Kala Jyothi Process Pvt Ltd. E-125, Site-B, Surajpur Ind. Area,
Gautam Budh Nagar, Greater Noida-201306 U.P. (INDIA). All
disputes are subject to the exclusive jurisdiction of competent
courts in New Delhi only
ELCOME, 2014. In all probability, this is going to be a
landmark year in India’s history. There will be a good
deal of churning this year: Who will be the new Prime
Minister of India? Which party will form the government? Will it be a hung parliament? Who will be the new Cabinet Secretary of India? How will the economy
shape up? Is young India in a mood to transform the face of Indian politics? No
one had been able to gauge the extent of the anger of the common man till the
emergence of the Aam Aadmi Party (AAP). Will the AAP be able to sustain the
momentum and become the agent of change for India? The mist will clear in 2014.
What is happening in the ruling Congress party? gfiles’ cover story debates
this. It states that if Rahul Gandhi is unable to muster votes and come up as a
veritable cheerleader, then it is certain he will be out of the game for the next five
years. The Congress leadership is completely disconnected from the common
man. Voter mindset has altered—voters now desire that their leader should be
among them, to be available as and when they need him. But Congress leaders
behave like monarchs; the common man cannot find any commonality with them.
As we analyse the emerging parliamentary scenario of 2014, the next Prime
Minister will be decided by more than 200 Members of Parliament who will be
neither from the Congress nor the BJP. It is going to be a fractured mandate and
it will be interesting to see how the BJP is able to form the government or how the
Congress allows others to form the government as it has done in Delhi.
Meanwhile, TN Pandey, former Chairman of CBDT, angrily points out in his
article, ‘Soft on tax evaders’, that tax economists and policymakers the world
over discourage amnesty. When 10 lakh registered taxpayers are not discharging
their obligations, they need to be dealt with sternly—not cajoled by being provided immunity from interest, penalty and prosecution. MG Devasahayam is concerned about Haryana, about the Gurgaon conundrum orchestrated by Bhupinder
Singh Hooda and about the implications of a nuclear power plant at Fatehabad.
He writes, “Since the Bhakra Water Sharing Agreement mandates that Bhakra
water can only be used for irrigation and generation of hydel power, the BhakraBeas Management Board cannot give water for the nuclear plant.” In a related
story discussing the role of the AERB, Devender Singh states, “There is no system
in place for monitoring the expiry of authorisations and their renewals with
instances of protracted delays for periods as long as 24 years. Alarmingly, 70 out
of 135 Gamma Chamber units continue to function without valid authorisations.”
Our Roving Editor, Niranjan Desai, comments on the Devyani Khobragade
incident, “The government must insist on a reciprocal level playing field with
the Americans on the question of diplomatic privileges and immunities, without
any exception of any kind.” Amitabh Thakur carries forward his analysis of the
bureaucracy: “They can become a political entity in their own right, not exactly dependent on various high commands, in case they definitely and strongly
decide upon that and go religiously, meticulously and sincerely on that route.”
Heartwarmingly, Kejriwal was a bureaucrat, not a politician, who has become the
voice of the common man. In the new year, let us make a commitment that the
communication channels of all the officers will be open for the common man. For,
if you don’t open them now then the aam aadmi, who pays for everything one
owns, will force open the door and raise the voice of pain and anger.
ANIL TYAGI
editor@gfilesindia.com
Download the gfiles app
www.indianbuzz.com
gfiles inside the government
vol. 7, issue 10 | January 2014
3
4. CONTENTS
6 Bric-a-Brac
LETTERS
editor@gfilesindia.com
10 Cover Story
is the gandhi aura on the wane?
SP MG
EA DE
K VA
OU SA
p3 T, HA
4
M YAM
OD
I!
polls & trolls
EXPOSÉ WHEN WILL ACTION BE TAKEN
AGAINST JIGNESH SHAH? p28
December 10, 2013
VOL. 7, ISSUE 9
SUNIL PATNAIK:
IAS TO ASHRAM
FIRST STIRRINGS
p42
22 Governance
devyani case stirs up a storm
gfilesindia.com
26 real estate boom in gurgaon
30 gorakhpur n-plant: is it all above
board?
32 review of radiation management
GOVERNANCE
AWARDS 2013
regime
40 encouraging tax evaders
36 Insight
the rise and fall of jignesh shah
42 First Stirrings
ias officer takes to stargazing
46 My Corner
serving the people
48 Silly Point
‘burking’ by the police
50 Stock Doctor
book profits along the way
56 Perspective
on true relationships
57 By the Way
poll-pouri, hi-tech offices and more
New Paradigms
Governance awards
I take this opportunity to compliment
you for the excellent conduct of the
gfiles governance awards event. I must
say that your magazine is doing great
work by identifying and felicitating public servants for their innovative solutions
to complex social and economic issues
of the country and their hard work.
Shekhar Dutt
Governor of Chhattisgarh
I read with interest your December 2013
issue, highlighting innovative and
commendable work done by our civil
servants. Each and every award was truly
well-researched and deserving. It is
important that hardworking and
committed civil servants get the
recognition due to them, or else they will
be engulfed by the malaise of corruption
that is spreading in our society. It is
extremely important that the
bureaucracy stay motivated for then only
will the standards of governance improve
in our country. I congratulate you on
successfully conducting the gfiles
governance awards ceremony.
BM Shah via email
Black money
COVER PHOTO: UNI
4
gfiles inside the government
vol. 7, issue 10 | January 2014
The article on black money (gfiles,
December 2013) clearly brings out the
fact that unless there is strong political
will to check black money and severely
punish the guilty, the super-rich or
politicians and industrialists will
continue to stash money in safe
havens abroad. There was a lot of hue
and cry sometime back but nothing
concrete seems to have emerged from
it. The government needs to spell out
to the public its strategies for
unearthing and recovering black
money stashed abroad. As pointed out
in the article by TN Pandey, the role of
black money in real estate transactions
has been accepted by the Finance
Minister of the country and no less.
Unaccounted monies continue to be
invested in real estate, given the good
returns. We would like to know what
the government is doing about it.
Making speeches and releasing white
papers is not enough.
SK Mishra via email
Wish list
I wholeheartedly agree with the point
made by MG Devasahayam (“Wish list
for the wannabe Prime Minister”,
gfiles, December 2013) that there are
some issues that can work in favour of
Narendra Modi—likely unemployment,
corruption, price rise of basic
commodities—but there are some
points where he should review his
facts before speaking at a public rally.
The carnage of 2002 and its
consequences are still haunting both
him as well as his party members.
Issues and concerns threatening the
stability and integrity of the nation
have not been meaningfully addressed
by the Gujarat Chief Minister. But,
there is no denying the Modi effect.
Modi’s pull can be clearly seen in the
results of the recent assembly
elections where the BJP defeated the
Congress by large margins. Is India
really ready for a change?
S Madhu on blog
www.gfilesindia.com
6. Bric-a-brac
polls & trolls
Hooda keeps the flag flying
campaigns in chhattisgarh
H
ARYANA Chief Minister Bhupinder Singh Hooda
knows exactly how to keep the Congress party bosses happy. No job or distance is too much. Everybody
was surprised in Congress circles when Hooda landed at
Raipur for campaigning. After all, Hooda is not a national
leader and he does not have a mass following in the country,
except in Haryana. However, some rich farmers who
received handsome compensation for their
land in Haryana, bought land in
Chhattisgarh. After attending many
public meetings across the state, Hooda
camped for four days in Rajanandgaon,
where assembly election was historic
this time. Congress treasurer and
Rajya Sabha member Motilal Vora’s
son, Arun Vora, contested from the
constituency. Arun had lost from
Rajanandgaon three times, so it became a prestige
issue for Motilal and his well-wishers (read Congress top
brass) to win the seat. All the staff and members of the AICC
Making the gods happy
modi visits kashi
hoped Arun could win as Motilal is loved by all. So Hooda
was deputed to hold the fort, and he definitely kept the flag
flying. The voters of Rajanandgaon were ‘very happy’ with
Hooda’s benevolence. Arun won the election and the ageing, humble, worried Motilal is now happy
and gratified as he had
personally requested Sonia
Gandhi to allot this seat
to his son.
g
N
ARENDRA Modi has managed to get the BJP’s godfathers
to declare him the Prime Minister of India. But he is still not
sure that the Almighty will bestow his blessings on him. It
was naturally a complicated issue—how to make the gods happy. The
task was duly assigned to his brother, Soma Bhai. Kashi Vishwanath is
considered the most powerful god in Indian mythology. So Soma Bhai
contacted the most prominent astrologers in Varanasi. Those top-notch
astrologers of the historic city of Kashi predicted that Modi will be the
next PM and he will do wonders. But
they also suggested that Modi should
visit Varanasi and take a sankalpa
(oath) before Lord Shiva himself.
Modi could not, however, go for this
purpose alone, so a massive rally was
organised. Modi paid his obeisance at
Kashi Vishwanath and took the sankalpa.
Apart from his brother, Soma Bhai, Smriti Irani,
one of Modi’s ardent admirers, too is in touch
with all kinds of personalities and characters to
muster support for Modi. It is to be seen what the
gods have in store for him, whether the gods of the
BJP will keep their promise or he will have to rely on more worldly gods.
g
6
gfiles inside the government
vol. 7, issue 10 | January 2014
www.gfilesindia.com
7. INSIDE EYE
ILLUSTRATIONS: ARUNA
Rahul’s elitist adviser
mistry angers party workers
D
IGVIJAY Singh, Mohan Prakash, Madhusudan Mistry
and CP Joshi are the top four advisers of Rahul Gandhi.
They are now being blamed by party leaders and workers for the recent debacle in the
assembly elections. Mistry, in
particular, has been accused by
Indore-based leader Raghu
Parmar of taking money before
finalising his ticket for the
Indore-5
constituency.
Parmar
alleged at a press conference
that money had exchanged
hands in a Gujarat hotel. It is
well known that though he was
originally
an
RSS
man,
Madhusudan Devram Mistry today
has enviably got the eyes and ears of
Rahul and is in charge of all
backroom strategy and plan-
www.indianbuzz.com
ning. Mistry was an acolyte of Shankarsinh Vaghela when the
latter was in the BJP and had RSS leanings. He left the BJP in
1995 along with Vaghela to form the Rashtriya Janata Party
(RJP). With the merger of the RJP with the Congress, Mistry
became a Congressman. His corporate style of functioning,
English orientation and database brand of politics have
already ruffled many local leaders. An even bigger problem is accessibility. That is why he was
roughed up at his residence in South
Avenue by a few Congress workers
from Meerut when he refused to meet
them and asked them to come to
Lucknow when he visited there next.
Going to Lucknow to meet Mistry
after taking prior appointment
didn’t suit them as Delhi is
hardly two hours from
Meerut. Moreover, they were
upset and anguished that
their own party General
Secretary insisting on
prior appointment for a
minor meeting!
g
gfiles inside the government
vol. 7, issue 10 | January 2014
7
8. Bric-a-brac
polls & trolls
A party for all
new entrants line up for aap
A
S politicians of all hues and inclinations queue up to
join the Aam Aadmi Party (AAP), the latter would do
well to recall a chapter from history. Today, there are
rich and influential politicians of every political colour who
are not averse to their supporters (read pawns) joining the
AAP. This way, they can keep track of the goings-on inside the
rookie party. Sources tell us that even some industrialists are
deputing their top corporates to become AAP members.
Sooner or later, these pawns will be in key posts. Recently,
Alka Lamba, the ex-secretary of the Congress, resigned from
the party and it is believed that she will join the AAP. Lamba
is an ardent supporter of industrialist Navin Jindal. Her
moves are being seen as part of Jindal’s penetration of the
AAP. To go back in time: In 1978, when the Congress was
divided, PC Sethi remained in the Congress (Reddy) as he was
treasurer of the party. Indira Gandhi allowed him to be there
as he was holding the keys to the treasure and she did not want
the Janata Party to fritter it away. Congress
(Reddy) was not the target of the Janata
Party and Sethi’s activities went
unnoticed. The moment Mrs G
came back to power in the
1980s, Sethi joined the
Congress(I) and brought
along the wealth which he had
kept as custodian in the Congress
(Reddy). Now, we have to see how
the AAP handles the pawns!
g
8
gfiles inside the government
vol. 7, issue 10 | January 2014
www.gfilesindia.com
9. (A Government of India Enterprise)
Power Transmission
ince its inception, EPI has been
committed to providing the best
project management service
through its dedicated and highly
experienced team of personnel for
a variety of multi-disciplinary projects.
During the last 4 years, EPI has been
engaged in the field of execution of large
and multi-disciplinary industrial and
construction projects on turnkey basis and
project consultancy services in India and
abroad. EPI’s areas of operations are spread
across the following projects:
■ Civil and Infrastructure
■ Water Supply and Environmental
Engineering
■ Material Handling
■ Metallurgical
■ Industrial and Process Plants
■ Oil and Petrochemical
S
Road Projects
Grain Silos
Water Treatment Plant
EPI has contributed immensely in the
advancement of the nation and the
company is presently focusing on high
technology, consultancy and high value
projects. The company is re-establishing its
activities in the overseas market. EPI has
also diversified in the following sectors:
■ Mass Rapid Transit System
■ Renewable Energy
EPI is a uniquely integrated
engineering
company
capable
of
undertaking projects from the concept to
commissioning and performs the
following:
■ Feasibility Studies and Detailed Project
Reports
■ Design and Engineering
■ Supply of Plant & Equipment
■ Quality Assurance
■ Project Construction
■ Erection and Commissioning
■ Operation and Maintenance
■ Overall Project Management in almost
all areas of engineering and
construction domain
EPI’s composition and character makes
it ideally suited to take up execution of
large and complex construction projects in
a wide spectrum of industries. Most of EPI
personnel have grown up with the
organisation and have considerable
experience. Its engineers possess vast
knowledge and experience in various
disciplines like civil, mechanical, electrical,
chemical, instrumentation and other
engineering disciplines.
Mass Rapid Transit System
HOUSING COMPLEX,
SURYANAGAR, BANGALORE
www.indianbuzz.com
Airports
gfiles inside the government
vol. 7, issue 10 | January 2014
9
10. COVER STORY
politics congress
Diminishing
returns from
dynasty
The Congress has nobody but itself to blame for attempting to run a national
party with the charisma of a single family. That, too, for the most part of its
existence. If old, family-held enterprises can topple because they failed to
move with the times, why can’t a family-held party?
by K SUBRAMANIAM
D
IFFERENT States, different
players, different playgrounds,
different rules and yet the same
result! It is time for the Congress leadership to sit back and dispassionately
analyse as to what has brought it to
this moribund state. Why is the party
losing everywhere? Why has it failed
to understand the needs and aspirations of the aam aadmi? Why has
Rahul Gandhi failed as a leader? Why
have Congress poll managers become
so staid, stale, inefficient and incompetent in gauging the mood of the
electorate? Where will it go from here
and who will lead the party now in the
forthcoming Lok Sabha polls?
Whatever logic and explanation
may be given by Congress leaders oncamera, yet the fact remains that
nothing has worked for the Congress
in the last four years. Be it Bihar,
Uttar Pradesh, Gujarat, Punjab, Goa
or the five states that recently went to
polls—Chhattisgarh,
Madhya
Pradesh, Rajasthan, Delhi and
Mizoram—nothing has worked for the
Congress. If this could be hailed as the
semi-final, then there is a clear
indication that the Congress would
struggle to even get into three digits
in the forthcoming general election
and will have a tough time in getting
a two-digit tally in the Hindi
heartland States.
Rahul no gamechanger
The biggest disappointment is the
failure of Rahul Gandhi as a weapon
which the Congress hoped to use as a
gamechanger. In a private conversation, a very senior Congress leader
said that “the Congress party can keep
foisting Rahul on the electorate and
we can never dare oppose him because
he is the scion of the party’s first family. But it is clear that people are not
prepared to accept him in the current
avatar. The sooner our party accepts
“Rahul Gandhi lacks the fluency and charisma that mark a politician who can excite or
charm an audience. His mannered behaviour, his stiff body language and his inability
to speak Hindi in a fashion that the audience can relate to, has clearly put paid to any
expectation of mass support,” says a political commentator.
10
gfiles inside the government
vol. 7, issue 10 | January 2014
www.gfilesindia.com
11. this, the faster it can start
re-building itself”.
Rahul’s close confidants
dants
have been using the term
nstrate
‘gamechanger’ to demonstrate
that his ideas and ideals are
als
different from the present dissent
pensation. The results of this
s
round of assembly polls have once
s
again proved that he did prove to be
d
a gamechanger. Instead of mobilisd
ing the electorate and translating
d
them into votes, Rahul’s “poori roti
’s “
khayenge, Congress ko jitayenge
(borrowed from Indira Gandhi’s election manifesto) in fact, boomeranged
on him and his party. Now, the party
think-tank will be forced to either
ced
abandon the term ‘gamechanger’,
gamechanger’,
or will have to look for fresh ideas and
resh
a better plan and projects to reclaim
cts
the term.
Congress party insiders admit
iders
that, “as heir to the Nehru-Gandhi
ru-Gandhi
dynasty, there were but two
possible reasons for the party to
e
look to Rahul Gandhi. One was
their belief in the possibility of
sibility
Rahul Gandhi’s ability to enthuse
o
voters on the basis of his pedigree,
while the other was that he may
at
be able to revitalise a decaying
party organisation through his
rough
ans
more
scientific
plans
and
preparations”.
But a look at the rallies of Rahul
ies f Rahul
clearly indicates that he is not a man
who has a natural connect with
nnect
crowds. “He lacks the fluency and
luency
charisma that mark a politician
olitician
who can excite or charm an
rm
audience. His mannered
nered
behaviour, his stiff body lany
guage and his inability to speak
o
Hindi in a fashion that the
hat
audience can relate to, has
clearly put paid to any expectaxpectation of mass support,” says a
veteran political commentator.
entator.
www.indianbuzz.com
gfiles inside h government
gfiles inside the government
fi es in d
ns de
overnm
ov nm n
ove n ent
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gfiles inside the government
vol
vol. issue 10 January 2014
vol. 7, issue 10 | January 2014
ol
ol. issu
ss
ssu
ss
January 2014
anuary
n
11
11
12. COVER STORY
politics congress
On many occasions, Rahul has
proved to be an enigma and surprised
both his friends and foes alike with his
quips and quotes on some important
issues. It is here that his failure is
most evident and provides the clearest evidence that it may be best for the
party to look beyond him.
More than that, however, it is the
systematic organisational failure and
decay within the Congress which
appears to have landed it in such a
state. Many people would have to take
the collective blame for this. Says
another political analyst, “The fall of
Rahul Gandhi as a leader is not the
only problem with the Congress party.
Manmohanomics and Sonianomics
too have to take an equal share of
blame for the present mess.”
There is a lot of truth in this statement. First, take a look at a few statements made by Rahul in recent
times. Rahul’s gaffe about intelligence
agencies briefing him about plots by
terror outfits to lure Muslim victims
of
communal
violence
in
Muzaffarnagar, raised a lot of hue and
cry. Apart from the stigma that the
victims could do without, questions
were raised about Rahul’s claim that
intelligence agencies were briefing
him when they had no business doing
so; neither is he the Union Home
Minister nor the Prime Minister. A
national newspaper also published a
report alleging that there had been
largescale misuse of intelligence
agencies
to
screen
possible
Congress candidates at the behest of
Rahul and his team.
Second, Rahul kept reminding voters in his speeches that the Land
Acquisition Bill was his idea and that
he had personally toiled on foot from
Bhatta Parsaul to Noida in Uttar
Pradesh to understand the related
issues and then pushed the UPA to
adopt this idea as law. He wanted the
12
gfiles inside the government
vol. 7, issue 10 | January 2014
compensation of the required land to
be raised to four times that of the market value in rural areas and twice the
market value in urban areas.
But his think-tank members perhaps failed to make him understand
that the landed gentry was wellentrenched in the political game and
knew how to use the Bill in their best
interests. The business community
and industry were already opposed to
it as it would inflate costs and make
the acquiring process so cumbersome
that no new ventures would be practically possible. Even Congress
President Sonia Gandhi and Congress
workers remained blissfully oblivious
to it and the net result was a dud!
Third, Rahul tried to woo the voters
in Madhya Pradesh and Rajasthan
through tear-jerker narration of his
mother’s illness and regret of not
carrying her resolve to press the
button during voting in Parliament
for the Food Security Bill. He tried to
connect to the sympathetic and
emotional chord of the people by
narrating how assassination of his
grandmother and father impacted his
Rahul Gandhi not only
needs to learn from the
past but also has to change
his persona and style of
functioning in the best
interests of the party. He
would have to make a fine
balance by synthesising
the traditional strongpoint
of the Congress party along
with a modern and
realistic outlook and a
scientific way of analysing
the present trends and
work for a better future.
life. Even his belligerent ‘tear and
throw the nonsense ordinance’
approved by his own party government
failed to impress the voters.
Dichotomy between words
and deeds
Rahul has always said that he wanted to usher in more democratisation
in the party and was a votary of giving
way to younger faces in elections. But
the end result of all such exercises
have been confusing and, at times,
contradictory to his statements. For
these assembly elections, the process
of selection of candidates has been
entirely the work of Rahul and his
team, with the Central Election
Committee (CEC) headed by Sonia
Gandhi just working to endorse the
selection. A report in a newspaper
quoted a CEC member as saying: “At
CEC meetings, names are taken and
cleared almost like a ritual as we know
Rahulji and his team have done the
background check through independent surveys, intelligence agencies and
various other sources. Madam (Sonia)
does not intervene anymore and
watches the proceedings silently.”
A few members of Team Rahul also
suggested that he has always favoured
credible young faces. Yet the biggest
howler was the Congress’ decision to
give a ticket to 80-year-old Ameri
Devi, the mother of Malkhan Singh
Bishnoi, the main accused in the
Bhanwari Devi abduction and gangrape case in Rajasthan. In terms of
party reorganisation, Rahul seems to
have relied heavily on people, who,
like him, have inherited the privileges
of power. In Rajasthan, for example,
both Sachin Pilot and
Jitendra
Singh were made co-chairmen of the
poll campaign committee. “This multiplication of imitations of Rahul
across the party has virtually ensured
that there are no grassroot leaders of
www.gfilesindia.com
13. General Election 2009: State-wise results
BJP
Congress
Others
Jammu & Kashmir (6)
2
BSP
Punjab (13)
8
1
4
1
Trinamool Cong
SP
Himachal Pradesh (4)
CPI(M)
3
Arunachal
2
Pradesh (2)
Uttarakhand (5)
Haryana (10)
9
DMK
4
4 1
1
Utt
Rajasthan (25)
19 4
7
ar P
rad
e
22
2
Delhi (7)
22
Assam (14)
Sikkim (1)
sh (
20
3
80)
Bihar (40)
10
6
11 2 27
(11
)
Madhya Pradesh (29)
Ch
ha
ttis
ga
rh
11 13 5
Maharashtra (48)
1
2
W
es
8
tB
Manipur (2)
2
1 1
en
ga
Tripura (2)
2
l (4
2)
Odisha (21)
6
6 15
Jharkhand (14)
17 9 22
Nagaland
(1) 1
Meghalaya
(2)
Gujarat (26)
17 9
4
7
1
1 7
6
1
Mizoram (1)
1
19
9
7
Andhra
Pradesh (42)
31
Goa (42)
1
11
1
Karnataka (28)
18 9
1
Andaman & Nicobar (1)
Tamil Nadu
(39)
1
Chandigarh (1)
1
Kerala (20)
8 13
Dadra & Nagar Haveli (1) 1
13 7
18
Daman & Diu (1)
1
Lakshadweep (1)
1
Pondicherry (1)
1
www.indianbuzz.com
gfiles inside the government
vol. 7, issue 10 | January 2014
13
14. COVER STORY
politics congress
any importance emerging from within the party structure. At the very
least, the result of Rahul’s intervention should have been the selection of
candidates who represented the new
and progressive face of the party,”
said a senior editor of a prominent
Hindi daily from Jaipur.
They may not voice it in public, but
a section of Congressmen has started
saying that if the ability to win a seat
is to override all constraints of public
morality, then isn’t much of the posturing being done by Rahul just
hypocrisy? If a small coterie of people,
with no direct experience of how politics actually plays out on the ground
in this country, can rely on survey
agencies and, far more problematically, on intelligence agencies, to
select candidates, what was Rahul
doing over the past few years, trying
to build the party from the grassroots?
A few questions are also being
raised on Congress President Sonia
Gandhi’s brand of politics, termed
‘Sonianomics’. This section of the
party describes her as the super government and her post of Chairperson
of the National Advisory Council as a
super constitutional position. Steps
like the Food Security Bill and the
Direct Cash Transfer schemes have
been attributed to her and yet the vot-
Though Rahul Gandhi has been the
Congress vice-president for nearly a
year, he has failed to make an impact
ers gave a decisive mandate to the BJP
in the recent assembly polls. The
Rajasthan debacle was a clear pointer
that distribution of freebees and doles
in the election year do not help.
Family-held enterprise
The Congress has nobody but itself
to blame for attempting to run a
national party with the charisma of a
single family. That, too, for the most
part of its existence. If old family-held
enterprises can fail because they
failed to move with the times, why
can’t a family-held party?
A few political commentators following the Congress beat for years
admit, “The first family never had
much live contact with the rank and
file, but it always had a feel of the people’s pulse and supporters had an
unflinching faith. That has suffered a
serious dent. The demoralisation in
Congress ranks following a total rout
in four north Indian States is slowly
turning into deep disenchantment,
even anger, against the person who
they until recently worshipped as
their unquestioned leader with a
divine right to rule.”
In their opinion, a leader’s aura
comes with his ability to foresee an
emerging situation, mould his action,
gear up the organisation to meet the
challenges and establish a connect
with the people and be the vote
catcher for the party. Rahul’s failing
to deliver on those counts has
diminished his authority. Ironically,
it is not just the old guard that is angry
with Rahul’s unpredictable statements
but even the younger leaders, both
sung and unsung, are deeply critical
of him and the mismatch between his
reaching and his practice. With the
Rahul Gandhi card being ineffective,
the Congress leadership appears to
have plunged into a crisis of credibility.
Muddled vision
Rahul, in all his recent election
campaign speeches, spoke about the
aam aadmi and the steps taken by the
Rahul Gandhi has not been able to
enthuse party workers
UNI
14
gfiles inside the government
vol. 7, issue 10 | January 2014
www.gfilesindia.com
15. RAJEEV TYAGI
UPA for their upliftment. But, he miserably failed to get his point across.
While all governments, particularly
the BJP-led ones, have been as populist as the Congress at the Centre,
what with several welfare schemes,
it’s the latter that is being panned for
trying to buy votes through schemes.
Some experts feel that Rahul and
his team should have been ready with
a blueprint about his vision of India.
He became the vice-president of the
party in January and 11 months were
good enough for his team of advisers
to draft his vision and his mission.
While BJP’s Prime Ministerial
candidate, Narendra Modi, has made
a lot of noise on his inclusive development model, neither Rahul nor the
UPA have come out with a coherent
view on an inclusive economy yet. It
may be so because Rahul’s team of
advisers has not yet been able to
understand the reality of politics at
the grassroots and are still torn
between copying the American quick-
www.indianbuzz.com
The failure of Rahul
Gandhi as a leader is not
the only problem with the
Congress party,
Manmohanomics and
Sonianomics too have
to take an equal share
of blame for the
present mess.
fix for Indian maladies.
Moreover, his advisers like
Madhusudan Mistry and Jairam
Ramesh have been giving him prescriptions which are not in sync with
the reality. While Mistry’s diagnosis
of the party’s shrinking base in various States has been bizarre, Ramesh’s
remark that “Modi on Lokpal is like
Asaram talking on virginity” has only
made the discourse frivolous.
With regard to the Modi versus
Rahul debate, the experience of taking responsibility is an important
issue. So far, Rahul has avoided any
ministerial responsibility, while Modi
has a proven track record of governing a State well. “How can the
Congress expect voters to accept
Rahul for the top job easily? Surely, it
has not stopped taking people for
granted, or it has no other option left.
If it has to survive, it has to sink or
swim with him. This was the predicament with the BJP sometime ago and
they found their solution in Modi,”
wrote a veteran commentator a few
days ago.
The Congress party think-tank, on
the other hand, appears to be convinced that it is a case of better late
than never and that is how they want
to present Rahul—on the basis of the
good work done by the UPA II government in many areas which have not
been given due publicity.
Congress losing allies
The DMK’s decision to dump the
Congress in the forthcoming Lok
gfiles inside the government
vol. 7, issue 10 | January 2014
15
16. COVER STORY
politics congress
Sabha polls is another piece of evidence that power—or even the prospect of power—is the key to alliances.
While this does not mean M
Karunanidhi is about to seek an entry
into the NDA under Modi, the smell of
defeat that hangs around the Congress
is certainly driving away allies, giving
the BJP hope for 2014. On the other
hand, AIADMK chief and Tamil Nadu
chief minister J Jayalalithaa is also not
ready to align with anybody. She has
already made it clear that her party
won’t have any alliance with the BJP
ahead of the polls. That means, for the
first time in decades, Tamil Nadu is
likely to witness a solo performance
during the next Lok Sabha elections by
all major political parties in the State.
The Nationalist Congress Party, led
by Maratha chieftain Sharad Pawar,
has also started making contrarian
noises. Not only is the Congress-NCP
alliance in Maharashtra tottering,
Pawar’s statement on Rahul’s
capability as well as his jholawala
brigade of advisers has raised
eyebrows in the Congress camp.
According to a senior Congress leader,
“Sharad Pawar is like a cat on the wall
and his support cannot be taken for
granted now.”
Hard truths
The biggest challenge before the
Congress will be, how to manage the
numbers? The fact that the Congress
is ruling in 11 States today may look
promising on paper, but all these
States together account for only about
180 Lok Sabha seats, of which the
Congress holds less than 100. In the
last general election, the Congress
and its allies had done well in these
States and managed more than half
of the seats. It is doubtful if the
UNI
Congress will reap the same kind of
harvest in 2014.
The Congress faces serious trouble
in Andhra Pradesh, where it had won
33 out of the 42 seats last time. With
its own Chief Minister, Kiran Reddy,
preparing the ground for an exit from
the party over bifurcation of the State
and YSR Congress leader Jagan
Mohan Reddy and TDP chief
Chandrababu Naidu looking more
amenable to aligning with the Modiled BJP, the party seems to have shot
itself in the foot with Telangana.
The situation is equally miserable
in Maharashtra, where the CongressNCP alliance won 25 out of 48 seats
last time. With the Adarsh housing
and irrigation scams, law and order
failures and no extraordinary governance to show, the Prithviraj Chavan
government will certainly face the
disadvantage of incumbency. Add to
this the nuisance of a wily NCP supremo, who can embarrass the Congress
and walk out of the alliance at the last
moment. In that case, the Congress
would not be in a position to take its
tally to double digits.
In Haryana, the Congress had
managed nine out of 10 seats on the
basis of Chief Minister Bhupinder
Singh Hooda’s popularity and deft
management. But then, there were no
Robert Vadra land deals or Ashok
Khemka inside stories. Additionally,
if the AAP expands contiguously to
the State, the Congress’s goose is
likely to be cooked.
Similarly, in Assam, the Congress
won seven out of 14 seats. Will Tarun
Gogoi deliver again remains a big
question. In the wake of the recent
rape outrage and charges of mis-governance, he looks like a defeated man.
In Kerala, the party and the
The youth brigade of the Congress
seems cut off from the people
16
gfiles inside the government
vol. 7, issue 10 | January 2014
www.gfilesindia.com
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gfiles inside the government
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vol. 7, issue
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18. COVER STORY
politics congress
Rahul Gandhi has not come out with a
clear-cut vision to connect with people
government it leads are in complete
disarray, thanks to neverending
scams— including its regular share of
sex scandals—and internal fights.
Unless the electorate is put off by the
violent and opportunistic ways of the
CPI(M), Oomen Chandy may not be
of any major help. In Karnataka,
which has 28 Lok Sabha seats, the
Congress tally is nine and its government is in power. But Chief Minister
K Siddaramaiah’s image has already
started to take a beating, thanks to
vociferous
cries
by
senior
Congressmen about all ex-Janata Dal
men getting plum posts and say in
governance.
There are nine States—Madhya
Pradesh (29 seats), Karnataka (28),
Gujarat (26), Rajasthan (25),
Chhattisgarh
(11),
Delhi
(7),
Uttarakhand (5), Himachal Pradesh
(4) and Goa (2)—where the Congress
is directly pitted against the BJP. Of
these 137 seats, the Congress may find
it tough to reach the 60 mark. Added
to that are States like Jharkhand (14),
Punjab (13), Haryana (10) and Jammu
and Kashmir (6), where the BJP
would be facing polls along with its
local allies. Of the 43 Lok Sabha seats
here, the Congress may find it difficult
to retain even 15 seats.
In Uttar Pradesh, which has the
highest representation in the Lok
Sabha with 80 seats, the Congress last
time won 21, with more going to the
ruling Samajwadi Party. If the multiple splits of the electorate (SP-BJPBSP-Congress)
continue,
the
Congress is going to suffer. If it has to
make it big, it has to win big-time in
UP, which looks absolutely impossible at the moment. An alliance will
not help much because both the SP
and the BSP—if at all they choose to
18
gfiles inside the government
vol. 7, issue 10 | January 2014
UNI
The Congress party has
indulged in
breeding sycophants. That
could be seen in the
appointment of various
AICC general secretaries
who have failed to perform
time and again and yet
they continue to occupy
prime positions.
align with the Congress—will want to
keep most of the seats for themselves.
Indications are that most of the sitting
ministers from the State in the Union
Government are likely to lose and the
Congress tally may not reach double
digits this time.
Tamil Nadu is an extremely important State for the Congress. With the
DMK, it had 26 seats (DMK 18 and
Congress 8) in the last elections. With
no anti-Jayalalithaa sentiment visible
in the State now, the taint of 2G and
effete handling of the Sri Lankan
Tamil issue will hurt the Congress and
the DMK both.
The only other State that stands out
for the time being is Bihar which has
40 constituencies where the JD(U)
and BJP together had won in
32. Whether the JD(U) will be able to
repeat the performance with the
Congress filling in for the BJP remains
to be seen. The Congress had won
only two seats the last time and that
does not seem likely to increase this
time either.
The way forward
It is here that the Congress leadership would have to invent a new
wheel. It would have to change its
leaders, politics and economics
completely. It would have to start
from the basics if it wants to be relevant in the Indian political arena. It
would have to look beyond Rahul’s
votebank politics, Manmohanomics
and Sonianomics.
The voice of opposition from within
the party is likely to grow stronger
now and the Gandhis will find it difficult to keep up the morale of the
party workers to fight the big battle
against a resurgent BJP with an
aggressive and acerbic Modi as
its commander.
As a senior commentator writes,
“What the Congress leaders would
have to think of the next few weeks
is the prospect that the grand old
party could be wiped out of the
political map of the bigger States in
northern and eastern parts of India,
www.gfilesindia.com
20. COVER STORY
politics congress
Even Congress leaders admit in private
that Rahul is no match for BJP’s Modi
thanks to charges of corruption, poor
governance, inability to rein in prices
and general apathy towards the
economy. Modi, with his loud and
aggressive attack on the Congress and
calculated approach to woo microconstituencies, has already got a
massive early lead in the race of 2014.
UNI
with governments in only a few States
like Karnataka, Assam, Himachal
Pradesh, Uttarakhand and Haryana.
This is a disastrous prospect for the
party, given that it has no chance of
revival in Bihar, UP, Odisha, West
Bengal or Punjab.”
Under these circumstances, both
Sonia and Rahul would have to toil
afresh to generate new content, work
out new formulae, build up a new
team of advisers and find new speech
writers because they have already
exhausted their rights-based government rhetoric in this round of
assembly elections.
A section of Congress leaders has
also started saying in private
conversation that their biggest
concern now is that the Gandhis have
stopped being vote-catchers for
the party and that was clearly
visible in the disastrous assembly
election results.
Clearly, declaring Rahul as the
Congress party’s Prime Ministerial
candidate to challenge the BJP’s
Modi in the 2014 Lok Sabha polls
would be out of sync with reality. A
section of Congressmen feels that it
would be an inopportune moment to
20
gfiles inside the government
vol. 7, issue 10 | January 2014
expose Rahul as its trump card in the
face of so many odds. The majority,
however, is keen on making the
Congress vice-president its Prime
Ministerial candidate despite understanding the pitfalls associated with
the decision.
As a senior Congress MP from
Andhra Pradesh said, “The present
coterie culture has already destroyed
the Congress party’s organisational
architecture at all levels over the last
few years. The self-serving and selfperpetuating middle level leadership
has entrenched itself so deeply that
nothing else than a purge would help
clean the Augean stables and the
efforts of Rahul to remedy the
situation by bringing in elections to
the organisation has not started
delivering the results yet.”
Another Congress leader was more
forthright in saying that “Rahul
Gandhi may have all good attentions
and even a big pedigree, but he has a
long way to go if he really wants to
confront Modi and lead the party to a
respectable stage”.
Obviously, the party cannot ignore
the external challenges—a hugely
unpopular
Central
government
Let the PM candidate be elected
The Congress President has disclosed that she will name the Congress
party’s Prime Ministerial candidate at
an appropriate time. However, political pundits interpret it in different
ways. According to one political commentator, “Rahul Gandhi should follow his promise by insisting that the
PM candidate be chosen in an open
election in which every primary member of the party has a vote. On the
other hand, if the Congress President
anoints Rahul Gandhi the same way
she did with Manmohan Singh,
then the voters of India will know
that the Congress has had no real
change of heart.”
Another noted political commentator said, “Rahul Gandhi needs to do
something dramatic to restore people’s faith in him. It is no use invoking
the merits of AAP as long as the aam
aadmi in the Congress has no say.
Words have never been Rahul’s forté.
Perhaps, then, radical action can save
a fast-sinking trajectory.”
Even a few Congress insiders are
prepared to concede in private
conversations that Rahul is turning
into an object of voter apathy and they
are worried that the party and Rahul
need to re-discover their exact worth
and charisma before plunging into the
2014 polls. g
With inputs from Narendra Kaushik
www.gfilesindia.com
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gfiles inside
vol. 7, issue 10 | January 2014
21
22. GOVERNANCE
diplomacy controversy
Give what you get
India must insist on a reciprocal level playing field with the US on the question
of diplomatic privileges and immunities, without any exception of any kind
by NIRANJAN DESAI
T
HE Devyani Khobragade incident has created widespread
outrage and revulsion in India
primarily because of the inhuman
and humiliating treatment accorded
to her by the arresting authorities.
It would not be wrong to say that in
terms of the magnitude of the adverse
impact it has created in Indo-US relations, this would rank after the decision of the Nixon-Kissinger duo to
send the US Seventh Fleet into the
Bay of Bengal during the war for the
liberation of Bangladesh.
However, it is not the intention
here to go into the rights and wrongs
of the incident. Enough debate has
been generated in the media with an
overwhelming majority condemning
the treatment meted out to India’s
Deputy Consul General. Of course,
there are dissenting voices which
focus narrowly on the legal aspects of
the case, or view it from the so-called
human rights angle. Even a national
daily like The Indian Express (dubbed
by a few after the incident as ‘American
Express’) saw it in terms of the Indian
Foreign Service issue and even castigated the Foreign Service as India
Feudal Service, with its editor proudly
proclaiming that he had indeed ‘a
chip on his shoulder’ when it came to
the Foreign Service.
Be that as it may, there is no denying that it is a national issue because
it was an Indian diplomat who was
grossly mistreated in an arbitrary
22
gfiles inside the government
vol. 7, issue 10 | January 2014
fashion as if the local authorities were
apprehending an Al Qaeda terrorist!
After all, a diplomat, to some extent,
embodies a nation’s sovereignty.
The question which arises is why
the Americans chose to behave in this
callous and thoughtless manner
towards a diplomat of a friendly country, and that too with a diplomat of
the female gender who certainly
deserved to be treated with a lot of
dignity. Normal diplomatic practices
were thrown overboard and no courtesies were shown in informing the
Foreign Secretary, who was on an
official mission to the US.
Maybe the streak of arrogance—in
MJ
Akbar’s
words, of a ‘unilateralist’
power—was at play here.
Perhaps they perceived
the Indians as meek who
will take the insult lying
down, as we have
repeatedly done in the
case of China and
Pakistan.
It could also be possible that our
general attitude of deferring to the
white man, especially the Big White
enchilada, may have encouraged this
devil-may-care attitude towards this
particular
diplomat,
who
the
Americans thought was allegedly in
the wrong. We have, as a government,
always shown a very generous attitude to American diplomats and the
US Embassy, going beyond normal
diplomatic practices and without
insisting
on
reciprocity.
www gfilesind a.com
www gfilesindia.com
www.gf lesindia com
www.gfilesindia.com
w
filesindi o
23. The reason being that this generates
that elusive ‘goodwill’ which has never
been quantified. We fail to realise that
the world is a cruel place and no
amount of goodwill is reciprocated
when it comes to the crunch. The late
Prime Minister, Inder Singh Gujral,
was hailed by many when he propounded the rather infamous Gujral
doctrine of not demanding reciprocity
in dealing with a recalcitrant and
hostile neighbour!
Sixty years of independence has
not taught us that in foreign policy
and diplomatic behaviour the surest
guiding principle is absolute reciprocity—you get what you give—because
that ensures fairness and acts as a
deterrent to any arbitrary and unilateral action on the part of any one
party. There was a famous case quite
sometime back of a vehicle of the
Nigerian Embassy in Washington
being towed away by local authorities.
The Nigerians in Lagos quietly rounded up a few vehicles of the US Embassy
and towed them into a forest area,
from where the US Embassy was
asked to recover the vehicles. The
Nigerians were then left alone, one
was told!
O
R, take the case of Brazil,
which promptly instituted a
system of fingerprinting of all
American arrivals into the country
when the Americans instituted such a
system for all visitors to the US. When
the Americans protested that only
Americans were targeted by Brazil
while the US had this requirement for
visitors without any discrimination,
the Brazilian retort was that
the US had exempted several
countries and Brazil should also have
been exempted!
We, on the contrary, bend over
backwards towards the US Embassy
and it is therefore natural that
www.indianbuzz.com
Devyani Khobragade (left) was posted at the Indian Consulate in New York (above)
American always demand more than
they give in terms of privileges and
immunities and we have acquiesced
to this non-reciprocal regime over the
years. The Ministry of External Affairs
always insists on not giving any undue
privileges to US diplomats, but other
ministries and agencies are always
ready to bend! I recall an incident
when I was the Chief of Protocol and
was temporarily looking after the
Americas Division. The then US
Ambassador was visiting the NorthEast and he had then to fly to Bhutan.
I received a request from the US
Embassy that since the Ambassador
had to reach Thimphu by a certain
time, he was not in a position to go to
Calcutta and clear immigration there
before flying off to Bhutan. So, could
he please complete immigration formalities in Guwahati and fly to Bhutan
from there? It was also conveyed that
the State authorities in Assam were
quite willing to arrange this, provided
the Home Ministry and the MEA
agreed to it. The Home Ministry was
wishy-washy on the issue and wanted
the MEA to take the final decision. I
politely told the US Embassy that
Guwahati was not a designated international airport and, therefore, no
immigration facilities were available
there and the Ambassador would thus
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vol. 7, issue 10 | January 2014
23
24. GOVERNANCE
diplomacy controversy
unilaterally confer such entitlements
which have no reciprocity. This clearly means that getting a green card for
a near and dear one in lieu of special
favour will not covered under any
reciprocal arrangement!
H
One of the many protests in India against US highhandedness
have to go to Calcutta before flying off
to Bhutan. Mercifully, this happened
quite late in the evening and therefore
there was no other contrary direction
from any higher-ups. The Ambassador
cancelled his visit to Bhutan and I was
reminded several times that I was the
cause why he could not visit Bhutan!
The other issue over which the
MEA Protocol then had continuous
argument with the Defence Ministry
was the question of the American
Embassy’s PX flights which, invariably, for inexplicable reasons, were
allowed to land at Palam Technical
Area instead of IGI airport. Our objections then were disregarded by the
Defence Ministry. I am not aware of
the present position, but the matter
has to be looked into if this practice
still persists.
Another issue was the practice of
the US Embassy in insisting that
certain cars belonging to the Embassy
officials should be given normal Delhi
number plates instead of CD plates.
Here again the IB had its way,
disregarding the MEA.
24
gfiles inside the government
vol. 7, issue 10 | January 2014
UNI
The Ministry of External
Affairs always insists on
not giving any undue
privileges to US diplomats,
but other ministries and
agencies are always ready.
The present problem provides an
excellent opportunity to have serious
negotiations with the Americans
about diplomatic privileges and
immunity on a strictly reciprocal and
level playing basis. In other words, we
would give them what they give us;
nothing more, nothing less. This
would mean, for instance, that US
dignitaries visiting India will be
received by US diplomats only after
the dignitary goes past immigration,
as is the case in the US when our
dignitaries go there.
The government must also make it
clear that on the issue of diplomatic
privileges and immunities, the decision of the MEA shall be final and all
other ministries and agencies cannot
OWEVER, it remains to be seen
whether we have enough political courage to take the bull by
the horns as there are too many vested interests who may wish to take a
softer line towards the US. One recalls
what former American Ambassador
Patrick Moynihan used to say, that
despite all the abuses America used to
receive in Parliament during the day,
he was inundated in the evening by
requests from the same set of characters for green cards for their near and
dear ones!
There was another such issue which
created quite a furore in India. This
had nothing to do with diplomats, but
related to young girls going to UK for
marriage purposes and who were
subjected to undignified virginity
tests by the UK authorities. There was
a lot of anger and fury at that time
over this and there was demand for
‘strong’ action against the UK. But in
the end, nothing much happened. The
Joint Secretary in charge of the
Europe Division then, the brilliant
Sumal Sinha, had rightly predicted
that nothing much would come out of
it as too many people in power had
sons and daughters in the UK.
One hopes that this will not come to
pass again and the government must
insist on a reciprocal levelplaying
field with the Americans on the
question of diplomatic privileges and
immunities, without any exception of
any kind. We must shed this notion of
generating goodwill; national dignity
and honour are more sacred. g
Niranjan Desai is a former Indian Foreign
Service officer
www.gfilesindia.com
26. GOVERNANCE
agenda mg devasahayam
Haryana: From Green
to Grey State?
The Haryana Chief Minister has adopted a zamindari style of functioning! While
banishing those who obstruct his real estate agenda, he rewards his loyalists
with fortunes and coveted postings
S
CHOLARS believe that the
name ‘Haryana’ came from the
words Hari (Sanskrit Harit,
‘green’) and Aranya (forest). At its
formation in 1966, Haryana was
meant to be so with early-day governments under Chief Ministers Bansi
Lal and Devi Lal laying strong foundations for a Green State with their
emphasis on agriculture, forestry and
irrigation. Having joined the cadre
around that time, I have seen and participated in the process in the arid districts of Hissar and Bhiwani adjoining
the deserts of Rajasthan.
In recent years, Haryana’s political/bureaucratic
architecture
is
geared to transform the once Green
State into a Grey State with obsessive
pursuit of land-lust as the overarching policy. This is evident from the
way IAS officers of the State are being
Gurgaon is standing testimony to how urbanisation should not be gone about in India
26
gfiles inside the government
vol. 7, issue 10 | January 2014
dealt with. While Ashok Khemka, who
boldly stood against the marauding
land lobby, is being ruthlessly hounded, his predecessors in the post of
Director General, Consolidation of
Land Holdings—Anil Kumar and SC
Goyal—are being fiercely protected
despite their being indicted by the
Punjab and Haryana High Court for
passing several illegal orders favouring the land mafia which have been
PHOTOS: NARENDRA KAUSHIK
www.gfilesindia.com
27. described by the court as fraud!
In line with this architecture, the
Haryana Chief Minister has adopted a
zamindari style of functioning! While
banishing those who obstruct his real
estate agenda, he rewards his loyalists
with fortunes and coveted postings.
His most loyal aide in meticulously
pursuing the agenda for eight long
years was recently appointed to the
prestigious constitutional position of
Member UPSC, thereby ravaging the
virginity of this hallowed institution!
Just prior to the appointment, this
officer had managed to scuttle a ‘performance audit’ by the CAG of the
fraud indulged in by the land mafia.
In the State government, it is the
real estate bureaucrats who occupy
key positions in the Chief Minister’s
charmed circle. They include the
Principal Secretary to the CM who has
already spent seven years as Director
and Principal Secretary, Department
of Town & Country Planning (DTCP).
Another one is following suit, with
more than three years as DTCP. As
against this, dissenter Khemka, who
had earlier seen 40 transfers in 20
years of his career, was allowed just
80 days in the job from where he had
blown the whistle. After being
repeatedly humiliated and tormented,
he is now being chargesheeted for
misconduct in cancelling the mutation
of a fraudulent land deal between
Robert Vadra and DLF in Gurgaon
in October 2012, thereby ‘damaging
their reputation’!
It is obvious that the Haryana leadership has been assiduously building
a kleptocratic network, comprising of
politicians, brokers and bureaucrats,
to usher in a real estate-oriented administration. In his report, submitted
to the Haryana Government on May
23, 2013, Khemka named seven senindulging in or covering up corrupt
www.indianbuzz.com
land deals, as the bureaucratic part
of this network. On September 6, TV
Channel Headlines Today telecast an
exposé of the political/broker component of this network, naming eight
MLAs and their cronies who were
charging `1 crore per acre for recommending change of land use. Earlier,
on February 4, a detailed investigative
story published in The Hindu named
Chief Minister Bhupinder Singh Hooda as the patriarch of this network!
The modus operandi has been
simple. The Chief Minister kept to
himself the portfolios of DTCP—the
licensing arm of the Haryana Urban
Development Authority (HUDA), the
government’s real estate developer
—and the Haryana State Industrial
Development Corporation (HSIDC),
It is obvious the Haryana
leadership has been
assiduously building a
kleptocratic network,
comprising politicians,
brokers and bureaucrats, to
usher in a real estateoriented administration.
the industrial promotion entity. This
gave him complete control over all
land deals in the State. Under the
Land Acquisition Act, HUDA and
HSIDC have powers to acquire land
under Sections 4 and 6 through the
rate with landowners/farmers, offering them a modest premium over
the government’s prevailing compensation rate. If landowners/farmers
resist, Section 6 is imposed, declaring the State’s intention to acquire
the land. This forces even resisting
landowners to enter into agreements.
Between the imposition of Sections
4 and 6, builders apply for change of
land use and licences to DTCP in collaboration with farmers/landowners.
Once the land is released from acquisition, its value skyrockets and there
is a kill!
T
HE epicentre of the real estate
kleptocracy is Gurgaon, not long
ago a sleepy village on the outskirts of Delhi, now hailed as the ‘Millennium City’. According to Khemka,
DTCP issued various types of colony
licences for 21,366 acres from 2005 to
2012. He points out that if the market
premium for a colony licence is assumed to be as low as `1 crore per acre,
the land licensing scam in the past
eight years is worth roughly `20,000
crore. At the premium of `15.78 crore
would jump to `3.5 lakh crore!
It has been separately reported that
in a span of six years, the Haryana
Chief Minister had made a staggering
54,000 acres of land available for
residential, commercial and industrial
use change and award of licence are
under DTCP.
Builders who are unable to coerce
the farmers to sell their land turn to
successive masterplans for Gurgaon.
Customisation of land development
and crucial changes in land use have
played an important role in the landto-gold stories of many real estate
companies. This would be loot of
tion that the government requires
lic purpose’. At this stage, builders
enter into agreements to sell/collabo-
other scams that have so far surfaced.
The
Gurgaon
story
started
sometime in the early 1980s when
KP Singh, Chairman of DLF, was
tom-tomming possession of 3,000
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vol. 7, issue 10 | January 2014
27
28. GOVERNANCE
agenda mg devasahayam
Agricultural fields (above) are being gobbled up by the builder mafia in Haryana (right)
acres of agricultural land at Gurgaon
bought dirt-cheap, to build a highrise, high-intensity ‘world-class’ city,
whereas Gurgaon hardly had the
carrying capacity to withstand lowdensity, low-rise development.
I was then Haryana’s Director,
DTCP-cum-Chief
Administrator,
HUDA, having just moved in from the
post of MD, HSIDC. At that time, we
had no intention whatsoever of allowing private players since HUDA was
capable of managing the low-intensity, low-rise development of Gurgaon.
Things took a dramatic turn after the
then Chief Minister, Bhajan Lal, defected en masse to Indira Gandhi’s
fold on her return to power in early
1980. One of Indira Gandhi’s conditions was to put the State Government
machinery at the disposal of DLF to
make Gurgaon a ‘world-class city’!
To facilitate this, I was eased out of
the job with the kind of sophistication
only Bhajan Lal was capable of. One
DTCP was too small a department
for my capabilities and that I should
handle the ‘bigger’ and ‘problematic’
28
gfiles inside the government
vol. 7, issue 10 | January 2014
It has been reported that, in
a span of six years, the
Haryana Chief Minister
made a staggering 54,000
acres of land available for
residential, commercial and
industrial use through the
notification of three
successive masterplans
for Gurgaon.
transport department, which was then
a three-in-one job as Commissioner,
State Transport Authority, and Chief
of Haryana Roadways. My protests
did not work and I was packed off.
S
OON, thereafter, in 1981, the
and ‘DLF City’ came up. In 1985,
DLF started plotted development in
the 3,000 acres. Other realtors joined
in and there was no stopping Gurgaon
from ‘developing’ into a ‘monster
city’—in the process, destroying every
vestige of town planning, urbanism,
environment and sustainability. Not
one prudent town planning norm has
been adhered to. In short, Gurgaon is
standing testimony as to how urbanisation should not be done in India.
The sole consideration was vulgar
real estate/property ‘development’
with the purpose of raking in billions.
More than any other State in India,
Special Economic Zones (SEZ) have
been a massive scandal in Haryana.
Real estate giants and multinational
acres of land to set up SEZs, were givof the land and permission to use it for
other purposes.
As a result, nearly two dozen projects—many of them in the lucrative urban markets of Gurgaon and
Faridabad—are being converted into
residential and commercial properties. Haryana had over the years
acres of land from farmers, much of it
in Gurgaon and Faridabad. Of these,
only six have so far been set up. The
allowed change of land use, enabling
www.gfilesindia.com
29. But the one to take the cake is
Reliance Industries Limited (RIL).
Planned on around 12,500 acres,
RIL’s Gurgaon SEZ failed primarily
on account of farmers’ refusal to part
with their land. The company was
able to procure 2,584 acres of land—
1,200 acres from farmers and 1,384
acres allotted by HSIDC. With the RIL
failing to acquire requisite land,
HSIDC revoked the allotment.
SEZ having failed, the company is
now developing a money-spinning
Integrated Township Project on this
1,200 acres of prime land.
Earlier, Reliance was given permission to develop a 25,000-acre SEZ
in Gurgaon and Jhajjar districts.
Quite a real estate rampage by one
of the small-sized States of the
Indian Union!
That is not all. Now Chinese companies are being offered thousands of
acres of land for purchase. China
Development Bank representatives
recently visited a sprawling 6,000acre site in Gohana, which is on offer.
They were also shown a 3,664-acre
site in Kharkoda, around 50 km from
www.indianbuzz.com
New Delhi. In a bid to court Chinese
investment, Haryana officials have
visited Beijing and Shanghai and presented the State’s real estate ‘expertise’ as the unique selling point! With
their deep pockets, the Chinese could
gobble up vast quantum of land
at prime prices, another windfall for
the realtors!
T
HE real estate boom will sustain
only if massive MNC/commercial/residential/industrial complexes, malls and theme parks get
built all over. The key to this is copious supply of water and electricity.
While water is diverted from irrigation use, power plants are being set up
on fragile canal banks. Typical is the
2800
MW-capacity
Gorakhpur
Nuclear Power Plant on the Fatehabad
Branch of the Bhakra Canal system.
For this plant, the Haryana government has allotted 320 cusecs of water
that would deprive over 140,000
acres of irrigation in this semi-arid
region. Agriculture will perish and
radiation/pollution will cause serious
damage to crops, drinking water and
wildlife (deer/blackbuck) in hundreds of downstream villages. This is
a clear case of extractive policy to
destroy farming and promote real
estate business.
For this project, 1,600 acres of
prime farming land have been
acquired by virtually bribing landowners with compensation ranging
from `12 lakh to `32 lakh per acre.
The Central Government is fully
involved in this racket. The Nuclear
Power Corporation of India is the
owner of the project, the Ministry of
Environment and Forest has given
clearance without even looking into
the water issues and the Planning
Commission has granted its approval.
What is worse, the Prime Minister is
to lay the foundation stone of this project being opposed by almost every
villager downstream!
Haryana is inexorably morphing
from a green to grey state only to
promote a black economy! The
damage will be permanent. Will
posterity forgive us? g
The writer is a former Army and IAS
officer. Email: deva1940@gmail.com
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vol. 7, issue 10 | January 2014
29
30. GOVERNANCE
n-regime power
Gorakhpur Nuclear Power Plant
Inviting Disaster
In an over-populated country like India with limited land and water
resources and weak regulatory governance, setting up a nuclear plant
in Haryana seems a strange decision
by MG DEVASAHAYAM
P
RIME Minister Manmohan
Singh is scheduled to soon
lay the foundation stone of
the 2800-MW Gorakhpur Nuclear
Power Plant (GNPP) in Fatehabad
district of Haryana. According to the
Department of Atomic Energy (DAE),
1,503 acres of land have been acquired
for the project, which will accelerate
the pace of ‘development’.
What has been left unsaid is that
this water-guzzling plant is located
on the fragile Fatehabad Branch of
the Bhakra canal system. For operating this plant, the Haryana government has allocated 320 cusecs of
water from the State’s share under the
Bhakra Water Sharing Agreement of
1959 between Punjab and Rajasthan.
Haryana, being the successor state of
Punjab, is legally bound by this agreement. Since the agreement mandates
that Bhakra water can only be used
for irrigation and generation of hydel
power, the Bhakra-Beas Management
Board (BBMB) cannot allocate water
to the nuclear plant.
Water use allotment for irrigation
in the cultivable command area is 2.25
cusecs per thousand acres. According
to estimates, 320 cusecs can irrigate
about 142,000 acres. Thus, diverting
this quantum of water to generate
nuclear power will deprive a vast area
30
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vol. 7, issue 10 | January 2014
of irrigation. Even after taking into
account that 30 per cent of the water
will be recycled back to the canal, the
potential irrigated area lost would be
about 100,000 acres. Further, the
polluted water that would return to
the canal would slowly poison downstream agricultural fields and drinking water. This canal is also plagued
with frequent breaches that could
pose a serious danger to the safety of
the power plant.
Water is the lifeline of this semiarid region. Power generated in this
nuclear plant would no doubt lead to
the ‘development’ of MNC/commercial/residential/industrial complexes, malls and theme parks in Delhi,
Gurgaon and other places, but in the
project-affected area, agriculture will
suffer and radiation will cause serious damage to wildlife. In fact, on this
count, the National Green Tribunal
had ruled against the setting up of a
GNPP residential colony in the neigh-
There was no public
consultation about the
project. Prime farming
land was acquired for the
project, allegedly through
coercion and bribing of
landowners with huge
compensation.
bouring Badopal village.
Legally too, this diversion of water
is untenable. Water comes within
the guarantee of Right to Life under
Article 21 of the Constitution. A huge
quantity cannot be diverted in an
already water-deficit area in violation
of the 1959 agreement, which permits
collaboration for improving irrigation
and generation of hydroelectric power
only. The Environmental Impact
Assessment of the project does not
address this critical issue. All it says
is: “….The Government of Haryana
confirmed allocation of 320 cusecs of
water for consumptive use through
Fatehabad branch canal, sourced by
Bhakra mainline tail-end at Tohana
headworks”.
There was no public consultation
about the project.
Prime farming land was acquired
for the project, allegedly through
coercion and bribing of landowners with huge compensation. The
Central government is fully involved
in this skullduggery. The Nuclear
Power Corporation of India (NPCI)
is the owner of the project, and the
Ministry of Environment and Forest
has dealt with the water issue in a
most shabby manner by giving conditional environmental clearance to the
plant. Pursuing a pre-set agenda, the
Planning Commission has also given
its in-principle approval.
www.gfilesindia.com
31. Gorakhpur villagers at a protest meeting
against the nuclear plant
Be that as it may, there are certain
basic realities about nuclear power.
First, people see, quite correctly,
the nuclear reactor as a major
threat to their lives and livelihood
when the reactors are located in
areas that support lakhs of people
living off farming, fishing and other
occupations. After the Fukushima
nuclear disaster in Japan in 2011,
this concern has become much more
severe and tangible. The Indian
government’s response has been a
combination of coercion, bribery,
and propaganda. Clearly, its nuclear
efforts are not respectful of human
and democratic rights.
The second reality is that nuclear
energy is not the answer to India’s
electricity problems. The current
nuclear capacity in the country is
just 5,780 MW, about 2.5 per cent
of the total generation capacity, and
meeting not more than 1 per cent of
the country’s electricity needs. Even
with optimistic assumptions, this is
unlikely to increase to more than 5
per cent for decades. The DAE has
long made ambitious projections and
failed to deliver. In 1969, the nuclear
establishment had predicted that by
2000, there would be 43,500 MW of
nuclear power-generating capacity.
In 2011, the figure was only 4,800
MW and the government’s ambition
to increase it to about 64,000 MW by
2032 is utopian and impractical.
This is because the DAE’s plans
involve constructing hundreds of
fast-breeder reactors. In the early
decades of nuclear power, many
countries pursued breeder reactor
programmes, but practically all
of them have given up on breeder
reactors as unsafe and uneconomical.
Imported light water reactors are
www.indianbuzz.com
unproven and prohibitively costly.
The DAE has simply not learnt from
the history of nuclear technology
globally, and, thus, has shown a lack
of organisational learning.
T
HE third reality is that India
needs electricity that is cheap
and
affordable,
whereas
nuclear power is expensive. If all
costs—construction, commissioning,
operation, decommissioning and safe
storage of spent fuel—are honestly
factored in, nuclear power is way
costlier than any other source of
electricity. Future reactors, both
imported and indigenous, will
continue to be much more expensive,
making electricity generated here
unaffordable for many sections
of society. Expectations that the
nuclear industry will learn from
past experiences and lower the
construction costs have been belied
repeatedly. On the other hand, the
cost has been going up while wind/
solar power costs are declining.
What is worse, Parliament’s Public
Accounts Committee (PAC) Report
says that India’s Atomic Energy
Regulatory Board (AERB) is weak,
under-resourced and “slow in adopting international benchmarks and
good practices in the areas of nuclear
and radiation operation”. The PAC
recently tabled a scathing 81-page
report in Parliament, critical of the
decades-long delay in establishing
an independent regulator for the
nuclear industry.
The sum and substance of the PAC
Report is that the failure to have an
autonomous and independent regulator is clearly ‘fraught with grave risks’
for setting up nuclear power plants
in India. The Fukushima lessons, as
brought out by Japan’s Independent
Investigation Commission, are pointed, poignant and portend ill for nuclear power in an over-populated India
with limited land and water resources
and weak regulatory governance. In
the event, the Prime Minister laying
the foundation of GNPP is odd and
inappropriate! g
The writer is a former IAS officer of the
Haryana cadre with experience in the
power sector—government and corporate.
He was formerly SDM of Fatehabad
subdivision, where this plant is located.
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vol. 7, issue 10 | January 2014
31
32. GOVERNANCE
n-regime devender singh
Strengthening
the AERB
A review of the radiation regulatory regime is a
must and it is hoped that the proposed Nuclear
Safety Regulatory Authority Bill will ensure this
R
ADIATION and radioactive
substances have many beneficial applications, ranging from
power generation to uses in medicine,
industries and agriculture but the risks
that arise are enormous, often transcending national borders. Radiation
risk management, therefore, necessitates international co-operation to
promote and enhance global safety
and mitigate harmful consequences.
In order that the radiation regulator
acts independently,countries such as
Australia, Canada, France, the United
States of America and even Pakistan
have conferred legal status on their
nuclear regulating bodies as stressed
by the International Atomic Energy
Agency (IAEA). In India, the Atomic
Energy Regulatory Board (AERB)
was set up in 1983 to carry out regulatory and safety functions as envisaged in the Atomic Energy Act, 1962.
Surprisingly, the AERB remains a
subordinate authority under the
Department of Atomic Energy
(DAE) though India has ratified the
Convention on Nuclear Safety. A
regulatory body must be equipped to
exercise its key regulatory functions,
namely, standard-setting, authorisation, inspection and enforcement and
must possess the core values of competence, independence, stringency
and transparency.
A review of the performance of
32
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vol. 7, issue 10 | January 2014
the AERB recently by the PAC found
glaring deficiencies and lacunae with
respect to the regulatory framework
for nuclear and radiation facilities;
development of safety policy, standards and codes; weak monitoring of
radiation facilities, and so on. AERB’s
independence is circumscribed by the
absence of institutional separation of
regulatory and non-regulatory functions; absence of a fixed term of office
of the Chairman of AERB; dependence
on DAE for budgetary and administrative support; and apparent conflict
of responsibilities as the Chairman,
AERB, reports to the Chairman, AEC.
The penalty for contravention of
the provisions of the Act and Rules
made thereunder remains abysmally low at a maximum fine of `500,
which by no stretch of imagination
can be construed as a deterrent. More
so, the penal provisions were never
invoked, rendering it virtually a dead
letter. The need for hastening the process of development of safety documents, codes, standards, guides and
manuals was stressed by the Meckoni
Committee Report way back in 1987
and the Raja Ramanna Committee
in 1997. A consolidated safety policy
document is yet to be brought out.
It is noteworthy that, subsequent
to the Fukushima nuclear incident,
the AERB set up a high-level committee on nuclear safety but the
recommendations are said to be
under implementation. Another serious problem bedevilling the AERB is
lack of manpower, compounding the
gap in the regulating and monitoring
regime. This needs to be addressed
as the nation can illafford to take any
risk, given the constantly increasing
application of radiation, especially in
fields like medicine, industry and agriculture. There is no system in place for
monitoring the expiry of authorisations and their renewals with instances of protracted delays for periods as
long as 24 years. Alarmingly, 70 out of
135 Gamma Chamber units continue
to function without valid authorisations. Subsequent to the Mayapuri
incident of April 2010, the AERB has
taken steps to ensure that operational
gamma chambers are subjected to
www.gfilesindia.com
33. close regulatory monitoring and nonoperational ones are safely disposed
of within a reasonable timeframe.
T
HE PAC noted that the regulatory mechanism concerning X-ray
units was virtually non-existent.
Out of a total of 57,443 medical X-ray
facilities operating in the country,
only 5,270 units had been registered
and were under the regulatory control
of the AERB. In other words, 52,173
units or 91 per cent of the total units
are operating without registration.
The AERB admitted that, with its very
limited workforce, it was impossible
to regulate so many X-ray machines.
The accelerated usage of ionising radiation, such as medical X-rays, as an
essential diagnostic tool poses grave
risks to the health of medical workers
www.indianbuzz.com
and the public in the vicinity of these
facilities. Surprisingly, even after the
Supreme Court directive in 2001 for
setting up a Directorate of Radiation
Safety (DRS) in each State for regulating the use of medical diagnostic
X-rays, only Kerala and Mizoram
have complied so far. From 2005-06
to 2011-12, regulatory inspections had
been made of only 15 per cent of both
industrial radiography and radiotherapy units having high radiation hazard potential. Apart from this alarming shortfall, the frequency of regulatory inspections of such facilities is
yet to be fixed in spite of prescribed
international benchmarks.
As regards radiological exposure
of the public, it is heartening to note
that during the period 2005-2010, the
effective exposure was far less than the
The Fukushima nuclear incident renewed
concern about nuclear plants
prescribed annual limit of one mSv
(Milli Sievert) in all nuclear facility
sites. However, as the Health, Safety
and Environment Group of the Bhabha
Atomic Research Centre (BARC) carries out environmental surveillance
through its Environmental Survey
Laboratories (ESLs), the authority of
the AERB with regard to environmental surveillance apparently weakens.
Safe disposal of radioactive waste is
another concern, exacerbated by the
tragic Mayapuri incident in 2010,
where one person died and several
were injured. Of course, the incident
was a case of a legacy source, which
occurred before the regulating regime
came into being. It is also heartening
gfiles inside the government
vol. 7, issue 10 | January 2014
33
34. GOVERNANCE
n-regime devender singh
Construction of the Koodankulam nuclear power plant in progress
to note that the radioactive waste
control management of our nuclear
power plants (NPPs) and fuel cycle
facilities has an impeccable record
and the same needs to be maintained
scrupulously.
Given the wide uses of radiation
in various fields apart from the stateowned NPPs, the AERB should be
accorded independent legal status for
effective monitoring so as to ensure
radiological protection of workers in
NPPs, and entrusted with the responsibility of environmental surveillance
with the close cooperation of ESLs. A
comprehensive inventory needs to be
prepared of all radioactive radiation
sources across the country indicating the suppliers/manufacturers and
suitable awareness created for safe
handling and disposal of radioactive
waste and to be updated regularly.
Systemic and well conceived linkages need to be established with
schools and colleges and communities for disseminating greater aware-
34
gfiles inside the government
vol. 7, issue 10 | January 2014
ness about the advantages of atomic
energy and the safeguards provided
against radiation and radioactive
substances and appropriate curriculum must be included in NCERT/
CBSE syllabi for enhanced sensitisation of impressionable young
minds about the lurking dangers
of radiation and over-exposure as
also potential application with
adequate safeguards.
W
E also need to strengthen
the regulatory aspect of
emergency preparedness in
the area of other radiation facilities—
prescribe mandatory safety codes/
procedures and emergency preparedness plans based on strict assessment
of risk factors; and put in place effective control mechanisms for securing
compliance to the prescribed safety
codes in accordance with the Nuclear
Safety Convention. An effective legislative framework also needs to be
provided for decommissioning of
NPPs. Any NPP or nuclear fuel cycle
facility, after its life is over, needs to
be decommissioned, decontaminated
and demolished. The role of AERB
with reference to decommissioning,
therefore, needs to be strengthened
and subjected to international peer
review and appraisal to derive assurance of its effectiveness. The PAC
was assured that this would be done
once the Nuclear Safety Regulatory
Authority Bill was enacted in the
form recommended by the Standing
Committee of Parliament on Science
and Technology. One hopes that once
the law is enacted, the AERB will take
care of all these concerns and emerge
as an independent and credible
nuclear regulatory authority. g
This article is based on the 90th report
of the PAC, presented to Parliament on
December 9, 2013. The author is a senior
parliamentary official and a student of
constitutional and parliamentary studies.
The views expressed here are personal. He
can be reached at dsaswal57@gmail.com
www.gfilesindia.com
36. INSIGHT
nsel scam
Shah of good &
bad times
Some people are born with a silver spoon; others achieve heights by their
deeds. Born in a mediocre family, Jignesh Shah rose to the very top as the
uncrowned czar of the world of finance. But after a quick and phenomenal rise,
the bubble burst and his empire came crashing down—all within a span of 10
years. It is too early to say whether he will be remembered for his magical
success or equally astonishing collapse.
by NEERAJ MAHAJAN
I
F Rahul Gandhi is to be believed,
the role of the government is to
maintain the rule of law, book the
guilty and ensure equality before
law. But when a petty criminal is
caught stealing a loaf of bread, he is
beaten black and blue and locked up
in jail before being given a chance
to explain, whereas Jignesh Shah is
getting preferential treatment. This
is one of those rare cases where the
government is trying to recover
money and intimidate others on
behalf of the kingpin.
If you intend to commit a crime,
do so on such a massive scale that
you have enough booty left for yourself even after distributing some to all
the needy and greedy. The whole idea
is that you should comfortably enjoy
the fruits of your crime and, whatever happens, neither the investors
nor the guardians of the law should
be able to touch your money which
should continue to grow. You should
continue to prosper under the patronage of high and mighty friends–partners in crime—who feel obliged to bail
you out. These are among the most
36
gfiles inside the government
vol. 7, issue 10 | January 2014
important lessons to be learnt from
the Shah case.
On the face of it, the law finally seems to have caught up with
Shah, Joseph Massey and Shrikant
Javalgekar, who were found “unfit
and improper” to hold board or managerial positions in a recognised commodity exchange. In a strongly worded order, commodity markets regulator Forward Markets Commission
(FMC) barred Shah and two of his
aides from holding more than 2 per
cent stake individually or through
others in any recognised commodity
exchange. Shah’s properties, including his Juhu bungalow, a house worth
`78 lakh in Aarey Colony and a residential plot in Pune, were attached by
the Economic Offences Wing (EOW)
of Mumbai Police. He had to step
down from the board of directors of
Multi Commodity Exchange of India
and MCX SX—the very companies
he founded. But is this fit and proper
punishment for a man who has been
described as the “head and brain”
as well as the “highest beneficiary of
the fraud”?
Not when you consider that `5,600
crore deceitfully swindled from some
13,000 investors is lying untraced
while the settlement guarantee fund–
a corpus created for investor protection—has mysteriously vanished. Till
such time this money is recovered,
any talk of allowing Shah to retain
`931 crore recovered from the sale
of Singapore Mercantile Exchange
(SMX), or the differential amount
recovered from downsizing the equity
to 2 per cent, would amount to allowing him to benefit from his own crime.
How can such a company be notified
as a “recognised stock exchange”
under Section 2(39) of the Companies
Act? The FMC order makes it clear
that all this was done with “mala
fide intention on part of the promoter of the FTIL to use the trading
platform of its subsidiary company
for illicit gains, away from the eyes of
the regulator”.
Still, instead of being punished,
FTIL is being deliberately allowed to
sell 100 per cent of its equity ownership
in Singapore Mercantile Exchange Pte
Ltd (together with its wholly-owned
subsidiary, Singapore Mercantile
Exchange Clearing Corporation Pte
Ltd) to ICE Singapore Holdings Pte
Ltd for US$150 million. FTIL is also
www.gfilesindia.com
37. selling total stake in the National Bulk
Handling Corp—FTIL’s warehousing,
which, in turn, holds a 60.88 per cent
stake in IBMA—and remitting these
funds to offshore subsidiaries. If this
is allowed, the real money will get
parked overseas, out of the reach of
NSEL investors who will be left holding the stump. FTIL has reportedly
remitted over US$90 million (about
`560 crore) to its offshore SPVs on the
pretext of prepaying offshore loans,
over the past few months.
S
INCE August 2013, when this
fraud came to light, FTIL has
remitted US$90 million as
loan to FT Group Investments Pvt Ltd
(FTGIPL), a wholly-owned subsidiary, to prepay an unsecured foreign
currency loan availed of by FTGIPL,
purportedly for meeting its working capital requirements of overseas
exchange ventures. Of this, FTGIPL
prepaid US$42 million towards the
foreign currency loan and US$44
million was sent back by FTIL. This
was utilised to prepay External
Commercial
Borrowings
worth
US$33.25 million on September 19,
2013.
Similarly, there are apprehensions
that FTIL might wish to siphon off
funds recovered from sale of its 100 per
cent shares in the Bahrain Financial
Exchange, 100 per cent in FT Group
Investments Pvt Ltd in Mauritius,
99.98 per cent in Bourse Africa Pte
Ltd, 100 per cent in Knowledge Assets
Pvt Ltd, Mauritius, 100 per cent in
the Global Board of Trade Ltd, GBOT
Clear Ltd, Mauritius, Singapore
Mercantile Exchange Ltd and several
other stock exchanges.
Such foreign currency transactions
without the permission of the Reserve
Bank of India are illegal and seriously
compromise the interests of FTIL’s
75,400 shareholders.
www.indianbuzz.com
Jignesh Shah had to step down from the board of
directors of the very companies he founded. He
cannot anymore sit on the board and manage the
affairs of any commodity derivatives exchange
and is legally mandated to downsize his
shareholdings to 2 per cent. But is all this a fit
and proper punishment for the man who has been
described as the “head and brain” as well as the
“highest beneficiary of the fraud”?
gfiles inside the government
vol. 7, issue 10 | January 2014
37
38. INSIGHT
nsel scam
VEY RESULTS: 25-28
DELHI POLL SUR
30-33 02-05
2013
September 5,
6
VOL. 7, ISSUE
T
HIS demolishes NSEL’s former
CEO, Anjani Sinha’s claim in his
first affidavit that the promoters
were no way involved, but substantiates his second affidavit in which he
said that he was blackmailed into giving a clean chit to the promoters. This
is also what another NSEL employee,
Amit Mukherjee, claimed.
With regard to Shrikant Javalgekar,
former MD and CEO of MCX and
board member of NSEL and Indian
Bullion Markets Association (IBMA),
the order says, “Such association by
the MD of a regulated exchange with
group entities of FTIL, which also
participated in the trading platform of
the same regulated entity of which he
was the MD, displays a lack of honesty
and integrity of the individual.”
Commenting on Joseph Massey’s
38
gfiles inside the government
vol. 7, issue 10 | January 2014
YAM
MG DEVASAHA
HOPE FROM
DURGA
p82
gfilesindia.com
interest
A gfiles public
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Innocent victim or
cunning plotter
One of the significant aspects
of the FTIL order is the manner
in which it has peeled off Shah’s
outer veneer as the innocent victim
who did not know any thing of what
his employees and senior management were up to. The man has been
exposed as the person who engaged
the services of his maternal uncle,
Mukesh Shah, as the statutory auditor of NSEL, to cover his tracks. “It
appears that Jignesh Shah has got
himself excluded from the list of key
management personnel, ostensibly
to distance himself from NSEL when
continuous defaults by members had
thrown the company completely out
of gear,” the FMC order says.
“Shah, as the promoter of FTIL and
NSEL, has misused his position to
create confidence in the minds of the
participants regarding the legitimacy
of the business and its operations in
the exchange platform of NSEL,” the
order states.
“Shah, as the promoter
of FTIL and NSEL, has
misused his position to
create confidence in the
minds of participants
regarding the legitimacy
of the business and its
operations in the exchange
platform of NSEL,”
the FMC order states.
role, FMC states, “His conduct
through the series of events that
led to the settlement crisis at NSEL
has certainly eroded his general
reputation, record of fairness, honesty
and integrity...”
Significantly, even the Registrar
of Companies (RoC), in its 69-page
report, opined, “The directors of FTIL
have failed in their fiduciary duty to
safeguard the interests of shareholders and creditors by not exercising
due diligence and prudence in respect
of its subsidiary (NSEL) and should
not continue as directors of FTIL and
NSEL.” Prime facie, it appears that
the FTIL board allowed the state of
affairs at NSEL to continue, which
resulted in the fraud. Some of the
violations are so serious that they can
lead to their imprisonment under the
Companies Act, the report adds.
Highest beneficiary of
NSEL scam
Isn’t it surprising that, while officials like Amit Mukerjee and Anjani
Sinha are now cooling their heels in a
Mumbai jail, mastermind Shah is out
of it? The government, on its part,
claims to have done its bit by ordering
the commodity spot exchange to stop
trading for violating trading rules.
For a change, the far-reaching FMC
order goes on to call a spade a spade.
“It can be logically concluded that
behind the corporate veil, the management and governance of NSEL
was practically carried out by Jignesh
Shah through the vehicle of FTIL.”
This is not the end of the story as
more trouble seems to be heading
Shah’s way and soon he might have
to vacate the chair on the board of
India’s largest electricity exchange—
Indian Electricity Exchange (IEX)—
offering a platform to more than
2,600 participants to sell and purchase electricity. The five-year-old
IEX commands a 95 per cent share
in the market. The Central Electricity
Regulatory Commission (CERC), led
by its chairman, Girish Pradhan, is
challenging Shah’s right to remain on
the IEX board.
The ball is now in the court of IEX,
chaired by former FMC chairman and
Maharashtra Electricity Regulatory
Commission member Venkat Chary.
Two IAS officers, KT Chacko and Asha
Das, as independent directors will
also have a say. Besides Shah, Paras
Ajmera is also on the IEX board. As
of today, FTIL controls one-third
of IEX shares. But once the CERC
guidelines are implemented, Shah’s
state and control over the IEX too will
get diluted. g
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