Banker, broker, leader, fixer-will India ever emerge from their clutches?
“In the race between secrecy and truth, it seems inevitable that truth will always win,” wrote Julian Assange in an article for The News just before his arrest. Ironically, he was quoting what a young Rupert Murdoch had written in 1958, when he was probably feeling more idealistic. One feels the same sense of irony and helplessness at the scandals tumbling into the public domain and exposing every pillar of society. And, despite the raids on former telecom minister A Raja, or the arrest of Suresh Kalmadi’s cronies, or the conviction of Neera Yadav (former chief secretary of Uttar Pradesh and one of the most corrupt IAS officers), we have the depressing sense that nothing is going to change in a hurry.
The silver lining is that several voices are incisively and boldly analysing the situation and its implications. But these voices are usually replicated in cyberspace and have zero impact on ruling politicians or the Opposition. Consider this: “Let’s be clear: Corruption stalls development, undermines social progress, undercuts the confidence of citizens in the fairness and impartiality of public administration, impedes good governance, erodes the rule of law, distorts competitive conditions in business transactions, discourages domestic and foreign investment, fosters a black market economy, and raises new security threats. In sum, corruption obstructs a country from realising its goals and undercuts national security,” says Brahma Chellaney in The Hindu.
In his Indian Express column, Pratap Bhanu Mehta writes, “The blunt truth is that the state has such an extraordinary ability to convert even basic procedural rights into discretionary entitlements that we should not be too sanguine about corruption disappearing on account of reform alone.” Consequently, he argues, “Indian capital remains timid and vulnerable to the state.” This has led to a nice network of fixers and lobbyists working with politicians to ensure that they, along with businessmen, thrive at the cost of the nation. India’s rapid economic growth and significantly higher disposable incomes in the hands of the middle class has meant that all the muck is hidden under the garb of ‘economic development’ and nobody is interested in questioning its costs or discovering the large-scale loot.
The political class remains sanguine (probably with good reason) that the outpouring of rage in cyberspace will have no impact on their vote banks. Opposition parties merrily disrupted an entire session of parliament demanding a meaningless joint parliamentary committee (JPC). Justice MC Chagla’s famous hearings of India’s first financial scandal (Haridas Mundhra and Life Insurance Corporation) have never been repeated because our politicians are uninterested in bringing the guilty to book. They merely want an opportunity to understand the modus operandi of scamsters—sometimes for use to their advantage—indulge in political bargaining and enjoy publicity without accountability to deliver results.
In fact, a couple of recent cases illustrate how new statutes and service rules for the senior-most government officials are deliberately designed to let off those who collude in looting the State or public sector entities. The spate of arrests in the recent LIC Housing Finance ‘bribes for loans & IPO subscriptions’ exposed the cosy nexus between bankers, brokers, fixers and politics that combine to loot the nation.
Nationalised banks and insurance companies often have boards packed with fixers/lobbyists/brokers under the garb of ‘public shareholders’ or shareholders’ nominees. Their appointments are greased by the finance ministry mandarins in consultation with the ruling political party. Many are chartered accountants who have made a career out of hopping from one nationalised bank board to another. This allows them to cultivate and favour executive directors by fixing their posting as chairmen.
Yet, most of us were seriously shocked to discover that Central Bank of India’s former chairman & managing director HA Daruwalla, would not be punished after a series of proven corruption cases. Although charges against Ms Daruwalla were proved, all she got was a ‘letter of displeasure’ and only then did we discover that there are no legal provisions to hand out stiffer punishments to bank chairmen (except removal from service) who misuse their power with impunity and allow the banks under their charge to be looted. The only punishment possible, we learnt, is following a CBI inquiry leading to prosecution and verdict. In a country that has handed draconian powers to investigation agencies to arrest and harass legitimate tax-paying businesses, the absence of legal provisions to punish bank chairmen has got to be deliberate.
Similarly, in the first week of December, the Supreme Court issued a notice to the finance ministry (in response to a public interest litigation) seeking its response to the absence of data or guidelines on loan write-offs by banks and the debt recovery tribunal. Moneylife has also pointed out how companies, such as Ispat Industries Ltd, have enjoyed repeated concessions and corporate debt restructuring (which was to be a one-time affair), despite their continued mismanagement.
Large infrastructure project contracts are another big pool of corruption. In Mumbai, the biggest industrialists say they used to receive calls from the chief minister’s (not the new incumbent) office asking them not to submit bids for some large infrastructure projects. In a recent case, they were asked not to insist on the tender document for a large toll contract.
Recently, Moneylife discovered that the Intelligence Bureau (IB) files monthly reports about stock market manipulation by Ketan Parekh (officially barred from the capital market for 14 years) with scrip details, prices and colluding entities or individuals. That the capital market regulator has done nothing suggests that it is unwilling to, or incapable of, protecting investor interest.
Civil society activists struggle to bore through these walls of corruption using tools such as the Right to Information (RTI) Act or public interest litigation. But the process is slow, expensive and, often, fruitless. A naive public used to depend on the media to expose wrongdoing; but the Niira Radia tapes have now exposed how easily the fourth estate too is manipulated.— Sucheta Dalal