RE S
IN TA
LE TE
S SC
p4 S H AN
4
OO
DA

GOVERNANCE: JIGNESH SHAH, UNFIT
AND IMPROPER p12
October 5, 2013
VOL. 7, ISSUE 7
...
From the Editor

I

vol. 7,

ISSUE 7 | OCTOBER 2013

Anil Tyagi | editor
TR Ramachandran | executive editor
Niranjan Desai...
CONTENTS
BIG BOSS
COVER STORY

22 Fissures in BJP’s citadel

While the BJP, as of now, looks likely to score a hat-trick i...
www.indianbuzz.com

gfiles inside the government
vol. 7, issue 7 | October 2013

5
CONTENTS
LETTERS
editor@gfilesindia.com

DELHI POLL SURVEY RESULTS:

25-28

Pledge for the IAS

30-33 02-05
September 5, 2...
www.indianbuzz.com

gfiles inside the government
vol. 7, issue 7 | October 2013

7
Bric-a-brac
lines & signs

Destiny’s child?

roses all the way for hooda

T

HERE’S a saying that you can’t fight with fat...
INSIDE EYE

ILLUSTRATIONS: ARUNA

Joshi, the new patriarch
temporary bonhomie?

L

AL Krishna Advani’s vehement opposition...
Bric-a-brac
lines & signs

Lalu squats to win over
ordinance troubles

I

T seems nobody is better than Lalu Prasad Yadav ...
GROUP
HOUSING
PROJECT
For Civil Servants
NMDC AD
“Commonwealth Co-operative Group Housing Society
Ltd” has been formed by ...
GOVERNANCE

nsel jignesh shah

Unfit and improper
Yet, ‘Operation Rescue Jignesh Shah’ seems to be in full force,
orchestr...
distance himself and claim to be unaware of the goings-on inside NSEL.
But NSEL co-founder, MD and CEO
Anjani Sinha, who s...
GOVERNANCE

nsel jignesh shah

Capital, Kotak Mahindra Bank,
HDFC, and JM Financials in buying out Shah’s controlling stak...
www.indianbuzz.com

gfiles inside the government
vol. 7, issue 7 | October 2013

15
GOVERNANCE

nsel jignesh shah

believed, NCP chief Sharad Pawar,
till recently one of the strongest
Shah supporters, has a...
www.indianbuzz.com

gfiles inside the government
vol. 7, issue 7 | October 2013

17
BIG BOSS

sanjay kothari secretary, administrative reforms & public grievances

‘Do what
you can do,
serve the
people’
The...
PHOTOS: FOTOS4INDIA

been implemented. The main issue
before us was, does the impact reach
the common man in the villages
...
BIG BOSS

sanjay kothari secretary, administrative reforms & public grievances

Sanjay Kothari: ‘For the first time (on pu...
www.indianbuzz.com

gfiles inside the government
vol. 7, issue 7 | October 2013

21
COVER STORY

elections madhya pradesh

Congress presents a united face in
Madhya Pradesh

Fissures in
BJP’s citadel
While ...
for the Congress in the elections in
November. However, the ground situation in the politically crucial state
seems to be ...
COVER STORY

elections madhya pradesh

the two individuals leading the campaigns of their respective parties, the
issues f...
with the people with regard to their
presence in the State. Scindia, Digvijay
Singh and Kamal Nath are more active
in Delh...
COVER STORY

elections madhya pradesh

for Scheduled Castes (SC). The SC-ST
votebank is what the Congress is eyeing in a b...
Vindhya Pradesh

Bundelkhand

Bhopal state

7 districts: Satna, Rewa, Sidhi,
Singrauli, Shahdol, Anuppur,
Umaria

6 distri...
COVER STORY

elections madhya pradesh

the BJP, which accused the grand
old party of “betraying tribals and
trusting feuda...
Kamal Nath (left) and Digvijay Singh: Strong leaders in their own right

BJSh had bagged two seats. Many in
the Congress b...
COVER STORY

elections madhya pradesh

because of his false image of a clean
politician,” he said.
Congress sources say th...
www.indianbuzz.com

gfiles inside the government
vol. 7, issue 7 | October 2013

31
EXPOSÉ
EXPOSE

coal scam jindal group

Chickens
come to roost
for

Jindal

Coalgate and other scams smear Naveen
Jindal’s ...
The decisive call for such a test of
purity came in June this year, when
the Central Bureau of Investigation
(CBI) reporte...
EXPOSE

coal scam jindal group

obscure company of the JSPL group
in the BSE-listed Sowbaghya Media
Limited (SML), which i...
paper also published a table, giving a
break-up of the money paid by these
companies, including JSPL.
The investigative re...
EXPOSE

coal scam jindal group

GOVERNANCE
AWARDS
2012

SK Misra

Anil Swarup

Armstrong Pame

Ajit Balaji Joshi

IAS (Ret...
GOVERNANCE
AWARDS

2013

Saturday,
November 30, 2013

Nominations invited

www.gfilesindia.com
summit@gfilesindia.in
www.i...
GOVERNANCE

corruption mg devasahayam

Kleptocratic India,

the enemy is
within!
The Supreme Court talks
of the “unholy ne...
TATRA trucks (left), the Admiral Gorshkov
(below) and Augusta-Westland choppers are
just a few examples of defence deal sc...
GOVERNANCE

corruption mg devasahayam

sounding the ultimatum to Prime
Minister Indira Gandhi, indicted for
electoral corr...
the country. A kleptocracy is a
deviant system wherein government
departments and public institutions
are commandeered for...
GOVERNANCE

corruption mg devasahayam

Kleptocrats in action

K

leptocrats can go to any
ca
extreme, eve treason, to
even...
just because General (Retd) VK Singh
was seen ‘sharing the dais’ at an
Ex-Servicemen’s rally with Narendra
Modi. There was...
STATE SCAN

xxxxx xxxxxx

UNI

Reinless Hooda
With Haryana assembly polls due next year, the focus is on the alleged corru...
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Fissures in BJP's citadel
While the BJP, as of now, looks likely to score a hat - trick in MP, the Congress seems to be closing the gap under the leadership of Jyotiraditya Scindia.
By Puneet Nicholas Yadav

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gfiles Magazine (Oct 2013)

  1. 1. RE S IN TA LE TE S SC p4 S H AN 4 OO DA GOVERNANCE: JIGNESH SHAH, UNFIT AND IMPROPER p12 October 5, 2013 VOL. 7, ISSUE 7 BIG BOSS SANJAY KOTHARI p18 gfilesindia.com Battle for Bhopal
  2. 2. From the Editor I vol. 7, ISSUE 7 | OCTOBER 2013 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) Dipanshu Gupta | Webmaster (Programmer) advertising & marketing adv@gfilesindia.com U K SHARMA— +919717588883 e-mail: uksharma@gfilesindia.in RAKESH ARORA— +919810648809 SAKSHAY PAHUJA— +918527006688 e-mail: adv@gfilesindia.com mumbai: 48/C-1, Areshwar, Mhada, S.V.P. Nagar, Andheri(W), Mumbai 400 053 bengaluru: 2210, 10b main road, 3 block, jayanagar, bengaluru 560 011 CONTACT — +91 9845730298 e-mail: venu@gfilesindia.in +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 NDIA is always in a festive mood from October to March every year but this year’s festivity is manifold as the country appears to be positioning itself against corruption, corrupt leaders and officials. The mood of the common man is jubilant; at last the Government of India heard the voice of the judiciary and the common man and withdrew the ordinance seeking to protect convicted MPs and MLAs. It is the beginning and India has to go a long way as far as the fight against corruption is concerned. Yet, India is missing the moot point—by sending corrupt MPs and MLAs to jail, India will not become corruption-free. The real problem is that the cracks in the governance system are so deep-rooted that a Lalu Prasad Yadav ruled Bihar for 15 years but the system could not check the glaring lapses in the chara scam. Another glaring scandal involving the National Spot Exchange Ltd has emerged, allegedly siphoning Rs 5,600 crore of investors’ money. Associate Editor Neeraj Mahajan’s report, “Unfit and improper”, elaborates how the entire system is reportedly backing Shah. Veteran journalist Naresh Minocha is very candid in his story, “Chickens come to roost for Jindal”, writing: “Analysts are awaiting the answers that Jindal gives to uncover the truth about the Rs 2.25-crore investment made by an obscure company of the JSPL group in Sowbaghya Media Limited, which is majority-owned by Dasari Narayana Rao. The CBI’s slow pace of investigation into the Koda scam and several other scams involving India’s top industrialists, has stirred doubts in the public mind.” M G Devasahayam further hammers the issue of corruption, saying, “In its judgment in the Black Money Case (July 2011) the Supreme Court talks of the unholy nexus between the lawmakers, the law-keepers, and the law-breakers, clearly indicating a statesponsored kleptocracy that runs the country.” Our Cover Story on the Madhya Pradesh elections by Puneet Nicholas Yadav indicates all is not well with Shivraj Singh Chauhan. The BJP’s only advantage in MP is that there are no Congress stalwarts challenging Chauhan. The Congress has to clearly understand that as long as it has paratroopers or visiting leaders, it will not be crowned with success. Former Chief Minister Devi Lal used to say, “One should have the village and postal address of the State if one desires to become a powerful State leader.” MP State Congress leaders might have the State address but they all live in Delhi. There is a crisis of connect between the voters and the Congress leadership. It was the reason Rahul Gandhi was not successful in UP; UPwallahs don’t feel connected with him, whereas Akhilesh Yadav proved himself to be a man from UP, having an address and living in Lucknow. Narendra Modi, Chief Minister of Gujarat, who used to serve tea at a railway station, is analysed by M K Kaw. He says, “The other major weakness is lack of experience of how the Central Government works. Modi has never served at the Centre and his long speeches show a completely naïve and innocent view of how the Central Government functions. He gives the impression that the Prime Minister is a magnified version of a Chief Minister. Those who have worked both at the Centre and the States will tell him that while a Chief Minister is all-in-all within the State, the Prime Minister is just primus interpares. Woe betide the ignoramus who extrapolates his Chief Ministerial experience and behaves like a Mughal sultan!” And Shailaja Chandra again digs out a wonderful story, “When the Saints Go Marching In”, about an organisation that provides a support system for civil servants who retire after a lifetime of transfers during which they are unable to build their own structures to lean on. ANIL TYAGI Download the gfiles app www.indianbuzz.com editor@gfilesindia.com gfiles inside the government vol. 7, issue 7 | October 2013 3
  3. 3. CONTENTS BIG BOSS COVER STORY 22 Fissures in BJP’s citadel While the BJP, as of now, looks likely to score a hat-trick in MP, the Congress seems to be closing the gap under the leadership of Jyotiraditya Scindia. By Puneet Nicholas Yadav GOVERNANCE 18 ‘Do what you can do, serve the people’ The government is taking great pains to change the typical bureaucratic mindset and churn out young officers with a can-do attitude. All this is sure to change the perception about anything official, sarkari and red-tapism, says Sanjay Kothari, Secretary, Administrative Reforms & Public Grievances. Excerpts from an interview by Anil Tyagi and Neeraj Mahajan. 8 Bric-a-Brac 12 Jignesh Shah, unfit and improper destiny, diamonds and more Yet, ‘Operation Rescue Jignesh Shah’ seems to be in full force, orchestrated by his friends in high places. By Neeraj Mahajan 48 Diplomacy 38 Kleptocratic India: The enemy is within! 51 Initiative slovenia: building on tradition The Supreme Court talks of the ‘unholy nexus between lawmakers, lawkeepers, and lawbreakers’, clearly indicating that a State-sponsored kleptocracy runs the country. By M G Devasahayam emotional quotient EXPOSÉ 56 Silly Point 32 Chickens come to roost for Jindal Coalgate and other scams smear Naveen Jindal’s white marbleengraved image, while putting a question mark on the rapid growth of the MP’s business empire. By Naresh Minocha 52 pensioners’ body in rajasthan strongman modi? 58 My Corner unregulated godmen 60 Travel STATE SCAN a stroll in ranthambore 44 Reinless Hooda With Haryana assembly polls due next year, the focus is on the alleged corrupt land deals and nepotism charges against the Hooda government. By Narendra Kaushik 64 Book Review the air india saga 66 Perspective FIRST STIRRINGS 46 ‘Official language and literature are worlds apart’ The former Chief Commissioner, Income Tax (Mumbai), V K Baranwal, is now doing something he always wanted to do — writing — and is today the author of three books. By Neeraj Mahajan 4 gfiles inside the government vol. 7, issue 7 | October 2013 worshipping the goddess 67 Stock Doctor stay cautious 73 By the Way blue-eyed boys, the class of ’80 and more www.gfilesindia.com
  4. 4. www.indianbuzz.com gfiles inside the government vol. 7, issue 7 | October 2013 5
  5. 5. CONTENTS LETTERS editor@gfilesindia.com DELHI POLL SURVEY RESULTS: 25-28 Pledge for the IAS 30-33 02-05 September 5, 2013 VOL. 7, ISSUE 6 MG DEVASAHAYAM HOPE FROM DURGA p82 gfilesindia.com gfilesind a.com lesindi c es A gfiles public interest initiative for the attention of the Supreme Court NAT ONAL POT NATIONAL SPOT ATIONAL OT T NA EXCHANGE LTD SCAM XCHANG T XC ANG LT NGE NG AM RS FI GREAT GAMBLER THE T SS ST JO G p7 IR 8 RI NG S JIGNESH SHAH IGNES HAH NE ES HAH ESH A FMC to blame in NSEL scam I am very thankful to you for your exposé on the NSEL scam (‘Loot in name of the farmer’, gfiles, September 2013). The NSEL acquired a licence on June 5, 2007. It started operation on October 15, 2008. It launched the castor seed T+15 scheme on November 22, 2009. Why did the ministry not act and stop it in 2009? The scam would not have occurred. Another point is that the ministry appointed FMC on February 6, 2012. Why did the FMC not do his job of regulation? The government should pay the investors their money. Kirit Vinaykant Seth on blog All this A to Z information related to the NSEL scam was very interesting. But the NSEL also allows e-series gold, silver, platinum, copper, zinc and other metals’ contracts on spot delivery basis. Can you provide some information like this to e-series investors who are also suffering? I noticed that most of the media has not covered the e-series story. I invested my savings in e-series gold and silver. Like me, many small investors are blank as to whether they will receive their money or delivery of the metal. And when? Vinodchandra M Mota on blog 6 gfiles inside the government vol. 7, issue 7 | October 2013 I read M G Devasahayam’s article (‘Redefining IAS?’, gfiles, September 2013) not once but three times. It is a bold article which has analysed the state of the Service extremely well. I am sure if the IAS/IPS goes by the oath of the Service, 90 per cent of the corruption in the country will vanish and we all can hold our heads high. The politic-ion won’t have a free run as he is having today. This small step is a start to cleanse the system. Maj Gen J P Gupta (1st course JSW/NDA) on blog Thanks to M G Devasahayam, a veteran, for reminding us that this Rajiv Kumar is the same infamous Rajiv Kumar of NOIDA fame who should be behind bars. And also for writing of Sanjiv Chaturvedi who has been facing harassment since long. I hope people remember all this when it is time to vote. The new government must then take these traitors to task. Maj Gen Ashok Coomar on blog There are brave and dedicated IAS officers but they are not taught the army motto, ‘The country first, my men second and then only the rest’. They should be asked to swear an oath to this effect when they leave the academy. This will at least morally bind them to act better than they do now. Should we not write to Padamveer Singh, the director of the IAS Academy? I am even willing to go to Mussoorie for this purpose if you are able to mobilise some signatures to this effect. Sivaraman, IAS (Retd) on blog Poll insight Your coverage of the Delhi elections is an exceptionally fine write-up. It is based on meticulous study, unbiased surveys and excellent analysis of data. No matter who wins or loses, this write- up places before the policy-makers a fund of data, feedback and the pressing needs of citizens. A beautiful piece of work by an informed group of journalists. Congratulations for the wonderful work. It will be a national tragedy if all this good work is ignored by our netas —which is an unfortunate way of life for us. Nevertheless, you did your duty. All the best. V N Rao on blog Nice write-up. What is shocking is that, for Indians, everything is always ‘chalta hai’. Their problems are not social, only individual. Why are we so greedy? Why do we not want to live in clean air? So it’s time to ask what motivates Indians, is it just their own aaloo and pyaaz? Manoj Khare on blog The winner from our area, Madanpur, in 2008 never bothered to even pay a visit to the area, forget about doing any work for the area. And he was blaming the Congress for the Batla House encounter but then he went and joined the party. Hitesh on blog Inspirational Jog Another excellent story by Shailaja Chandra (‘First Stirrings: S S Jog’, gfiles, September 2013). I happened to meet Mr Jog when he was a police officer and I was a postgraduate student of law at Bombay University. He came to the department of law to address a small group on constitutional law and discussed the relationship between police and citizens. His talk was followed by a very interesting discussion that included corruption in public life and in the police. We found him very honest, transparent and the talk was inspiring. I appreciate the article since it has brought me in touch with him again. I admired him always. V N Rao on blog www.gfilesindia.com
  6. 6. www.indianbuzz.com gfiles inside the government vol. 7, issue 7 | October 2013 7
  7. 7. Bric-a-brac lines & signs Destiny’s child? roses all the way for hooda T HERE’S a saying that you can’t fight with fate. The classic destiny’s child is Haryana Chief Minister Bhupinder Singh Hooda. He has been bestowed a life of roses. He is an accomplished man, whether in politics or with regard to his family. The one-time protégé of Ghulam Nabi Azad and Birendra Singh is now the all-powerful Congress Chief Minister of Haryana. He is in direct touch with Rahul Gandhi and all the powers that be in 10 Janpath. His proximity to 10 Janpath has made Hooda a changed politician. Many Congress party leaders are surprised at this, marvelling at the transformation since the days when he used to sit on a sofa for hours at a Mother Teresa Road house. Hooda has also shifted his loyalties. The latest on the Congress grapevine is that he is very close to a Congress General Secretary. He is benevolently doling out favours to the relative of the General Secretary, who lives in Haryana. Hooda has also been seen hobnobbing with a prominent Thakur politician of the Congress party from MP. After 35 years in politics, Hooda now knows which side of the grass is greener. Many people, who used to earlier see him waiting for endless hours at 10 Janpath, find this amusing. Is this a case of, as they say, a man’s destiny being fulfilled, or is it something else! g Diamonds and Rajnath a gift a day… B JP President Rajnath Singh seems to be following Gujarat Chief Minister Narendra Modi, literally as well as metaphorically, since he announced the latter’s name as the party’s prime ministerial candidate. While Modi is enthralling his party workers around the country, the ‘wily’ (an adjective borrowed from Advani’s letter) Thakur has partymen and businessmen vying for his attention at home and elsewhere. The traders and saffronites are trying to curry favour with the BJP chief and they turn up with all kinds of ultra-expensive gifts, which may well draw tax sleuths to Singh’s door at a later date. A wrapped-up diamond plate, handed over to Singh by controversial diamond merchant and Geetanjali gem promoter Mehul Choksi at a function organised by the Bombay Bullion Association recently, has raised eyebrows within the BJP and outside. The BJP’s political opponents may want to know why Singh accepted the gift from Choksi, who was suspended by the Securities Exchange Board of India (SEBI) from trading in July this year on the allegation that he manipulated the market. Singh’s detractors may also wish to know the whereabouts of the costly plate, the way the Nationalist Congress Party (NCP) has been demanding to know about the diamond-studded garland Nitin Gadkari presented to Modi after the latter’s coronation as PM candidate. g 8 gfiles inside the government vol. 7, issue 7 | October 2013 www.gfilesindia.com
  8. 8. INSIDE EYE ILLUSTRATIONS: ARUNA Joshi, the new patriarch temporary bonhomie? L AL Krishna Advani’s vehement opposition to Narendra Modi’s candidature for prime ministership has raised the stock of his bête noire, Murli Manohar Joshi, in the party. The former HRD minister was initially in sync with Advani on the issue, but changed his mind at the 11th hour. There is a buzz that the change of mind had to do with the patriarchal status the party bestowed on him in place of Advani at the time of Modi’s anointment. Joshi was in Varanasi on September 13. The party arranged a special plane to fly him back to Delhi for the parliamentary board meeting and to flank Rajnath Singh, when the latter made the all-important announcement. The former BJP chief was also with Modi when the Gujarat Chief Minister made his acceptance speech. But it is to be seen how long the camaraderie between Joshi and Modi lasts. Speculation is rife that Modi may be fielded from Varanasi, the current Lok Sabha constituency of Joshi. g www.indianbuzz.com gfiles inside the government vol. 7, issue 7 | October 2013 9
  9. 9. Bric-a-brac lines & signs Lalu squats to win over ordinance troubles I T seems nobody is better than Lalu Prasad Yadav when it comes to getting Sonia Gandhi on board in a dubious deal. The Bihar strongman apparently had a meeting with the Congress President, after which the latter fell in line with her government on taking the ordinance route to protect convicted netas from losing their seats. This was before Rahul Gandhi publicly tore into the ordinance at a press conference at the New Delhi Press Club. It transpires that the former railway minister squatted on the ground before Sonia and played the secular card to plead his case for the ordinance, now withdrawn. He told her that his possible incarceration in the fodder scam case would add to the BJP’s advantage in Bihar. The saffron party, Lalu warned, would get more than 25 Lok Sabha seats in the State and scupper the UPA’s chances of ruling India again. “Rajpaat naa rahi (you’ll lose power),” Lalu cautioned the UPA chairperson in his inimitable style, sitting on the ground before her. The exhortation obviously helped the Congress President make up her mind on the ordinance. Besides Lalu, Rashtriya Lok Dal Chief Ajit Singh also played a key role in bringing the demurring Sonia around. The Union Civil Aviation Minister warned the Congress chief that imprisonment of senior Congress leader Rashid Masood might jeopardise her party’s chances in Uttar Pradesh. Masood has been sentenced in an old corruption case. Ironically, apart from Lalu Prasad and Masood, the major beneficiary of the ordinance, which brought Congress fault lines to the fore, could have been former Haryana Chief Minister and Indian National Lok Dal (INLD) chief Om Prakash Chautala, who is in jail in a teachers’ recruitment scam. The ‘nonsensical’ ordinance was as much a comment on Sonia Gandhi’s gullibility as on Prime Minister Manmohan Singh’s diminishing authority in the government. g 10 gfiles inside the government vol. 7, issue 7 | October 2013 www.gfilesindia.com
  10. 10. GROUP HOUSING PROJECT For Civil Servants NMDC AD “Commonwealth Co-operative Group Housing Society Ltd” has been formed by a group of senior Civil Servants by enrolling members from IAS / IFS / IPS / IFOS / IRS / IES / Railways and other services not below the rank of Deputy Secretary to GOI. Limited membership is also open for PSUs, Bankers, eminent professionals such as CAs, Advocates, Business persons and Academicians. The society has already received more than 200 memberships. The objective of the society (in brief) would be to make available built-up flats / land for construction of flats for state-of-the-art highend residential accommodation at prime locations to its members in GURGAON / NOIDA / DELHI. www.indianbuzz.com For any further clarification/application form contact Prem Gupta, Chartered Accountant on email: cmscghs@yahoo.in or mobile: 09810137909, NEW DELHIthe government gfiles inside vol. 7, issue 7 | October 2013 11
  11. 11. GOVERNANCE nsel jignesh shah Unfit and improper Yet, ‘Operation Rescue Jignesh Shah’ seems to be in full force, orchestrated by his friends in high places by NEERAJ MAHAJAN W ITH the Rs 5,600-crore NSEL scam out in the open, the issue now is whether Shah should be given a ‘fit and proper’ certificate to run the spot exchange. If he does not get this certificate, not only will Jignesh be unable to run NSEL, he will be debarred from running the MCX and MCX-SX too. But it seems that efforts are on to camouflage the scam and confuse the issue to such an extent that he gets the certificate. This will mean a victory for him, despite the unearthing of the scam that has rocked the nation. Clearly, if you are Shah, even Isaac The office of Financial Technologies (India) Ltd 12 gfiles inside the government vol. 7, issue 7 | October 2013 Newton’s law of gravity –What goes up must come down – does not apply. Whatever the official stand, privately, everyone in the government, regulators and the investors do not want Shah to be harmed. The investors’ point of view is that, if anything happens to him, they might never recover their money. “Good or bad, Jignesh is an approachable face of FTIL group. If anything happens to him, BSE, NSE and the brokers will be affected,” Sharad Saraf, the convenor of NSEL Investors Forum, told gfiles. Even the Finance Ministry, for some reason, does not want to upset the balance. It seems wary of bringing Shah’s empire down. Ministry offi- cials reportedly spoke to Shah before finalising the Mayaram Report, which, many say, is eye-wash. Wasn’t the KC Chakrabarty subcommittee, headed by the RBI deputy governor, instituted to assess the systemic impact of the NSEL crisis and pinpoint the violation of laws? Strangely, the sub-committee did not find broader systemic connotation. That too, when the Enforcement Directorate, working simultaneously, could smell violation of the Prevention of Money Laundering Act and the Foreign Exchange Maintenance Act? Chakrabarty, who served as MD of Punjab National Bank and Indian Bank, and Chairman of the Indian Banks’ Association, before taking over as RBI deputy governor, failed in his duty and ended up coining a phrase, “minor systemic implications”. The term caught the fancy of the Economic Affairs Secretary, Arvind Mayaram, who used it in his report to Finance Minister P Chidambaram. Significantly, Chidambaram admitted that NSEL was not a registered or recognised association under the FMC, but got exemption even before it started its business. “The investors knew that they were investing in an entity which was unregulated,” he said. But the perception managers downplayed the Enforcement Directorate’s hints about money laundering and FEMA violations and everyone conveniently accepted Shah’s ‘victim of NSEL management fraud’ story. The safe bet for Shah was to www.gfilesindia.com
  12. 12. distance himself and claim to be unaware of the goings-on inside NSEL. But NSEL co-founder, MD and CEO Anjani Sinha, who signed an affidavit accepting blame for whatever happened at the spot exchange, raised more doubts than he laid to rest. The fact that Sinha filed his affidavit before the Economic Offences Wing (EOW) is no less intriguing—confessions before police officers have no legal sanctity. Besides, Sinha, who presided over the shut-down of the Magadh, Ahmedabad and Safal exchanges, was picked up by Shah to head the NSEL. Still, if Shah claims to be in the dark, it is sufficient to prove that he and his team are incapable of running the commodity, spot and derivative exchanges. Interestingly, one of the Directors of FTIL (India), Chandrakant Kamdar, was a fraud investigation and anti-money laundering specialist with over 22 years of experience. A person of his stature, who also worked as vice-president of the Vadodara Stock Exchange, should have smelt a rat. Completing the picture is the fact that Chakrabarty’s colleague and fellow RBI deputy governor Urjit Patel, was previously on the Board of Directors of MCX and worked as President (Business Development) at Reliance Industries Ltd. T HE possibility of an Ambani connection behind the Shah bail-out plan cannot be ruled out as, besides Patel, Anil Chandanmal Singhvi, the founder of proxy advisory firm IIAS, who is playing a key role in the crisis, is an old Ambani loyalist. Singhvi was Vice-Chairman and Director of Reliance Natural Resources Ltd of the Anil Dhirubhai Ambani Group, before moving to Ambuja Cements. It has been reliably learnt that, some time ago, Reliance Capital had tried to take over MCX but somehow the deal could not go through. Even now, if the corporate entities are ready, the government may go to any extent to facilitate Reliance Jignesh Shah: in the eye of the storm www.indianbuzz.com gfiles inside the government vol. 7, issue 7 | October 2013 13
  13. 13. GOVERNANCE nsel jignesh shah Capital, Kotak Mahindra Bank, HDFC, and JM Financials in buying out Shah’s controlling stake in Financial Technologies (FTIL). This reinforces the belief that there are two sets of laws, one for the common man and another for influential persons like Shah. “I fail to understand why these people are being given the benefit of doubt when a person who commits a minor offence is arrested. These people are going scot-free and the police is behaving as if its duty is to prove them innocent,” says BC Bhartia, National President of the Confederation of AllIndia Traders. I N an unprecedented move, 200 inspectors and one battalion of Mumbai policemen raided 184 locations in 52 cities all over India. Two income tax sleuths also carried out searches on the premises of defaulters, many of whom were found to have given false addresses or inadequate stock of commodities. What will be the outcome? Will it serve any purpose? No, because policing is a State subject. Policemen in one State do not like others to interfere in their jurisdiction. Secondly, Mumbai Police or EOW staff does not have any extraterritorial powers to conduct raids, search with or without the permission of a magistrate, or prepare a seizure memo in case some incriminating evidence is found in the presence of neutral public witnesses, as required There were many protests by investors, brokers and traders in the run-up to the exposé but these were largely ignored by the powers that be. by law. What if the money is found? Will it be handed to the investors or the exchange? No, as a case property, it will remain locked up in the malkhana till the case is decided. There is a lot happening at NSEL, MCX, FTIL, La-Fin—in Shah’s domain. Battle-lines are drawn between pro- and anti-Shah lobbies, with MCX-SX director Paras Ajmera, MD & CEO of NBHC, Anil Choudhary, CEO, MCX SX Currency Derivatives, and Member of the MCX-SX Governing Board U Venkataraman, Joseph Massey, Shreekant Javalgekar and Saji Cherian on one side and other senior officials in the group on the other. Massey, who, till recently, was one of the highest -paid employees, drawing Rs 1.8 crore, has already lost much of his powers and many others in FTIL and MCX may get the axe soon. If the current trends are to be Protests were held against Jignesh Shah in Mumbai last month 14 gfiles inside the government vol. 7, issue 7 | October 2013 www.gfilesindia.com
  14. 14. www.indianbuzz.com gfiles inside the government vol. 7, issue 7 | October 2013 15
  15. 15. GOVERNANCE nsel jignesh shah believed, NCP chief Sharad Pawar, till recently one of the strongest Shah supporters, has a lot of interests. As a symbolic gesture, NSEL chairman Shankarlal Guru and BD Pawar, a former Maharashtra bureaucrat and director of state agricultural marketing, have resigned from the NSEL board. Both were confidants of Pawar and were associated with the Centre for International Trade in Agriculture and Agro-based Industries, a Sharad Pawar outfit. Financial Technologies India Ltd’s (FTIL) independent directors, P Devarajan and PR Barpande, both senior chartered accountants, CM Maniar, PG Kakodkar and N Balasubramaniana resigned from the board. Likewise, on the MCX Board, Chairman Venkatchary, former managing director Lambertus Rutten, CM Maniar, PR Barpande, Shvetal Vakil and Prakash Apte resigned. None of them wanted to share Shah’s shame. But what’s happening on the sidelights has the potential to change the complexion of the game. The key players to watch include Sameer Gehlaut, India’s youngest self-made billionaire and Chairman of Indiabulls Group, Uday Kotak, the founder and promoter of the Kotak Group, India’s first nonbanking finance company to be converted into a bank, and BNP Paribas, one of the largest banks in the world. Gehlaut, who started Indiabulls, has a burning desire to make his presence felt in the commodities exchange segment in India. He has the money, connections and a toe-hold in the commodities segment through the Indian Commodity Exchange (ICEX), jointly promoted by Indiabulls and MMTC. Sanjay Chandel, a former Sebi official, is its CEO. 16 gfiles inside the government vol. 7, issue 7 | October 2013 Raids were conducted at Shah’s residence above. As developments unfold, the key players to watch include Sameer Gehlaut, India’s youngest self-made billionaire and Chairman of Indiabulls Group, Uday Kotak, founder and promoter of the Kotak Group, India’s first NBFC to be converted into a bank, and BNP Paribas, one of the largest banks in the world. The plunging FTIL stock has caused a lot of distress to Shah’s institutional investors. The worst affected are shipping magnate Ravi K Sheth and his brother, Bharat Sheth. One of the early investors in FTIL, Ravi Sheth has been on the company’s board, promoter of NSEL, and anchorinvestor in MCX since 1994. The Sheth brothers, who own Great Eastern Shipping, have lost over Rs 450 crore. Finally, they have decided that enough is enough and have called it a day. Another investor in FTIL is Pivotal Securities and Sunidhi Securities and Finance, with Sunil Natverlal Karia, Mahesh Subodhchandra Desai, Jayantilal Chhotalal Shah, Jasvantlal Chhotalal Parekh, Arun Jayantilal Shah, Jayesh Dhirajlal Parekh, Bimal Jasvantlal Parekh and Rishabh Jayesh Parekh, as its eight directors. Pivotal Securities Pvt Ltd. and Sunidhi Consultancy Pvt Ltd. operate from a common office and were under the IncomeTax scanner for alleged illegal transfer of shares. Since the NSEL crisis deepened, many shareholders like the NSE and BNP Paribas have offloaded their holdings. Bank of India completely sold off its 5.25 lakh shares. The only buyer since the NSEL scam broke is HDFC Mutual Fund, which purchased 3 lakh shares. Astonishingly, two of the Shah’s shareholders are the Times Group and HT Media Ltd. The MCX and FTIL are required to bring their shareholding down to 5 per cent by January 2014. In the past, the FTIL managed to sell 44.2 million shares of MCX-SX to IL&FS, 71.875 million shares to IFCI and 40 million shares to Punjab National Bank, with an assurance to buy back the shares in future. It will be worth watching whether the FMC and SEBI give the promoters of MCX and MCX-SX the ‘fit and proper’ person tag to allow them to continue running these exchanges. This is the issue over which future battles will be fought. g www.gfilesindia.com
  16. 16. www.indianbuzz.com gfiles inside the government vol. 7, issue 7 | October 2013 17
  17. 17. BIG BOSS sanjay kothari secretary, administrative reforms & public grievances ‘Do what you can do, serve the people’ There was a time when government officials and the public, the rulers and the ruled, distrusted each other, but not anymore. Today, the government is taking great pains to change the typical bureaucratic mindset and churn out young officers with a can-do attitude. All this is sure to change the perception about anything official, sarkari and redtapism, says Sanjay Kothari, Secretary, Administrative Reforms & Public Grievances. Excerpts from an interview by Anil Tyagi and Neeraj Mahajan. gfiles: What is the basic idea behind the administrative reforms that your ministry is trying to implement? Kothari: The basic idea is that whatever reforms or whatever steps we are taking should reach the common man. For that we feel that there should be an attitudinal change. The Administrative Reforms Commission has given 1,200 very thorough and concrete recommendations on all kinds of subjects. About 1,000 of them have been accepted and 600 have 18 gfiles inside the government vol. 7, issue 7 | October 2013 www.gfilesindia.com
  18. 18. PHOTOS: FOTOS4INDIA been implemented. The main issue before us was, does the impact reach the common man in the villages and interiors? That was our main objective. So, after brainstorming on the issue, we decided to sensitise our young officers. Every year, we take about 1,000 officers through the civil services exams. So, we thought that we should sensitise them through a two-day workshop aimed at telling them that reforms can be done. One approach would be to tell them that these are the 600 reforms, you implement them. The other approach is that we just tell them these 600 reforms can be implemented and they pertain to transparency, right to law or accountability. We discussed this with the directors and faculty of the Administrative Training Institute and Central Training Institute, who also agreed that the second approach was better wherein we tell them about the reform and its focus. Now the second question came, how to communicate all this to probationers who are young, full of ideas and at an impressionable age. We thought that we would develop case studies and tell them a story with a message in the end. We also did a training of trainers’ workshop at the customs academy in Faridabad. The third challenge was, who will teach them. It had to be someone good, with a good public image. Probationers are very bright people; they will only listen to people whose integrity is beyond doubt. Who are these role models? So, on one side, we are training people who can be role models and on the other side, developing case studies. Another thing is that there are people among the public who are doing a lot of good work. Take the case of Sulabh Shauchalaya. Bindeshwari Pathak has delivered a www.indianbuzz.com Sanjay Kothari: For taking reforms to the common man lot of things…in a number of places these toilets are well-maintained. Everyone has heard of Anand Kumar of Super Thirty at Patna. He picks up children from the streets, doesn’t charge a single penny and coaches them for IIT. For the last three years, he is getting 30 out of 30 selections in IIT. Till now he has created 281 IIT graduates. We thought, if these people talk to the professionals, they will make an impression. We are doing a workshop with such people. We want them to share how they achieved their goals. Does this mean that leaders in the administrative sector are not competent enough to motivate the young officers? No. Probationers today are very bright. They might feel that officers will just tell us to do things in a certain way. So while senior officers will still talk to them on certain official subjects, we will choose experts from the social sector to come in as role models and motivate them. Apart from this, there will be people with landmark achievements in the financial sector. This way, the young officers will hear a mix of people – senior officers, social people, financial people – and then make up their own mind. We are just trying to motivate them so that one can achieve a change in mindset. They are the people who will be at the helm of affairs for the next 35 to 40 years. If you can’t do something in the first five years, you might be able to do it in the next five years. But isn’t this a repetition of gfiles inside the government vol. 7, issue 7 | October 2013 19
  19. 19. BIG BOSS sanjay kothari secretary, administrative reforms & public grievances Sanjay Kothari: ‘For the first time (on public service delivery norms), the onus has passed on from the citizen to the officials’ what you imbibed in the initial training – that you are the government… you will rule the country for the next 38-39 years? Not ‘rule’. I have serious objection to the term ‘rule’. I would say ‘serve’ the country. We are telling them, contribute your small bit today, whether you are an SDM or a Collector. When you are in a position to change the policy, then change it but don’t make excuses about what you can’t do today, at least do what you can. Most of the things you have said so far are not big, but very small issues related to attitudinal and behavioural changes… Yes, I am talking about very small things… you do whatever you can… if you cannot do it today, do it whenever you are in a position to do so. Even that means a change in behaviour... a change in mindset? Exactly… I want to avoid harassment of people. You want to cut down on the red-tapism? 20 gfiles inside the government vol. 7, issue 7 | October 2013 We want to cut down on any procedure that is redundant. Whether you call it red tape or whatever, I want that we should trust our people. What do you have to say about the antiquated laws? Look at the forms… most of these forms, leave aside a few, are of 1950 and 1960s vintage. Why can’t we change them? An admission form for a school, I am told, has a question, which is the nearest police station… what relevance does this have? Wearing of a Gandhi cap is a prison offence in the jail manuals even today… Why can’t we have a look at our laws? In fact, in the reforms that we have sent to all Secretaries and Chief Secretaries, we have only said two very simple things—one please see whether all reforms are downloadable or not and two, please see whether this information is relevant or not. There seems to be a disconnect between the government and the people? Both seem to exist in different worlds and time zones with little in common. You must have noticed that 17 states have adopted public service delivery norms. One major change that has occurred in this country is that, for the first time, the onus has passed on from the citizen to the officials. Earlier also we used to have a citizens’ charter but, out of say, 30 days, even on the 29th day someone could say your application is incomplete, please fill it up. But in public service delivery, once the application has been accepted, you have to deliver the service. Still, some of the worst symbols of government functioning are long delays and tedious procedures. Look at the reasons behind that... why do you want so many papers? If you want a certified copy, take a self-certified copy. A man living in a village, on an average, spends Rs 400 and one full day to get a document attested. Why do you have a threepage form when the relevant details could have been filled up on one page. This is because you still have a British mindset. We still do not trust the common man and treat him/her as if they are deliberately trying to tell lies. We are trying to change this and make the government believe in its people. g www.gfilesindia.com
  20. 20. www.indianbuzz.com gfiles inside the government vol. 7, issue 7 | October 2013 21
  21. 21. COVER STORY elections madhya pradesh Congress presents a united face in Madhya Pradesh Fissures in BJP’s citadel While the BJP, as of now, looks likely to score a hat-trick in MP, the Congress seems to be closing the gap under the leadership of Jyotiraditya Scindia by PUNEET NICHOLAS YADAV, BHOPAL A decade after the Bharatiya Janata Party (BJP) romped to power in Madhya Pradesh (MP), riding on a massive antiincumbency wave against the then Digvijay Singh-led Congress government, come November, the saffron party will defend its citadel in the face of a rapidly resurgent adversary. Pollsters in New Delhi have, as is evident from the various recently aired opinion polls, predicted a third consecutive, comprehensive win for the BJP—a second under Chief Minister Shivraj Singh Chauhan— while projecting only marginal gains PHOTOS: FOTOS4INDIA 22 gfiles inside the government vol. 7, issue 7 | October 2013 www.gfilesindia.com
  22. 22. for the Congress in the elections in November. However, the ground situation in the politically crucial state seems to be swiftly changing. A victory for the BJP under Chauhan could significantly alter the prevailing political discourse in the country, particularly with regard to the saffron party’s recently declared prime ministerial candidate, Narendra Modi. Another defeat for the Congress (especially if it coincides with a similar verdict in Delhi, Rajasthan and Chhattisgarh) would crush its morale ahead of the 2014 Lok Sabha polls. It is in this perspective, arguably more than any other, that the election in MP and its result will be keenly observed. Firmly holding power in the State since its comprehensive victory in 2003, the BJP has expectedly drawn first blood in the election campaign with its slogan, ‘Yeh Yuddh Aar Paar Hai, Antim Yeh Prahaar Hai’. In what was touted by the BJP as the “world’s largest congregation of (party) workers”, the outfit organised on September 25 a ‘Karyakarta Mahakumbh’ in Bhopal. The party claimed that nearly 7 lakh people attended the rally. Apart from that, it had in attendance the entire BJP top brass, including Modi, who had before that kept away from campaigning in the State, reportedly under pressure from the Chief Minister. The BJP leaders in MP are claiming that the September 25 rally marks not only the official launch of the party’s assembly poll campaign, but also its campaign for the 2014 Lok Sabha elections! The Congress, which characteristically woke up late to realise the high stakes in the Madhya Pradesh polls, is finally drawing up a cohesive campaign. It officially sounded the poll bugle from the BJP bastion of Vidisha on September 23 at an impressive rally, which was addressed jointly by leaders of all the warring factions of the party. The decision was a bold and politically significant one, since Vidisha is represented in the Lok Sabha by Leader of Opposition Sushma Swaraj, and Shivraj Singh Chauhan’s own assembly constituency of Budhni falls in the district. T HE BJP is relying heavily on what is arguably its biggest strength in the State – the Chief Minister’s popularity – with its slogan, ‘Phir BJP, Phir Shivraj’. The Congress has pulled out what is being touted as its trump card by nominating the charismatic Union Power Minister Jyotiraditya Scindia as its election campaign committee chief. The MP election will thus see the ‘common man’s CM’ Shivraj Singh Chauhan pitted against the scion of the erstwhile Gwalior royal family Jyotiraditya Scindia. While the former is seen as a man who understands the ground realities and issues concerning the masses in the State, the latter is a young, dynamic, honest and well-spoken alternative to an allegedly “corrupt and non-performing State government”. Interestingly, when the Congress lost power to the BJP in 2003, the campaign of that election had been reduced to a clash between a raja, the then chief minister Digvijay Singh, and a saadhvi, BJP’s Uma Bharti. Beyond the personality clash of BJP’s Prime Ministerial candidate Narendra Modi with senior BJP leaders at the ‘Karyakarta Mahakumbh’ in Bhopal www.indianbuzz.com gfiles inside the government vol. 7, issue 7 | October 2013 23
  23. 23. COVER STORY elections madhya pradesh the two individuals leading the campaigns of their respective parties, the issues for the assembly polls remain the same as in 2003. While the BJP has claimed that its 10-year stint in power has eradicated the three main problems of bad roads, power and water shortage that plagued the State during the Congress rule from 1993 to 2003 and ushered in massive development, the Congress has rubbished these claims as “a pack of lies and exaggerations”. Congress’ state unit president Kantilal Bhuria said, “we will contest the polls on the issues of massive corruption and crumbling law and order situation, while also exposing the BJP and its Chief Minister’s blatant lies about the State’s development.” Opinion polls have so far claimed a third consecutive victory for the BJP, albeit with a reduced number of seats, with a C-Voter survey projecting the BJP winning at least 130 of the State’s 230 assembly seats and the Congress contained in 84 constituencies. There may be some truth to these surveys since the Chauhan government has succeeded in showcasing rather convincingly a slew of achievements. The Madhya Pradesh government has even been applauded by President Pranab Mukherjee, Congress ministers at the Centre like Jairam Ramesh and also the Planning Commission for its “inclusive development model”. Adding to this is the popularity of the Chief Minister himself, who appears to be carrying the entire State BJP on his shoulders despite complaints and allegations of massive corruption against several of his cabinet colleagues and the State’s bureaucracy. Also, the voters have still not forgotten, nor forgiven, the Congress’ poor governance during Digvijay Singh’s second term as chief minister from 1998 to 2003. 24 gfiles inside the government vol. 7, issue 7 | October 2013 The adversaries: Shivraj Chauhan (left) and Jyotiraditya Scindia H OWEVER, the Congress’ fortunes do seem to be improving as the elections approach. For starters, there is the anti-incumbency factor against a majority of the BJP’s 143 sitting legislators. Even an internal survey conducted by the BJP a few months back showed how nearly 70 per cent of its legislators were now unpopular in their constituencies. There is also an undercurrent of dissatisfaction amongst pockets of the State’s electorate on issues like lopsided development, arrogance and corruption of various ministers in the Chauhan government, malnutrition deaths and an overall deterioration of the law and order situation in the State, in particular with regard to women. By nominating the charismatic Scindia to lead the Congress’ poll campaign in the State instead of the unimpressive Bhuria, the party has shown some seriousness about winning the election – an impression that had been missing hitherto. The Congress is also trying very hard to project a united face, with warring faction leaders AICC general secretary Digvijay Singh, Union minister Kamal Nath, former PCC chief Suresh Pachouri, Khandwa MP Arun Yadav and Scindia himself sharing the stage at poll rallies. Sources said that Congress president Sonia Gandhi and vice-president Rahul Gandhi have firmly instructed these satraps to work together and address as many joint rallies across the State as possible to dispel any notion of fissures within the party. But, some experts are of the view that the Congress will have to resolve one issue if it has to regain its stature in the State. They feel the Congress should either give Digvijay Singh total control of the party in the State, or ask him to fully withdraw from State affairs. The Congress faces another major problem—the disconnect of its leaders www.gfilesindia.com
  24. 24. with the people with regard to their presence in the State. Scindia, Digvijay Singh and Kamal Nath are more active in Delhi than in the State, while the BJP has a homegrown leadership that lives and works in the State. T HE political landscape in Madhya Pradesh is divided into five regions – Vindhyanchal, Mahakaushal, Madhya Bharat, Bundelkhand and Bhopal state. The BJP had swept each of these in the 2003 polls and largely retained them in 2008. The Congress now seems to be recovering lost ground in Madhya Bharat and Mahakaushal, while it has a fighting chance of reclaiming Bhopal state only if it chooses the right candidates. However, there seems to be little improvement in the Congress’ fortunes in Vindhyanchal and Bundelkhand. Madhya Bharat is the largest bloc with 21 districts and includes the www.indianbuzz.com The Congress officially sounded the poll bugle from the BJP bastion of Vidisha on September 23 at an impressive rally, which was addressed jointly by leaders of all the warring factions of the party. Malwa and Nimar regions. Of the 101 seats from here in the State’s 230-member assembly, the Congress won only 40 in 2008 while the BJP got 56. The Bahujan Samaj Party (BSP) too has pockets of influence here, particularly in the GwaliorMorena-Bhind belt, and had won three seats here in 2008 while one seat each went to Uma Bharti’s now defunct Bharatiya Jan Shakti party (BJSh) and an independent candidate. The State’s senior Congress leaders – Digvijay Singh, Jyotiraditya Scindia, Kantilal Bhuria and Arun Yadav – belong to Madhya Bharat. The BJP too has enormous political muscle in this bloc with leaders like Shivraj Singh Chauhan, Sushma Swaraj, Narendra Singh Tomar, Yashodhara Raje Scindia, Anup Mishra, Kailash Vijayvargia and Sumitra Mahajan. However, barring Chauhan, none of these BJP leaders – not even Sushma Swaraj – wields much influence outside their respective seats. Congress sources say that their best bet to win the assembly polls is to bag maximum seats in Madhya Bharat along with the tribaldominated Mahakaushal. “With Scindia leading the Congress’ campaign, the party is hoping to win a lion’s share of seats in Madhya Bharat, particularly those that fall in the districts of Sheopur, Morena, Bhind, Gwalior, Guna, Shivpuri and Ashok Nagar. If Scindia himself contests the assembly polls, then there is a strong possibility of the Congress sweeping these districts,” a senior Congress leader said. Of the 31 seats that these districts account for, the Congress is hoping to win at least 20-25 as against their present tally of 13. However, what could upset the game for the Congress is the infighting between Scindia and Digvijay Singh. Candidates owing their allegiance to either of these leaders fear their campaigns being sabotaged by the rival faction. It is, thus, imperative for Scindia and Digvijay to work in unison. The other area where the Congress could hope for increased seats is Mahakaushal, the political bastion of Kamal Nath. With 13 districts that account for 55 seats, Mahakaushal is the tribal belt and has 19 constituencies reserved for Scheduled Tribes (ST), while six are reserved gfiles inside the government vol. 7, issue 7 | October 2013 25
  25. 25. COVER STORY elections madhya pradesh for Scheduled Castes (SC). The SC-ST votebank is what the Congress is eyeing in a bid to return to power. This is a major cause of concern for the BJP, which had in 2003 swept these seats for the first time but failed to retain many of them in 2008. In 2003, the BJP had won 30 of the State’s 34 SC constituencies and 37 of the 42 ST seats. In 2008 after delimitation, while the seats reserved for SC-STs went up, the BJP began to lose support from these communities. It did win 25 of the 35 SC seats, but could retain only 29 of the 47 ST constituencies. E VEN though the BJP won the 2003 elections as a result of the anti-Digvijay Singh wave, the shift of the SC-ST votes towards them was politically significant. “However, the BJP failed to capitalise on this crucial vote-bloc. It failed to develop any SC-ST leadership. The expulsion of Kunvar Vijay Shah from the cabinet earlier this year (after he made some rather uncharitable comments against the Chief Minister’s wife, Sadhna Singh) further angered the tribals as he was the only big name the BJP had from the STs besides Dileep Singh Bhuria, who has also been sulking. Shah was brought back into the cabinet last month, but it looked like a belated move,” said political commentator Dinesh Joshi. The Congress, on the other hand, has a prominent tribal face in State president Bhuria. Of the six Lok Sabha seats reserved for STs, the Congress had won four in 2009 – Bhuria from Ratlam, Gajendra Singh Rajukhedi from Dhar, Basori Singh Masram from Mandla and Rajesh Nandini Singh from Shahdol. Interestingly, when the Congress chose Scindia over Bhuria to lead the party’s poll campaign, the loudest protests came from 26 gfiles inside the government vol. 7, issue 7 | October 2013 Madhya Bharat Mahakaushal 21 districts: Sheopur, Morena, Bhind, Gwalior, Shivpuri, Guna, Ashok Nagar, Vidisha, Rajgarh, Shajapur, Dewas, Indore, Khargone, Badwani, Alirajpur, Jhabua, Mandsaur, Dhar, Ujjain, Neemuch, Ratlam 13 districts: Katni, Jabalpur, Dindori, Mandla, Balaghat, Seoni, Narsinghpur, Chhindwara, Betul, Harda, Hoshangabad, Khandwa, Burhanpur 101 seats: 56 BJP, 40 Congress, 3 BSP, 1 BJSh, 1 Independent Prominent leaders Congress: Digvijay Singh, Jyotiraditya Scindia, Kantilal Bhuria, Arun Yadav, Meenakshi Natarajan, Sajjan Singh Verma, Govind Singh, KP Singh BJP: Shivraj Singh Chauhan, Sushma Swaraj, Narendra Singh Tomar, Anup Mishra, Yashodhara Raje Scindia, Kailash Vijayvargia, Sumitra Mahajan Projection: The Jyotiraditya Scindia factor is expected to benefit the Congress in the Gwalior division while Kantilal Bhuria could shore up support for the party in Jhabua-Ratlam region. The BJP is certain to hold on to its clout in Indore and Vidisha, but could lose out in Gwalior division and Khargone. The recent death of Congress leader and former PCC chief Subhash Yadav could help the party get sympathy votes in Khargone; his younger son, Sachin Yadav, is expected to contest from the family stronghold of Kasrawad 55 seats: 36 BJP, 18 Congress, 1 Independent Prominent leaders Congress: Kamal Nath, Basori Singh Masram, Jyotiraditya Scindia (in Jabalpur) BJP: Sartaj Singh, Ishwar Das Rohani Projection: The Congress could improve its tally since the tribaldominated region is likely to shift loyalties back to the party. Kamal Nath has been tasked with ensuring an increased tally. Scindia’s popularity in Jabalpur and neighbouring constituencies could also help the Congress and the party is also set to retain its bastion of Narsinghpur. The BJP is likely to hold on to Hoshangabad, Betul and Burhanpur, but could lose support in Khandwa and Seoni due to the sympathy in favour of the Congress following the demise of senior party leaders Subhash Yadav and Harvansh Singh, who were popular in these districts. Subhash Yadav’s son, Arun, is a Lok Sabha MP from Khandwa while Harvansh Singh’s son, Rajneesh, is expected to contest from the family stronghold of Keolari www.gfilesindia.com
  26. 26. Vindhya Pradesh Bundelkhand Bhopal state 7 districts: Satna, Rewa, Sidhi, Singrauli, Shahdol, Anuppur, Umaria 6 districts: Datia, Tikamgarh, Chhatarpur, Damoh, Panna, Sagar 3 districts: Bhopal, Raisen, Sehore 29 seats: 16 BJP, 8 Congress, 2 BJSh, 1 BSP, 1 SP, 1 Independent 15 seats: 11 BJP, 3 Congress, 1 BJSh Prominent leaders Congress: Satyavrat Chaturvedi, Yadvendra Singh Bundela, Pushpraj Singh BJP: Uma Bharti, Jayant Mallaya, Gopal Bhargav Prominent leaders Congress: Suresh Pachori, Arif Aqueel, Digvijay Singh, Ajay Singh ‘Rahul’ and Jyotiraditya Scindia are also popular in Bhopal Projection: Not likely to change much for the Congress if the BJP manages to get Uma Bharti to campaign and work for the BJP. The Congress is likely to retain Tikamgarh and some pockets in Sagar Projection: The Bharatiya Janata Party likely to retain its hold over Sehore and Raisen, but can suffer setbacks in Bhopal if the Congress manages to put up good candidates and check infighting and sabotage 30 seats: 24 BJP, 2 Congress, 3 BSP, 1 BJSh Prominent leaders Congress: Ajay Singh ‘Rahul’, Indrajit Patel, Sriniwas Tiwari, Bisahulal Singh BJP: Nagendra Singh (Nagod), Rajendra Shukla, Nagendra Singh (Gurh) Projection: The BJP is expected to hold on to power; the Congress is likely to make only marginal gains. The SP and BSP could further eat into the Congress’ vote share www.indianbuzz.com gfiles inside the government vol. 7, issue 7 | October 2013 27
  27. 27. COVER STORY elections madhya pradesh the BJP, which accused the grand old party of “betraying tribals and trusting feudals”. Scindia retorted by asserting that his party had always worked for the interests of the tribals and promoted leaders from amongst them while the BJP had little to showcase on this front. “It was the Congress party that made Jamuna Devi (the late Congress veteran from Kukshi) the State’s deputy Chief Minister and later CLP leader, and it was the same party that made Bhuria a Central minister and then the PCC chief. What has the BJP done for its tribal leaders?” Scindia said, adding, “Bhuria and I are two sides of the same coin. We are both working to strengthen the Congress and will discharge whatever responsibility the party bestows on us.” On the BJP’s charge about the Congress depending on feudals, a direct attack on Scindia, the Union minister said, “I only wish to point out to them that my grandmother (the late Vijaya Raje Scindia) was a founding member of the BJP and my aunt (Vasundhara Raje Scindia) was the 28 gfiles inside the government vol. 7, issue 7 | October 2013 Chief Minister of their government in Rajasthan. Did the BJP see them as feudals too? One becomes a feudal only by his/her mindset and ethics, and the real feudals are sitting in the Madhya Pradesh cabinet.” If the Congress manages to significantly gain in Madhya Bharat and Mahakaushal, which together account for 156 assembly seats, it could well upset the BJP’s ambitions of an electoral hat-trick in the State. However, in Mahakaushal, one leader that the Congress would sorely miss is the late Harvansh Singh, former deputy speaker and minister in the Digvijay Singh government, who enjoyed a good rapport with all the warring Congress factions. B HOPAL state, which comprises the three districts of Bhopal, Raisen and Sehore, accounts for 15 seats. The Congress has had a history of messing up possible electoral triumphs here solely due to factional feuds. The party had won only three of these 15 seats in 2008; only because various factions fought bitterly over candidates and ended up fielding weaklings. Curiously, even in Bhopal, which has a significant Muslim population with the community being a deciding factor in at least four of the district’s seven constituencies, the Congress could win just one seat! While Madhya Bharat and Mahakaushal could be the Achilles’ heel for the BJP, the spoiler for the Congress is expected to be Vindhya Pradesh. With its seven districts that send 30 legislators to the assembly, Vindhya Pradesh was once a Congress bastion where the party is all but wiped out now. Interestingly, while a former State Chief Minister, the late Arjun Singh, belonged to this region and was once the undisputed leader of the State, the Congress today is finding it hard to find its feet here. In 2008, the party could win only two of the 30 seats with Arjun Singh’s son, Ajay Singh ‘Rahul’ – at present the CLP leader and chief ministerial aspirant – managing to retain his traditional Churhat constituency with great difficulty. The region, dominated by the Brahmin, Thakur and Kurmi communities, has seen a complete shift to the BJP in recent years while the Samajwadi Party and the Bahujan Samaj Party (BSP) have eaten into the backward caste votebank of the Congress. The BSP had won three seats here in 2008, including Sirmour, the stronghold of Congress veteran and former assembly Speaker Sriniwas Tiwari. Similarly, in Bundelkhand, the Congress has been struggling to retain its grip over the backward class votes. Of the 29 assembly seats in the six districts of Bundelkhand, the Congress had won only eight in 2008 while the BJP got 16. The BSP and the Samajwadi Party had won a seat each while Uma Bharti’s www.gfilesindia.com
  28. 28. Kamal Nath (left) and Digvijay Singh: Strong leaders in their own right BJSh had bagged two seats. Many in the Congress believe that, had Uma Bharti not floated her party in 2008, the Congress would have performed much better in this region since BJP voters, who switched to Bharti’s party, would have voted in favour of the Congress. Though Bharti herself lost, her party cornered a near five per cent vote share, primarily from this belt. The Congress is now hoping that, with Bharti sidelined due to her rivalry with Chauhan, she may not work with her characteristic gusto during the polls. Bharti holds a vicelike grip over the Lodh community which dominates several pockets of Bundelkhand, and her lack of interest in the MP polls could help the Congress – but only if the BJP and the Chief Minister fail to win her support. The Congress doesn’t have any ‘resident leader’ in Bundelkhand and has to depend largely on the limited appeal of Scindia, Digvijay Singh and Ajay Singh in some pockets of this belt. The BJP, however, has State-level leaders like ministers Jayant Mallaya and Gopal Bhargav, besides Bharti, who are popular with the voters across Bundelkhand www.indianbuzz.com The Congress faces a major problem—the disconnect of its leaders with the people with regard to their presence in the State. Digvijay Singh and Kamal Nath are more active in Delhi than in the State. and can mobilise both resources and public support. H OWEVER, despite all these limitations for the Congress, there are still enough factors which the party can use to gather public support and come close to power, even if it doesn’t actually succeed in doing so. Alleged corruption charges against close aides of the Chief Minister, his cabinet colleagues and the bureaucracy have forced the electorate to some extent to overlook the scams and scandals of the Congressled UPA government at the Centre. “The Congress talks about and believes in decentralising power, but the BJP practises decentralisation of corruption,” said Scindia, add- ing, “in the past decade of BJP rule, only those from the saffron party or its supporters have flourished. The Chief Minister has condoned corruption and is heading a cabinet of those involved in mass plunder of the State’s wealth. We all know how the sand mafia has wreaked havoc in the State and even the bureaucracy has been sold out.” Endorsing Scindia’s views, PCC president Bhuria said, “There are complaints pending in the Lokayukta against 12 of Chauhan’s ministers. The Chief Minister himself is involved in scandals like the multi-crore dumper scam and his connivance with Dilip Suryavanshi (owner of infrastructure major Dilip Buildcon) in selling out the entire state. The Lokayukta has said publicly that he has been asking the government for various files to examine the facts of these complaints, but has been denied access to them.” “All this will be exposed before the voters,” Bhuria said, adding the Congress has already drafted a ‘chargesheet’ against the Chauhan government and its ministers. “The main target of our campaign will be the Chief Minister himself since the BJP in the State is surviving purely gfiles inside the government vol. 7, issue 7 | October 2013 29
  29. 29. COVER STORY elections madhya pradesh because of his false image of a clean politician,” he said. Congress sources say that a large chunk of the party’s poll slogans, nearly 50 of which have been personally prepared by Scindia, will focus on the corruption of the BJP. The state Congress leadership has also drawn out details of funds allocated under various central schemes for MP which have either been siphoned off by the Chauhan government, or spent under the garb of State-sponsored schemes, PCC president Bhuria said. For instance, Scindia, who is also the Union power minister, has been stridently putting the State government on the mat over Chauhan’s claims of Madhya Pradesh getting 24x7 electricity supply. T HE power minister makes it a point to stress the issue of electricity at each of his rallies, public meetings and press conferences, and rattles out details about various power projects sanctioned by his ministry for the State while criticising the Chauhan government for “lying to the voters about the electricity situation”. Highly placed Congress sources said the party leadership also wants to finalise the list of candidates for the assembly elections latest by October first week. The traditional practice of ticket aspirants rushing to Delhi with their bio-data and camping at the AICC office with their political patrons is being discouraged, it is learnt. All ticket aspirants were asked to fill in a form with specific questions about their political and social activities, criminal background and reasoning for seeking a ticket. The candidates’ screening committee, headed by AICC general secretary Madhusudan Mistry and comprising Mohan Prakash and Union minister 30 gfiles inside the government vol. 7, issue 7 | October 2013 Jitendra Singh, is now going through these forms to decide on the list of probable candidates. The BJP, on the other hand, has chosen to focus on the “unprecedented development brought to the State by the Shivraj government”. Sources in the BJP say the Chief Minister is personally monitoring and vetting the party’s advertisements for the elections. Besides launching a massive ad campaign to showcase the achievements of his government and the many schemes he has launched, Chauhan is also trying to keep alive amongst the voters the haunting memories of Digvijay Singh’s tenure The BJP is relying heavily on what is arguably its biggest strength in the State – the Chief Minister’s popularity – with its slogan, ‘Phir BJP, Phir Shivraj’. as Chief Minister. Hoardings have been put up across the State with ‘comparative photographs’, most notably the condition of roads. Interestingly, Chauhan faces a major challenge, perhaps an unforeseen one since it is a key reason that differentiates him in a good way from Modi. Ever since he became the State’s Chief Minister in November 2005, Chauhan has consciously projected himself as a ‘secular’ leader, who, unlike Modi, constantly reaches out to the minorities. He dons a skull cap while attending functions organised by Muslims, attends and hosts Iftaar parties during Ramazan and even joins Muslims to offer prayers during Eid at the Idgah mosque in Bhopal. Ironically, it is Chauhan’s image of a moderate right-winger – one who is committed to the RSS-BJP ideology but also towards the minorities – that has caused much heartburn within the party cadres. “There is a sense of betrayal amongst the workers,” says RSS ideologue Anil Saumitra, also the former editor of the State BJP’s mouthpiece, Charaiveti. “The cadres feel the party is moving away from the ideology,” he says, while pointing out that “earlier this year, a large group of Hindus was lathicharged by the police in Dhar district for protesting against the Archaeological Survey of India’s (ASI) permission to Muslims to offer Friday prayers at a mosque situated inside the Dhar Bhojshala Complex.” It is perhaps for this reason that Chauhan has in recent months been praising Modi and asserting that the Hindutva mascot and BJP’s prime ministerial candidate will campaign for the party in Madhya Pradesh. “Of course, as a BJP Chief Minister, Chauhan cannot be seen as openly opposed to the party’s official prime ministerial candidate and nor can he restrict Modi’s entry into MP for campaigning. But Chauhan also realises that he desperately needs the support of Modi to win back slighted and dissatisfied cadres of the BJP and RSS and also the staunch Hindutva supporters across the State,” a close aide of Chauhan said. It is evident that even though the BJP has a definite edge over the Congress to win the elections, the scales of power are only too precariously placed at the moment. Will Shivraj manage to duck anti-incumbency against his party legislators, allegations of rampant corruption and once again mobilise BJP cadres to secure an electoral victory? Or, will the Congress trump the popular Chief Minister and prove the pollsters wrong? It is a close call. g www.gfilesindia.com
  30. 30. www.indianbuzz.com gfiles inside the government vol. 7, issue 7 | October 2013 31
  31. 31. EXPOSÉ EXPOSE coal scam jindal group Chickens come to roost for Jindal Coalgate and other scams smear Naveen Jindal’s white marble-engraved image, while putting a question mark on the rapid growth of the MP’s business empire by NARESH MINOCHA A GNI (fire) is pure and a great generator for all creations to happen. Just as adhering to the sanctity and sacredness of the holy fire can purify us from negative karmas, similarly, imbibing qualities like integrity and loyalty help us keep a self-check and do what is right,” says natural resources tycoon-cumparliamentarian Naveen Jindal’s flagship company, Jindal Steel and Power Limited (JSPL). When JSPL gave a philosophical touch to the five elements of the Universe — Bhoomi (earth), Agni (fire), Aakash (sky), Jal (water) and Vayu (air) — to explain ‘The Jindal Way’ of doing business in its annual report for 2011-12, it hardly visualised that Naveen Jindal would face ‘agni pariksha’ to prove his corporate and personal integrity. 32 gfiles inside the government vol. 7, issue 7 | October 2013 www.gfilesindia.com
  32. 32. The decisive call for such a test of purity came in June this year, when the Central Bureau of Investigation (CBI) reportedly accused JSPL and three other group companies of paying kickbacks to the then Minister of State for Coal, Dasari Narayana Rao, to secure allocation of coal blocks in 2007. JSPL and its associate, Gagan Sponge Iron Ltd (later renamed Gagan Infraenergy Ltd), have also been accused of misrepresentation of information to the Government to secure coal blocks. This, coupled with earlier allegations of JSPL’s involvement in the Koda mining scam and alleged government bail-out of the company for violations of forest law, have smudged Jindal’s meticulously-crafted image. Jindal has had a fairy-tale success in spawning a global empire of natural resources-based business within about 15 years of coming into the saddle at JSPL. “Committed to building the nation of our dreams,” says the catchline at the top of naveenjindal.com, the personal website that projects him as an enlightened, values-cherishing parliamentarian, philanthropist and a professional committed to diverse Analysts are eagerly awaiting the answers that Jindal gives to reveal the truth about the Rs 2.25crore investment made by an obscure company of JSPL group in Sowbaghya Media Limited, which is majority owned by Rao. vassing for population stabilisation. I N recognition of Mr Jindal’s exceptional distinction in the for honesty, personal integrity and high standards of personal and professional character, the University of Texas has named its school of management in his name. It has now been christened as Naveen Jindal School of Management,” says the website of Jindal Africa, a brand operating in Africa. Now political and business analysts are awaiting answers from Jindal to a volley of questions that the CBI should logically pose to him to uncover the truth about the Rs 2.25 crore investment made by an A bird’s eye-view of the Jindal Steel plant www.indianbuzz.com gfiles inside the government vol. 7, issue 7 | October 2013 33
  33. 33. EXPOSE coal scam jindal group obscure company of the JSPL group in the BSE-listed Sowbaghya Media Limited (SML), which is majorityowned by Rao. D ID JSPL try to wipe out the money trail involving purchase of SML shares at a price several times above the market price, by divesting its 3.66 per cent stake in the last quarter of 2011, about four months before the draft CAG report on Coalgate hogged headlines? Did anyone in the Government alert JSPL about the brewing Coalgate? Were the names of two JSPL group companies, named in the CBI FIR, changed as a part of the money trail wipe-out strategy? The CBI actually does not deserve a pat on its back for booking JSPL group companies and SML because the monetary nexus between the Jindal and Rao companies was reported in depth by The Economic Times two The news of the CBI alleging kickbacks led to a substantial drop in JSPL share prices on the stock market in June, but the company did not itself is a deviation from the canons of corporate governance. Neither did SML inform the BSE about the CBI raids on the premises of the company The CBI’s slow pace of investigation into the Koda scam and several other scams involving India’s top industrialists, has stirred doubts in the public mind. Former Minister of State for Coal Dasari Narayana Rao 34 gfiles inside the government vol. 7, issue 7 | October 2013 and on Rao. A report in The Hindu, however, stated that Rao had issued a release denying the allegations and claiming that the truth would ultimately emerge. Rao, however, wisely refrained from denying the investments by a JSPL group company, New Delhi Exim Private Limited, in his company as facts cannot be erased from the public domain. Jindal, too, skirted the issues raised by the CBI in its widely reported FIR. He, however, tried to put on a brave face by tweeting in June: “I’ve been observng reports appearng in d media and am surprisd by d level of conjecture. Neither am I in Argentina nor hv I been summoned by CBI.” Later, on the same day, Jindal again tweeted: “JSPL is bound by strict code of conduct. We’re cooperatng completly w/d investigtn. I’ve full faith d issue wl b investigtd thoroughly, fairly.” Jindal had earlier too been accused of getting favours from the Government. The reports about the nexus of JSPL and several other blue-chip companies with the bribe-tainted exchief minister of Jharkhand, Madhu Koda, have been in the public domain. So is the aborted move by certain ofand Forests (MoEF) to bail out JSPL after accusing it of violating forest law in Odisha while implementing an integrated steel project. The Sunday Guardian had accessed Koda’s personal secretary, Basanta Kumar Bhattacharya’s statement to the Enforcement Directorate under Section 50 of the Prevention of Money Laundering Act, 2002, in which he had said that commissions amounting to Rs 118 crore were collected from 10 companies for approving different projects. The www.gfilesindia.com
  34. 34. paper also published a table, giving a break-up of the money paid by these companies, including JSPL. The investigative report had even printed two scanned pages of the Income Tax Department’s investigation into the Koda scam, with one page listing the 10 companies. There is nothing in the public domain to show that JSPL has denied its involvement in the Koda mining scam. Nor is any information available to indicate whether the CBI quizzed any JSPL executive in this case, as it reportedly did a senior executive of Tata Steel. The CBI’s slow pace of investigation into the Koda scam and several other scams involving India’s top industrialists, has stirred doubts in the public mind. I T, thus, remains to be seen whether the CBI will grill Jindal in the Coalgate and the Koda scam. Or will the ‘Caged Parrot’, as the CBI is known today, drag its feet over the investigations to ultimately cite ‘lack of of quid pro quo investment in SML for favoured allotment of coal blocks by Rao. Whatever the outcome of the investigations, the fact remains that that Jindal enjoys with the powers that be. He has steered clear of his JSPL in controversies. A case in point is the start of the 2,400-megawatt expansion of its power project in Raigarh district of Chhattisgarh in 2010, without even securing environmental clearance. After raising objections in June 2010, the MoEF did clear the expansion project in March 2011. Another case in point is the www.indianbuzz.com The University of Texas has named its school of management after Naveen Jindal crucial dilution of norms by the MoEF in January 2011 for enforcement of forest clearance norms for projects that need environmental and forest approvals through separate procedures. The circular revising the guideline stated that “if a project involves forest as well as non-forest land, it is advisable that work should not be started on non-forest land till the approval of the government for release of the forest land under FCA 1980 has been given.” The crucial dilution was done by inserting “it is advisable” in the existing guideline. This was allegedly done to bail out JSPL from a punitive situation team reporting violation of environmental approval by the company at the steel project site in Odisha. June 6, 2011, issued under the Forest (Conservation) Act, were however, cancelled and status quo restored on February 17, 2011, after Minister of State for Environment and Forests Jairam Ramesh recorded his displeasure over amending the guidelines without his approval. Information as to whether any penalty was imposed on JSPL or crucial dilution, is hard to come by in the public domain. Jindal’s business empire has grown by leaps and bounds at home and abroad. JSPL is a Rs 20,000crore conglomerate with a maze of 42 subsidiaries, several step-down subsidiaries, joint ventures and associates. The stock market-listed JSPL is yet to unlock the value of this empire. It, for instance, had planned the maiden public issue for subsidiary Jindal Power Limited in 2010, but did not proceed with the offer. g gfiles inside the government vol. 7, issue 7 | October 2013 35
  35. 35. EXPOSE coal scam jindal group GOVERNANCE AWARDS 2012 SK Misra Anil Swarup Armstrong Pame Ajit Balaji Joshi IAS (Retd.) IAS IAS IAS The Awardees Jyotsna Sitling IFS 36 gfiles inside the government vol. 7, issue 7 | October 2013 JK Tripathy IPS Aradhana Patnaik IAS www.gfilesindia.com
  36. 36. GOVERNANCE AWARDS 2013 Saturday, November 30, 2013 Nominations invited www.gfilesindia.com summit@gfilesindia.in www.indianbuzz.com gfiles inside the government vol. 7, issue 7 | October 2013 37
  37. 37. GOVERNANCE corruption mg devasahayam Kleptocratic India, the enemy is within! The Supreme Court talks of the “unholy nexus between lawmakers, lawkeepers, and lawbreakers”, clearly indicating that a Statesponsored kleptocracy runs the country T HE existence of an octopus-like mafia in the financial arena is no secret. That it has gone to kleptocratic extremes has been vividly brought out in the gfiles cover story of September (Loot in name of the farmer). The ‘embedded bureaucrats’ listed in the write-up have been conspiring to sell ‘bloated air’ to fleece the farmers and small investors of their flesh and bones. It is extremely distressing to see that some of the names, including of senior civil servants, are well known and even well regarded. Is it conceivable that they were so overtaken by love of mammon so as to fall easy prey to a small-time stock trader? Is it because this conniving carpetbagger “deals with tons of money every day by dominating all of India’s assets: equities, currency, commodities, derivatives, power and precious 38 gfiles inside the government vol. 7, issue 7 | October 2013 www.gfilesindia.com
  38. 38. TATRA trucks (left), the Admiral Gorshkov (below) and Augusta-Westland choppers are just a few examples of defence deal scams metal and the forex trade,” makes billions in the process and throws some crumbs at these worthies? Why have governance standards in India, with one of the finest civil service structures in the world, descended to such deplorable depths? We need to seek the answer by going back four decades. Being from the pre-Emergency vintage of the IAS, I was the District Magistrate of Chandigarh, joint capital of Punjab and Haryana, before, during and after the Emergency. Both these States enforced Emergency rules with rigour and ruthlessness. Therefore, I have grassroots knowledge of what happened during that period. As the custodian-in-jail of Loknayak Jayaprakash Narayan (JP), the ‘enemy-number-one-ofthe-State’, who was arrested by the District Magistrate, Delhi, and sent to www.indianbuzz.com Tragically, several AIS officers have willingly entered into this kleptocratic pact in return for plum ‘commercial’ postings during service, coveted ‘independent directorships’ and an ever-multiplying government sinecure after retirement! me for safe custody, I dealt with the Delhi Administration, Union Home Ministry and the Prime Minister’s Secretariat (PMS), and, therefore, had a macro-level view of the functioning of Delhi’s ‘power centres’. The collapse of democratic governance and its institutions that we witness today had its origin during that period, starting with the breakdown of the elite All-India Services (AIS). The strategy adopted by the rulers then was akin to the ‘Trojan Horse’ described by Homer in his legendary epic, Odyssey. It is a tale of deceit and subterfuge that the Greeks used to enter the city of Troy and end the conflict, which they could not win otherwise. For centuries and generations, this episode is remembered as the epitome of ‘betrayal of trust’! A similar thing happened to India’s democratic governance during the Emergency. The Indian version of the Trojan Horse was set in motion on the fateful night of June 25-26, 1975, as top leaders of the opposition, including JP, Morarji Desai and AB Vajpayee, were triumphantly returning from the massive rally at the Ramlila Grounds, Delhi, after gfiles inside the government vol. 7, issue 7 | October 2013 39
  39. 39. GOVERNANCE corruption mg devasahayam sounding the ultimatum to Prime Minister Indira Gandhi, indicted for electoral corruption by the Allahabad High Court, to resign forthwith. By that time the Trojan Horse, filled with a ‘committed’ bureaucratic-police coterie, had been smuggled into the Prime Minister’s Household (PMH) and positioned in the Home Ministry, Delhi Administration and Police. On a signal from the PMH, these wolves pounced on and arrested the opposition leaders and shut down the newspapers by cutting off electricity so that the news of the Emergency was ureleased. Within hours, they formalised the Emergency and proclaimed draconian rules and regulations to choke the media and extinguish people’s freedom and liberty. The Emergency thus ushered in, ripped apart India’s delicately crafted and carefully nurtured democratic fabric and the institutions of governance. A new type of regime and new criteria of allocation of rights and obligations were sought to be legitimised. The real issue was the abrogation of any sense of boundary or restraint in the exercise of power, and the strik- ing arbitrariness and arrogance with which citizens were turned into subjects. Democracy was replaced with a crude form of autocracy. Most of those who facilitated this belonged to the covenanted services of the IAS and IPS, meant to defend and safeguard our democratic republic! Today, things are worse. In its judgment in the ‘Blackmoney Case’ (July 2011), the Supreme Court talks of the “unholy nexus between lawmakers, lawkeepers, and lawbreakers”, clearly indicating that a State-sponsored kleptocracy runs The change of land use certificates in Gurgaon has resulted in a loss of crores of rupees to the Haryana State exchequer 40 gfiles inside the government vol. 7, issue 7 | October 2013 www.gfilesindia.com
  40. 40. the country. A kleptocracy is a deviant system wherein government departments and public institutions are commandeered for the benefit of carpetbaggers and packed with their loyal retainers. Tragically, several AIS officers have willingly entered into this kleptocratic pact in return for plum ‘commercial’ postings during service, coveted ‘independent directorships’ and an ever-multiplying government sinecure after retirement! This has turned Delhi into a kleptocratic den with loots and scams galore. These have been cropping up like mushrooms in recent times —Commonwealth Games, ISROAntrix-Devas deal, 2G Spectrum, Godavari basin gas, National Spot Exchange, imported nuclear deals, thorium loot, Air-India mega purchase, and the biggest of them so far, Coalgate, where crucial files have gone missing! In all these massive cases of corruption, not one bureaucratic head has rolled. In fact, key players in these scams and scandals are being meticulously shielded and protected by ‘caging’ the CBI and sabotaging the instruments of Parliament, like the Public Accounts Committee and the Joint Parliamentary Committee! For pushing the Indo-US nuclear deal, Parliament itself was compromised! But the humungous nature of defence purchase scams, that vitally affect the nation’s security, takes the cake. Here, even the Comptroller & Auditor General of India, the “most important officer under the Constitution”, has been brought into the kleptocratic network. This IAS officer has been joint secretary, additional secretary, director-general of acquisitions, officer on special duty and, finally, secretary in the Ministry of Defence from 2003 to May 2013, when he was seamlessly shifted as CAG as if it was just another routine www.indianbuzz.com The Wheeling and Dealing Army 7,000 TATRA trucks were purchased, each with an approximate mark-up of Rs 75 lakh, eating up Rs 5,250 crore of the taxpayers’ money. The former Army Chief, General VK Singh, tried to break the chain by refusing to extend the yearly contract at the highly inflated price. He was hounded out and, soon after he demitted office, the purchases commenced again. The total value of the project to upgrade approximately 1,100 vehicles of BMP-2 (infantry fighting vehicle) is estimated at Rs 8,000 crore. This deal was put on single vendor mode to a foreign company, instead of going for multiple vendors or upgradation by Indian companies. Tenders for Multi-Barrel Rocket Launchers were floated for 300 vehicles, at an inflated cost of Rs 600 crore. Navy Admiral Gorshkov, Russia’s discarded warship to be refurbished and converted into a modern aircraft carrier, renamed INS Vikramaditya, was originally scheduled to be delivered by August 2008 at a total cost of $947 million. The carrier has repeatedly failed the ‘sea trials’ that have been carried out and yet the cost has gone up to $2.9 billion – 60 per cent higher than a new aircraft carrier of similar specifications. There is no sign of delivery yet. It is under CAG audit. Air Force The procurement of 12 VVIP choppers, a Rs 3,500-crore deal with Augusta-Westland, was investigated by Italy, and Italian prosecutors have in their chargesheet stated that a kickback of at least Rs 350 crore was paid to middlemen to swing the deal in the company’s favour. The CBI has registered an FIR and is investigating allegations of possible kickbacks against the accused, including a former IAF chief. For clarifications on this deal sought by the former CAG, the Defence Ministry – whose then secretary is the present CAG – gave vague and misleading response. Offset Contracts The CAG had made serious observations in the recent past on the Defence Ministry’s procurement policy. In the Compliance AuditDefence Services report (Air Force/Navy) in November 2012, the CAG had pointed at major deficiencies in the defence procurement. It noted that between 2007 and 2011, India concluded five offset contracts in the defence sector worth Rs 3,410 crore, that were not in consonance with the provisions laid down in the defence procurement procedure. gfiles inside the government vol. 7, issue 7 | October 2013 41
  41. 41. GOVERNANCE corruption mg devasahayam Kleptocrats in action K leptocrats can go to any ca extreme, eve treason, to even achieve their ends. This is proven in the ‘exposu of the ‘exposure’ Div Technical Services Division (TSD) set up by former Army Chief General VK Singh and wound up by Genera his successor, General Bikram Singh. In a well-calibrated leak, The well-calibr Indian Express has ba bared the report of a secret inquiry that went into tha the covert operation of the TSD. o General VK Singh sees a ‘nexus see between arms dealers and those deale behind the report’, a attributes and the leak to “a joint secretary of the se Defence Ministry, who has since w moved out from th there.” Incidentally, this joint secretary worked very closely with the defence secretary-turned-CAG! By its very nature, the TSD operation was ‘top secret’. In that event, even the existence of the TSD should never have been publicised. Further, if there is exposure of the actual working of the top secret unit, leaking the information about it could be seditious, regardless of whether information is true or false. Even knowledge of the existence of the TSD can help the nation's enemies. Therefore, consequences for the ‘leakers’ and their collaborators could be very serious. Such treason was indulged in not bureaucratic transfer! During his long tenure in the ministry, he has been closely associated with many policy/ purchase/acquisition decisions and deals spanning the Army, Navy and Air Force. Most of these have become stinking scams due to wheeling and dealing and huge kickbacks. They are either under the CBI scanner or CAG scrutiny (see box). Now he is himself CAG and can cover up everything. What a wonderful kleptocratic pact. The Union Public Service Commission, that recruits the crème de la crème of India’s civil services, has also not been left out. Here, the coveted position of Member, UPSC has gone to the loyal retainer of a State land/real estate mafia. For eight long years, this IAS officer has been deputy principal secretary, principal secretary and, on re-employment, Ashok Khemka, the crusading officer 42 gfiles inside the government vol. 7, issue 7 | October 2013 www.gfilesindia.com
  42. 42. just because General (Retd) VK Singh was seen ‘sharing the dais’ at an Ex-Servicemen’s rally with Narendra Modi. There was something more sinister—diverting media/public attention from the scandalous decision directing the Nuclear Power Corporation of India to buy 6x1000 MW reactors, costing Rs 90,000 crore, for the Mithivirdi (Gujarat) Nuclear Power Project from the US multinational Westinghouse Electric Company by waiving a key provision of India’s nuclear liability law that would hold the US company liable in the event of an accident caused by faulty or defective equipment. This could expose the Indian public to death and destruction without compensation. On September 18, Times Now got hold of the ‘strictly confidential’ note for the Cabinet Committee on Security, written by the secretary, Department of Atomic Energy, proposing that though the viability/technical analysis of the project had not been done, the ‘agreement-to-buy’ should be signed bypassing Atomic Energy Commission prior to the PM’s meeting with the US President on September 27. Doing so would open the floodgates of imported nuclear deals running to several lakhcrore rupees from the US, France and Russia without any supplier liability! Kickbacks in dollars could be mind-boggling! On September 19, The Hindu carried the story on its front page and Times Now went live, ‘breaking news’, of this humongous scandal and betrayal. By the next day, this would have gone viral, ripping apart India’s ‘nuclear prostration’. Nuclear kleptocrats panicked, because this could expose the non-starting of Russia’s Koodankulam Nuclear Power Plant, built with sub-standard material due to the absence of supplier liability. So, early in the morning on September 20, defence-nuclear kleptocrats struck with their mouthpiece, publishing the concocted story, ‘Unit set up by VK Singh used secret funds to try and topple J&K govt, block Bikram Singh: Army probe’, containing pure canard and innuendoes with frontpage banner headlines! Cleverly orchestrated by spin doctors, this lie went viral, blocking out the ‘nuclear prostration’ news! Mission accomplished! These are kleptocrats in action! officer on special duty to the Haryana Chief Minister. In these capacities, he has been handling the State’s Town & Country Planning (TCP) Department, which, during this period, plundered Gurgaon district and issued colony licences and change-of-land-use certificates for thousands of acres in the State, causing a loss to the exchequer running to Rs 3.5 lakh crore due to land frauds. This officer also managed to scuttle an ongoing ‘performance audit’ by the CAG on these frauds, that included the DLF-Vadra land deal. It looks as if the UPSC has lost its virginity! By all accounts, the Haryana Government, which has successfully transformed the State into real estate in the past few years, has put together a neat kleptocratic network. The newly appointed UPSC member is not the only one to have a long stint in this network. Others include his successor as principal secretary to the CM, The humongous nature of defence purchase scams, that vitally affect national security, takes the cake. Here, even the Comptroller & Auditor General of India, the “most important officer under the Constitution”, has been brought into the kleptocratic network. (on extension) PK Chaudhary, for cancelling Vadra’s land deal, Khemka is being chargesheeted for administrative misconduct that could attract major penalties. UPSC membership and high-profile positions for the looters and gallows for the crusader! Can the IAS-anchored kleptocracy get any worse? Kleptocratic India is fast moving towards being a ‘failed State’. Several senior and middle-level members of the IAS, more particularly the service I once belonged to, are the root cause of this. Because, without their concurrence, connivance and collaboration, no kleptocratic network could ever emerge, exist or expand. Wailing and shifting blame on politicians is pointless. Because the enemy is within, hidden in the underbelly of the Trojan Horse, the universal symbol of betrayal! g www.indianbuzz.com who has already spent seven years as director, TCP Department, and its principal secretary. Another one is following suit with more than three years as director, TCP. As against this, the crusader against this network, Ashok Khemka, who had already seen 40 transfers in 20 years of his career, was allowed to stay for just 80 days in the job from where he had blown the whistle. Now, as per Chief Secretary (The writer is a former Army and IAS officer. Email: deva1940@gmail.com) gfiles inside the government vol. 7, issue 7 | October 2013 43
  43. 43. STATE SCAN xxxxx xxxxxx UNI Reinless Hooda With Haryana assembly polls due next year, the focus is on the alleged corrupt land deals and nepotism charges against the Hooda government by NARENDRA KAUSHIK W ILL Haryana Chief Minister Bhupinder Singh Hooda go the Lalu Yadav way? The alleged rampant corruption and policies implemented to favour builders and business houses have cast a shadow on Hooda’s image. The Indian National Lok Dal’s (INLD) Om Prakash Chautala and Ajay Chautala are in jail for the teachers’ recruitment scam, the BJP does not have much influence in Haryana, the Haryana Janhit Congress’ Kuldeep Bishnoi is trying to hold on to father Bhajan Lal’s legacy, and it appears that there is no major political threat to the Hooda regime as of now. This safe zone has allegedly made Hooda despotic in Haryana. 44 gfiles inside the government vol. 7, issue 7 | October 2013 But, in politics, it is difficult to predict the future with certainty. Next year, 90 assembly seats in Haryana will go to the polls. How the people of Haryana will react to the policies of Hooda will be known only then. During the last assembly elections in Haryana, an opposition candidate in Bhiwani, when asked how he was canvassing, had this to say: “I’ve hired a couple of private buses which daily transport people from Bhiwani to Rohtak for sightseeing.” The candidate was apparently trying to fuel Bhiwanites’ anger over the neglect of their city at the cost of Rohtak by the Hooda regime. The Congress fared poorly in the city, once considered a bastion of the late Bansi Lal. Hooda’s landslide victory in Rohtak and Jhajjar and better-than-average performance in Sonepat was mainly responsible for his return to the helm of affairs in the State in 2009. Come 2014, and there is a strong possibility that someone may do an encore of Bhiwani’s campaign strategy in Gurgaon. The millennium city, reeling under acute shortage of infrastructure, is set to hang like an albatross around the Congress’ neck. A sprawling megapolis, Gurgaon is not just crumbling under the apathy of the State government, but is also sitting on a volcano of land scams that may run into hundreds of thousands of crores of rupees. The sleight of hand with which the State’s Town and Planning Department, under the direct tutelage of Hooda, has converted hundreds of acres of agricultural land into www.gfilesindia.com

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