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Hey scam--hey-ram


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Hey scam--hey-ram

  1. 1. 1 HEY SCAM – HEY RAM Contents: Ten examples of recent scams in India - Discussion of recent examples - The Prevention of Corruption Act 1988 and Indian Penal Code – Typology of Corruption - Consequences of Corruption – Citizen‟s Charter - Anti-corruption movement of Anna Hazare 10 Examples of Corruption Scams in India Since the 1990s several scams and big corruption cases have been unearthed in India. It is seen that these scams were the biggest and most damaging to the country and its citizens alike. In our daily life, most of us must have been a witness to or a victim of the corruption thriving in some or the other part of our country. It could be in the form of a taxi-driver manipulating the meter to jack-up the reading or a government officer taking bribery to promptly transfer your file to the next department or even yourself offering bribe to a traffic police on breaking a signal. An average Indian citizen is hard working and diligent, but it is the people in charge of the system (The Babus) or with whom the power rests, that act tough as a cancer spreading and slowing down progress. But, somewhere down the line, we ourselves are responsible for allowing and being taken for a ride by these people, aren‟t we? However, it is during a multi-thousand crore scam, that a tax-payer actually realizes the heartburn of being cheated from his valued contribution of funds towards the development and well-being of the nation. But, that‟s what a scam, be it big or small, means – the act of swindling by some fraudulent scheme or action.
  2. 2. 2 Ten Scams in twenty years of free India 1) 2G Spectrum Scam We have had a number of scams in India; but none bigger than the scam involving the process of allocating unified access service licenses. At the heart of this Rs.1.76-lakh crore worth of scam is the former Telecom minister A Raja – who according to the CAG, has evaded norms at every level as he carried out the dubious 2G license awards in 2008 at a throw- away price which were pegged at 2001 prices. 2) Commonwealth Games Scam Another feather in the cap of Indian scandal list is Commonwealth Games loot. Yes, literally a loot! Even before the long awaited sporting bonanza could see the day of light, the grand event was soaked in the allegations of corruption. It is estimated that out of Rs. 70000 crore spent on the Games, only half the said amount was spent on Indian sportspersons. The Central Vigilance Commission, involved in probing the alleged corruption in various Commonwealth Games-related projects, has found discrepancies in tenders – like payment to non-existent parties, will-ful delays in execution of contracts, over-inflated price and bungling in
  3. 3. 3 purchase of equipment through tendering – and misappropriation of funds. 3) Telgi Scam As they say, every scam must have something unique in it to make money out of it in an unscrupulous manner- and Telgi scam had all the suspense and drama that the scandal needed to thrive and be busted. Abdul Karim Telgi had mastered the art of forgery in printing duplicate stamp papers and sold them to banks and other institutions. The tentacles of the fake stamp and stamp paper case had penetrated 12 states and was estimated at a whooping Rs. 20000 crore plus. The Telgi clearly had a lot of support from government departments that were responsible for the production and sale of high security stamps. 4) Satyam Scam The scam at Satyam Computer Services is something that will shatter the peace and tranquillity of Indian investors and shareholder community beyond repair. Satyam is the biggest fraud in the corporate history to the tune of Rs. 14000 crore. The company‟s disgraced former chairman Ramalinga Raju kept everyone in the dark for a decade by fudging the books of accounts for several years and inflating revenues and profit figures of Satyam.
  4. 4. 4 Finally, the company was taken over by the Tech Mahindra which has done wonderfully well to revive the brand Satyam. 5) Bofors Scam The Bofors scandal is known as the hallmark of Indian corruption. The Bofors scam was a major corruption scandal in India in the 1980s; when the then PM Rajiv Gandhi and several others including a powerful NRI family named the Hindujas, were accused of receiving kickbacks from Bofors AB for winning a bid to supply India‟s 155 mm field howitzer. The Swedish State Radio had broadcast a startling report about an undercover operation carried out by Bofors, Sweden‟s biggest arms manufacturer, whereby $16 million were allegedly paid to members of PM Rajiv Gandhi‟s Congress. Most of all, the Bofors scam had a strong emotional appeal because it was a scam related to the defense services and India‟s security interests. 6) The Fodder Scam If you haven‟t heard of Bihar‟s fodder scam of 1996, you might still be able to recognize it by the name of “Chara Ghotala,” as it is popularly known in the vernacular language. In this corruption scandal worth Rs.900 crore, an unholy nexus was traced involved in fabrication of “vast herds of fictitious livestock” for
  5. 5. 5 which fodder, medicine and animal husbandry equipment was supposedly procured. 7) The Hawala Scandal The Hawala case to the tune of $18 million bribery scandal, which came in the open in 1996, involved payments allegedly received by country‟s leading politicians through hawala brokers. From the list of those accused also included Lal Krishna Advani who was then the Leader of Opposition. Thus, for the first time in Indian politics, it gave a feeling of open loot all around the public, involving all the major political players being accused of having accepted bribes and also alleged connections about payments being channelled to Hizbul Mujahideen militants in Kashmir. 8) IPL Scam Well, I am running out of time and space over here. The list of scandals in India is just not ending and becoming grave by every decade. Most of us are aware about the recent scam in IPL and embezzlement with respect to bidding for various franchisees. The scandal already claimed the portfolios of two big-wigs in the form of Shashi Tharoor and former IPL chief Lalit Modi.
  6. 6. 6 9) Harshad Mehta & 10) Ketan Parekh Stock Market Scam Although not corruption scams, these have affected many people. There is no way that the investor community could forget the unfortunate Rs. 4000 crore Harshad Mehta scam and over Rs. 1000 crore Ketan Parekh scam which eroded the shareholders wealth in form of big market jolt. Discussion of recent examples of misappropriation of public funds / trust and remedies: Barely had the dust from the Commonwealth Games exposes settled, which brought infamy to the country before the international community, the country has been rocked by a series of scams which has undermined public trust like never before. What is interesting is that corruption has become a common malaise afflicting all political parties and no party can claim the moral high ground. The season of scams has once again set over us in India. Every week there is a new scam which is unearthed by the media who then go to town with the stories. But this scam season should even hit the hardest cynic and make him think about where as a nation we are headed. All and sundry have been implicated in these scams from the usual suspects like our politicians and bureaucrats to the more unusual suspects like senior Defence personnel and still every day we hear new names coming up in the context of these scams.
  7. 7. 7 The season was kicked off by the now “world famous” Common Wealth Games Scam where a certain Mr.Kalmadi and his lackeys made off with crores of rupees meant to be spent on the games. According to estimates an amount of almost 70,000 crores was spent on the games and it is hard to imagine where all this money went. Then we have the Adarsh Housing Society Scam where flats and apartments meant to be given to the relatives of soldiers who gave up their lives fighting for the country in the Kargil war. But instead these flats and apartments in high end South Mumbai landed in the hands of politicians, babus and senior Defence officers. And then of course we have the 3G scam with telecom licenses for operating 3G services in the country were given out at a much lower than the market rate. The total revenue loss caused to the Government due to this underselling is already estimated to run into thousands of crores. The media of course took up these issues and shouted at the top of its voices. The Government finally decided to act. Kalmadi lost his place as a Secretary in the Congress, Ashok Chavan resigned as the Chief Minister of Maharashtra and now the Telecom minister A Raja has also put in his papers after he was forced to resign. And now some committees will sit on these scams and after 10 years submit a 10,000 page report which nobody would care about. The main problem we have is that just by giving up their public offices these politicians feel they have now come clean. The question when will people like these actually spend some quality jail time and their assets are confiscated? In China they hang people for corruption and in India they just give up public office and all is hunky dory. It is
  8. 8. 8 time that the common man stood up and made his voice heard and these politicians are actually punished. The latest scam to shock the country is the 2G Spectrum allocation, which has been called the mother of all scams causing a combined loss to the exchequer of Rs 60,000 crores. Though the controversy has cost Telecom Minister A Raja his job, as he was forced to resign, it continues to rock the parliament and the nation with Prime Minister Dr Manmohan Singh making a fervent appeal to the opposition to forget the issue and let the parliament function in the true spirit of democracy. A few weeks ago, the chief minister of Maharashtra state Ashok Chavan resigned after his involvement in Adarsh housing scam, a land grab in the name of Kargil war heroes. Another important state in the country too is convulsed by corruption scandal and this one is ruled by the opposition Bharatiya Janata Party. Karnataka Chief Minister B S Yeddyurappa has been facing allegations of nepotism and cronyism in favouring close family members with allotments of plots of land at prices much lower than market rates. He is continuing in office in defiance of his party. Saying that corruption is deep-rooted in India will be an understatement. Once the dust settles on the current scandals, new ones will break out, with equal vehemence and of same size. The main reason for the sordid state of affairs is that the country has no serious laws to punish the guilty. Resignation from the ministerial position is considered the biggest punishment, while the culprits loot millions of dollars and are left to enjoy them in peace.
  9. 9. 9 Sonia Gandhi, the president of the ruling Congress party summed up the mood of the nation when she said a few days ago that though the economy is dynamic, the country‟s moral universe seems to be shrinking. “Graft and greed are on the rise. The principles on which independent India was founded, for which a generation of great leaders fought and sacrificed their all, are in danger of being negated,” she said. Further discussion India is amongst the most corrupt countries of the world with a score of only 2.7 out of 10 and ranks 71st amongst 102 countries in 2002. CORRUPTION PERCEPTION INDEX AND RANK OF INDIA, 1995- 2002 PEOPLES’ PERSPECTIVE Indians think that corruption cannot be eliminated in India – at least not in their lifetime. This pessimistic and cynical perception of the people is largely an outcome of confusing corruption with all kinds of illegal actions and activities like dishonesty, cheating, duping etc. Most
  10. 10. 10 illegal actions, many of which are private actions, are confused with corruption. The Prevention of Corruption Act 1988 and Indian Penal Code clearly distinguishes between corruption indulged by public servants for private gains and illegal actions by individuals. There are separate Acts in India for dealing with different kinds of illegal actions of private individuals. For example, if a public servant amasses wealth disproportionate to his known sources of income then he can be tried under Prevention of Corruption Act 1988. However, if a businessperson amasses wealth disproportionate to his known source of income he will be dealt under Income Tax Act for concealing his income and not under Prevention of Corruption Act. TYPOLOGY OF CORRUPTION Corruption is defined as the use of public office for private gains. Scales of corruption can be Grand, Middling or Petty and payment of bribes can be due to collusion between the bribe taker and the bribe giver, due to coercion or even anticipatory. Existence of corruption implies that there are corrupt people, there are also corrupt practices, and there is a corrupt system. Therefore, all the three have to be fought simultaneously to eliminate the vice of corruption. The present system provides for taking on the corrupt persons through a legal mechanism, which has not been found to be very effective. Many corrupt practices fall outside the purview of existing laws and need to be tackled by people themselves. The responsibility for dealing with corrupt people, corrupt practices and corrupt systems devolves equally on individuals, civil society institutions, legislature, executive, and the judiciary.
  11. 11. 11 Corruption as an issue is receiving focused attention due to several scams exposed in recent times and democracy in India has a strong capability for debate now due to an independent press, electronic media and the information and communication technology revolution. India has delivered well on reforms and aroused economic aspirations for betterment have led to political demands for politicians to deliver yet more. This suggests that voters will look to vote for the politicians who can deliver growth. On corruption, Jagadish Bhagavati, an eminent development economist, has said that the menace can be dealt by institutional reforms and use of science. As an example, he cited the government initiative of giving electronic identity cards to the poor. He said Nandan Nilekani is engaged in "arguably the most important innovative reform in recent years by creating a national database of identity details of Indian citizens. This should take the political corruption out of the Public Distribution System and in the Employment Guarantee Scheme. As per perception of the people, Police is the most corrupt sector. However, the impact of corruption is on a much larger scale in the Health and Education Sectors involving far greater number of population. Corruption in Health and Education deprives people of these basic facilities and affects human development. These are, co-relates of Human Development. Cross country data of 102 countries show that there is a high rank correlation (0.788) as well as coefficient of correlation (0.766) between Human Development Index (HDI) and Corruption Perception Index (CPI). Countries with low scores in CPI have low HDI. Civil Society organisations can raise awareness among the populace and act as catalysts. Cause for corruption is certainly not continuing „low salary‟ of those indulging in corruption. It is the lack of
  12. 12. 12 effective deterrence in the form of punishment to the corrupt and the lack of adequate supervision. The fact that money is being demanded directly and openly by the corrupt is a clear indication that the corrupt persons are confident that no worthwhile action can be taken against them. This reflects the fact that those guilty of corruption do not expect to be hauled up. The existing systems for identifying the corrupt and punishing them appear ineffective and provide no deterrence to those indulging in corrupt practices. Perceptions at best are indicative of the existing malaise in the systems. However, for prioritizing issues, formulations of policies and planning strategies hard data is a requirement. Policies and programs should not be based on perceptions alone. Consequences of Corruption Corruption is found to be one of the most damaging consequences of poor governance characterized by lack of both transparency and accountability. Corruption lowers investment and hinders economic growth and human development by limiting access to basic social services as well as increasing the cost of their delivery. It also increases poverty, subverts the financial system,, and undermines the legitimacy of the state. Thus, corruption is anti-poor, antidevelopment, anti-growth, anti-investment, and inequitable. The cost of corruption to a nation is very high. At present, 19.5 million people hold public office with central and state governments, quasi-central and quasi-state institutions, and rural and urban local bodies spread over 200,000 establishments and offices all over India.
  13. 13. 13 At present, the perception is that government can eradicate corruption and responsibility for eradicating corruption is that of government alone. However, in view of the kind of corruption and the framework that we have in India, it is very clear that government alone cannot eradicate corruption. If the people and civil society institutions remain indifferent and show helplessness in combating corruption then it can never be eradicated or for matter that even reduced. Thus, the responsibility and the onus of combating corruption are as much of the people and the civil society institutions as that of the government. Prevention of Corruption Act 1988 To deal with corruption amongst public servants India enacted Prevention of Corruption Act 1988 (PCA 1988), replacing Prevention of Corruption Act 1947. PCA 1988 incorporates provisions of chapter IX of the Indian Penal Code to deal with Public servants and those who abet them by way of criminal misconduct and provides to enable attachment of their ill-gotten wealth obtained through corrupt means. This act also widens the scope of definition of Public servants. Public servant means any person in the service, pay of the government, or remunerated by the government by fees or commission for the performance of any public duty. Public duty means a duty in the discharge of which the state, the public, or the community at large has an interest. The „State‟ includes a corporation established by or under a central, provincial or state act or an authority or a body owned or controlled or aided by the government or a government company defined in section 617 of the Company‟s Act 1956. In India in addition to a large number of health and educational institutions, the government also aids many other kinds of organisations. Hence, the employees of such bodies are also covered by this act.
  14. 14. 14 Normally corruption is defined as using public office for private gains. In PCA 1988 Public Servant and Public duty have very wide definitions covering every person who is in the actual possession of the situation of a public servant and discharging public duty which the state, public or the community at large has a interest. Persons holding various public offices are public servants, whether appointed by the government or not. Citizens Charter The concept of Citizen Charters has been introduced to improve the quality of public services. It ensures accountability, transparency and quality of services provided by various government organistions. It enables citizens to avail of services with minimum hassle, in reasonable time, and at a minimum cost. Effective implementation of Citizens Charters will go a long way in controlling corruption. The Government of India has launched an ambitious programme for formulation and implementation of Citizens Charters in all government departments. To oversee the implementation and diffusion of these Charters, there must be Watch/ Monitoring Committees consisting of both public service providers and service receivers. Anti-corruption movement of Anna Hazare Model Village as contemplated by Gandhiji was brought in reality by Shri Annaji at Ralegan Siddhi by his dedication. “Late Shri Achyutrao Patwardhan, the great freedom fighter, suggested to the government of Maharashtra that to commemorate the golden jubilee of Bharat Chhodo Andolan, it would be most befitting to create model villages like Ralegan Siddhi in every tehsil of the state. The government accepted this suggestion and declared to implement “Adarsh Gaon Yojana”. The Government entrusted this responsibility to him and Adarsha Gaon
  15. 15. 15 Yojana was started under his leadership. He travelled whole of Maharashtra and selected 300 villages to implement this scheme. While working in this scheme he realised that development is getting hampered due to planned corruption in Government machinery and he decided to fight against this corruption. He gave evidence against two ministers who had amassed wealth disproportionate to their income. However since the Govt was passive about this he started agitation and undertook fast for l0 days. Chief Minister intervened and he deleted these two ministers from ministry and appointed an Inquiry Commission. The Commission held both the ministers guilty but to save them the Govt appointed another commission who discharged them from the allegations. Though the ministers were discharged from the allegations, they had to lose their ministership which is the success of Mr.Hazare's agitation. Mr. Hazare's gave evidence of corruption by Social Welfare Minister to the then Chief Minister. On 3lst July l999 the Chief Minister informed him that inquiry is being instituted about the charges leveled by him. He had given an interview to a local daily regarding this inquiry and based on this interview the concerned minister had filed a case in the court against Mr. Hazare for defamation. He was held guilty by the Court and the court had asked him to give an undertaking that he will not make such allegations in future. He refused to give such undertaking and preferred to go jail for 3 months as ordered by the court. He told the court that He was willing to give his life for truth. His punishment created commotion in public and scores of people started visiting Yerawada Jail. He wanted to complete his jail term but to give respect to the public feelings he accepted his release. In l992 Gandhji had told the court that if court feels that his actions for the freedom of the country are considered as anti-government activities he was willing to undergo any punishment .Similarly he did not give bond
  16. 16. 16 to the court and accepted punishment. He did not prefer any appeal against the court order immediately but due to public pressure he later made an appeal which was upheld by the Higher Court and rejected the suit of minister. Mr. Hazare asked the Govt. to conduct the inquiry against the minister which is still on. In the regime of coalition Government of Congress and National Congress Party, He had forwarded evidence of corruption about 4 ministers and had asked the Government to conduct inquiry. One of the ministers had made allegations about corruption in the institutions in which he was associated. Since there was no action from the Govt. he undertook fast for 9 days in August 2003 at Azad Maidan. The minister concerned also started agitation at Azad Maidan in Mumbai. At last the Government relented and Retired Supreme Court Judge Shri P.B. Sawant was appointed to conduct the inquiry. The commission conducted the inquiry and sent its report to Govt. on 22nd Februrary. In the report the commission had observed ministers guilty and had held Mr. Hazare also guilty for irregularities but not a single charge of corruption was proved against him. Mr. Hazare has offered the Government that it should take action against him as well as the ministers based on the findings of the enquiry commissions. Though Govt has not taken any action on the Commission's report three ministers had to go and this is a big achievement of his agitation against corruption. He felt that corruption will not stop merely by taking action against a few officers and ministers and it is necessary that a change should be brought about in the system. He believes that unless decentralization of power takes place the system will not change. In order to bring change in the system he felt that information should be made available to people regarding Govt.'s actions which was not being provided to people on the ground of secrecy. Here again he decided to follow Gandhiji's path and started Maun Vrat and later fast unto death.
  17. 17. 17 This brought pressure on the Govt. and both the Central as well as State Governments have enacted Right to Information Act. His whole life and work is based on Gandhian philosophy.