Battle for MP: Fissures emerge in BJP citadel

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

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
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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

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editor@gfilesindia.com

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

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


worshipping the goddess

67 Stock Doctor
stay cautious

73 By the Way

blue-eyed boys, the class of ’80 and more

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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
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EXCHANGE LTD SCAM
XCHANG T
XC ANG LT
NGE
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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


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

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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


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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


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


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gfiles inside

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


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

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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

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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


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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


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

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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


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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

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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


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


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

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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


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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

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23

COVER STORY


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


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

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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

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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


25

COVER STORY


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


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

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

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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

2 BJSh, 1 BSP, 1 SP, 1 Independent

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

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


27

COVER STORY


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


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

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


29

COVER STORY


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


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

www.indianbuzz.com


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


www.gfilesindia.com

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


33

EXPOSE


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


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

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


35

EXPOSE


GOVERNANCE
AWARDS
2012

SK Misra

Anil Swarup

Armstrong Pame

Ajit Balaji Joshi

IAS (Retd.)

IAS

IAS

IAS

The
Awardees
Jyotsna Sitling
IFS

36


JK Tripathy
IPS

Aradhana Patnaik
IAS
www.gfilesindia.com

GOVERNANCE
AWARDS

2013

Saturday,
November 30, 2013

Nominations invited

www.gfilesindia.com
summit@gfilesindia.in
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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



www.gfilesindia.com

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


39

GOVERNANCE


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



www.gfilesindia.com

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

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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.


41

GOVERNANCE


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



www.gfilesindia.com

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

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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)


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


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

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