Essay on scandals of the political crime in India

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Essay on the scandals of the political crime in India

In the last two decades or so, several scandals or financial irregularities, including the paying of massive commissions, pay-offs and kickbacks, have been reported in our country.

Mostly it is chief ministers, central and state ministers, and leaders of political parties who are reported to be involved in these scams. But hardly anything has been done to uncover, trace, apprehend, prosecute, and punish the culprits on the plea of 'lack of evidence'.

From among the more notorious scandals like Hawala, Bofors, stock market securities, sugar, fodder scam, etc. mentioned below, we will analyse only a few more recent ones involving political corruption and pertaining to years 1985 and 1996.

Bofors Pay-off Scandal in 1987 involved a total amount of Rs. 1,750 crore in the purchase of guns from the Swedish firm for the armed forces.

It was alleged that a sum of Rs.64 crore had been paid as kickbacks, though one estimate puts the figure of Rs. 160 crore and another estimate at as high a figure as Rs. 204 crore. High-ranking politicians, including the former prime minister were alleged to be involved in the scandal.

A Joint Parliamentary Committee ([PC) was appointed in 1987 to find out the nexus between politicians and recipients of kickbacks. It submitted its report in April 1988 that Bofors had not used any middlemen to win the contract, nor had it paid any bribes.

But a south Indian newspaper (The Hindu) pointing out the hollowness of these conclusions made many disclosures of commission paid to middlemen, including politicians following the publication of these documents, an inquiry was ordered by the Central Bureau of Investigation (CBI) and the Directorate of Enforcement. However, no action has been taken against anybody till May 2000.

The Hawala Scandal, which surfaced in 1991, not only rocked political circles but also the whole country. It was a case of a person (Surendra Kumar Jain) influencing the country's top politicians and bureaucrats by paying money to them.

In fact, this was the only case in which the Supreme Court of India directed the CBI, on a public interest litigation filed by two journalists in October 1993, to unravel the scandal sincerely. In this case, the leaders of all political parties except the left party were accused of receiving money from Jain brothers.

The nefarious activities of the Hawala racket came to light in March 1991 following the arrest of two persons which led to a search of S.K. Jain's house and the discovery of a diary which contained names of 111 politicians, bureaucrats, public servants, and others having received payments from the Jain brothers between April 1988 and March 1990.

The diary and the files were seized on May 3, 1991 along with cash, bearer bonds and foreign money. The diary languished for four years and it was only on November 28, 1995 that the CBI filed charge-sheets in the court against thirteen public sector bureaucrats, and on January 16, 1996 against ten politicians, and on February 22, 1996 against fourteen more politicians.

It was said that the former Central Energy and Civil Aviation Minister received Rs. 7.5 crore, late Prime Minister received Rs. 2 crore, the Chief Minister of a northern state Rs. 1 crore, and another Chief Minister Rs. 1.9 crore, the Central Agriculture Minister Rs. 6.1 million, former Deputy Prime Minister Rs. 5 million, the President of Hindu-oriented political party Rs. 6 million, and the President of another political party Rs. 1 crore.

The Union Minister of Parliament Affairs Rs. 6.6 million, the Central Energy Minister Rs. 5.4 million, former private secretary to the Prime Minister Rs. 5 million, and five central ministers who were given below Rs. 2 million each (Frontline, March 22, 1996: 9).

The money was paid for various favours received. The Jains had received 241 contracts during the period 1988 and 1993 mainly in the fields of power, steel, and coal.

The total amount of the Hawala transactions by the Jain group was estimated at 65 crore rupees. Some recipients of money from the Jains have lost political power, some have died and some are said to have fled the country.

The case against the politicians involved was tried by the especially designated CBI court of Additional Sessions Judge, Delhi, which ultimately discharged all cases for want of evidence in 1999.

The Animal Husbandry Scam involved a large number of public officials of animal husbandry department and politicians in South Bihar. They were accused of purchasing fodder beyond the sanctioned amount and of illegally withdrawing about 600 crore rupees from government treasuries in South Bihar between 1990 and 1995.

It is said that many bureaucrats and several political leaders in power were aware of these withdrawals but consciously covered up the misappropriation by misusing the civil deposit and public ledger accounts in order to balance state finances from time to time.

It is alleged that many government officials were in league with the animal husbandry mafia in siphoning off money. The allegation was that the state government did not spend much on 'centrally aided' projects against which the state government was expected to put up matching grants.

The money to be contributed by the state government was shown as 'released' by a government order but was superseded by another immediate directive to the concerned departments to surrender the 'released' amount in its entirety in the state chest or the civil deposit account. In this way, funds for the project were actually deposited in the state chest till central funds were again released on the basis of work stated to have been expedited.

While in many departments, a proper check was maintained on such 'orders' and 'deposits', in the animal husbandry department, the 'expenditure' was allowed to be shown as 'genuine expenditure'.

There were huge withdrawals from treasuries and the 'loot' was shared by the officials. The finance officials consciously misquoted the actual expenditure from grant-in-aid for development projects. The officials of the state government thus misinformed the central government with the backing of bureaucrats and some political brokers.

The financial officials denied being a party to such misappropriation and fraudulent transactions. They only described the 'order' for diverting the money to the civil deposit or public ledger account to save state funds from the 'March loot' when during the closing stages of the financial year, excess withdrawals are regularly noted.

Probably, this is the reason why in spite of the Patna High Court's directive to the CBI to investigate the whole case, and the Supreme Court's rejection of the state government's appeal, the state government continued to resist CBI inquiry and insisted on an inquiry by a judicial commission to be set up by the state government. The case started in the court in 1998 and the former CM has been sent to jail twice for a short period. At present he is on bail.

The Pay-off Scandal involved the former Congress Prime Minister who was alleged to have received a suitcase containing one crore rupees from a share-broker who was the main accused in the securities scandal in 1992.

This former Prime Minister was also declared as co-accused along with Chandra Swami in July 1996 by the chief metropolitan magistrate, New Delhi, in one Lakhubhai Pathak cheating case involving one lakh dollars.

The former Prime Minister has been accused and chargesheeted in another case in the matter relating to the bribing of Jharkhand Mukti Morcha MPs. He was also named by one Jain brother (of Hawala case) as one of the largest beneficiaries of receiving several crore rupees.

The CBI officer who obtained this confession from Jain brother was moved out by the CBI Director who was alleged to be very close to the former Prime Minister. No wonder that Bureau's conduct is now described by the Indian media as a national scandal.

The Urea Scam is the scam of the century. It is a scandal that makes Bofors scam look like a teddy bear's picnic; a deal that makes the sugar scam seem puny in comparison; and a deal in which the corruption is of a magnitude that is unprecedented in the history of Independent India. The urea scandal is different not because of the size of the kickbacks (Rs. 133 crore) but because the transaction was essentially fraudulent.

The deal was made in October 1995 by National Fertilizers Limited (NFL), a public sector undertaking operating under the Fertilizer Ministry with an unknown small Turkish firm to purchase two lakh metric tonnes of urea-a raw material used for the manufacture of fertiliser. The entire amount was to be paid in advance to the firm.

Though the total amount was paid to the firm within a week of signing the deed but the urea which was to be supplied by March 1996 was not supplied till August 1996.

The kickbacks of US dollars 4 million are alleged to have been paid by the Turkish company's agent to the son of former Prime Minister, son of former Central Fertiliser Minister, Managing and Executive Directors of NFL, and a person related to former Prime Minister's son. The judgment of the case is likely to be announced in May, 2000.

The Rice Scam in Madhya Pradesh was reported in the media in February 1996. According to the state's levy scheme, 40 per cent rice produced was to be sold to district administration and the remaining produce can be exported.

But in most cases, almost 100 per cent of the total produce was palmed off by the traders to rice-buying companies that existed only on paper. The fictitious companies were issued levy-paid certificates for as many as six lakh tonnes of rice in the last few years when only two lakh tonnes were actually sold. The top politicians were alleged to be involved in the fraudulent dealings involving fifty crore rupees.

In the Balarpur Scam, the former chief minister of Orissa is alleged to have abused his official position by granting concessions on bamboo royalty in 1992 to the Thapar-group (owned) Ballarpur Paper Mills in which the chief minister's son and wife had business interests. The state incurred a loss of seven crore rupees.

In the Textile or Dhoti-Sari Scam of Tamil Nadu, detected in mid-February, 1996, public officials of the Handloom Department, Handloom and Social Welfare Minister, her private secretary and his brother, and an AIADMK activist were alleged to be involved.

This was when the Tansi and the Coal-Import Scams in which the chief minister was alleged to be involved remained unsolved upto May, 2000.

In the textile scam, the strategy was to effect purchase of yarn (from non-existing firms) by Tamil Nadu Textiles Corporation (TNTC) and then show it as consumed by supplying it to government handloom cooperatives (which did not even own looms).

These cooperatives were supposed to be weaving saris and dhotis from the yarn so received and then to distribute these to the poor under the government "clothing for the poor" scheme in operation from 1978.

In the year 1994-95 alone, close to 200 lakh bundles of yarn were shown to have been bought. The saris, dhotis and children's dresses actually distributed on the Pongal day were bought from the open market in Tamil Nadu and Andhra Pradesh and sold to the Handloom Department at highly-inflated prices.

The bungling by the state's Social Welfare Department was not a major embarrassment for the chief minister who was alleged to have spent about Rs. 70 crore in her adopted son's marriage in 1995.

It will not be out of place to recall here the public reaction to corruption amongst politicians and the failing standards of integrity in public life on the basis of a survey commissioned by India Today (magazine) and conducted by MARG. The survey was conducted in ten constituencies of ten politicians involved in the Hawala scam.

In all, 3,901 registered voters scattered in 630 localities (i.e., rural and urban areas) in six different states (Nandiyad in Andhra Pradesh, Gandhinagar in Gujarat, Satna, Gwalior and Raipur in Madhya Pradesh, Ghosi and Bahraich in Uttar Pradesh, Ranchi and Madhepara in Bihar, and Sikar in Rajasthan) were interviewed. The survey was carried out in the second and third weeks of February 1996.

In 9 out of 10 cases of politicians involved in the Hawala case, 35 to 80 per cent of the respondents believed that their leaders had taken the money (from Jain brothers) and 45 to 75 per cent voters said that they were unwilling to re-elect the politicians involved from their constituencies in April 1996 elections (though surprisingly a good number of these accused politicians were actually elected). All this points out the premium placed by people on honesty in politics today.

An average politician spends Rs. 10 lakh on contesting a Vidhan Sabha seat (against the permissible amount of Rs. 1.5 lakh) and Rs. 30-40 lakh on a Lok Sabha seat (against the permissible figure of Rs. 4 lakh in big cities). Without accepting pay-offs, it is impossible for politicians to arrange for such huge amounts.

One Prime Minister (Indira Gandhi) had banned corporate contributions to political parties in 1983 but another Prime Minister (Rajiv Gandhi) reversed that policy in 1985. Politicians now receive cash contributions from fat cats.

Consequently, politicians remain obliged to businessmen because of whom the prices of sugar, oil, cement, and many other commodities suddenly rise during/after elections. Who supports the politicians who are not in power but continue to travel by planes for addressing rallies and attending meetings of their supporters?

The money is probably dished out by business concerns who consider it an 'investment' with an eye on future profits. Such a thing happened in Gujarat in October 1995 when fifty lakh rupees were supposed to have been spent merely on transporting and accommodating, in a five-star hotel for one week in Khajuraho, about 60 dissident legislators of one faction of the ruling political party.

All this analysis demonstrates not only the nature and extent of corruption within our political system but also how it has become embedded in the national consciousness.

If we take only mega scams in a period of ten years between 1986 and 1996, the country lost about Rs. 15,000 crore, or Rs. 1,500 crore a year. If we take various other 'questionable deals' in which colossal sums of money were received by the politicians and bureaucrats, India has been losing about twenty crore rupees every single day. This is surely a big threat to the very survival of democracy in our country.

Different scholars have pointed out different causes of political corruption. My contention is that the main factor is the emergence of political elite who believe in self-oriented rather than nation-oriented programmes and policies. Not surprisingly, the post-British Raj (rule) has been described as the "Raj of Ministers and Bureaucrats".

The political elite in the first two decades after independence were honest, dedicated and nation-oriented to the extent that they always worked for the country's progress. In the fourth general elections in 1967, such persons came to hold political power both at the centre and in the states who worked only on the basis of some vested interest, say interest of self, family, region, party, and so forth.

Their policies and programmes incidentally might have been nation-oriented but mainly they were self interest-based. They encouraged bureaucrats too to follow suit. A majority of bureaucrats (sub elites in politics) in our country are 'ritualists' and remain concerned more with perks and privileges than with development-oriented policies for society.

The politicians and bureaucrats thus started using their power and position for illegal benefits. The emergence of new business leaders who wanted to make quick profits, and who did not mind sharing them with people in power, was equally responsible for growing political corruption.

Political corruption also ensues from the vast powers enjoyed by position-holders and having no sense of accountability to people.

Politicians have powers of taking decisions, say, issuing licenses, sanctioning contracts for projects, enacting laws for the chosen minorities who can give them votes for winning elections, and so forth. It is not the rules but the interpretation of the rules which enables power-holders to receive kickbacks and pocket bribes.

The point is that political corruption exists in our country it is all-pervasive and this fact is undeniable. This is so not because we are a congenitally corrupt people, but because we are living in a system that is flawed. How do we set about tackling it?

Is simply reporting cases in the newspapers or filing charge sheets in the courts or appointing commissions of enquiry enough? Has any politician in India ever been punished?

So many commissions have been appointed against so many chief ministers and ministers, and on occasions even the charges leveled against them were proved but what action were taken against them?

They were asked to resign from their political posts. We may not expect our rulers to be too honest but we surely expect them to work for the development of the community and society.

Let the amount of money transferred to politicians by industrialists be accepted as a corporate payment a donation that is accounted for. Let not unreasonable limits be placed on the amount of money a campaigner needs to spend on elections. Let there be fewer rules. At the moment, numerous rules achieve nothing except their violation.

What we expect from our politicians is honesty in their dealings, not the amassing of wealth. People expect them to think only of the country's development. Political corruption, let it be emphatically stated, will only ruin our country.


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