In the public agitation over the recent Saradha ‘chit fund’
scam, a key fact that is being overlooked is that it is a political crime after
all, not just a financial swindle. Sudipto Sen,
the mastermind of the Ponzi scheme that went bust, might have had
started his operations as early as 2006, when the CPM-led Left Front was in
power in West Bengal. But its final term,
2006-11, was the wobbliest in its career, Mamata Banerjee’s Trinamool Congress
being the ‘rising force’ of the day.
Came 2009, and, with 19 seats in the Lok
Sabha, the party had risen. It’s from around then that Saradha, a firm that was
enticing its poor depositors often with the promise of 50% interest per annum,
began spreading its tentacles in West Bengal, Assam, the North
Eastern states and Jharkhand. By the 2011 assembly elections, which witnessed
‘pariborton’ with the end of the Left Front’s 24-year-long rule, the difference
between Saradha chit fund and the Trinamool Congress had been so blurred that
it was barely visible. In many districts of south Bengal, Saradha’s collection
agents doubled as TMC office-bearers. It is now evident that Mamata was using
the proceeds of Saradha for political gains, donating ambulances and bicycles
to Maoism-affected districts, showering money on “intellectuals” loyal to her,
and building a war-chest to win the panchayat elections due in summer.
Saradha is not a “chit fund” in the technical sense.
It is a conglomerate of some 160 firms with their professed objectives ranging
from construction to travel and tourism. But none of them is allowed to indulge
in Collective Investment Schemes (CIS), or raising funds from multiple
investors on the promise of unrealistic returns. This is precisely what
fraudsters of the past did in Bengal, a state
especially susceptible to their guiles. There were elements in the CPM that
were indulgent to them. But Mamata treated Saradha almost as the government
treasury, or, for that matter, a treasure trove with no account kept. As the
saner sections of the people were appalled by Mamata’s poor governance, and the
established media, including Ananda Bazar Patrika, the largest circulated
newspaper, turned against her, she required an obedient media,
by helping crate it if it didn’t exist. Kunal Ghosh, a pro-Trinamool journalist
who often pulled strings in the media for her, became the CEO a slew of brand
new media ventures, of course under the Saradha umbrella. Ghosh began receiving
a salary of Rs 1.89 crore annually, a bit too decent considering that his
professional experience is limited as his educational attainments. To lend even
more power to her chief media aide, she got Ghosh elected to the Rajya Sabha
last year.
As expected, the media business was a non-starter. Sen, who is
now in police custody, has, in a letter to the CBI, alleged that he was still
forced to spend crores on the project. Besides, he says large amounts were
spent to pay retainer as consultant to a Trinamool Rajya Sabha member who is an
film star past her prime. The letter, and revelation in the media of Sen’s
interrogation by the police, are a saga of politicians blackmailing the owner of
an illegal fund, with an array of characters—a former IPS
officer-turned-Trinamool leader, the estranged wife of a former Congress
Minister aspiring to start a television station in the North-East, her lawyer
who is the wife of an influential Union Minister, and a football manager having
powerful links with the personal staff of the then Finance Minister and the
chief of SEBI, the market regulator.
Being the version of the accused, its credibility is limited. But it brings to
the fore two crucial issues: the Centre, which controls SEBI, took too long to serve a
notice on Sardha—it was not until TMC had quit the UPA coalition;
and the state government under Mamata’s TMC, which ought to have had put Sen
under detention as soon as SEBI had rung the warning bell, did remain unfazed—and perhaps would have
remained so if the Ponzi hadn’t crashed, making depositors run
around, and journalists in the media companies of Saradha did not throw a ruckus, which they rightlydid, for unpaid
salaries. The irony is that the young Corporate Affairs Minster at the Centre
also opted to sleep over these ponzi companies’ activities.
It points to a rather grim sub-text to the Saradha story. India
is a nation of savers, andWest Bengal is particularly so. But of late both
are losing that distinction. The national savings schemes are in a crisis, with more deposits
being withdrawn than added. In mid-year 2012-13, the net outflow from the
National Small Saving Fund rose to Rs 13,600 crore from Rs 6,500 crore in
mid-year 2011-12. In West Bengal, the small savings and
Post Office collections in April-August 2012 was a measly Rs 194 crore against a targeted Rs 8,370 crore. The
national net collection of small savings, which was a robust Rs 64,300 crore
even in 2009-10, has collapsed to Rs 1,500 crore in the negative in April-June,
2012.
While nothing is known yet about how much public money had Sen
mopped up, a PIL filed in Calcutta High Court has mentioned a figure of Rs
40,000 crore. There are at least two dozen more entities involved in the same
business in West Bengal and other states. It is clear that rising
inflation, and stagnant deposit rates of small savings, are driving the poor
and the middle class savers into the clutches of Sen and his ilk, a phenomenon
that throws cold water on the UPA government’s claims of ‘inclusive growth’.
It also sheds light on the absolutely bizarre manner in which
the business of politics is being funded. Sen had reportedly bought a rather
mediocre (and ineptly drawn) painting by Mamata Banerjee for an astounding
price of Rs 1.86 crore. It’s a different matter that she donated the entire
proceeds to charity. But the fact remains that the money came from poor men’s
savings, and a politician could swindle it because it was kept away from public
scrutiny, and in the hands of racketeers. The imminent total collapse of
official small savings will egg on politicians to turn every struggling saver
into a pauper.
(The author is National Editor of the Lokmat group)
