Monday, June 29, 2015

The silence of Modi

by Harish Gupta, National Editor, Lokmat Group

The Lalit Modi fiasco has in the last few weeks brought into question some notions about NDA government that were taken as given. First, its executives, be at the Centre or the outposts, are persons of integrity unlike what could be said about their UPA predecessors. Second, BJP, the core party of the NDA, has come out of its misplaced mould and has put an impressive array of women leaders in important positions; in other words, women of integrity and quality have come forward to neutralise its long-derided gender skew. Sadly, all these presumptions about the ‘Modi sarkar’ have been turned on its  head by an avalanche of revelations about all Modi’s men, or women, rather.

Wednesday, June 24, 2015

Modi Govt. struggling to slap PMLA against Modi

by Harish Gupta, National Editor, Lokmat Group

Special report

The Modi government is struggling to invoke Prevention of Money Laundering Act (PMLA) against ex-IPL commissioner Lalit Modi who is holed up in London after various cases were slapped against him five years ago.

Top officials in various agencies including Enforcement Directorate, CBI, DRI, Corporate Affairs, Narcotics and Mumbai Police are scanning tons of files to zero on a fool-proof criminal case against him to enable the government to invoke PMLA.  Even the SIT was struggling yesterday through the day to zero on a criminal case against Lalit Modi so that he can be booked under PMLA. 

The UPA government slapped 15 cases against Lalit Modi for Foreign Exchange Management Act (FEMA), 1999 which does not provide ED powers to arrest him. The ED could not issue an arrest warrant against Lalit Modi due to this very reason and failed to press the Interpol to issue a Red Corner Notice. What ED issued was a “Blue Corner Notice” which is no meaning in law. Even Finance Minister Arun Jaitley admitted that there is some confusion over "the shades of blue" whether it was a Light Blue Corner Notice. 

Highly placed sources in the ED told this correspondent that the PMLA can be invoked only after a pre-dated criminal case is registered against a person under 28 Acts notified to invoke PMLA. Secondly, the PMLA case can be registered by the ED on its own if it has evidence to prove that the person laundered money which are “proceeds of crimes including drug, smuggling, terror” etc.  The problem is that if the ED converts a FEMA case into the PMLA after five years, it must have some fresh impeccable evidence to prove criminality.

Another reason for successive governments going soft on Lalit Modi is that it will also bring officials and members of the BCCI & IPL governing bodies. The game of Cricket being an all party affair, nobody wanted to precipitate the issue after Lalit Modi quietly eloped in 2010. If the UPA didn’t convert the FEMA cases into PMLA and not registered a single criminal case against Lalit Modi for four years, the NDA too looked the other way. 

Yet the pressure on the Modi government is so intense that a agencies have been told to register a criminal case against Lalit Modi under any of the 28 notified Acts to slap PMLA. Interestingly, the BCCI doesn't want to be a complainant in the matter. Therefore, the agencies are working overtime to find out a case against Modi not related to Cricket, IPL, Champions League etc. The government wants to file an appeal in the SC and for this a fresh case is considered necessary.

Tuesday, June 23, 2015

A throw of dice

by Harish Gupta, National Editor, Lokmat Group

Faced with its two troublesome contessas, external affairs minister Sushma Swaraj and Rajasthan chief minister Vasundhara Raje, and the raging controversy created by their surreptitious involvement with Lalit Modi, the ruling BJP seemed giving up earlier last week, choosing as strategy to make light of the allegations. Prime Minister Narendra Modi, in particular, passed the endurance test with great aplomb by giving messages to all and sundry, including wishing Iceland on her National Day, and became the star of the government-sponsored yoga session last Sunday, the International Yoga Day; yet his lips were zipped on l'affaire Lalit Modi though its echoes resounded in every corner of the media and politics. 

It was clear that expediency was dictating the government's response. With the monsoon session of Parliament due as close as next month, and the reform bills holding the key to faster growth crying for getting passed, giving up on yet another opportunity can be very costly. Instead, the government is deflecting attention to legalities of the allegations. If Swaraj had, way back in July last year, indirectly told the British government to let Lalit have the necessary travel papers for a trip away from the country where he was almost in asylum, it was, as Modi's ministers argued, out of "humanitarian" grounds. That the Prime Minister too wasn't in favour of much fuss over Swaraj's action was evident from the fact that he cleared her trip to the US as the country's representative at the International Yoga Day observance in New York. But that could hardly mean business as usual for Swaraj, as the conflict of interest in her case was glaring! Her husband and her bar-at-law daughter have served Lalit as counsel for twenty years and six years respectively, so the minister mother helping out, in a gingerly fashion, the client of the family is anything but par for the course.

As far as Vasundhara Raje is concerned, the technicalities behind which the BJP is sheltering are even more tattered. It appears that her MP son Dushyant Singh had got into a sweetheart deal through his Niyant Heritage Hotels Private Limited with Lalit Modi's companies in 2008 and 2009, when Vasundhara Raje was just out of power. It was during her earlier term as CM between 2003- 2008 that she changed the voting rules of Rajasthan Cricket Association (RCA) by transferring voting rights from individual members to elected representatives of the cricket associations of the state's 33 districts. Lalit Modi became the Tsar of RCA by one stroke of Vasundhara Raje's pen. The favour was repaid, or so it seems, when Lalit Modi invested in Niyant Heritage Hotels. After the secret was out, Dushyant brazened it out by claiming that he had done no wrong. The UPA was in power in the state and at the Centre and did nothing and rather RBI cleared the deal. Still it remains enigmatic that it is Lalit Modi who has dragged Raje into the controversy, claiming in an interview that it is she who recommended him when he applied to the UK government for an immigrant visa. The recommendation is accompanied by a confidentiality agreement which does not carry any signature. BJP is latching on to it as proof that Raje kept her nose clean, nor did she back Lalit Modi on the sly. But the party has swallowed its embarrassment over the sheer fact that it had no clue whatsoever on the Dushyant-Lalit cosy nexus. Its no secret that Lalit had fallen out with Vasundhara much before she returned to power in 2013 with a massive mandate.

Similarly, it is highly unlikely that the Prime Minister had a sniff of what was going on at the floor below him on the South Block where the external affairs ministry is housed. I have no doubt that if he got a hang of it Swaraj's plot would have backfired on her a long time back. And now, with the party right down to the wire on a make or break election in Bihar, and the equally critical bills on uniform goods and services tax and land acquisition waiting to be made into laws, it is too late in the day to act against her. Forget acting against the Jaipur sultana.

In fact more things about Lalit Modi should now come to light to 
examine the murky underbelly of a 'gentleman's game' that has 
degenerated into a cash machine for not only betting operators 
but the big daddies of the business - politicians and underworld bosses.

But I am sure the mine called Lalit Modi hasn't fully exploded yet. In fact more things about him should now come to light to examine the murky underbelly of a 'gentleman's game' that has degenerated into a cash machine for not only betting operators (known as bookies, they're often small fry) but the big daddies of the business - politicians and underworld bosses. An early indication came with the 1999-2000 India-South Africa match fixing scandal which claimed the reputation and career of two national captains, Hansie Cronje of South Africa and Mohammed Azharuddin of India, besides raising the suspicion that those cricketers who threw a game or suddenly bowled a no-ball were actually puppets on a string held by, among others, the dreaded 'D Company' of fugitive terrorist Dawood Ibrahim. The 2013 IPL spot-fixing and betting case got even more skeletons tumbling out of the cupboard. It raised deeper questions far more intricate than, say, why N. Srinivasan should continue as BCCI president after his son-in-law came under scanner for his role in spot-fixing. The nexus will be out if a thorough probe is ordered how IPL teams were first awarded, how bitter battle led to the ouster of Shashi Tharoor of Union Ministry, why the Adanis lost the race to get an IPL team and what kind of mind-boggling monies grab position in the controlling boards of cricket, and their quid pro quo with a character like Lalit Modi?

There has been no conclusive investigation till now into the connection between cricket betting and money. But its epicentre is no doubt India and Pakistan. When Australian cricketers Mark Waugh and Shane Warne were on a tour of Sri Lanka in 1995, they were paid handsome amounts in exchange of information on pitch and weather by "John", an  Indian bookmaker. But that is chicken feed compared to the huge money that sloshes around in this subcontinent every time there is an ODI or IPL match plaed anywhere in the world. With the financial greed of politicians knowing no bound, it is the lure of this torrent of cash flow which is drawing them close to the world of Lalit Modi? Not impossible, in the land of the Mahabharata, the epic in which the king wagers not only his kingdom but his wife in a game of dice.

Monday, June 22, 2015

Andhra-Telangana CMs' face-off: Centre steps in

by Harish Gupta, National Editor, Lokmat Group
Exclusive Report

Centre steps in as CMs of AP-Telangana fight bitterly
Governor to set up SIT to probe Cash-for-Vote scam

Harish Gupta
New Delhi, June 21

The Modi government has decided to step in as the show down between the Chief Ministers  of Andhra Pradesh and Telangana is snowballing into a major crisis over the “Cash-for-vote-" scam.
The Centre has advised ESL Narasimhman who is the Governor of both the states, that he should invoke his special powers and directly take charge of investigations into the bribery and telephone tapping scandal that has rocked Hyderabad for the past several weeks.
Highly placed sources in the government say that a worried ESL Narasimhman rushed to New Delhi to meet the Prime Minister, Narendra Modi two weeks ago, was asked to consult Union Finance Minister Arun Jaitley to resolve the developing crisis. Later, Attorney General of India Mukul Rohtagi advised the Governor to invoke Section 8 of The Andhra Pradesh Reorganisation Act, 2014 which gives special powers to the Governor for “security of life, liberty and property of all those who reside in the common capital area” of Hyderabad. It may be mentioned that Hyderabad is the common Capital of the two states for ten years under the Act and the Governor is its Chief Administrator.  

The trouble began when the Anti-Corruption Bureau of Telangana Police arrested TDP legislator Revanth Reddy and two others in Hyderabad for allegedly trying to hand over bribe of Rs.50 lakh on May 31 to buy votes. The TDP-BJP alliance wanted that its candidate to win in the Telangana legislative council elections. The ACB tapped the telephones of Andhra Chief Minister Chandrababu Naidu with the TDP MLA Stephenson which surfaced in the media surfaced on June 7 and all hell broke.

The Andhra Pradesh CID swung into action last week and lodged a criminal case against Telangana Chief Minister K. Chandrasekhar Rao.  

This is the first case of its kind wherein the police of two states have lodged cases against the Chief Ministers. The two Chief Ministers  do not see eye to eye and not even on talking terms. This is also first time in the recent history that the CM of one state has lodged a criminal case against the sitting CM of a neighbouring state sharing a common Capital.    

 The Centre has now told the Governor to form a Special Investigation and take over the probe of the case in the interest of peace and tranquility of the two states and Hyderabad.

Tuesday, June 16, 2015


by Harish Gupta, National Editor, Lokmat Group

The next general election is not happening before 2019 but it seems some opposition leaders can’t wait to bang the war drum. In other words, they have been thinking that the 2014 mandate in favour of Narendra Modi and the BJP got screwed up for one reason or the other, and that it must be rectified now. The challengers to Modi’s election are three in number, call it a trinity, if you like, but each of them thinks that it is he who deserved to get the job in 2019.

Tuesday, June 9, 2015

The Permanent Hawk

by Harish Gupta, National Editor, Lokmat Group

Alan Greenspan, former US Federal Reserve chief and the man often regarded as the inspiration behind the binge lending by banks resulting in the post-2008 global economic meltdown, however, had a remarkably modest idea about his job, particularly his policy pronouncements at regular intervals that had repercussions worldwide. He said, “what I have learnt at Federal Reserve is a new language which is called ‘Fed-speak’. You soon learn to mumble with great incoherence”.

RBI Governor Raghuram Rajan, as a central banker, is what is known in banking parlance as hawkish and his disposition therefore is quite the opposite of Greenspan. But he seems to have acquired the Indian variant of Fed-speak with much ├ęclat. Earlier this month, he cut repo rate by 0.25 per cent, or 25 basis points, seemingly against his wishes. It is bad if he hadn’t approved of it, for that exposes the pliability of someone entrusted with the institution which is custodian of the value of the national currency. It is equally bad if he was not altogether opposed to a small rate cut, the third in 2015, even though he kept “mumbling” about the inflationary clouds on the horizon, careful, perhaps, that his hawk image does not get dented.

That his words do not square with his actions is obvious. He harbours doubts about the authenticity of the new methods employed by the Central Statistical Office to measure growth. His misgivings are tell-tale in the following post-policy observation by him: “Even with 7.5 per cent growth numbers, there is some discussion on how much of it includes special factors, including excise taxes and subsidies. When you subtract that, growth does not look as strong as before”. It is undoubtedly a matter of concern if the headline growth numbers have resulted from some creative computing.

India cannot afford to have a 
central banker who refuses to 
change his stance and lives in the past glory.

It is impossible to figure out why the RBI governor is increasingly putting himself in an adversarial role with the Central government publicly even though he couches his feelings in velvety words. “If I cut interest rates, it means I want to please the government. If I don’t cut interest rates, it is because I want to have a fight with the government. Why can’t you make up your mind?” he shot back at a questionnaire during his press meet. But his inner turmoil finds expression in a remark laced with sarcasm—“RBI is not a cheerleader. There are other people in the country who can play that role. Our job is to give people confidence in the value of the rupee, in prospects of inflation, and having established that confidence, create the longer-term framework for good decisions to be made”.

The top inflation manager of the country is evidently not in agreement with a single of the government’s future projections. Finance Minister Arun Jaitley has denied that there is any official prediction yet of a sub-normal monsoon. But Rajan is not convinced. Instead he has made his view on the subject profoundly enigmatic: “As you know there have been El Ninos in the past with reasonable rainfall. Poor rainfall has not (necessarily) led to a fall in production...” What is he saying? It confounds confusion. Returning to the issue of his perceptible doubt about growth, he wonders why we think the economy “needs great cuts” when it is growing at 7.5 per cent. It is a replay of his pet theme so far that left to himself he would possibly have not agreed on the cut. But he still keeps the escape hatch open. “In some sense it (recent rate cut) is a Goldilocks policy, just right given the current situation”.

Economics, as we know, is a bit like physics before Newton, with very few certainties, least of all outcomes that are universally applicable. Much of the economic expectations are shaped by collective hopes and fears of buyers and sellers, which in their turn are shaped by the central banker’s words. They are certainly not the Fed-speak Greenspan fancied them to be but are the rational fulcrum on which people’s expectations rest. It seems Rajan has taken Greenspan’s words seriously.

Ideally he should not. In fact he shot to stratospheric fame himself in 2005 when he presented, at a function celebrating Greenspan on the eve of the Fed chief’s retirement, that the recent financial developments had made the world riskier and “disaster might loom”. Sure it did, though celebrated economists of the day, including former US Treasury Secretary Lawrence Summers, had called his warnings “misguided”. The banking sector crisis in 2008 earned Rajan his reputation as doomsayer and is possibly the reason behind his familiar hawkish postures, now as RBI governor but even earlier as Chief Economic Advisor to the Union Government.

Of course the image he has acquired of being robustly risk-averse should help him in his future career, be it at home or abroad. With demographic changes in the rich world, and little restructuring in its most conservative part, notably southern Europe, it is likely that global economy in the near to mid-term future will need hard taskmasters like Rajan. But that does not necessarily mean that he should treat India as the laboratory for his views in the “austerity Vs stimulus” debate.

Rajan’s attitude gains added poignancy as Prime Minister Narendra Modi is currently leading the country through a series of structural reforms, be it in targeting subsidy and moving towards uniform indirect tax rates, the results of which can be visible only if there is no shortage of capital along the way. It may call for spending on, say, infrastructure being front-loaded, much as it happened in China of the 90’s. If, by a miracle, Rajan were China’s central banker at that time and could give its communist party his thumbs-down, maybe there would have been no rise of China to talk about. Nobody has doubted Rajan’s intellectual prowess, and his uncanny ability to smell risk, but India cannot afford to have a central banker who refuses to change his stance. Nor can Modi move ahead with reforms if capital remains sticky.
(The author is National Editor, Lokmat group)

Tuesday, June 2, 2015

The Ali Baba Story

by Harish Gupta, National Editor, Lokmat Group

On completion of Indian Prime Minister Narandra Modi’s first year in office, an influential foreign magazine described him as a “one-man band”. From outside, India under Modi indeed looks like a one-man show. But the ordinary Indian who spends his or her life in today’s India will understand the growing disconnect between the Centre under Modi and the states, where authoritarian figures are emerging to run their territories like fief. The democratic principles that bind the country are at their weakest in the states, where a slew of despotic leaders have interpreted Modi’s pet phrase, “cooperative federalism”, to their own liking. To them, it means the licence to loot and plunder, and behave like tin-pot dictator, all as a trade-off against remaining nice to Modi on some of his pet national and international issues.

Monday, June 1, 2015

Modi proposes, yoga ministry disposes

by Harish Gupta, National Editor, Lokmat Group

Special Report

• AYUSH has set a new record in non-performance in this area. 
• Rs. 203 crores was allocated to ministry, but it spent Rs. 222 crores. 

New Delhi May 31, 

Prime Minister Narendra Modi may have carved out a separate ministry of AYUSH to promote ayurveda, yoga etc. last year on May 26 when his Cabinet was sworn in. He also ensured that June 21 is observed as International Yoga Day bringing a feather in the cap to promote yoga globally. 

The Modi government launched media blitzkrieg listing its achievements during the past one year for the past 10 days. However, shocking details have surfaced about the performance of his pet ministry of AYUSH.

AYUSH has rather set a new record in non-performance during the one year of Modi government. It has not emerged that the AYUSH did not spend more than 48% of funds allocated to it during the financial year of 2014-15. Of the ` 1272 crores allocated to AYUSH during the 2014-15, the ministry returned to the finance ministry as much as ` 607 crores under the head "Amount Unutilised". 

The unspent amount of 48% which was returned is a record of sort by any ministry under the Modi dispensation. Surprisingly, it happened when Modi picked up party veteran and his trusted man Shripad Nayak to head the ministry as minister of state with independent charge. Before Modi took over, AYUSH was merely a department under the ministry of health & family welfare. Nayak is also holding the post of minister of state in the ministry of health. 

According to figures available with Lokmat reveal that AYUSH failed to utilise the entire amount of ` 607 crores meant for research and plan expenditure. But the ministry overshot its expenditure when it comes to non-plan areas during 2014-15. The ministry was allocated ` 203 crores for non-plan expenditure. But it spent ` 222 crores. However, when it comes to plan expenditure, the ministry failed to utilise as much as 48% funds.

Prime Minister Modi may be laying emphasis on innovation & research of tradition Indian systems. But the AYUSH has set a new record in non-performance in this area. If the amount sanctioned during 2014-15 for research projects was ` 224.20 crores, as much as ` 98.53 crores remained unutilised. 

When AYUSH functioned as a department under the ministry of health during the UPA regime, it was allocated ` 189 crores in 2012-13 and ` 237 crores during 2013-14. But the department utilised ` 180 crores and ` 217 crores during the two financial years.