The CAG is an excellent weapon. Unfortunately, the CAG reports are all post-mortems. We need something that may be described as “concurrent audit” of government deals, a detective’s review of the proposal at the point that the final decision is to be made
First, it was the Mundhra scandal, an affair so small that Raja and other scam kings of today won't even sniff at it. The details are not worth recalling but the scandal was good for newly Independent India.
It warned the country that corruption is an ever-present danger; and the government's response showed honesty and integrity were still alive in India. TT Krishnamachari, one of the most brilliant financial minds the country has produced, was the finance minister. He resigned when the scandal broke and it was clear that the finance ministry was involved.
Then came Bofors, which sent out exactly the opposite message. It was good news for crooks and bad news for the country. The message was that the Congress party and its government would go as far as necessary to stonewall investigations and protect the guilty, the obvious ones and the shadowy figures in the far background.
Bofors announced the code word-Open Sesame-to open and loot Ali Baba's cave. It told the crooked that it was open season to raid the treasury.
Fast forward to 2010 AD. The Comptroller and Auditor General (CAG) announced that the country has suffered a probable loss of Rs176 lakh crore in the distribution of 2G (second generation) spectrum licences. Even today, I cannot, off the top of my head, say how many zeroes follow the 176 in that number.
Bofors was penny ante stuff. The mind boggles at modern numbers. Add to this the projected loss in Coalgate and we get a bigger lot of zeroes which I have to count on my fingers.
Add the loan loaded on to the innocent Air India in order ensure windfall profits for a few aviation entrepreneurs, the land scams in Maharashtra, land-grab arrests in Tamil Nadu, illegal iron more mining in Andhra Pradesh and Karnataka, et cetera, et cetera, et cetera as the King of Siam keeps saying in "The King and I" and we get a figure that is one-third of the way to the googol.
A googol is 10 to the power of 100 or 1 followed by 100 zeroes. It was invented by Edward Kasner, a mathematician of the early 20th century, and the name was given by his nine-year-old nephew. Kasner used it to illustrate the difference between an unimaginably large number and infinity. It is useful when comparing with other very large quantities such as the number of subatomic particles in the visible universe or the number of hypothetically possible chess moves.
Googol can be used to indicate the total amount of graft and black money that can be siphoned off from the Indian economy. In 2062, fifty years from now (is this an underestimate?) this amount will total Rs Googol.
Any way of stopping this or slowing down the juggernaut? You, me and the man in the street have plenty of ideas which have to be developed and refined. Let me put one forward for consideration.
The CAG is an excellent weapon. Unfortunately, the CAG reports are all post-mortems. The CAG looks at government operations long after they have been completed. Taking the 2G spectrum case as an example, a lot of people knew that something illegal was going on during the process of allocating the licences but they did not have documentary proof to pin down the illegalities or estimate the amount of black money was created. Only the CAG report could surgically cut open the whole operation, with Raja conducting the full orchestra of the government, and display the anatomy of India's biggest scam to the public.
Some culprits have been caught but many more have escaped. The money was gone, hidden under plants at the bottom of the garden or sitting in bank accounts abroad or financing the trade in weapons and drugs; solely because the CAG report was only a post-mortem.
We need some mechanism which catches the scamsters when they are going about their dirty work; like catching a thief in the act of breaking open the safe in your house. We need something that may be described as "concurrent audit" of government deals, a detective's review of the proposal at the point that the final decision is to be made.
Consider the example of Air India. Air India got into trouble because Praful Patel wanted to buy 111 planes. Everything would have been fine if, as prudential financial norms dictated, a proper plan to raise the funds for the aircraft had been formulated. The funds should have come from a mix of equity, retained earnings, loans and leases.
Instead, Air India was loaded with an unbearable loan burden of Rs38,000 crore and the proposal went through on the nod, right past even the Cabinet. If we had a system of concurrent audit, the detective review would have cried 'halt' and Air India would be healthy now. Prevention is better than cure?
(R Vijayaraghavan has been a professional journalist for more than four decades, specialising in finance, business and politics. He conceived and helped to launch Business Line, the financial daily of The Hindu group. He can be contacted at [email protected].)
Early in his presidency Obama realized that the Muslim world would constitute the most important foreign policy challenge for the administration. It will be up to Romney to come out with an alternative vision to his advantage
Within just a few weeks what was looking as a really troublesome aspect of foreign policy-the Iranian Nuclear Imbroglio-has at least for the moment settled down and it seems as if president Obama will carry the advantage in the foreign policy into the election. Generally it is the Republicans who have a foreign policy advantage-they are traditionally more hawkish which somehow seems to translate as foreign policy expertise while the Democrats are generally on the back-foot trying to explain their foreign policy. But the two wars that were started under the Republican administration of George Bush-the 'necessary' war in Afghanistan and the 'unnecessary' war in Iraq. Both of which have dragged on for many a year seem to have dulled the appetite of the American public for war and have taken a heavy economic toll, which combined with the Great Recession, has led to a greater appreciation of the "leading from behind" policy of president Obama.
Early in his presidency Obama realized that the Muslim world would constitute the most important foreign policy challenge for the administration. He also realized that the relationship with the Muslim world was broken and that a new deal was needed with the Muslim world to make for a safer America and a safer world. He addressed the Muslim world from a University in Cairo on 4 June 2009. He greeted them with a Salaam Alekum. He said that the cycle of suspicion and discord must end. He stated that a tiny minority of extremists had taken over the agenda. He said that he came to seek a new beginning between America and the Muslim world-one based upon mutual interest and mutual respect and that America and the Muslim World are not exclusive and need not be in competition. Obama sought to find common ground between the US and Islam. He addressed the wars in Afghanistan and Iraq and said that he would bring back the troops from Iraq and that he would bring back the troops from Afghanistan as soon as he came confident that no threat was posed by extremists in Afghanistan and Pakistan. He addressed the two state solutions for Israel-Palestine. He offered a dialogue on Iran so that Iran and the US could move forward. He addressed the issue of democracy in the Muslim world. He addressed religious freedom of religion and women rights and many other issues.
The president has succeeded in winding down two wars that he had inherited-the war in Iraq which he had inherited and which he campaigned against and the war in Afghanistan which has gone on far more than a decade and though the resolution is less than perfect the situation is certainly better than what he inherited. Also the sustained assault on Al Qaeda has resulted in a considerable weakening of the extremist group. The most significant achievement in this regard is the killing of Osama Bin Laden, the leader of Al Qaeda who was holed up in Abbottabad, Pakistan. It was a particularly risky decision given that the agencies told him that the chances of it being Bin Laden were only 50%. Also the nuclear imbroglio with Iran has been tempered down with the latter returning to the negotiating table as the sanctions bite. This has considerably reduced the chances of a conflagration in the Middle East with a preventive strike on Iran by the Israel.
Further is the remarkable Arab Spring which has spread from Tunisia to Egypt liberating wide swathes of people from years of Autocracy America can justly claim a share of the credit because they have generally played a helping hand in promoting freedom though Dick Cheney claimed that the Iraq war was the catalyst for the Arab Spring. The spread of democracy has always been a goal of the US foreign policy and though this has also led to the citizens of these countries turning to Muslim parties; it seems that grassroots of democracy is taking root. Further the resolution in Libya which America supported has been satisfactory.
All in all, these events should give president Obama an edge in the foreign policy in the coming election. The usual Republican advantage in the foreign policy should be neutralized. But there are serious problems that remain. One of the major problems is the insensitivity that the Americans show to their Muslim allies. Then the recent instance of the way their Afghan allies were travelled after a staff sergeant went on a rampage in Afghanistan, as also the stalemate in Pakistan about the apology demanded for the killing of 24 soldiers on the Afghanistan- Pakistan border.
With the help of technology (read Drones) the Americans have been able to bypass their allies while carrying out missions from the sky to take out militants, though sometimes with tragic collateral damage. The results seem to be satisfying but the price that America might be paying in terms of resentment of the people for collateral damage as also the violation of sovereignty may be difficult to calculate. Its validity in international law is also troublesome at best. Meanwhile the two long-drawn wars have ensured that at least in the foreseeable future there will not be American boots on the ground in terms of troops. The new defence budget stresses the use of special forces rather than full blown military operations.
It will be up to Romney to come out with an alternative vision and Americans may not been on a mood for simple hawkishness. His stand against Iran as also China (regarding currency manipulation) may both turn out to be counter-productive and need to be more nuanced.
In this topsy-turvy election foreign policy may well be a democratic advantage.
(Harsh Desai has done his BA in Political Science from St Xavier's College & Elphinstone College, Bombay and has done his Master's in Law from Columbia University in the city of New York. He is a practicing advocate at the Bombay High Court.)
In the “Silicon Valley” of India, plumbers, carpenters and water supply are scarce while flat-owners bickering among themselves in illegal “associations” formed to run the buildings
There are essentially two types of residential buildings in Bangalore. The first type is those that are constructed by builders who use tracts of land from their land bank. The second is those where an independent home owner (often called a 'promoter') enters into an agreement with the builder to sell the plot to him. In return for the same, the builder demolishes the structure and constructs defined number of flats, of which, some of the flats are sold in the outside market. The balance flats are owned by the promoter. So, for instance, if the builder constructs 20 flats, depending on the type of contractual agreement, eight flats may be sold in the outside market while 12 flats may be retained by the promoter.
The flats built by top-notch builders like Prestige, Embassy, Mantri, Sobha Developers and Puravankara are sold at a premium depending on the location and the amenities available. These developers are particular about aesthetic appeal of the structures and also provide facilities like round-the-clock security, comprehensive elevator maintenance, swimming pool, gymnasium and a club-house. It is another matter that Bangalore faces a severe water shortage and so most of the swimming pools are defunct.
Water supply: There are essentially two types of water connections in flats in Bangalore. One is the borewell water that is used for cleaning and washing. The other is the supply from the municipality, popularly known as Cauvery water. The quality of the borewell water is such that it can corrode even your stainless steel vessels. The Cauvery water can't be used for drinking without filtering. Many areas in Bangalore do not have even the Cauvery water facility. So, it becomes a field day for drinking water suppliers. I have seen at least 15 different brands of mineral water supplies and people consume them simply because they are packed and sealed. They seldom worry about the nitty-gritties like whether the source of water is good or if the water is purified.
Incessant drilling for borewell water: Walk into any of the narrow by lanes of Bangalore and at any time of the day (or night) you can hear the huge noise of borewell machines drilling the ground. One of the residents near our area had drilled the ground and the noise stopped after 72 hours of incessant drilling. Even as we were wondering what happened, the penny dropped that the resident had become a supplier of tanker water. He proudly displays the board-"Manjunatha Water Supply".
Funny associations: Every building has a so-called association that has no legal standing. The so called municipal bye laws are rarely ever complied with. The association meets once a year to discuss the most absurd and silly issues that one can never imagine. However, they never discuss things like sinking fund, financial management of association funds, etc. Anyone who questions the association is bad but people who are silent spectators are good. I know of associations where bank balance of around Rs2 lakh lies idles in a SB account at 4% interest but the association members cringe to give Rs50 for menial work like tank cleaning, removing the weeds in the garden, etc. Despite the fact that water is in short supply, people wash their cars as if there is no tomorrow. Every household has a minimum of four vehicles-two cars and two scooters/bikes.
One can see independent home owners throwing garbage on the road and using water to wash their gates and the streets outside their homes. Even the IT crowd that stays in flats under a leave-and-licence agreement are quick to buy large vehicles (thanks to easy availability of vehicle loans), regardless whether there is adequate parking space or not. In case of independent home owners, they avail of free parking facility on the road. Many independent home owners block the roads to put up a shamiana to celebrate family functions.
Plumbing woes: There is a severe shortage of skilled and unskilled labour in Bangalore so if you are looking at repairing something, you are in for a rude shock. One has to cajole the carpenters and electricians to get your work done and they won't touch the debris generated.
Anyone with plumbing tools and tackles passes off as a plumber. On most occasions, these unskilled technicians aggravate the plumbing problem instead of solving it. Builders do the vanishing act once the flats are sold, so there is little recourse on that front. The second rung builders also do not worry about doing the plumbing in an aesthetic fashion. So, you will have drainage pipes bang above the parking lot on the front side of the building. Leaking water taps are never rectified.
Legal issues: In Bangalore each flat owner is given a 'khatha' certificate that indicates that he holds the share in the area on which the structure has been erected. To get this certificate, you have to grease the palms of people in the registration office. This system is something like the conveyance deed scheme in Mumbai (though there are differences). Other than this, one has very little control on what happens in the premises. Flats are bought and sold without anyone's knowledge. There are no transfer fees payable to the association. There is no need for a "No Objection" certificate at all, when flats are sold. Likewise, tenants walk in and out of the buildings, stay and vacate the flats as though it is a lodge. Neighbours rarely open the door to each other.
Despite being called as the "Silicon Valley" of India, the Garden City has not managed to keep pace with the changing times. Monstrous transformers stare at you from every nook and corner. Garbage is handled manually by scavengers who sort the garbage right on the road. Hooligans pass off as auto rickshaw drivers. Bus conductors do not issue tickets for short rides and even if you insist on a ticket, they brazenly ask you to return the ticket so that the same can be reissued. Street dogs swarm every street. The only advantage of living in this city is probably the anonymity it offers you.