Bonds, Currencies & Commodities
Circulation of counterfeit currency will now be terrorist act

The Unlawful Activities (Prevention) Amendment Bill would cover those involved in procurement of weapons, raising funds for terrorist activities and counterfeiting Indian currency

New Delhi: Offences that threaten India's economic security including circulation of counterfeit currency will now be a terrorist act, as a bill in this regard was cleared by Parliament on Thursday, reports PTI.

 

The Unlawful Activities (Prevention) Amendment Bill, 2012, passed by the Rajya Sabha by voice vote amid a walk out by Left parties, JD-U and RJD, also provides for extended period for ban on an association from current two years to five years. Lok Sabha has passed the bill earlier.

 

Home Minister Sushilkumar Shinde said an individual, group of individuals and an association who are involved in counterfeit currency circulation will be covered under the law and is not against innocent people.

 

The other salient features of the bill include expansion of the definition of terrorist act to include acts that involve detention, abduction, threats to kill or injure, or other actions so as to compel an international or inter-governmental organisation to comply with some demand.

 

The bill would cover those involved in procurement of weapons, raising funds for terrorist activities and counterfeiting Indian currency. It would also cover offences by companies, societies or trusts.

 

That apart, courts would be given additional powers to provide for attachment or forfeiture of property equivalent to the counterfeit Indian currency involved in the offence or to the value of proceeds of terrorism involved in the offence.

 

Seeking to allay apprehensions expressed by members, Minister of State for Home RPN Singh said the amended law will not be misused. "This bill is against terrorism and terrorists. I assure that the bill is religion neutral...Terrorism is not just about guns, it is also about attack on a country's economy," he said.

 

The CPI-M had moved an amendment seeking to take trade unions out of the purview of this Act but it was negated by a majority 79 members out of 107 present. 28 members voted in favour of the amendment.

 

The amendment moved by BJP to include NGOs under it so that their foreign funding also comes under scanner for its misuse in terrorist activities was withdrawn.

 

The junior Home Minister said that terrorism is on rise and affecting economic security. Hence, the bill has been amended to curb economic offences in line with the suggestions of the Financial Action Task Force (FATF), a 34-member global body, that chalks out policies to counter financial frauds.

 

India is among six Asian countries who are member of the FATF, he said.

 

Allaying apprehensions of some members, the minister said there is no "gender bias" and both male and female individuals involved in a terrorist act would be covered under this law.

 

He assured members that the bill will not be used against innocent individuals. "There are no such clauses and we are not giving enormous power to police. There are so many safeguards, there are no chances to misuse," he said.

 

Interrupting the minister's reply, members of CPI, CPI(M) and JD-U sought further clarification on the bill, while two of them - one each from BJP and CPI-M - moved amendments.

 

CPI-M leader Sitaram Yechury wanted to know reasons for bringing back three provisions like enhancing period for which an association involved in terrorist acts will be declared unlawful, which were part of the Prevention of Terrorism Act (POTA) and were opposed.

 

Responding to his query, Singh said, "This bill has nothing to do with other laws (like POTA). It is to prevent counterfeit currency that is weakening our economy."

 

Shivanand Tiwari (JD-U) said even POTA was religion neutral but the 'draconian' law was misused, while D Raja (CPI) asked the government to "defer the bill for wider consultation before passing it in hurry."

 

To this demand, the Minister said, "All recommendations of the Parliamentary Standing Committee are taken into consideration."

 

During the discussion, a number of members mainly from JD-U, RJD, CPI and CPI-M expressed serious apprehensions over the law granting extra powers to police and the possibility of its misuse against members of a particular community, caste and trade unions.

 

Several members also asked the government not to pass the bill in haste and have a rethink. They demanded that the bill be sent to the Select Committee for seeking views of members of various parties by holding wider consultations.

 

Some members also termed the law as "draconian", saying it will become another tool in the hands of police to harass innocents.

 

Naresh Agrarwal (SP), Sabir Ali (JD-U), MP Achuthan (CPI), AA Jinnah (DMK) and Ram Vilas Paswan (LJP) were among those who opposed the bill.

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High Mark Credit: Four directors and chairman bagged 70% of the ESOPs

High Mark which desperately needs an injection of money to remain viable, had given four independent directors, including Vepa Kamesam, former deputy governor of RBI, and chairman Prof Anil Pandya 70% of ESOPs. The top management team which set up High Mark got just 30%. This team quit, leaving High Mark without an effective management team

High Mark Credit Information Services, one of the four credit information companies (CICs) in India licensed by the Reserve Bank of India (RBI), is not just under financial pressure but also facing crunch of key persons to manage its operations. According to sources, unequal distribution of shares under the employee stock ownership plan (ESOP) has made some of its top executives and key technocrats leave the credit bureau on which among other investors stock speculator Rakesh Jhunjhunwala has a stake.

 

In fact, High Mark's four independent directors, Dipankar Basu (1.63 lakh), Vepa Kamesam (1.63 lakh), Rajiv Johri (6.53 lakh) and Shyam Sunder Suri (6.53 lakh) and its chairman Prof Anil Pandya (3.27 lakh), together hold 70% of ESOPs. Of these, while Prof Pandya was designated executive chairman in position, if not in responsibilities, the other four directors have had little operating roles. And yet, the board allotted 1.9 lakh ESOPs to Kiran Moras, its senior vice-president and 2.7 lakh to Siddharth Das, its executive vice-president and chief operating officer. These options lapsed due to the resignation of both these officials. While Moras resigned on 21 March 2012, Das left High Mark on 20 March 2012.

 


High Mark’s total approved ESOPs were about 32.7 lakh, out of which 28 lakh were granted to independent directors, its chairman and other employees. As of 7 November 2012, about 4.66 lakh options lapsed. This means the credit bureau has 9.3 lakh options available for grant.

 

As Moneylife pointed out, the big bone of contention in High Mark was the generous salary, bonus, perks and stock options that the board has given to Prof Pandya when he has had little operating role. Apart from a salary package of Rs60 lakh a year in 2011, the chairman also got Rs4.27 crore as lump-sum compensation for past services including obtaining license from the RBI.

 

While other three CICs—Credit Information Bureau (India) Ltd (CIBIL), Experian Credit Information Company of India Pvt Ltd and Equifax Credit Information Services Pvt Ltd (ECIS)—have leading global credit bureaus as stakeholders and technology providers, High Mark preferred to develop its own technology and build systems accordingly.

 

High Mark has invested heavily over the past four years in creating competencies and technologies. The credit bureau has spent around Rs19 crore just for building its IT infrastructure and support systems.

 

Sachin Vyas, who was the chief technology officer (CTO), actually built the systems. Vyas while working with CapGemini headed a team that built loan systems for HSBC. However, according to sources, he also resigned from the company over differences with the chairman and allotment of ESOPs. Surprisingly, while Vyas resigned from High Mark in April, he was relieved only at the end of November 2012.

 

Bereft of a management team, High Mark is in a particularly tough spot because it does not have money either to run the operations beyond two months. It now appears strange that the RBI licensed High Mark at all to run a capital-intensive and long gestation business like a credit bureau, given how financially shaky and operationally mismanaged it has turned out to be. By all accounts the board of directors, who bagged the ESOPs for contributing little operationally, has remained unperturbed in the face of this raging crisis.

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COMMENTS

S K Gupta

4 years ago

Wow!!!! Now we have Credit Bureau which lack credibility of its own.... what an Irony!!!! Someone enlighten me, Was Satyam to was a Credit Bureau??????

sachchidanand

4 years ago

One must question due diligence done by RBI before giving out license. It is not proper to cast aspersions but something fishy appears to have happened . One must probe management who have squandered lot of money even before systems were in place.

LPG quota: Mockery of subsidy reduction efforts or unadulterated politics?

The whole episode of LPG quota is another drama enacted to show how the Congress is taking care of the common man. Unfortunately while our politicians are indulging in dirty politics, our navaratna oil companies will soon be facing bankruptcy like our state electricity boards

Ever since the announcement to impose a quota of six domestic LPG (liquefied petroleum gas) cylinders per family per year by the UPA government, there have been protests by every kind of stakeholders—from political parties to NGOs to social activists to trade unions. Every one has been critical of the new policy because it will hurt the common man. Has there been serious look to find out what impact it will really have on the common man?

 

According to the 2011 census, 65% urban households use LPG while only 11.4% rural households are able to secure LPG. Thus only 28.5% Indian households use LPG. While universal unlimited LPG subsidy was not equitable (which no one questioned), even the new policy of six cylinder quota or the proposed nine cylinders cannot be justified. After al it is enjoyed by only 28.5% when the rest are deprived.

 

Still our politicians shed crocodile tears saying increased price for LPG will hurt the common man. Under the Mahatma Gandhi National Rural Guarantee Act—MGNREGA—(when Rs15,000 is given to help the rural unemployed, we happily give Rs 4500 mostly to the rich and the middle class families to subsidize their cooking. Let us not forget the shocking revelations of LPG transparency portal which showed several VIP politicians using more than 30 cylinders in a year and thus getting a subsidy of more than Rs15,000. The Jindal family seems to have got a subsidy of as much as Rs1,50,000 per year (use of more than 369 cylinders a year)!

 

Woes of LPG consumers: Result of our belief in free lunch

 

Because of the unrest even among the ruling Congress party members, its leader Sonia Gandhi recommended that the states where her party is in power should give three additional cylinders at subsidized rates. This was an indirect command to the newly appointed petroleum minister Veerappa Moily, He has been discussing with the finance minister of changing the policy to change the quota to nine for the whole country. Should that suggestion be accepted by the UPA government, then a simple analysis shows that the total reduction in subsidy burden on account of LPG would be only around 10.8%.

 

If the total LPG burden per year is around Rs46,000 crore, then the total reduction will be around Rs5,00 crore. The cost of elaborate bureaucracy needed to administer such a complex quota system would be enormous. In addition, whenever the complexity of selling a subsidized product is high, opportunity to beat the system and to earn economic rent (in simple terms black money) is also high. If the real and unannounced goal is to help all those involved in the long chain of distributing LPG (mostly the politically connected) to earn black money, then LPG quota system is an excellent one despite the use of direct cash transfer through Aadhaar.

 

Never-ending woes of LPG consumers

 

The following two tables—one using the data for Kerala and the other for the whole country—shows that savings from LPG quota implementation can vary depending upon the actual consumption pattern of the LPG consumers. There is no hard and credible data available. Still there was enough published data to develop these tables. In the case of Kerala, subsidy savings resulting from adapting six or nine cylinders quota is not at all significant. Just by increasing LPG price by Rs17 per cylinder, it is possible to get the same savings as nine-cylinder quota. Is it really worth the effort to develop an elaborate system to administer the quota system?

 

Even in the case of all India data, Rs53 per cylinder will give us the same result as the introduction of nine-cylinder quota.

 

 

 

 

Any objective look of these two tables would have resulted in increasing the LPG price marginally rather than imposing a new LPG quota policy which is extremely difficult to administer. The petroleum ministry would have carried out an analysis like the above one before taking the decision to implement the six-cylinder quota policy. Why did they fail to do it?

 

How to use your subsidized LPG cylinders wisely?

 

A charitable explanation could be that the petroleum ministry wanted to float a trial balloon to see how its small efforts to reduce the LPG burden will be accepted by the political class. If there was no resistance they might have reduced the limit gradually to zero and limited the subsidized LPG only to those below the BPL. On the other hand, if they have not done any analysis and they really thought that they would reduce the subsidy burden then increasing the quota to nine is to make a mockery of their efforts to reduce subsidy. It would be much better to drop the quota policy and increase the price marginally.

 

One can also argue that the whole episode of LPG quota is another drama enacted to show how the Congress is taking care of the common man. After giving the impression that the government is reducing the burden of subsidy by limiting the number of cylinders, Congress party can get brownie points by showing how it has helped the common man by increasing the quota. If this was indeed the case then it is a crass populism at its worst. Unfortunately when our politicians are indulging in dirty politics, our navaratna oil companies will soon be facing bankruptcy like our state electricity boards. Only then we will realize the foolishness of our failure to deal with petroleum sector subsidy.

User

COMMENTS

Vaidya Dattatraya Vasudeo

4 years ago

Get Induction cooktops. Formerly it was only available only in chinese makes, no matter which Indian Brand is selling them. Now it is available as pure Indian Made. I was just waiting for that. Now I have purchased it, about two months ago and getting the benefits. This should be irrespective of what is the gas policy.

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