Book Reviews
'Elections: An undocumented Wonder' by Dr SY Quraishi -Book Review

Former CEC Dr SY Quraishi unravels the myth and mystery behind the great election machine, the men and women who run the world’s largest democracy and the citizens who participate in it with great gusto in his book, 'An Undocumented Wonder'. The book will be launched in Mumbai on 9th May

The Indian election is a gigantic exercise that is often called the “greatest show on earth”, not merely because of the scale, size and diversity of the exercise but because of the vibrant volatility of our democracy.


Dr SY Quraishi’s well-written book “An undocumented Wonder- the Making of the Great Indian Election” would be launched in Mumbai ( ) on 9th May by Deepak Parekh, in presence of television and film actor Kabir Bedi and note social activist Medha Patkar, at the Indian Merchants Chamber.


Gopalkrishna Gandhi succinctly sums this up in his foreword to the book. He says, “India is valued the world over for a great many things, but for three over others: The Taj Mahal, Mahatma Gandhi and India’s electoral democracy. The credit for the last of the three fames goes to the people of India ... The people are the propulsive force, the driving energy of India’s Electoral democracy. ... But the vehicle’s engine, where ignition and combustion take place and the fuel and engine combine to move the vehicle is the Election Commission of India (ECI)”. And behind the vehicle’s steering wheel is the Chief Election Commissioner of India (CEC)”. Dr SY Quraishi, by documenting 'The Making of the Great Indian Election”, he says, has not only given us a ‘vivid portrayal of what makes India’s elections work and prevail over many obstacles that confront it’, but by also ‘confidence and pride’.


If only this well-written book had been released before the 2014 Parliamentary Elections instead of making its appearance at the fag end of the polls in May 2014, it would have made a world of difference, more particularly to the lakhs of people who were reportedly unable to vote in Pune, Nagpur and Mumbai. The Election Commission ought to have announced to citizens via print and electronic media that it expects everyone to recheck their names, even if they have been voting in all earlier elections. It would have made a big difference.


Dr Quraishi, in the chapter on Use of technology in the Indian elections outlines the Election Commission’s efforts at providing better services that include online enrolment in electoral rolls, complaint registration and public grievance management, call centres for public grievances, online information sharing and electoral roll search.


Dr Quraishi writes - “The book is my modest attempt to unravel the myth and mystery behind the great election machine, the men and women who run the world’s largest democracy and the citizens who participate in it with great gusto.


As promised, the pages are 'replete with anecdotes, case studies and analyses’. It ends with the author's reflections on ‘a few unresolved issues that affect Indian polity’ such as the paradox of great elections and a flawed democracy, election as the mother of corruption, the rise of the rich in politics, participation without representation, protest and participatory politics, the election as a festival and not a funeral’. Dr Quraishi also dwells at length on his own innovations, including the creation of Voters’ Education and Election Expenditure Monitoring Divisions, India International Institute of Democracy and Election Management and distribution of voter slips and their impact. Here again, as a Mumbaikar, I believe, if the distribution of voter slips was known to more voters through a public information campaign, they would have checked out to ascertain their names figure in the voting list and would not have had to return disappointed.


The book is divided into thirteen chapters – the most interesting reads are Engaging Youth: Converting Subjects into Citizens, Secure Elections Safer Democracy, Voter Education towards peoples’ participation, and Money power in elections.


The most illuminative to me is an extract on Election rules and processes in early medieval India (sourced from listing inter alia the selection process in ancient India. The nominee’s name written on a pre-designed palm leaf is dropped in the common pot (kodavolai in Tamil) on election day, in the presence of all the people. The oldest priest randomly transfers some leaves to another pot and a small boy from the crowd is asked to pick one. The winner is chosen. The basic criteria for contesting is that the candidate lives in a house on taxpaid land, is between the age of 35 and 70, knows the rules and laws mantra-prahmaana. The qualifications required are– knowledge of business, honest income, a pure mind and not been on any previous committees. The disqualifications are more stringent; they exclude those who are foolhardy, those who have accepted bribes in any form, have been on a committee that has not submitted accounts, the foolhardy, those who have stolen the property of another, partaken in forbidden dishes, committed sins and have become pure by performing expiatory ceremonies or those guilty of incest. For a country whose Bharatiya Sanskriti goes back millennia, some of these some of these qualifications and disqualifications probably need to be included in the Representation of Peoples Act, Election Moral Code of Conduct that are violated so brazenly.


Another interesting box lists the modus operandi of hiding illegal expenses during elections. The 40 different modes listed are unique, as also the six ways of corrupt political financing. There is a page on Financial Discipline and Accountability that requires audit of election expenditure by EC empanelled chartered accountants. These in-house auditors of political parties “are naturally likely to do a perfunctory or whitewash job” says the author.


Some over hyped controversies includes a box on How costly was the cost of covering Mayawati/ BSP symbol ‘elephant’. Dr Quraishi’s also has some interesting comments on his predecessors such as TN Seshan chomping carrots and gabbling on about how he eats politicians for breakfast, JM Lyngdoh being a stickler for rules, who moved Gujarat Chief Minister to refer to him in public rallies as ‘James Michael Lyngdoh in a sly reference to the fact that he is a Christian.’


The chapter Emerging concerns in Electoral Reforms delves with concerns of aam citizens like cleaning criminalization of politics, Tainted MPs in the Lok Sabha, Inner Party Democracy, Transparency in accounts of parties, the problem of dummy candidates, Right to Reject.


The pros and cons of the NOTA option that is used in France, Belgium, Brazil, Chile and Bangladesh, provisions regarding the Right to Reject in Canada are discussed at length. Compulsory Voting, relevance of First-past-the-post and Proportional Representation systems also figure.


The concluding chapter Reflections and afterthoughts has an interesting quote from Sir Winston Churchill –“Democracy is the worst form of government, except all those other forms that have been tried’ and failed.” This has his reflections on Trust in public institutions, Tally of the tainted, Enriching the rich, Mother of all corruption, Good Elections Flawed Democracy, Fifty plus one, his views on compulsory voting, Funereal or Festival, Yes, We Can, Is AAP Movement Democracy or Anarchy?


Overall, this book is a must read for all Indians to understand, from a man who has conducted this greatest show, what it means to participate in the election process. They will then see that being part of democratic India is not a right or a duty but a privilege and hopefully we will see even larger numbers of people coming out to vote in the future.

An Undocumented Wonder

Author: Dr SY Quraishi
Publisher: Rainlight Rupa,
434 pages
Price: Rs795 

(Nagesh Kini is a Mumbai-based chartered accountant turned concerned citizen activist.)


Economy & Nation Exclusive
Jignesh Shah arrested in Rs5,600 crore NSEL scam

The EOW of Mumbai Police arrested Financial Technologies' promoter Jignesh Shah in the Rs5,600 crore NSEL scam

The economic offences wing (EOW) of Mumbai police on Wednesday arrested Jignesh Shah, chairman and managing director of Financial Technologies (India) Ltd (FTIL) in the Rs5,600 crore National Spot Exchange Ltd (NSEL).


NSEL, promoted by Shah-led Financial Technologies group, is already being probed by various other regulators and investigative agencies with regard to a Rs5,600-crore payment default and persistent violations of various regulations.


Last year in September, EOW of Mumbai police searched 184 places across 16 states, including residences of Jignesh Shah, and Joseph Massey, the then managing director and chief executive of MCX-SX.


In December, commodities market regulator Forward Markets Commission (FMC), has termed Shah, FTIL and two other directors, Massey and Shreekant Javalgekar as 'unfit' to run Multi Commodity Exchange of India Ltd (MCX), the country's largest commodity exchange. The commodity market regulator also held FTIL and its directors, Shah, Joseph Massey and Shreekant Javalgekar responsible for Rs5,500 crore payment crisis at NSEL.


FMC had said, Shah was practically the 'highest beneficiary' of the fraud perpetrated at the NSEL Exchange. "It is because of the huge profit of Rs125 crore (approx.) earned by NSEL during FY 2012-13 that the value of the shares of Jignesh Shah in FTIL shot up manifold giving him the benefit of a spectacular market capitalization of his investment in FTIL running into thousands of crore of rupees. Jignesh Shah, as the promoter of FTIL and NSEL has misused his position to create a confidence in the minds of the participants regarding the legitimacy of the business and its operations in the exchange platform of NSEL. Shah consciously used his position to represent to the public at large about the attractive features of the contracts being traded on NSEL platform while taking no steps to introduce any effective governance mechanism including risk management, due diligence, assured collaterals etc., to ensure the legitimacy of his claims and to prevent frauds," the Commission had said in the order.


On 31 October 2013, Shah had resigned as non-executive vice-chairman of MCX after sector regulator FMC issued a notice to him and FTIL. MCX fiasco was due to the imposition of commodity transaction tax (CTT) applied in July and recent payment crisis at NSEL.


His statement issued at that time showed that he thinks he had lost control over the company forever. "The NSEL crisis has destroyed everything that I have worked hard to build over past two decades. My loss is not just financial but what has hurt me and my family most is the concerted effort to destroy my credibility and trust for which I have lived by all my life," he had said.


Here are notable facts about the mismanagement and poor governance of NSEL mentioned by FMC…

i. NSEL conducted its business not in accordance with the conditions stipulated in the notification dated 5 June 2007 granting it exemption from the operation of FCRA, 1952, with regard to the one-day forward contracts to be traded on its exchange platform. As noted in the show cause notice (SCN), the condition of ‘no short-sell’ and ‘compulsory delivery of outstanding position at the end of the day’ stipulated in the notification were violated by NSEL.

ii. NSEL Board allowed launching of paired back-to-back contracts on its exchange platform comprising a short-term buy contract (T+2 settlement) and a long-term sell contract (T+25 settlement) with pre-determined price and profit for the buyer and seller, which violated the very concept of spot market of commodities and the transactions ultimately were in the nature of financial transactions.

iii. The Directorate of Marketing, Government of Maharashtra passed an order on 26 December 2012 suspending the private market licence issued to NSEL with directions to them to ensure transparency in the transactions on the electronic platform.

iv. NSEL suspended abruptly its trading in all the contracts (except e-Series contract) leaving thereby an outstanding default of Rs5,500 crore (approx.) from a group of 24 borrowers with poor credentials who owed the money to a large multitude of over 13,000 investors.

v. The management of NSEL provided inconsistent figures about the fund availability in Settlement Guarantee Fund which, from a stated position of Rs738.55 crore on 1 August 2013 came down to a figure of only Rs62 crore on 4 August 2013.

vi. Within a few weeks, 19 out of 24 borrowers were declared defaulters and the management had no risk management tools at their disposal to recover any money from them.

vii. The management of the NSEL formulated a Settlement Plan to pay to the investors through equated weekly disbursements of Rs174.72 crore for 30 weeks, but till date have not been able to meet the said target for any single week.

viii. The NSEL engaged a collateral management firm, named SGS to make a detailed assessment of the stock of commodities lying in their accredited warehouses. As mentioned at paragraph No.7.3 of the SCN, SGS has pointed out in their interim report that from their inspection of 16 warehouses, physical verification revealed that as against stock of Rs2,389.36 crore supposed to be lying in these warehouses as per the records, stock worth only Rs358 crore was found. Moreover, the inspecting firm was prevented from inspecting 22 warehouses despite the fact that they were engaged by NSEL for carrying out inspection on their own stock lying in their accredited warehouses. The survey conducted by the Income -tax Department on 23 May 2013 at ARK Imports Ltd, a member of NSEL, wherein gross discrepancies in the stock of raw wool was found, has also been set out at paragraph no.7.4 of the SCN.

ix. The Commission directed NSEL to engage a forensic auditor to inspect their books of accounts, records maintenance etc. Accordingly, NSEL engaged a forensic auditing firm, Grant Thornton who have submitted their report to NSEL. From the report of the forensic auditor and other information collected by the Commission in course of dealing with NSEL, various facts about lack of due diligence and control over warehouses, gross irregularities in risk management by allowing repeated defaulters to trade without margin money or collaterals, poor clearing and settlement system, mis-utilisation of margin utilisation account, financing of defaulters by NSEL, allowing related party like IBMA (a group company) to trade on the platform of NSEL and MCX etc., have come to the knowledge of the Commission which have been elaborately addressed at paragraph 6 to 8 of the SCN issued to FTIL and the other three directors.

x. The Board of NSEL failed to constitute 9 out of 10 committees mandated under the rules and bye-laws of the Company which included important Committees such as Vigilance Committee, the Clearing House Committee and the Trading Committee etc., as a result of which there was absolutely no oversight over the risk management system in place at NSEL.



Shirish Sadanand Shanbhag

3 years ago

Highly informative, painstackingly well documented storey by Moneylife Foundation, of the scandel at FTIL & NSEL by Jignesh Shah.

jaideep shirali

3 years ago

The NSEL story shows how easily and casually the Govt can look the other way, when something illegal is going on under its nose. An illegal building comes up, just behind the BMC HQ and in front of the Police Commissioner's office at Crawford Mkt, supposedly without either's knowledge. Benami multiple share applications through NSDL demat accounts, insider trading, the list goes on. In case of NSEL, the Govt, through its numerous agencies, said first that no specific agency regulated NSEL, FMC was later brought into the picture. Mr. Chidambaram behaved as if nothing had happened, maybe no minister had lost money in NSEL. NSEL will not be the last scam, provided regulators constitute persons who understand problems from the investor's or customer's point of view. Till that happens, the government will remain mute spectators to scams that come and go, nobody will be punished, because the Govt is only keen to save somebody who was sleeping on the job.


3 years ago

Jignesh Shah is a Great Magicean

Sanjay M Shah

3 years ago


Sensex, Nifty again trend lower: Wednesday closing report

Nifty having fallen below 6,790, its recent uptrend is broken for now

The Indian market on Wednesday gave up more than the gains it made in the past two days of trading. The indices opened almost at the same level as Tuesday's closing, after which it traded in the green for a few minutes, when it hit its day’s high. Soon the benchmark indices started trending lower and hit their day’s low in the last few minutes of the trading session. The S&P BSE 30-share Sensex closed at its lowest since 16 April 2014 while NSE 50-share Nifty closed at its lowest since 27 March 2014.

Sensex opened at 22,489 while Nifty opened at 6,709. Sensex hit a high of 22,533 while Nifty hit a high of 6,719. The Sensex went lower to hit 22,286 and close at 22,324 (down 185 points or 0.82%) while Nifty hit a low of 6,643 and closed at 6,653 (down 63 points or 0.93%). The NSE recorded a higher volume of 63.90 crore shares. India VIX today rose 1.04% to 33.6125.

NTPC came up as top gainer in the Sensex 30 pack. The Supreme Court has allowed NTPC to cut supplies to Delhi's power distribution companies (discoms) BSES Yamuna Power and BSES Rajdhani Power, if they do not clear outstanding bills of Rs700 crore by the end of this month. The discoms have so far refused to pay the bills to NTPC and other suppliers, arguing that they had no money because of inadequate tariffs. The discoms have argued that they need to recover Rs21,701 crore in past costs from Delhi's consumers.

Infosys was the top loser in the Sensex 30 stock. UBS has given a 'sell' call to Infosys after downgrading the stock.

IRB Infrastructure was the top gainer in the ‘A’ group on the BSE. IRB Infrastructure informed BSE that the company has emerged as a selected bidder and received letter of award from NHAI for the project of Four Laning of Kaithal - Rajasthan Border Section of NH-152/65. The estimated project cost is approximately Rs2,300 crore.

Allahabad Bank posted a net profit of Rs157.75 crore for the quarter ended March 31, 2014 as compared to Rs126.15 crore for the quarter ended March 31, 2013. Total income has increased from Rs 4,776.90 crore for the quarter ended March 31, 2013 to Rs5,237.68 crore for the quarter ended March 31, 2014.  However, the annual net profit fell marginally. The stock was the top loser in the ‘A’ group on the BSE.

US indices closed in the negative on Tuesday. The US trade deficit narrowed in March as exports grew by the most in nine months, the Commerce Department reported on Tuesday. A Purchasing Managers' Index for services in the euro region climbed to 53.1 in April from 52.2 in March, Markit Economics said.

US Federal Reserve Chairwoman Janet Yellen's congressional testimony is scheduled later today.

Except for Jakarta Composite (0.57%) and NZSE 50 (0.27%) all the other Asian indices closed in the negative. Nikkei 225 (2.93%) was the top loser.

A services index in China from HSBC Holdings Plc and Markit Economics dropped to 51.4 in April from 51.9 in the previous month.

Most members of the Bank of Japan agreed to keep easing monetary policy until inflation stabilizes at 2%, according to minutes of the April 7-8 policy meeting released today, 7 May 2014.

The global economy will strengthen over the coming two years, but urgent action is still required to further reduce unemployment and address other legacies from the crisis, according to the OECD's latest Economic Outlook. The BRICS (Brazil, China, India, Indonesia, Russia and South Africa) are projected to see GDP growth of 5.3% this year on average and 5.7% in 2015. China will again have the fastest growth among these countries, with rates just below 7.5% in 2014 and 2015.

European indices were showing mixed performance while US Futures were trading in the green.


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