Citizens' Issues
Forget Pakistan, corruption is bleeding India by a thousand cuts

The enemy within our country is graft; even the armed forces, the true backbone of our country, are now simmering with discontent. The time to stem the rot is now 

'Breaking the enemy's will to fight' has been a military doctrine practised by warring nations for centuries. The mechanics of achieving such strategic long-term goals are always covert, indirect and innocuously camouflaged to be inserted into the mainstream of the targeted nation.

In Indo-Pak relations, it is particularly significant because having suffered successive defeats and even its dismemberment at India's hands in its short history, Pakistan's leadership, especially the military, has realised that the option of waging and winning a conventional military war against India will be disastrous. Even covert attempts by Pakistan to encroach upon and occupy mountain heights in Kargil in 1999 were not only beaten back by the Indian Army but also invited widespread international condemnation. This adverse equation can, however, change to Pakistan's advantage if India's fighting potential and will is weakened by different means from within.  Fortunately for Pakistan, this is now happening!

State of Defence Preparedness

Discontent in India's armed forces—among the top five largest standing armies in the world-has been growing over the past few years. Reassuring explanations of the top brass notwithstanding, the malaise has amply manifested itself in the increasing cases of suicide, fratricide and indiscipline at junior levels, and officers of 'colonel' level rank who constitute the spine of our armed forces, are queuing up for voluntary retirement—despite the 6th Pay Commission's dubious largesse. There is still a deficiency of about 15,000 officers in the Armed Forces. Officers. Even the 2.3-million strong military pensioners feel cheated by the corruption-ridden dispensation. The resentment is so intense that they are returning their medals en masse and joining Anna Hazare and other satyagrahis in their crusade against corruption and resultant administrative callousness all over. A long held military suspicion now turning into belief is that the top political leadership and bureaucracy are too busy in their self-serving pursuits to think of vital national interests.  

At a time when high-tech Indian brains are in the forefront everywhere in the world; Indian industry tycoons have acquired the world's multi-billion dollar companies; and indigenous manufacturing infrastructure is providing our exports a competitive edge, our own Armed Forces remain humbly dependent on imports for their major war-like requirements.  

Who is perpetuating this dependence on others? Obviously, those who have tasted blood in the kickbacks in military hardware deals and those who wish to break India's will to fight. Being overly dependent on other countries for crucial war-like equipment, India is compromising its sovereignty and freedom to express free opinions in the international arena even though it aspires for a global role. In times of war, this 'dependence' on others can become a serious handicap because the 'providers' can wrest strategic initiatives and coerce us to fight or negotiate on their terms.  

Enviably, tiny countries like Israel have developed their defence industry to such an extent that besides enhancing their self-reliance, it is also raking in sizeable revenue and expanding its area of influence through crucial exports.

A sizeable part of India's military hardware today comes from Israel too. An overview of 'powerful nations' of the world reveals that their power is not the economy (think OPEC, the oil cartel), it is the military (US). It surprises no one that despite a devastating economy meltdown, thanks to her military might, the United States has continued to be No 1 Power in the world.

Dance of Democracy!

Unabated spate of scams, each bigger than the previous, inundating the media everyday, reinforces this belief. The initial list of 154 tainted MPs in the present Lok Sabha has been expanding and now has more high profile additions with the likes of Raja, Kalmadi and Kanimozhi lodged in Tihar jail along with their corporate cronies and senior bureaucrats. Some more from the 'honest' Prime Minister's Cabinet appear to be in the pipeline and may join them in due course. The labyrinthine judicial process, however, helps to unite all the stakeholders in crime who cobble up a formidable nexus. Little wonder that we have not yet seen a powerful politician or a top bureaucrat finally convicted in our post-Independence history.

Vital issues like national security, military preparedness and defence allocations are glossed over in Parliament without attracting any serious debate or proposals from the Treasury and Opposition benches alike. Issues that cannot be used as tools to score mileage over opponents-party or leader—do not evoke any interest in our political circles unless an issue holds out promise to gain from, like the Congress overdrive to win over the agitating farmers UP's Bhatta Pasraul by blowing up non-issues through dangerous lies only to be later refuted by the National Human Rights Commission.

In spite of the Election Commission's efforts, our electoral process has got so vitiated that we end up having 'elected representatives' with less votes cast in favour and more against. Also, thanks to money and muscle power, elections are highly risky and unaffordable if you are an unsponsored contestant. It is simply logical that disillusioned and frustrated, the masses are seeking alternatives to farcical democracy by aligning with anybody who holds promise to deliver them from the malaise of bad governance.

Little wonder that radical crusades like the Maoist/Naxalite movements today hold sway over 40% of India. And the violent threat is only beginning but menacingly expanding and making inroads into newer areas from West Bengal to Andhra Pradesh and from Chhattisgarh to Maharashtra. Lessons learnt from terrorism in J&K and insurgent movements in the North-East have gone unheeded. By now, we should know it too well that growing alienation of people from their own governments holds an open invitation to our external adversaries who are ever ready to invest in terms of finance, material (weapons, accessories, explosives etc) and ideology, and push their war effort through eager proxies already up against their own government.  

Strategic Bankruptcy

In recent times, the government has appeared running from pillar to post, reacting on a crisis-to-crisis basis with no long-term strategy to solve existing problems or to envision and forestall future threats. Bankruptcy of statesmanship stands exposed through the Government's jittery reactions, be it the incongruent manner in which its top ministers and Delhi Police dealt with a yoga guru and his peaceful gathering at Delhi's Ramleela ground or the way they first bend to form a joint committee and invite Anna Hazare to work out an effective Lokpal Bill, bestowing co-chairmanship upon the Civil Society's nominee and later questioning Team Hazare's representative credentials!

While there is a stubborn stand taken by the government representatives at the joint committee against inclusion of the Prime Minister in the Lokpal's jurisdiction, PM Manmohan Singh has expressed his willingness and no-objection to such inclusion. Emerging from his self-induced hibernation, the PM, during his interaction with the media, expressed his helplessness and pitiably confessed that he did not have a 'magic wand to control prices'. On the issue of Lokpal, he said, "Lokpal is no panacea to prevent corruption."

Contradictory statements and confessions of helplessness emanating from the highest echelons of government only betray the chaos and disarray within. The government is floundering to come out of the deluge of scams and has little time to think of bigger issues like national security, public welfare and holistic development. Obviously, people's confidence in the system of governance is waning. {break}
Emasculation of the Nation's Moral Fibre

It is not for nothing that Pakistan is pumping tonnes of fake currency notes into India. Rampant corruption in India provides the enemy an ideal environment to insidiously infect and weaken the nerves of our nation. Obviously, it is so much easier for the enemy to infiltrate deep into the systemic government network through pliable power centres and influential lobbyists willing to work at a price. The enormous size of black money stock-piled outside the country has every potential to be utilised to influence government decisions to serve vested interests at the cost of our national interest. Inside the haloed ambiance of Parliament, our 'honourable' MPs have betrayed their fallibility for cash on more occasions than one whether it was to raise 'paid queries' or to sell their vote to keep a weak government from falling in a no-confidence motion. There is no dearth of money that can be mobilised to win over individuals, parties and organisations with a view to emasculating the nation's moral fibre so completely that it shall slowly but surely disintegrate and wither.

In a Parliamentary system where Madhu Koda (of the multi-crore scam fame) became Chief Minister of Jharkhand, despite being a lone MLA without a Party, only worse can be feared if the likes of him gang up to form a pressure group in the Lok Sabha where he is one of the 154 tainted MPs today. He may well be aspiring to be India's Prime Minister one day.

Terrorists, communal enthusiasts and shady businessmen from within and enemies from outside would be more than willing to invest in helping pliable leaders and officials to redeem their aspirations. As for the bureaucracy, corruption has become so risk-free that complaints of malfeasance no longer deter anyone even as career progresses unaffected despite adverse remarks in the service books or pending enquiries. As confessed by the sacked CVC PJ Thomas in his affidavit filed in the Supreme Court, all the nine senior IAS officers empanelled with him had a tainted past and yet were approved to hold top government positions as secretaries. With the political leadership is so greedy and bureaucracy so pliable, contracts and licenses can be procured even for the ineligible provided you are prepared to pay handsomely as has been seen in the 2G spectrum scams and the CWG deals.

If they could manipulate and sway Indian government decisions to have their way, will any cost be too much for Pakistan or China vis-à-vis expenses and stakes involved in the option for war?

In a micro-chipped cross-culture environment when the younger generation watches corrupt officers and politicians prospering through crime with impunity, the evil of corruption turns motivator and inspires many more to join in.  

Efficiency goes for a toss, yielding way to callous performance as is manifestly evident in the performance of our police and civil administration all over the country. Honest and efficient officers are exceptionally rare-and, hunted and harassed for their integrity, they are the endangered category on the verge of extinction.

This is an era of paid editorials, paid justice, paid 'darshan' in temples, paid 'ghost' employees and so on. This is how corruption destroys the character of a nation and society!  

Home-grown Security Risks

With dhan-kubers like Hassan Ali at home, why will our terrorists depend only on Pakistan now for funding and support? Mentors and fund providers are readily available indigenously aplenty. Dawood's investments in Bollywood and other businesses like airlines, telecom, cricket and benami/pseudonym deals is no secret. Even Judges have found corruption a lucrative pursuit. There have been cases of privileged clients extracting judgements made to order from courts and we have a horde of tainted judges—including a retired CJI—who shamelessly cast aside their honour and dignity for an easy buck. With the character of our leaders, bureaucrats and judges having degenerated to these levels, on what grounds do we believe that they will protect and promote our national interest?  

Let us not be fooled by the much-hyped economy boom. Wealth, like beauty, in the absence of credible power to defend and retaliate, can be a serious liability that could tempt the greedy and leering goons. Is it not already happening in the oil-rich countries? Divisive forces within are already taking their toll in India too. For instance, caste-based reservation—initially conceived as a social leveller—has led to infusing more bitterness in society, driving even the higher castes to agitate and demand their pound of flesh in the loot.


A new phase of 'future wars' is lurking around. To start with, these future wars in our context might be unleashed clandestinely through benign-looking social organisations and schemes patronised by the powerful -you know who! The current Indian scenario is just perfect for the enemy to deliver the final blow. The WikiLeaks exposés have already shown us how some foreign powers and lobbyists have coerced the Indian government to accept their diktats as to who should be assigned particular portfolios in the Central Cabinet and who should be kept out! Are alien powers already ruling India through remote control?   

People know that even a strong Lokpal will not be a panacea to wipe out corruption instantly. Yet, an effective Lokpal is the first but most needed step to stem the rot. Comprehensive reforms that can make civil administration, police and judiciary accountable, people-friendly and responsive, have been lip-serviced enough. So are electoral reforms and the much-awaited modernisation of our armed forces.

We have delayed action enough and must act now before it is too late.  

(The writer is a military veteran who commanded an Infantry battalion with many successes in counter-terrorist operations. He was also actively involved in numerous high-risk operations as second-in-command of the elite 51 Special Action Group of the National Security Guard (NSG). He conducts leadership training and is the author of two bestsellers on leadership development that have also been translated into foreign languages).



MK Gupta

5 years ago

Tira T has done well to draw our attention to the height of corruption at the highest level of govt. resulting in the harassment and torture of a govt. servant thankfully exposed by the court. Is it not imperative that the govt. makes a publicapology to the officer and penalise those responsible for the whole series of continuous injustice?

Tira T

5 years ago

Here is a blatant example of corruption at the highest level, as reported i the press:

HT, 19 Sept., 2011I&B ministry penalised for harassment of official
Satya Prakash, Hindustan Times
New Delhi, September 19, 2011
The Central Administrative Tribunal has come to the rescue of a senior song and drama division official harassed by his superiors, who dragged him into “avoidable litigation” for years. Such was the bias against song and drama division director Prem Matiyani that his department seniors
even passed a punishment order against him on the day of his retirement on June 30, 2010 reducing his pay by one stage with retrospective effect. A bench of ACT chairman Justice VK Bali and member Veena Chhotray on September 16, 2011 set aside the order terming it “arbitrary” and “patently illegal” and made it clear that he would be entitled to all consequential benefits.
“We do not find any justification for reducing the pay of an employee from a retrospective date. Surely, when the order was passed on the very day of retirement of the applicant, and the respondents (information and broadcasting ministry) may not have been able to pass such order on that day, as surely after that day the applicant would not have any pay and would have only pension, the respondents chose to make the penalty applicable from a date earlier to the said date. They appear to have devised a way to somehow or the other punish the applicant (Matiyani),” the bench said.
It ordered the ministry to pay R25,000 as cost of litigation to Matiyani for having dragged him “in avoidable litigation, illegally, arbitrarily and without a semblance of justification”.
The CAT praised Matiyani’s “resolve to fight injustice” and “tenacity” that sustained him, saying “a normal person may have been buried under the spate of adverse and wholly illegal decisions taken against him”.
Matiyani’s ordeal started on September 30, 2005 when the CBI recommended major penalty proceedings in connection with the appointment of one Asha Sanwal in Shimla office under Scheduled Tribe category, without there being any vacancy under ST vacancy.
On the basis of some pseudonymous complaints, it was alleged that while posted and functioning as director, song and drama division, New Delhi during the period 1998-2000, Matiyani “failed to maintain absolute integrity and devotion to duty and acted in a manner unbecoming of a government servant”. Accordingly, he was placed under suspension.
However, on April 11, 2008, a review committee recommended revocation of Matiyani’s suspension. But despite that he was not reinstated. In the first instance, the HC dismissed Matiayani’s plea but later on August 4, 2008 granted him liberty to challenge the suspension order.
“The way and manner in which the applicant (Matiyani) has been treated does leave us with an undeniable impression that there was an overall bias on the part of the department against the applicant,” CAT said.

nagesh kini

5 years ago


Shadi Katyal

5 years ago

The very word corruption has become a part of our culture and maybe even genes. We can talk of it and look for some Messiah like Baba etc. while doing nothing about it. we are told this is how things work in India.
The armed forces have a head who either lied or trying to get his age changed so he can retire later. The first question is thatiof he lied when he joined the army why should he not be stripped of his rank and court martial but he being head can roll others head if any one try. So let us hear about this corruption or does any exchange of money and property is counted as corruption?
India has failed to manufacture any equipment as she wants to reinvent the wheel and thus depends on foreign buying which is again very lucrative to those involved as they get kick back.Take case of Bofore bought through an agent who also was paid and many others benefited but instead of correcting the issue we cut our nose to spite and thus have many guns rotting and no ammunition to use.during Kargil India bought from S.Africa at much higher prices than Sweden the manufacturer.
Similarly we bought third rate equipment from Russia at many times higher prices than other western nations as kick back was good. Take MIG20's but no training equipment. The recent fiasco of burnt Carrier ship given free but will still cost 3.5 Billions to equip which is twice more than original contract.
India unfortunately has been run like a private estate and due to non accountability and any transparency it has become part of true corruption.
Same is true of all PSU whether it is STC,MMTC,SAIL,AIR INDIA, Power grids etc.
One wonders why have we lost any pride and self respect when it comes to monetary gains?Where are our ethics and why are we scared to produce quality good.roads,military equipment etc.Why we feel happy to cheat and look for shortcuts????
This is the biggest corruption of the nation and unless we can grow up to have an ethical back bone , nothing is going to change.CHALTZA HAI BHAI



In Reply to Shadi Katyal 5 years ago

You have made some baseless remarks about the Army Chief's regarding the issue of his age. Obviously you have not bothered to acquaint yourself with the mass of evidence on the net which clearly vindicates the stand he has taken.

shadi katyal

In Reply to objctiveindian 5 years ago

If my remarks are baseless and he is innocent than why all this fuss about his age???Who started it and WHY?
It is easy to coverup as we do in every possible way and truth is an enigma to all of us.
Kindly tell me why was this case brought to press and public if he was not guilty? We heard nothing so far of any other officer???


In Reply to shadi katyal 5 years ago

Since you prefer to remain ill-informed there is no point in pursuing the matter.Ignorance is bliss-but a little learning is a dangerous thing. As far as the press and media is concerned, they are only too keen to sully anyone's image for more TRPS and circulation, facts be damned.

Sancia Sequeira

5 years ago

Only when the 'war against corruption' by civil society wins against the 'war against the people' initiated by the Govt, will we be able to purge our society of these Ali Babus. And we will be vindicated when all our money that has been stashed away is brought back into the exchequer. This will herald the birth of a new dawn.

nagesh kini

5 years ago

Response to Sukumaram
Just await the follow up post SC verdict on Ram Jethmalani/KVM Pai PIL on Swiss bank repatriation.
Many generation of Indians may not have to pay taxes.
It's Insaaha Allah!
Just wait for that day that may not be far away and watch!


5 years ago

why not start a 'tax math bharo' aandolan...people will be happy to support such clue how it will end...:-)

Hitesh Jha

5 years ago

An excellent exposition on the worst enemy hiding inside, that is corruption. Whereas we have wherewithall to fight and deal with China or Pakistan, we do not yet have the fair idea of the size of the enemy (corruption) within because every new exposure highlights a new dimension which seems to be only growing. Every thinking Indian must wake up and unite against government corruption.

Adi Daruwalla

5 years ago

Corruption has reached from TOP to BOTTOM in government and also in PRIVATE SECTOR. It has gone from CEO down to chaprasi and toilet cleaners also. The most unfortunate part is that those who protect the nation from enemies they are also not spared. The equipments used by army, there have been unscrupulous deals there also, risking the lives of those who protect us. Every man has a price and two wrongs will not make a right. If it is not stopped now, we will see something worse than the holocaust. The nation is in limbo, especially those who can take action seem to be in total paralysis. Anyone who takes a stand is threatened with his life. What do you want the youth of the nation to see, in the future years dead bodies across India ?????


5 years ago

I agree and support 110% to all points analysed and state by the author-i would just like to add few from my side-
the biggest hurdle in democratic society like ours(which is not true democracy but more like a anarchy),is that political parties try to do anything to get votes of influencing sectors of a particular constituecy leaving aside the basic values-tickets are these days SOLD by parties which have some influence-this SELLING of tickets to criminals or corporate agents is done by congress,BJP,BSP,SP or we can name many more-
can we expect anything good from these businessmen who have joined politics for making money?
i personally do not believe in present form of democracy which we are living now-this is not democraccy-it is directionless Anarchy-
to me a better option is a dictatorship like china or russia where corrupt people are punished severly and such ahrsh punishement keeps corruption level lower then our anarchy and atleast people know well whom they have to address their problems-even old time kingdoms were far better managed then today's system.People atleast knew who ruled the state-many good kings are even more respected today then these rascals(ministers-i should say),many kings used to visit their PRAJA(masses)in secret dress to findout what way their staff was doing,
Today these rascals are not available in full day light -and wherever they go-they are surrounded by commandos who treat people like everyone is a terrorist,what to expect from these rascals-
so finally i believe we will not progress as a nation if we live in this anarchy-we need TOUGH rules,tough punishement for corruption and treat all citizens equally without favour of caste,religion,language or nepotism,
at the same time we need to build a society which believes in scintific approach for solving matters-so that we can become self-reliant for our all needs(as pointed by writer for deffence equipments).it is a SHAME for this country which has FAILED to built its own fighter aircraft or main battle tank till today besides claiming itself to be very intelligent brains-(IT IS JUST SHAME FOR ALL INDIANS).

A Banerjee

5 years ago

Excellent and most timely article. And the author is absolutely right in his observations. Corruption, and not casteism or communalism which is India's greatest and the most dangereous enemy. And not one single political party is prepared to accept this hard fact in their self-interest as the bane of India's electoral structure is based on the corruption-generated funds. The bureaucracy is, as is bound to happen in such situations, all powerful, making the politicians dance to their tunes with the latter having no courage of conviction to annoy this class. There is no leader worth the name to stand up against the family rule and the all-pervading corrupt system. Political expediency and not moral and ethical convictions rules the polity, while the number of people being denied the fruits of the development is increasing. One hopes that some people--not the self-appointed "Civil" society guardians--are able to see the dangers and steer the nation clear of the possible damage.

kalyan raman

5 years ago

citizenindia he says... but the comment makes you wonder which country he comes from... dont you pay a bribe for almost everything in India? dont you free frustrated at how laws and rules are so opaque that any govt or police official can harass you unless you pay?
If you don't experience this.... please tell us where and how you live. What does the reporting of large scale loot have to do with media TRPs. For god sake, what does this website where you have chosen to post your comment have to do with TRPs???

nagesh kini

5 years ago

The armed forces personnel once considered holy cows, like any citizens have succumbed to the curse of corruption. Adarsh has two army and one navy chief claiming to be "Kargil heroes", the Kargil coffins, Sukna land deal, adulterating petrol army tankers going to Kargil, clothing, foot wear and victuals at Sianchean and total lack of documentation for army lands. One Minister for Defence wanted to open up cantonment land for sale.
Only silver lining is that the present Minister is above board and has committed to free his ministry and the forces. May God bless him! All the best to you Mr. Anthony!

Ghulam Muhammed

5 years ago

The writer is using the value system of Western warmongering nation, to hold that army is the backbone of India. The people are the backbone of India. This country belongs to its people and our people do not have the kind of hegemonic and warmongering ethos that pumps the adrenaline in western countries' economies. Our is for our defence. Period. Our economy has to follow a different pattern that the military-industrial model that now has lost all its steam in the West given fruitless armed misadventures that brought only bankcruptcies and widespread unemployment. We should build up over economy on more stable pattern and keep our people in front rather than our politicians and army which have to be subservient to the well-being of our citizenry.


5 years ago

i dont completely agree. media news on corruption is also about TRPs. It makes good economic sense. not that india suddenly became scma ridden. we are openly confronting it thanks to a revitalised judiciary and a stable govt although mediqa would like you to believe govt will fall. as an ordinary citizen. corruption i day to day activities is going down. thanks to e governance. Rural india is doing well . We need to move to state funded elections , auction of all scarce resources, reform judiciary to speed up justice delivery, strictly curtail discretionary powers of ministers and improve delivery mechanisms through uid. a large part of corruption will be taken care off. that can only happen f we allow a stable govt as work is in progress in abv matters at advance stages. the credibilty of all is equally low in the eyes of those who just hate the word politicians. but one must understand that there are good people but its not like they can unilaterally decide on things. there are people who are democratically elected and you have to give them their space in multi party democracy . it is human nature to try and find a way around laws. so the system needs to be re caliberated continiously in light of new challenges. india has been stuck in the 272 phenomena for the past 2 decades when corruption figures have sky rocketed. its not abt bjp or congress or 3rd front. its about revamping systems to plug leakages.
and media is largely sensationalising things. bat for transparency in every walk of life. media , judiciary or politics. amrecians and europeans officially pay for 'scam' of their bankers and administrators through bailouts.... tax payer money. thats also a scam. media isnt using the word scam. if you can put a few more bigwigs in tihar and keep them in . it will be the biggest eent in indian history inc independence and the best detterent to corruption. best of luck manmohanji. with the limited mandate , you can buy peace with some to round up the others . i understand your predicament. ignore the media. they only want breaking news. they will forget you if prince falls into an open drain....

Govt approves Cairn-Vedanta deal; but with riders

The Cabinet Committee on Economic Affairs approved the sale with preconditions that Cairn or its successor has to treat royalty payments on Rajasthan oilfields as recoverable from oil sales. Also, Cairn India will have to withdraw the arbitration it has initiated disputing its liability to pay Rs2,500 per tonne oil cess on its 70% share in the fields

New Delhi: More than 10 months after the $9.6 billion-deal was first struck, the Indian government on Thursday gave its approval to Cairn Energy for selling its Indian unit to Vedanta Resources, subject to the new owner agreeing to share royalty and pay oil cess on mainstay Rajasthan oilfields, reports PTI.

The Cabinet Committee on Economic Affairs (CCEA) headed by prime minister Manmohan Singh approved the sale with the preconditions that Cairn or its successor has to treat royalty payments on Rajasthan oilfields as recoverable from oil sales, oil minister S Jaipal Reddy told reporters here.

Also, Cairn India will have to withdraw the arbitration it has initiated disputing its liability to pay Rs2,500 per tonne oil cess on its 70% share in the fields.

Besides, the approval will be subject to ONGC, which has a stake in all the three oil and gas producing properties and five out of seven exploration assets of Cairn India, waiving its pre-emption rights, which Mr Reddy termed as the partner’s no-objection certificate (NOC).

He said the deal would also need the security clearance.

“The CCEA endorsed the recommendation of a Group of Ministers (GoM) headed by finance minister Pranab Mukherjee, which was asked to go into the transaction,” he said.

Asked if the report of the Serious Fraud Investigation Office (SFIO), which had found Vedanta group firm Sesa Goa guilty of misconduct, would in anyway affect the government approval, Mr Reddy said he has communicated the decision taken by the CCEA.

Refusing to say if the SFIO report was discussed, he said “The CCEA records decision not the thoughts.”

Commenting on the development, finance minister Pranab Mukherjee said the government’s decision to clear the Cairn-Vedanta deal will send good signals to foreign investors.

Mr Mukherjee said the Cabinet cleared the recommendations on the deal given by a ministerial panel headed by him and the decision would “create appropriate sentiments in the market”.

Approval has been delayed over royalty payments that ONGC makes on behalf of Cairn India in Rajasthan oilfields.

ONGC owns a 30% stake in Cairn India’s Rajasthan oil field but pays the entire royalty on production under the government’s previous policy of giving discounts to attract investors.

ONGC had, much before the Cairn-Vedanta deal was announced, cited contractual provisions to demand that the royalty to be recovered as a cost from revenue.

The state-owned firm maintained that as a partner it has pre-emption or right of first refusal and the deal should not proceed without its concurrence, Mr Reddy said.

Both Cairn and Vedanta disputed royalty being made cost recoverable as it would dent Cairn India profits. They also opposed the need for partner consent for the transaction.

The GoM held that ONGC’s views were correct and recommended to the Cabinet that the deal be approved if Cairn or its successor agreeing to adding royalty to the project cost and recovered from oil sales besides agreeing to pay its share of Rs2,500 per tonne oil cess.

Sensing the mood, Cairn lowered the price it is demanding from Vedanta to make up for reduced profitability on acceptance of the preconditions. It removed a non-compete provision and related non-compete fee of Rs50 per share.

Vedanta’s total payment at the reduced price of Rs355 per share for a 40% stake in Cairn India will now be $6.02 billion instead of $6.84 billion previously.

The Cairn India stock was trading 4.01% higher at Rs323.20 per share on the Bombay Stock Exchange (BSE) in late morning trade while ONGC rose 1.46% at Rs277.95 apiece on the BSE.


Disclosure of fiduciary information under Sec 8 (1) (e) of the RTI Act: This is the true scope of the exclusion clause

No statutory authority is above the Republic of India. In our democratic setup, the people of India are supreme. The exceptions contained in Section (8) are exceptional pieces of information for which disclosure is not warranted or not desirable for a variety of reasons—but the broad spirit of the RTI Act is full transparency

The RTI Act is one of the rare legislations that empower citizens and bind the bureaucracy. The rest of the laws do exactly the opposite. However, though the purpose of the RTI Act might have been benign, its actual operation continues to be bogged down by the burden of bureaucracy.

At first blush, a PIO (Public Information Officer) hides behind one or the other of the exclusions given under Section (8) of the Act and declines to provide the information under some pretext. The information seeker has the right to file an appeal, but how many people have the time, patience and resources to go for appeals?

Section (8) of the RTI Act enlists some special instances when the authorities are exempted from disclosing information sought for. This includes information that would be prejudicial to national integrity, security or economic interests; would constitute to contempt of court of law; would hamper police investigations; would affect commercial interests like trade secrets; would impede the process of investigation; would affect 'fiduciary' relationships and would harm the person physically.

One of the common exceptions relied upon by the authorities is that the information being sought is with the regulatory agency in "fiduciary relationship" [Sec 8 (1) (e)]. This article explains the meaning of information in fiduciary capacity in Sec. 8 (1) (e) and how, in most cases, the information held by a regulator cannot be said to be information held in a fiduciary capacity.

The plea of fiduciary relationship, advanced by several regulatory bodies has not impressed us. Fiduciary relationship is not to be equated with privacy and confidentiality. It is one where a party stands in a relationship of trust to another party and is generally obliged to protect the interest of the other party.  While entrusting any information under any Act, rule, proceedings etc., that is no agreement between the provider of the information and the regulatory authority that the information provided is to be kept immune from the scrutiny of the public authority. It is to be kept in mind that the RTI Act is premised on disclosure being the norm, and refusal being the exception.


The word "fiduciary" has been defined in Black's Law Dictionary as follows: which reads thus:

    Fiduciary- The term is derived from the Roman Law and means-

As a noun-a person holding the character of a trustee, or a character analogous to that of a trustee, in respect to the trust and confidence involved in it and the scruples of good faith and candor which it requires, or a person having duty created, by his undertaking, to act primarily for another's benefit in matters connected with such undertaking.    

It is evident from the above that a fiduciary is a trustee. In context of information, if the information was reposed with a person for safe-keeping, or a person came to be vested with confidential information, and there is a question of good faith between the information provider or concerned entity, and the person having the information, it can be said that there is a relation of trusteeship.

The Advanced Law Lexicon, 3rd Edition, 2005, defines fiduciary relationship as:

"A relationship in which one person is under a duty to act for the benefit of the other on the matters within the scope of the relationship. Fiduciary relationship usually arises in one of the four situations:

(1) When one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first,
(2) When one person assumes control and responsibility over another,
(3) When one person has a duty to act or give advice to another on matters falling within the scope of the relationship, or
(4) When there is specific relationship that has traditionally been recognised as involving fiduciary duties, as with a lawyer and a client, or a stockbroker and a customer."{break}

The scope of the exemption in Sub-section 8(1) (e) of the RTI Act was discussed by the Supreme Court in CPIO, Supreme Court of India, New Delhi v. Subhash Chandra Agarwal and another (Writ Petition No. 288/200), decided on 2 September 2009. The Apex court held that the purpose of the exemption is to permit screening and preservation of confidential and sensitive information made available due to a fiduciary relationship.


In Bristol & West Building Society vs. Mothew [1998] Ch 1, the term 'fiduciary', was described as under:

"A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence."

It is to be therefore noted that a fiduciary relationship is build up when one acts for another's benefit. However, a public authority such as SEBI (the Securities and Exchange Board of India) cannot be acting primarily for benefit connected with such undertaking but for the benefit of the entire public, i.e., in the public interest.

In Woolf vs. Superior Court (2003) 107, the California Court of Appeals defined 'fiduciary relationship' as:

"Any relationship existing between the parties to the transaction where one of the parties is duty bound to act with utmost good faith for the benefit of the other party. Such a relationship ordinarily arises where confidence is reposed by one person in the integrity of another, and in such a relation the party in whom the confidence is reposed, if he voluntarily accepts or assumes to accept the confidence, can take no advantage from his acts relating to the interests of the other party without the latter's knowledge and consent".

The traditional definition of a 'fiduciary' is a person who occupies a position of trust in relation to someone else, therefore requiring him to act for the latter's benefit within the scope of that relationship. In business or law, we generally mean someone who has specific duties, such as those that attend a particular professional role, e.g., financial analyst or trustee. The information must be given by the holder of information when there is a choice as when a litigant goes to a particular lawyer, or a patient goes to a particular doctor.

It is also necessary that the principal character of the relationship is the trust placed by the provider of information in the person to whom the information is given. An equally important characteristic for the relationship to qualify as a fiduciary relationship is that the provider of information gives the information for using it for the benefit of the giver. All relationships usually have an element of trust, but all of them cannot be classified as fiduciary.


Only that information can be considered as "available to a person in his fiduciary relationship", which is available to a person in an explicit relationship of trust (typically that of a lawyer, medical practitioner or financial advisor), where the trustee has been given access to the information on the mutual understanding that it is solely to be used for protecting the interests or promoting the welfare of the person giving the information, and where the withholding (or not proactively making public) of such information is not contrary to the law of the land.

If information is at all available with a regulatory agency in a fiduciary relationship, there is a reason to withhold the disclosure of the same. However, where information is required by mandate of law to be provided to an authority, it cannot be said that such information is being provided in a fiduciary relationship.

Admittedly, the authorities are not a public library of information, nor are a databank where people deposit information because they love to keep it with them. We have no hesitation to hold that even if there be any agreement—the same cannot be used as a shield to counter a request from any citizen seeking information and the RTI Act would obviously override such an assurance.


It is not necessary in case of RTI applications for a citizen to provide the reason for which the information may be required. If there is information available with an authority covered by the RTI Act, the information available must, on requisition, be made available to a citizen seeking the same. The RTI Act works on the noble principle that statutory authorities seek information and are seized and possessed of information as repositories of public faith. There is no question of hide-and-seek in the functioning of statutory authorities, as what they are—and what powers they enjoy—are for the larger interest of the citizens of India. No statutory authority is above the Republic of India. In the democratic setup in which India functions, the people of India are supreme.

Hence, no statutory authority can pretend to play hide-and-seek with the citizens of the country. The exceptions contained in Section (8) are exceptional pieces of information, for which, disclosure is not warranted or not desirable for a variety of reasons. However, the broad spirit of the RTI Act is full transparency.

It is surprising and unfortunate to find that on being requisitioned, the authorities generally take the ground that the information is being held by them in a fiduciary capacity. A mere cryptic statement that the information is protected under a fiduciary relationship does not do service to the object of the RTI Act at all. As contended above, whatever information the authorities have, it is because they have power to seek the information under the law, rules, and proceedings and not because the information provider provided the information for safe keeping.

(Vinod Kothari is a chartered accountant, trainer and author. He is an expert in such specialised areas of finance as securitisation, asset-based finance, credit derivatives, accounting for derivatives and financial instruments and microfinance. He can be contacted at [email protected]. Visit his financial services website at




5 years ago

Thanks Vinod Sir & Aditi for such a beautiful article... I also share similar views that no statutory authority can be above the Republic of India! All the laws are made by the legislature which comprises of the elected representatives of the people. The legislature derives its legislative powers from the Constitution. The preamble to the Constitution lays down that it is "We the people of India" who has given ourselves this Constitution implying that the ultimate source of the Constitution and all the statutes is we the people of India! Hence legislations like RTI Act cannot be so interpreted that it comes within the trappings of the exceptions provided therein so as to prejudice public interest or the object for which that special law has been made!

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