Citizens' Issues
IAC questions BJP president Gadkari's ‘silence’ over irrigation scam

Instead of raising questions over the Rs72,000 irrigation scam in Maharashtra, the BJP president allegedly told RTI activist Anjali Damania that he and the NCP chief are friends and do business together and often do favours for each other

 

India Against Corruption (IAC) and Right to Information (RTI) activist Anjali Damania have questioned the silence of Bharatiya Janata Party (BJP) president Nitin Gadkari over the Rs72,000 crore irrigation scam in Maharashtra. IAC and Damania alleged that Gadkari refused to rake the issue of irrigation scam saying BJP has good relations with Sharad Pawar, chief of Nationalist Congress Party (NCP), and the role of opposition party is limited to asking questions in the assembly and at best, taking a press conference.

 

“It is shocking state of affairs when all parties are together looting the nation, there are no checks and balances, this whole system have rotted totally! It is time now to lay bare the nexus, to bring down those people who have such scant regard for the sanctity of our democracy. The only glimmer of hope in all this is that Kirit Somaiya has not been stopped from filing his PIL and some better sense seems to have prevailed,” IAC said in a press release.

 

Damania, a member of India Against Corruption (IAC), at a news conference in Mumbai in the presence of Arvind Kejriwal yesterday initially did not name Gadkari only alleging that “a president from the opposition party” from Maharashtra attempted to cover up the irrigation scam. Later, she named the BJP president and said she has met him thrice.

 

Damania had alleged that when she approached Gadkari to pursue the case against NCP leaders involved in the Rs 20,000 crore irrigation scam, he asked her not to go ahead.

 

She has alleged that Gadkari told her he has business interests with Pawar and that they extend mutual help where required.

 

BJP rubbished the charge by Damania against Gadkari, alleging that the “dirty tricks” department of the Congress is at work to derail the opposition's on-going national conclave.

 

IAC volunteers led by Anjali Damania, have been relentlessly fighting corruption by exposing the irrigation scam. When the strength of the perpetrators was used in full force to subvert the exposure, we were heartened that help came from an unexpected quarter, the opposition party. MLA Devendra Phadnavais and BJP leader Kirit Somaiya began demanding a probe into the irrigation scam and the disproportionate assets of Maharashtra irrigation minister Sunil Tatkare. “Then we heard a rumour that there was some settlement likely between NCP and BJP, that Bhaiyyu Maharaj met Nitin Gadkari on behalf of NCP and asked them to drop the issue. Anjali in her naiveté carried an idealistic impression of the RSS and firmly believed this was not possible. She decided to meet Nitin Gadkari to clarify the rumour

and enlist his support,” IAC said in a release.

 

According to the release, On 14th August, Anjali Damania visited Nitin Gadkari’s residence at Worli in Mumbai. Gadkari allegedly told Damania that the opposition’s role was limited to asking questions in the assembly and at best taking a press conference. “Kirit Somaiya was an eccentric person to attempt a public interest ligitation (PIL) and Gadkari said he would ask Kirit Somaiya to stop it. He clarified that ‘Sharad Pawar ke saath hamara uthana baithna hai, ham saath dhanda karte hein. Woh hamare char kaam karte hein aur hum unke char kaam karte hein’, (We are friends and do business together and often do favours for each other). He went on to say in the forthcoming elections, they may even partner together!” the IAC said.

 

Amid the row whether or not Damania met Gadkari, Kejriwal said the meeting did take place.

 

“This is unfortunate for the country. There is no opposition in the country. If the president of the biggest opposition party has business links with the leaders in ruling parties, then there is no difference between ruling and opposition parties," he said.

 

Kejriwal also posed four questions to Gadkari asking whether he had ever raised the issue of involvement of NCP, Sharad Pawar or Ajit Pawar in the irrigation scam and why he has not voiced his opposition yet. Ajit Pawar has resigned over the scam which has triggered a crisis in the ruling Congress-NCP alliance in Maharashtra.

 

Gadkari was also asked whether he has any business links with Pawar and demanded that he make public his business interests.

 

According to a TV channel, Gadkari is planning to sue Damania over the allegations, but it cannot be confirmed.  

 

Following the meeting, Damania said she sent an SMS to the BJP president. Here are the snapshots of the SMS sent by Damania...

 

 

User

SC judgement vindicates government stance: Sibal

The Supreme Court has said that the auction or profit maximisation cannot be the only method or basis for allocating natural resources and it cannot prescribe or proscribe method of allocation of natural resources but can undertake judicial scrutiny on case to case basis

 
New Delhi: Hailing the judgement by the Supreme Court of India on auction of natural resources, Telecom Minister Kapil Sibal on Thursday said the apex court has brought "constitutional clarity" on the issue, reports PTI.
 
Stating that the Court has upheld the government's stand, Sibal said it has opined that auction was not the only way for allocating natural resources.
 
Institutions like CAG "might have perhaps unwittingly, erroneously interpreted the SC judgement relating to the 2G case and thought that all natural resources must be auctioned," he said. "The SC has provided Constitutional clarity today and we welcome it." 
 
Welcoming the SC decision, Commerce Minister Anand Sharma said the judgement "vindicates" the position that the government had taken.
 
"When a state has to take decisions, public good has to be kept in mind... The SC has also upheld, that it is public good which is important, and revenue maximisation is subservient to that, not the other way round," he said. "And all national resources (are) not meant to be auctioned." 
 
Sharma said there has been lot of confusion, some deliberately created, and also fed by some elements of political forces who are opposed to the government.
 
"...there was never any doubt in my mind, or in the mind of my colleagues of the government, (that) there was no constitutional mandate for auction," he added. .
 
The Supreme Court has said that the auction cannot be the only method for allocating natural resources, and profit maximisation cannot be only basis for it.
 
The apex court also said it cannot prescribe or proscribe method of allocation of natural resources but can undertake judicial scrutiny on case to case basis.
 
Reacting to the judgement, Sibal said the judgement clearly states that policy issue is entirely within the domain of the executive, "especially in the context of the economic policies".
 
However, the Court can intervene if the decisions taken pursuance to the policy are not implemented properly, he said.
 
"Clearly any implementation of the policy, if it falls foul of the constitution, the Court has ample jurisdiction to deal with it by striking down those decisions," he said.
 
This is exactly what the government's position was earlier and this is exactly what the court has said, so the government's position has accordingly been fully vindicated, Sibal added.
 
The government will go ahead with the auction of spectrum in November and today's judgement in no way affects the February order of the apex court, he said.
 
"...the govt was in no way backing away from the implementation of the SC judgement in respect to cancellation of 122 licences... We are moving ahead through the process of auction and hopefully the auction will take place sometime in November-December," Sibal added.
 

User

COMMENTS

M G WARRIER

5 years ago

The statement attributed to Sibal that ‘institutions like CAG might have perhaps unwittingly, erroneously interpreted the SC judgment relating to the 2G case and thought that all natural resources must be auctioned’, is too vague and misleading. Institutions like CAG do not work on vague thoughts like this. Such statements are meant to divert attention from main issues, almost like the ‘zero loss’ theory when 2G issue came up.


How good is Reliance Capital’s equity-linked debenture, Series B-57?

If you are an HDFC Bank customer, you may have been approached to buy equity-linked debenture of Reliance Capital. Should you?

 
Reliance Capital, which has investments in broking, insurance and asset management and investments through private equity and investment banking, has launched its S&P CNX Nifty Index Linked Debenture named Series B-57, and its exclusive distribution has been handed over to HDFC Bank. Many of the bank’s customers are being wooed to buy this product. Does it make sense?
 

Key Features of ELD
 

The product is a 40-month equity-linked debenture (ELD), whose performance is linked to S&P CNX Nifty with the following return structure:
 
If at the end of the 36th month, the market is higher than the initial level (by any quantum), the investor gets an absolute return of 49%, which equals an annualised compounded rate of return of 12.68%
If at the end of the 36th month, the market is lower than the initial level, the return will reduce by 2.45 times of each percentage reduction in the index. For example, if the market falls by 5% the return will reduce by (2.45*5)%, that is, 12.25%. Therefore, the final return for the investor in this case would be 49-12.25=36.75%, which is an annualised rate of return of around 9.9%. The compounded return comes to 9.9%.
If the market falls beyond 20%, the rate of return becomes 0% (because 20*2.45=49%), and the investor gets back only his/her initial investment.
 
The following table gives a complete scenario at different Nifty levels.
 

Initial investment

Market movement

Return (percentage)

Return in rupee terms

Annualised rate of return

Rs50,000

+ 10%

49%

Rs74,500

12.68%

Rs50,000

+5%

49%

Rs74,500

12.68%

Rs50,000

0%

49%

Rs74,500

12.68%

Rs50,000

-5%

(49-(2.45*5))=36.75%

Rs68,000

9.9%

Rs50,000

-20%

(49-(2.45*20))=0%

Rs50,000

Nil, you get back you initial investment

Rs50,000

-30%

(49-(2.45*30))=    -24.50%, but you will get 0%

Rs50,000

Nil, you get back you initial investment

 

What works in its favour: 
 

• It is an AAA-rated security and therefore has the highest degree of safety in terms of getting timely returns. The rating, however, can be revised and changed whenever the rating agency gets new information about the financial condition of the company.

• Your initial investment is secure till maturity. Even if the markets crash in the 36th month of your investment period, you still get back your investment.

• A coupon rate of 49% for 40 months works out to be an annualised compounded return of 12.68%, a good return for a fixed investment in a stagnant or falling interest rate market. 
 

What works against it:
 

• If you do not hold the debenture till 40 months, your initial investment is not guaranteed. That means if you want to withdraw your money, your returns may be linked with the actual return of the market. The brochure does not give any information on this issue.

• Also, if the company buys back the debentures, the return will be calculated on basis of fair market value and that could hurt your initial investment as well.

• Besides these, credit risks attached to debentures stand

 

Does it make sense?
 

Every single recommendation regarding this product will start by saying: “If you are bullish about the markets...” In effect, the onus is on you to make the product work for you. Remember, the essential factor behind the success of the product is your successful market call. Do you want to be a market forecaster to make 12% plus?  
 

Apart from this, there is another basic flaw in all these structured products. It never makes sense to mix fixed income products with market-linked products. You cannot calculate the odds of total returns if you mix fixed income products with market index. They are essentially totally different products in nature and all you are doing is reducing the effectiveness of one with the other. You must stick to an asset allocation plan which will mean investing in a systematic manner in fixed income (bonds, bond funds, fixed deposits and debentures) to protect your wealth and separately in shares or well-chosen equity mutual funds to grow your wealth. 
 

In this case, who really knows what the Nifty will do three years from now and why would you want to bet on that outcome? Also, 12.68% compounded return in the best of circumstances is nothing attractive; there are perpetual bonds, for instance, which could give you similar fixed returns with an upside if the interest rates fall, without you having to bet on the direction of the Nifty. 

 

 

 

User

COMMENTS

Merchant M S

5 years ago

One more bouncer from the house of Ambani Brothers Inc.

Nem Chandra Singhal

5 years ago

It seems that it is good product for the issuer. The issuer will get Rs. 50,000/- from each investor. The issuer may invest the raised amount in his/ her own business and reap the benefit of interest-free capital. At the end of 40 months, the money will be returned to the investors liking the return to Nifty. Kudos to Reliance. Thanks.
Nem Chandra Singhal

Rajat Bhatia

5 years ago

Dont buy this product - not suitable for retail investors

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