It appears that there is a clear modus operandi at work to ensure that illegal buildings can be built without any let or hindrance, says former CIC Shailesh Gandhi
It is a national shame that most building regulations are flouted and completely illegal buildings proliferate and no action is taken, especially in Delhi. In 2009 as an Information Commissioner, Shailesh Gandhi came across issues relating to many illegal buildings in dealing with RTI (Right to Information) queries, which were trying to expose these. Once when he had evidence of about 70 illegal buildings, he thought that he would flex his official muscles to get some action.
Shailesh Gandhi, in his complaint of 3 November 2009 to the chief minister of Delhi, states, “It appears that there is a clear modus operandi at work to ensure that illegal buildings can be built without any let or hindrance. The builder starts constructing the building—most likely in violation of the laws—and the officials turn a blind eye towards it. No cognizance is taken of any complaints. Citizens exercising their Right to Information are also defeated by stating that there is no record of any building activity or approval. The buildings are constructed in about six months’ time, and subsequently it is claimed that these are old buildings.”
Mr Gandhi argues in his letter to the CM, “Honest citizens who complain about this begin to believe in the axiom that dishonesty pays handsomely. It is clear from the scale and extent of the illegal constructions that they could not have been carried out without some level of collusion with the MCD officials. The value of these illegal and unauthorized buildings is likely to be a few hundred crores.”
Mr Gandhi has, in particular, highlighted the complaint of 65 buildings with unauthorised constructions in just one Zone of Delhi—Shahdara South Zone. Buildings upto four storeys have come up without even applying for approval from the Municipal Corporation of Delhi (MCD).
Sheila Dikshit, CM-Delhi in her reply dated 23 December 2009, states that she is aware of the menace of rampant unauthorised constructions in many parts of Delhi and the corruption attached to it. However, she points out that Municipal Corporation of Delhi (MCD) is a local body with elected members and there is no control over it in day-to-day functioning. She has asked the Commissioner, MCD to take all possible steps to stop unauthorised constructions.
Mr Gandhi has also complained to the chief justice of the Delhi High Court and Commissioner, MCD in this regard during the years 2009 and 2010. On 4 August 2010, he complained to Nand Kumar, IO/Inspector, Anti Corruption Branch (ACB), Directorate of Vigilance (GNCTD), Delhi saying, “A CD containing joint inspection report and photographs taken during the inspection dated 15 September 2009 is being sent to you.”
Mr Nand Kumar sought the following clarifications from Mr Gandhi:
He also requested a competent official from Mr Gandhi’s office to come to his office to provide all the clarifications.
Although the ACB and Mr Gandhi pursued the complaint/case to its logical conclusion, nothing finally came out of it and there were no arrests or demolitions.
These problems are not exclusive to Delhi, as Mumbai has similar problems in quality of construction of buildings and it has been highlighted by the recent building collapse in Thane. (Read here: Thane building collapse: Recover the compensation money from builder, civic officials and local representatives Thane building collapse: Recover the compensation money from builder, civic officials and local representatives)
Chief Passport Officer Muktesh Pardeshi who had earlier refused to accept that there were serious problems at the Pune Passport office finally agrees he miscalculated the division’s projection in terms of the number of passport applicants. He has introduced one appointment date for a family and increased online appointments to 1,100 from today
A reluctant Muktesh Pardeshi, who earlier told Moneylife that the Government of India is not bound to give the passport in 45 days and confidently stated that Pune’s Passport Division is amongst the best in the country, was compelled to come down to Pune for inspection of the Passport Seva Kendra (PSK) on 6th April, after Moneylife’s continuous crusade against the dominance of illegal touts, citizens’ harassment in not getting online appointments, passport officials asking applicants for needless documents, and delay in police verification at the Pune’s Passport offices.
Accepting that “we were wrong about Pune’s projection and could not anticipate the enormous growth in the number of passport applicants,” he announced an increase in online appointments from 775 presently, to 1,100 from today (950 online and 150 walk-in appointments as against 650 online and 125 walk-ins). In case, even this is inadequate, Pardeshi said he would take a review after a month and increase the number of appointments further, if necessary.
(From left, Shalini Mathur, Project Head, PSK at TCS; TD Sharma, RPO, Thane; Vinay Kumar Choubey, RPO, Mumbai; Tanmoy Chakrabarty, Global Head, Government-Industry Solutions at TCS; Muktesh Pardeshi, CPO, Prakash Javadekar, MP-Rajya Sabha, Shakuntala Rane, RPO, Pune and KG Shah, RPO, Nagpur )
The appointments which until last week were open for a week, will from today (8th April), open up for a fortnight. One appointment date for a family has also been introduced from today. Until last week, family members were given different dates, much to the inconvenience of citizens, especially those who came from out of Pune from districts which are under the Pune Regional Passport Division.
In the interim period, Passport Melas will be held on a regular basis, in order to bring down the pendency to zero, stated Pardeshi.
In order to further reduce the interference of illegal touts who allegedly indulge in blocking appointments and to reduce the 20% absenteeism of applicants after taking appointments, pre-payment facility would be introduced in a month’s time. Stated Pardeshi, “Citizens will have the facility to pay online through debit or credit cards and for those who are not Internet savvy, through a physical challan to State Bank of India branches. The model is at an advanced stage and MEA (ministry of external affairs0, TCS and SBI are working towards a citizen-friendly system. The fees of the applicant will be valid for one year and he will be given an opportunity to reschedule his appointment, twice, during this period.”
Pardeshi also stated that Citizen Facilitation Centres which are already functioning in different cities would shortly become centres for receiving and helping people in filling up application forms, for Rs100 per application form. There are 60,000 such CFCs in the country, he added.
Lamenting that Maharashtra takes an average of 70 days for police verification which is extremely poor, as against Andhra Pradesh, Gujarat and Delhi which do not take more than 21 days on an average, Pardeshi said that, “the online verification process which has already begun in Pune should make things easier. We are looking into the present grievances and pendency and will address it on a fast-track basis so that pending police verifications are disposed off as soon as possible. We are going to nudge the police to enhance their efficiency and provide training support.”
At the press conference on 6th April in Pune, Pardeshi refused to accept the dominance of illegal touts and their alleged nexus with passport officials. However, he relented after the media gave him examples. He instantly ordered that, “passport officials would be rotated” and ordered Regional Passport Officer Shakuntala Rane to do so.
Pardeshi refused to make the Master Service Agreement (MSA) between MEA and TCS, public saying that “we will ask if TCS feels comfortable about it.” When Moneylife brought to his notice that it is a public document and TCS is pushing it on the MEA for not providing the agreement copy, he refused to comment. When asked what were the 27 stringent deliverables that TCS was bound by, he gave vague replies.
Tanmoy Chakrabarty, Head Government Industry Solutions Unit at TCS, stated that, “the feedback has been welcome and we will work towards a more efficient service, hand in hand with MEA and the police.”
The meeting-cum press-conference was held in Pune on Saturday, 6th April. Prakash Javadekar, Pune’s Rajya Sabha MP and BJP leader and Vandana Chavan, Pune’s Rajya Sabha of NCP party, had met the minister of external affairs, Salman Khurshid on this issue and requested him to send a team for inspection to Pune. Accordingly, Pardeshi had come to Pune along with Passport officers of Nagpur, Nashik, Thane and Mumbai. At the press conference, Javadekar urged Pardeshi to set things right in a month’s time.
Activists of the Pune Passport Grievance Forum were happy with the progress but will monitor the situation.
(Vinita Deshmukh is the consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)
With the slowing of the emerging market economies it is possible that 2013 default rate could achieve a new record. As the business cycle moves into an inevitable contraction, one success of the central banks may result in a dismal failure
It wasn’t supposed to be this way. Emerging markets, especially the BRICS countries, were reputed to grow far faster than developed countries. Investments in emerging equities markets were a one way bet. With expanding young populations, cheap labour and growing consumer demand, emerging markets were supposed to routinely turn in annual GDP (gross domestic product) growth of over 5%. It has not happened. The US S&P 500 has witnessed record highs and an impressive 11% return in the first quarter, while emerging markets have had generally disappointing results. Europe, perennially on the verge of crises, managed a 12% rise. The Japanese market, often written off, has achieved an astonishing 28% return.
In contrast many emerging markets have lost ground this year. The worst is Brazil, which is off 7.8%. India is next, where the BSE has dropped 3%. Russia is off 2.6%. The Chinese market appeared to be showing signs of life, after a 20% rise from December lows—it has again experienced an 8% decline and is off 1.66% for the year. As a whole, emerging market stocks have experienced their biggest first quarter drop since 2008. In theory, emerging markets should attract buyers because of their valuations which are 11 times 12-month projected earnings, compared with 14 for the MSCI World Index.
In a way it is a bit unfair. The boom in developed country markets is primarily based on a flood of free money. Emerging stock prices don’t jump upon the happy pronouncement of ever more easing by American or Japanese central bankers. On the contrary. The Chinese government has made it clear that rising inflation at 3.2% is too high. But their problem is far less than other emerging markets. Russia, Brazil, Turkey and South Africa all are coping with inflation rates above 6%, while India’s inflation rate has remained stubbornly above 8% for over a year.
In fact without the illusion provided by monetary policy, the emerging markets may more accurately reflect the reality of the world economy. After four years of expansion, it is rather late in the business cycle. Global growth forecasts are being cut from 3.3% to 3.1% and emerging market forecasts declined from 5.5% to 5.3%.
Brazil is particularly troubled. For many years it appeared to be on the path of sustainable growth. Between 2004 and 2008 it averaged an annual growth rate of almost 5%. Now that growth has declined. The average growth between 2011 and 2012 was only 1.8% less than the growth of the United States. Falls in commodity prices and lower exports to China and Europe haven’t helped, but the real problem has been a fall in labour productivity, various bottlenecks like inadequate infrastructure, a bureaucracy with an insatiable taste for red tape and weak investment.
The economy of Poland was one of the few economies in Europe that never experienced a recession. But its proximity has limited its immunity to the problems of the Eurozone. When the numbers out of Europe and especially Germany, Poland’s primary market, fall, Poland’s statistics follow suit. Its unemployment rate increased to a six-year high of 14.4% and increased from 14.2% in January. Retail sales have fallen by 0.8% and the forecasts of GDP growth of 1.5% look out of the question.
Another country that has been affected by Eurozone issues is Turkey. A recent economic tiger with growth of more than 8% in 2010 and 2011, it has shrunk to more of a house cat with growth last year of 2.2% slowing to 1.4% in the fourth quarter. The year-end bounce that was supposed to have been stimulated by monetary easing never materialized. Exports have slowed. Foreign direct investment has cooled from over $40 billion to $8 billion.
Falling oil prices due to falling demand has impacted Russia. The numbers for February showed a miniscule amount of growth at 0.1% down sharply from the 1.6% growth recorded in January, but consistent with the trend. The Russian economy has been slowing for five consecutive quarters.
The tables have been turned on what was to become the S in BRICS. South Africa used to make up 40% of the total GDP of the 48 countries in Africa south of the Sahara. Its closest rival was Nigeria in second place at 14%. Today, while the South African economy can only manage 2% growth, the rest of Africa’s average rate has risen to 6%. Peripheral Europe is not the only place to experience a downgrade of its sovereign debt. The rating agencies have not only downgraded the South African sovereign credit rating, but also five major metropolitan areas and two state-owned companies.
China’s government reversed its tightening last year, just in time for the leadership change in October. The reversal allowed a revival of the real estate boom. Both housing prices and inflation began to rise helped by an explosion in lending through the shadow banking system. With the worries over a political hand off out of the way, the Chinese government is again trying to slow out of control financial and real estate markets. New regulations limiting the sale of Wealth Management Products have been created. Taxes of up to 20% on sales of houses are supposed to come into effect along with real estate taxes which have previously been unknown.
The general assumption is that emerging market problems are due to issues in the developed world—slow growth in the US and a recession in Europe. The reality is that emerging markets have been slowing for quite some time. If you look at the GDP growth charts for China, India, Brazil and Turkey they all reveal the same thing. They all recovered very rapidly from deep downturns in 2009. Their growth sprung back quickly and hit highs in early 2010. But then the increase in growth rates stopped. The trend in growth has been downward ever since. Until today when in many emerging markets there is barely any growth at all, certainly not the advertised vibrant growth of 5% or more.
The promise of their markets has also been an illusion. While the US equity markets have made a slow but steady progress from March 2009 to their recent new highs, many emerging markets have moved in a trading range. Russia, India and Brazil reached post crash highs in 2010 and have not moved any higher. The Chinese market peaked in 2009 and has been on a slow but steady decline ever since. The exceptions are Indonesia and Turkey whose markets have progressed upward over the entire four years.
Unlike their stock markets, emerging market bonds have done well. Much of the capital flows into emerging markets have been due to the largesse of developed countries’ central banks. The suppression of interest rates has stimulated an international hunt for yield and a higher tolerance for risk. However, the steady decline of emerging markets does not bode well. Much of the demand in the world economy and the source of record corporate earnings came from emerging markets. As they begin to contract, we will see the effects.
Already the default rate from emerging market corporate issuers has begun to rise. Emerging market corporations defaulted on $22 billion of their obligations last year, a massive jump from the $182m of defaults recorded in 2011. In percentage terms, this translates into an emerging market corporate default rate of 1.43% in 2012, compared to 0.33% in 2011. The problem was especially acute for junk bonds. Last year was the fourth worst year on record for junk bond defaults in emerging markets. One would think that 2009 took the prize, but that is not true. Defaults in emerging markets were especially bad in—1998, 1999 and 2001—and years of the Asian financial crisis, the sovereign crisis in Russia and the 2001 default of Argentina respectively. With the slowing of the emerging market economies it is possible that 2013 default rate could achieve a new record.
Central bankers have shown themselves particularly adept at inflating certain asset markets. They have not been as successful in creating real growth. As the business cycle moves into an inevitable contraction, their one success may result in a dismal failure.
(William Gamble is president of Emerging Market Strategies. An international lawyer and economist, he developed his theories beginning with his first hand experience and business dealings in the Russia starting in 1993. Mr Gamble holds two graduate law degrees. He was educated at Institute D'Etudes Politique, Trinity College, University of Miami School of Law, and University of Virginia Darden Graduate School of Business Administration. He was a member of the bar in three states, over four different federal courts and has spoken four languages.)