RTI Judgement Series
RTI Judgement Series: How blame game within the Delhi govt kept authorised colony without water

There was no urgency or will to ensure water supply to Bindapur Colony and this despicable pushing the blame within the government continued for decades without fulfilment of a simple promise. This is the 42nd in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application

The Central Information Commission (CIC), while disposing an appeal, said although it did not have authority in the matter it would send a copy of its decision to the chief minister of Delhi in the hope that a promise made by the government of the National Capital Territory of Delhi (GNCTD) to Bindapur Colony in Pocket 4 can be fulfilled.


While giving this important judgement on 15 February 2010, Shailesh Gandhi, former Central Information Commissioner, said, “Inspite of two chief secretaries (CSs) loftily committing, there is no urgency or will to ensure that water is supplied to this (Bindapur) colony. This despicable pushing the blame within the government can continue for decades without fulfilment of a simple promise made to this colony.”


Delhi resident Jawahar Singh sought information from the GNCTD about a letter written by chief engineer DDA (Dwarka) for supplying water to Bindapur Colony. Here is the information he sought on 13 November 2009 from the Public Information Officer (PIO) of the GNCTD...


Information Sought (with reference to a letter written by chief engineer DDA (Dwarka) on 11/02/2007 Bindapur 3856 dated 08/10/2009 No CE by /RTI/D104)....

1. Whether action has been taken on the basis of a letter written by DDA to chief secretary, finance. This letter was written in response to a query sought by the appellant.

2. Whether any fund has been earmarked for different plans.

b) Whether any fund has been set aside for water development in Bindapur Pocket 4.

3. Whether any action has been taken by the finance department of the GNCTD on the basis of the letter sent by DDA.


In his reply on 23 December 2009, the PIO mentioned that the appellant’s RTI application had already been transferred to the office of PR secretary, urban development ministry and also to the office of chief engineer (DWK), DDA Manglapuri.


Not satisfied with the reply, Singh then approached the First Appellate Authority (FAA). The FAA did not pass any order. Then Singh filed his second appeal before the Commission.


During the hearing, the PIO of Delhi Development Authority (DDA) informed the Commission that in 1999 the chief secretary had directed Delhi Jal Board (DJB) to ensure that water supply was provided to Bindapur JJ Colony. On 16 February 1999, the then chief secretary of the GNCTD had recorded that, “CS made it clear that this decision would be specific only to Bindapur JJ Colony and would not act as precedent for any other case. DJB was directed to complete work of provision of water from their own resources.”


Following this directions, government officials held several meetings without getting anywhere near to implementation of the project.


On 1 May 2006, the then CS of GNCTD directed both DJB and DDA to make a joint inspection and issue a deficiency estimate so that the work can be completed. During the inspection, DJB pointed out that the system laid by DDA was not functional. This was also informed to the principal secretary of the urban development (UD) department of the GNCTD. In a meeting on 26 October 2006, the then principal secretary (UD) declared that “principal secretary (UD) made it clear that the services cannot be kept on hold and directed DDA to remove the deficiencies in the presence of DJB, out of funds from their own sources and then hand over the water/sewer lines to DJB. Thereafter, the responsibility of maintenance would rest with the DJB.”


The Commission, said about 15 officers of the Delhi government, with whom it held discussions, indicated that DDA appeared to have spent about Rs1 crore for laying a system of pipes and underground reservoir. DJB also claimed that when the joint inspection was done it was found that the under reservoir had no pipes or equipment for pumping and it was housing pigs and cattle. The DJB official also stated that there was no system in place by which water supply of Bindapur Pocket-4 could be ensured. It was not known what happened to the money spent.


The officials also told the Commission that Bindapur Colony, Pocket-4 was an authorized colony developed by the DDA and there was a difficulty in supplying water to this colony. “Around this colony there are unauthorized colonies to which the government is finding it easy to supply the water. It is apparent that the Delhi Government is incapable of supplying water which is a basic function which the government has to fulfil,” the Commission noted.


Mr Gandhi, in his order, said, "In spite of two chief secretaries loftily committing that water has to be supplied to this colony. There is no urgency or will to ensure that water is supplied to this colony. This Commission has no authority in this matter but will send a copy of this decision to the chief minister of Delhi in the hope that a promise made by the Government to Bindapur Colony, Pocket-4 can be fulfilled.”




Decision No. CIC/SG/A/2010/000073/6839


Appeal No. CIC/SG/A/2010/000073


Appellant                                            : Jawahar Singh,

                                                            New Delhi- 110059.                                                                         


Respondent                                       : SKS Yadav

                                                            Public Information Officer & JS

                                                            Government of NCT of Delhi.

                                                            Urban Development,

                                                            9th Floor, Delhi Secretariat, New Delhi


Anatomy of a credit crisis: US Vs China

China has a powerful elite class, which like the financiers, are a law unto themselves. For the privileged it can mean vast fortunes. It is one of the few places that can give Wall Street some lessons on greed

The US stock market is nearing its all-time high. This appears to be very good news, but it also reminds us of what happened the last time the markets reached these dizzying heights. The recession of 2008 not only devastated the US economy, it sent markets around the world into a tailspin. So this might be a good time to examine what exactly caused the Great Recession of 2008. What factors were important in creating such a disaster and do those factors exists today?


When considering the origins of the crash, most people immediately think of the United States. Most fingers would gravitate toward Wall Street and the American financial sector. The first factor that might come to mind is that the unlimited greed of American financiers. Financial institutions of all types coupled with either the incompetence or corruption of the rating agencies allowed incredibly risky behaviour. In 1947 the US financial sector represented only 2.5% of its gross domestic product (GDP). By 2006 it had risen to 8%. In the first decade of the 21st century it managed to gobble up 41% of all profits earned by businesses in the US. Directors in US financial firms were earning millions and in some cases—billion dollar bonuses. The average bonus on Wall Street was half a million dollars a year. These hefty pay packets pushed the US to have an even more unequal distribution of income as the richest 1% took an ever larger share of the national income.


Sovereign debt crisis and tax collections


These outsized profits were often earned by a second factor, financial innovation. Financial wizardry created novel financial products that sliced and diced debt into new and different ways. Once repackaged, this debt could be sold on as riskless investments all over the world. Much of this debt was considered safe because it had rock solid collateral: US real estate. Housing prices in the United States had been rising steadily for fifty years. The last time housing prices declined was during the Great Depression in the 1930s. So no one ever considered that a decline was even remotely possible.


This seemingly riskless financial innovation was hailed as one of the triumphs of capitalism, a third factor. Most people believed that financial innovation actually made the markets and the banking system safer by spreading the risk far beyond banks.


This faith in capitalism was actively supported by the government. The Federal Reserve provided a fourth factor: loose monetary policy and light supervision. Subsidized government agencies like Fannie Mae and Freddie Mac provided the implicit government guarantees that freed investors from concern and allowed even riskier behaviour. So the government’s oversight not only failed miserably to reign in the abuses, it actively participated.


Most of these problems do not exist presently in the US, Europe and Japan. It is well known that these countries may be running large and perhaps unsustainable sovereign debts, but they do not seem to have other major credit issues. But there might be another country that is showing a similar pattern: China.


China has a powerful elite class, which like the financiers, are a law unto themselves. For the privileged it can mean vast fortunes. It is one of the few places that can give Wall Street some lessons on greed. Just before he stepped down it was revealed that the family of premier Wen Jiabao had amassed a fortune of $2.7 billion dollars. China’s Gini coefficient, an index measuring income inequality, was 0.61. This makes China one of the most unequal societies in the world. The inequality of wealth equals or surpasses countries in Latin America like Brazil, long famous for the gap between rich and poor.


Unintended consequences of central bank policies


China may not be leading the world in new financial innovations, but its financial system has been evolving rapidly. Many of the products are not new, but they are new to China. As little as two years ago the Chinese financial system was firmly in the hands of the state-owned banks. State-owned banks had captive depositors, who could not object to the interest rates paid on their accounts. There were no alternatives. Bad debts and defaults could be absorbed, hidden and socialized in the mandated spread. The system may have been unfair, but it was stable.


But recently there has been an explosion of the shadow banking system. This was a system of investments like Wealth Management Products (WMPs) that provided an alternative to the regular banking system. The system now has 12 trillion yuan ($1.9 trillion) under management almost 13% of the banking system. They have grown over five times since 2009. It has also led to an explosion of credit growth. In 2012, credit in the amount of RMB 15.6 trillion was formed. But it did not create an equivalent amount of growth. Nominal GDP grew by only RMB 4.6 trillion. So every RMB of credit generated in 2012 created only RMB 0.30 of economic growth. The controls available in the state banking system are absent in the shadow banking system. So it is neither transparent nor stable.


The shadow banking system was not so much created as allowed. Last year the government in an attempt to tame inflation and housing prices slowed credit creation through the banks. They were probably a bit too successful. In a year of leadership change a sudden collapse might not be appropriate, so the regulators were far more lenient on this sector.


But the like the poor regulation in the US, regulation in China is far behind the financiers. Banks used to funnel money through trust companies to borrowers that otherwise couldn’t receive bank loans like over indebted local governments. In 2010 the China Banking Regulatory Commission put limits on the practice. So instead of trust companies, banks cooperated with Chinese brokerages. Last year the assets managed by these firms soared from 280 billion yuan to over 1.2 trillion yuan ($193 billion). Most of this money, between 80% and 90% came from banks shifting assets off their balance sheets in order to circumvent lending restrictions. Of course where this money eventually goes is also beyond the regulator’s knowledge.


China is far from a truly capitalist society, but that does not mean that its system does not have apostles. Quite the contrary, China has managed spectacular growth for the past fifteen years. While most of the developed world barely manages slow growth, when they manage growth at all, China booms ahead. The decline of its growth below 8% is considered a major change. CEOs and economists throughout the world give enormous credit to the Chinese technocrats. It has long been an article of faith that the government can and will do everything possible to keep the economy growing.  Like comments made during the “Great Moderation”, people believe that in China recessions, let alone crashes, simply cannot happen.


Finally, like the Federal Reserve before the crash, monetary policy of the Chinese monetary authorities has been exceptionally loose. In 2008 before the crash the number of loans was only Rmb 3.5 trillion yuan a year. Since then it has averaged Rmb 7.5 trillion ($2 trillion) or a total of Rmb 37 trillion yuan ($6 trillion) over the past four years. This January it hit a record high of Rmb of 2.5 trillion ($400 billion) in one month alone, more than double the rate of a year ago.


In the US the equity and housing markets just before the crash were hailed as the product of a healthy, well-managed economy. The increased wealth of most people through the rise in the value of their assets was considered evidence of the ability of the financial system and the policy makers. When the crisis finally occurred it seemed to come as a complete surprise, a black swan. The reality was that the elements were always there for all to see.


Other stories by William Gamble.


(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.)


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