Fake identities were created in the Pune Municipal Corporation (PMC) computer server to generate forged birth certificates in order to apply for a Slum Rehabilitation scheme. Such crime puts national security at stake if secure databases are compromised. Strangely, the PMC has initiated no action
A massive forged birth certificate fraud at the Pune Municipal Corporation (PMC) was revealed through a Right to Information Act (RTI) inquiry filed by the noted Pune activist, Vijay Kumbhar. Consider this:
The above information pertains to 12 names shown as beneficiaries of the Government of Maharashtra’s ambitious but controversial slum rehabilitation scheme that is being haphazardly and dubiously implemented in major cities, particularly Mumbai and Pune. In Mumbai, Central Information Commissioner Shailesh Gandhi who was then a RTI activist had filed a Public Interest Litigation (PIL) way back in 2006 on the basis of 89 complaints lodged by citizens with the Anti-Corruption Bureau about crimes such as forgery, cheating, bogus documents, fake tenancies, threats and coercion in obtaining signatures and vacating slum dwellers in different Slum Rehabilitation Authority (SRA) schemes. There were charges of corruption and collusion against various Government officials of the SRA as well as the collectors’ office and municipal officials. The ACB expressed its inability to deal with the issue due to lack of manpower while the state government concluded that Mr Gandhi was exaggerating and then instituted a tame inquiry by a retired IAS officer. Subsequently the Nagrik Chetna Manch filed a PIL but it has not been admitted to date. So much for the seriousness of addressing large scale corruption—no wonder the country is clamouring for a strong Lokpal Bill.
In this case, the SRA scheme pertains to a locality in Pune called Mangalwar Peth, but probably reflects the manner in which schemes meant for the upliftment slum dwellers are hijacked by ‘fraudulent’ beneficiaries. It also highlights political-bureaucratic-builder/developer nexus wherein more beneficiaries are allegedly added in order that the developer gets more building space and in turn, more FSI. For more information on Maharashtra’s Slum Rehabilitation scheme, you may visit www.sra.gov.in
In the case of the Mangalwar Peth slum rehabilitation scheme, the issue is far more dangerous. Very clearly, it shows that secure government databases have poor security and any hacker or an outsider in connivance with a municipal corporation employee can enter his name in the computerized birth record register and claim to be a citizen. He could, for all you know, be a terrorist or an illegal immigrant. Imagine how much worse it will be when these databases contain biometric information such as Iris scans and fingerprints as well!
Strangely, the PMC Commissioner Mahesh Pathak has not found it fit to initiate severe action against the Birth & Death Registration officers; instead, he delayed ordering an inquiry even after the forgery was established. RTI activist Vijay Kumbhar’s inquiry has revealed that out of the 180 beneficiaries of the Mangalwar Peth slum rehabilitation scheme, a shocking 80 names do not qualify as they do not fit into the 12 proofs required to be a beneficiary. Mr Kumbhar says, “If you do the numbers, each of these 80 fake beneficiaries would receive 350 sq ft dwelling, which amounts to 28,000 sq ft given as TDR to the developer. This is perhaps just the tip of the iceberg of how such schemes are being used for the benefit of the entrepreneurs in the building industry in connivance with top officials of the PMC.’’
That’s not all. In an official complaint to Municipal Commissioner Mahesh Pathak, Mr Kumbhar states, “On November 28, I had sent you proofs procured from RTI of fake beneficiaries of the slum rehabilitation scheme of Mangalwar Peth but you have not taken action despite the fact that such tampering in your computer records can lead to breach of national security as anyone can become a ‘legal’ citizen of Pune and therefore India. The documents reveal serious irregularities in the working of the department. Yet no action is being taken by you.’’
It all began four months back, when a genuine beneficiary of the Slum Rehabilitation scheme in Mangalwar Peth filed a RTI application, asking for a list of 12 beneficiaries with copies of their identity proofs. After he got a reply, he approached Mr Kumbhar for advice. Shocked with the details, Mr Kumbhar filed an official complaint with the municipal commissioner and requested him to conduct an inquiry. After much delay, Mr Pathak instituted an inquiry which showed that the PMC’s computer sever had been tampered with.
Mr Kumbhar then made another complaint to the municipal commissioner requesting him to file a case with the police against those involved in the fraud. Again, he dilly-dallied. Finally, Additional Registrar Aparna Basalkar has lodged a police complaint with the Faraskhana police against seven slum dwellers under Sections 468 (forgery for purpose of cheating), 471 (using as genuine a forged document or electronic record) and 420 (cheating and dishonestly inducing delivery of property) of the Indian Penal Code (IPC). Period. Police, too, has not thought it fit to sternly pursue the case!
Not surprising, as slum rehabilitation schemes under Slum Rehabilitation Authority (SRA) in Maharashtra have termed as “nothing short of organised crimes.’’
A PIL filed in 2006 in regard of slum rehabilitation frauds of large proportions in Mumbai shows the huge scandal thriving unabashedly even today. Excerpts from the PIL originally filed by Shailesh Gandhi will give you the horrific reality:
““That the petitioner is concerned with what appears to be a major and organized crime being reported to the police, with no chance of any charges being framed, since no investigations are being done in them. When a large number of criminal actions are reported and no investigation is done, it would be a clear signal that crimes will not be punished when the government so desires. In such a situation the rule of Law, is increasingly subverted, and has no chance of being enforced.
The main facts that emerged from the papers mainly obtained from the government using Right to Information were as follows:
a) At the end of October 2006 the ACB had 89 complaints about crimes such as forgery, cheating, bogus documents, fake tenancies, threats and coercion in taking signatures and vacating slum dwellers in different SRA schemes. There were charges of corruption and collusion against various Government officials from SRA, collectors’ office and municipal officials.
b) The ACB wrote that they would only be able to investigate three complaints where the Court had issued specific directions. They have also confirmed that evidence regarding criminal acts had been unearthed in these cases. The question is, if criminality is evident in just three cases, statistically, the probability of significant evidence of criminality being exposed in 89 other cases is very high. I quote from the ACB’s letter to me (Exhibit C page 22): "The offences are of criminal misconduct under prevention of Corruption Act, along with IPC offences done by government officials and investigation is largely based on documents. The collection of documents, to prove these offences, is voluminous in nature and also a very large number of witnesses need to be examined and thus a stipulated period cannot be given for completion of investigation in these offences.
A proposal to the ACS home, Government of Maharashtra, has been sent to form a special cell for investigation of cases”.
c) The letter from the director general of ACB, Maharashtra written on 21 September, 2006, mentions that at that time 26 complaints had been received by ACB. It further states, "In view of the seriousness of this newly visible scam, it is recommended that Government may consider setting up of a Special Investigating Team (SIT) for undertaking a comprehensive investigation into all corruption charges pertaining to the SRA schemes.
“It is recommended that the proposed SIT should have a strength of 10 investigating officers of the rank of PIs and ACPs with sufficient constabulary to assist these officers. It is also recommended that in view of the extent of this incipient scam, the SIT should be headed by an officer of the rank of DIG or IG assisted by two officers of the rank of Superintendent of Police as supervisory officers.” When 26 complaints were received, the head of the ACB in Maharashtra felt the need for a SIT of 12 officers to investigate the matter. The government made no move to support this and stymied the investigation.
d) In a letter which reveals the government’s intent the deputy secretary, housing wrote to the CEO of SRA on 15th November (Exhibit K-page 47) “Information which has been ordered by the Hon. Special Court to be given should be given to the Additional Commissioner, ACB, Mumbai. The administration has decided that there is no need to give the information of the other matters to the ACB.”
e) Thus, there was a clear design and method to the government's approach in this matter by denying information to the ACB and ensuring that no resources were available for investigating a very large number of criminal complaints. After all, we know that delay in investigation allows wrongdoers the time to bribe or threaten complainants with the help of organized underworld thugs.
This suggests collusion and a conspiracy to ensure that criminal acts though reported to law enforcing agencies, and reported widely go unpunished. Given the letter of the deputy secretary, housing, mentioned earlier, citizens would have to increasingly approach courts to keep alive the hope of corrective action; in the process the judiciary will end up performing the job of the police who have been rendered helpless.
Disturbed by these facts and the all the circumstantial evidence, I filed my PIL, asking for specific relief. My main prayers needed to be addressed urgently, if they were to have any effect. The prayers were:
a) This Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, commanding the respondents to set up a Special Investigation Team.
b)That the Hon'ble Court be pleased to direct the government that the SIT be furnished with adequate staff to specially probe the very large fraud in the SRA schemes.
c)That this Hon'ble Court be pleased to direct that the SIT be charged with completing the investigations into the SRA schemes where there are complaints or reported irregularities, within a time-bound program., and reporting the progress and results to the court.
d)That this Hon'ble Court be pleased to direct that until the final disposal of this petition no third party interests in the SRA schemes should allowed to be created.
e)That this Hon'ble Court be pleased to grant interim reliefs in terms of prayer clauses (a), (b), (c) & (d) above.’”
Till date no SIT has been set up. The scandal now spreads to other cities having SRA schemes.
(Vinita Deshmukh is a senior editor, author and convener of Pune Metro Jagruti Abhiyaan. She can be reached at [email protected])
The fund has done better than the Sensex over 1-3 years but it is too short a period to extrapolate
BNP Paribas Mutual fund, recently filed an offer document with the Securities and Exchange Board of India (SEBI) to launch an open-ended overseas fund-of-funds scheme—BNP Paribas Russia Fund. The fund will invest 90%-100% of its assets in the units of its overseas fund—BNP Paribas L1 Equity Russia. The remaining units will be invested in debt instruments. The scheme will be benchmarked against the MSCI Russia 10-40 index, which is also the index for the overseas fund.
There have been many such funds launched in the past, inviting Indian investors to park money in their overseas fund. Apparently, most of these overseas funds do not have a long and proven track record of good performance. Moneylife has constantly been writing about such funds in the past years. These funds are pure fads. (Read: Avoid HSBC Brazil Fund new fund offer)
Same is the case for the Russia fund. Though the fund may seem to have performed better than the Sensex, the performance has just been mapped over a four-year period. The returns have shown greater volatility and just about managed to outperform its benchmark in just two periods out of four. In the last one-year period ending 30 November 2011 the overseas fund has returned -10.56% whereas the Sensex has returned -17.29% and its benchmark returned -5.59%. The fund itself has been launched in March 2007, so its long-term performance cannot be judged. Its performance though much better than the Sensex in the one-year, two-year and three-year period, it has just about managed to match the benchmark on the other two occasions. Apart from this, the variance in returns is a clear indicator of how volatile the returns have been for the fund. And it has been clearly much more volatile than the Sensex in the past four years.
Chasing returns is not for the average retail investor especially when it comes with high risk. The return of the fund is highly correlated with the Sensex. Thus investors do not get any added benefit if they try to diversify their risk.
The main attraction of any insurance product is tax benefits at entry and exit. This is possible as long as there is minimum insurance component. Does your insurance policy comply with the rules?
The main attraction of any insurance product is tax benefits at entry under Section 80 C and at exit under Section 10 (10) D. Investors plunge in with their hard earned money just to reduce their tax burden and with an intention to build tax-free corpus at the end of the policy. But you need to be aware of the rules before you go by what your agent or advisor or a friend tells you as tax-free.
Insurance products give you deduction of up to Rs1,00,000 from taxable income under 80 C, subject to the life cover being at least five times the premium. If it is less than the minimum, the amount that can be claimed under Section 80 C for tax savings reduces appropriately. For example, if you take a single premium insurance policy with life cover of 1.25 times, then the amount claimed under 80 C will be only Rs25,000 for Rs100,000 premium paid.
The tax benefit for life insurance plans also extends to the time of maturity and in case of death claim under Section 10 (10) D. However, the maturity benefit is tax-free only if the premium paid per year is lesser or equal to 20% of the life insurance cover. In other words, the life cover has to be at least five times the premium. The maximum sum assured (SA) for most single premium insurance products is only five times the single premium. You will have to ensure that the SA is five times the premium before you buy the product for tax benefits.
Bajaj Allianz Guaranteed Maturity Insurance Plan has just launched a single premium ULIP (unit linked insurance product). It is walking the fine line of interpretation of grey areas of tax benefit. The product has SA of five times the single premium for the first policy year and for subsequent years it will reduce to 1.25 times of the single premium for age-at-entry less than 45 years and 1.10 times of the single premium for age-at-entry 45 years and above.
The policy term is 10 years. In short, the SA of five times the single premium in the first year will reduce for the remaining nine years to be only 1.10 to 1.25 times the single premium. The question is whether customers can get tax benefits with this product?
A lot will depend on the subject of interpretation by tax consultants and more importantly Income Tax (I-T) authorities as there can be arguments on both sides. The product is single premium and in the first year when premium is paid, it is 20% of the SA. As there is no premium paid after the first year, does it have to comply with the SA being five times the premium for all the remaining years?
The argument on the other side will be that the product offers SA of five times the premium in first year and for the remaining nine years it offers SA of only 1.10 to 1.25 times the premium. It technically cannot get benefit of section 10 (10) D at the end of policy term even though it may possibly qualify for Section 80 C benefit at entry. The reason for laying down the minimum insurance component to be five times the premium is that the product should be an insurance product. If the insurance component is negligible, then it is as good as a fixed deposit (FD), which is taxable!
We spoke with few tax consultants. The consensus among them was that there is a very fine line of interpretation the insurance company is taking. According to them, “80 C tax deduction at entry may go through, but 10 (10) D tax exemption of the corpus at policy end may have an issue.” A different view was taken by an insurance industry official. According to him, “The product is filed by the insurer and approved by IRDA (Insurance Regulatory and Development Authority) considering the tax benefits under 80 C and 10 (10) D.”
This is a clear case of exploiting the loophole. If at the end of policy term (10 years), the customer finds that the corpus is taxable, will the insurance company stand by them? The insurance company states ‘Tax benefits under Sections 80 C and 10 (10) D, subject to the provision stated therein’. When Moneylife contacted Bajaj Allianz, a clear stand taken by them is that the individual has to consult his own tax consultant to avail the tax benefits.
To be on a safer side, it is better to not invest in a product which will require you fight with some regulatory authority like the I-T department to argue your case. Better be safe side than be sorry! If you don’t fall in the tax bracket and will not fall after end of 10 years, then there is no issue at all.
Bajaj Allianz Guaranteed Plan flies against IRDA’s intent