Citizens' Issues
The pornography of elite corruption, or why they really don't want the Jan Lokpal Bill

When one digs deeper into why the Jan Lokpal Bill is not progressing, and tries to analyse the reason why the mainstream media appears to be stuck on the ‘small corruption’ angle, while the business media maintains a discreet silence on what is happening, one hits on huge numbers

Earlier yesterday we had the PAN-IIT group of young and old alumni from all the IITs across India, on stage with Arvind Kejriwal and Team Anna. This was, for all observers, one of the few organised groups of influential people who actually came on board and declared where they stand on the issue of corruption in India in no uncertain terms. By comparison, industries and industry bodies of repute who otherwise would not think twice about throwing glamorous functions on issues related to corruption and never fall short of suitable comments on the issue of corruption, have been absent from making or taking any coherent and cogent position on the issue.

# Now, the grapevine is rife with talk about how certain NRI and NRI-linked politicians, with British, European and US linkages, who have stacked funds abroad in tax havens allied to those countries, have been informed that certain tax deductions by the authorities abroad would now be applied to these funds before they can be released back. This includes Switzerland, which is already doing this in the case of the United Kingdom, and proposes to do so with countries in the European Union too. Look carefully, the body language is beginning to say it all.

# Some members of the electronic and print media were at an informal get-together, when one of the most influential 'perception-benders' or lobbyists-call him what you may-explained to them how the Jan Lokpal Bill would not only impact politicians and public servants, but also the media and industrialists. The tone of some of the TV channels and newspapers/magazines appears to be changing slowly, if you read carefully, between the lines. Looks like advertising support from the strangest of organisations, for example ESIC, which is sponsoring an automobile show on NEWSX television channel that is bleeding money since hardly anybody watches the channel, is perhaps influencing the rhetoric.

Globally, New Delhi is now increasingly seen as a gigantic hub of rent-seekers, and one reason for this is that over the past few decades, a whole new class of political-businessmen (and women) have perfected the art of converting outright lies and theft into legalese, by the simple expedient of getting them converted into, what else, that language of criminal whitewash, good English. And then monetizing this in ways which are increasingly blatant and vulgar, with little regard for probity or concern for whether they are being seen or not.

As a matter of fact the more flagrant the criminalities, the brighter the lights used. And then, not just that, but a crass and commercial display of the acts themselves, which is why the term being used is "pornographic". At the finest and oldest clubs with memberships going past lifetimes, to the toniest of "membership by invitation only" lounges and reserved floors in the many 5-stars dotting the city, the word is out. If you've been able to stick it to the Great Indian Public Exchequer, then let the world know about it.

And then collect more rent on it too. Surrounded by fleets of "consultants" of all hues and numbers, safeguarded by fleets of private security guards, and usually finding cover under the term "NRI", the business ventures range from the old traditional narcotics and arms and then onwards, to the newer technologically perfect counterfeit currency and diamond transaction management. This is, of course, in addition to the mining, defence and real estate, and every other racket you can think of, very often covered under the all-encompassing term "PPP". Even good old infotech, the poster boy of development in India, is not immune.
The numbers are, to put it simply, huge. By one estimate, provided by the political and economic calculations of a particular High Commission that should know, the leakage is in the region of more than Rs1,200 crore a day. The thought itself is mind-boggling; what kind of theft generates this kind of numbers, even if it is to be reduced by half?

As a denizen of this city for the past 50 years and as one who has seen how it went on in other cities, globally, where the carpetbaggers reigned, one can well believe it. The spending patterns have gone ballistic in Delhi, especially over the past three-four years. Rs200crore-Rs300 crore for a wedding is the kind of number that a good MLA, or a middle-level "business person" spends lately, it seems.
So when one digs deeper into WHY the Jan Lokpal Bill is not progressing, and tries to analyse the reason why the mainstream media appears to be stuck on the "small corruption" angle, while the business media maintains a discreet silence on what is happening, one hits on huge numbers. For example, for every day that the progress can be delayed, the payout will be enormous. Goes without saying. And the risks taken, politically, suddenly become worth it. What's just the notional daily interest in an inflationary economy for these numbers? It will pay for any amount of free biscuits and bananas and ads on television, just to make sure that the focus remains on "small corruption", while the lobbyists take a short break.
Astonishing stories are sweeping this city. Some high-profile punters in the park-your-money-abroad game have apparently left town, leaving a good number of people with funds parked in tax havens abroad extremely worried. You can hardly go to the local police and complain about this. The average industrialist is up to here with local level corruption, and does not see how a Jan Lokpal will help him, so he is keeping his head down and just getting along with work in a recessionary market. And a friend who is a transporter has confirmed that he is trying to ensure that all his trucks and cargo on them are suitably "secured" every morning, staying off roads and highways during the day as much as possible.
In addition, as credible reports of sporadic rowdyism and violence start appearing from the India Gate and Vikas Marg areas, it becomes even more apparent that the foot-soldiers of those who are going to be impacted are beginning to realise just how deep the Jan Lokpal Bill can go to put an end to the whole pornography of elite corruption, and they are strong enough to ensure it will not happen. There is just too much rent at stake. A new breed of hooligans can be seen on the streets, and counter marches as well as protests are visible.

But yes, the pornography display, that can be scaled down. It will keep the mainstream media happy, too. After all, it is time to replace the lot that has been in jail for close to six months already for assorted Commonwealth Games and 2G scams. The same cells are required for the mining lot as well as the cash-for-votes guys.

To sum up, it is the lack of clarity, the hiding of facts, the reading between the lines, which provides the answers. The Jan Lokpal Bill will, if introduced, put at stake the very survival of many of those who benefit from the ongoing pornography of the elite. Not just that, it will also involve loss of face, tremendously.

The powers that run this country have been able to get the message across to those who perform on their behalf. Obviously, the elite corruption part will continue, but the blatant display of pornography may need to be curtailed, for some time at least.  
And that's what will probably be the tactic to be adopted, as something drastic happens at Ramlila grounds and in the rest of the country in the next few hours, or day. The naked display of elite corruption may shift elsewhere for some time.

Which is how it was in the days of the British Raj, as well as the early years of Independence, remember? You stole what you wanted, but you kept a stiff upper lip as you just pretended to be cleaner than the natives-which is what the Jan Lokpal will in all likelihood achieve. Meanwhile, those who "collect tax on freehold" plan to continue to do so.

It will keep the natives in check. And that's the simple truth. The Brits taught us this.



Nagesh KiniFCA

5 years ago

Though the NRI/PIOs do enjoy Indian tax benefits, the tax authorities in Switzerland, UK and USA have started probing them and bringing them to book. Our country has effective DTAAs with many countries but our authorities for very obvious reasons not invoking them.
When Warren Buffet and other billionaires in France can voluntarily offer to pay more taxes, the least our
fat cats with large sums of money stashed in fast depreciating currencies abroad legitimately repatriate them to India well before the authorities tax/ freeze them.
After all East or West Home is best!



In Reply to Nagesh KiniFCA 5 years ago

Thank you for writing in, Nagesh Kini ji, and to your points I wish to add one more aspect - for many of the 1st generation immigrants in the developed country, the real possibility of their lives becoming worse than that of 3rd world citizens stares them in their faces. That adds to their worries as well as decisions and risk taking abilities.

Humbly submitted.


nagesh kini

In Reply to malq 5 years ago

The post-rating slowdown in the US with its cascading effect in the other European countries and Japan has accentuated the conditions making return to the land of their forefathers a far better viable option.


5 years ago




K B Patil

5 years ago

The road ahead is long, dark and treachorous. All who fight for a cleaner India need to curb their instincts for a head on collission with their opponents and should learn trench warfare. There is going to be a long war head. Anyone who exposes his head without precautions will be at risk.



In Reply to K B Patil 5 years ago

Thank you for writing in, KB Patil ji, and valid points. However, for many, things have reached a point of no return and the sheer daylight robbery and outright killing of the middle class now simply outweighs any risks.

Humbly submitted.

Pankaj Mehta

5 years ago




In Reply to Pankaj Mehta 5 years ago

What a joker!


In Reply to Pankaj Mehta 5 years ago

Thank you for writing in, Pankaj, and I would be grateful if you could please let me know what was "all trash" about this article. humbly requested.


Mario Rodrigues

In Reply to Pankaj Mehta 5 years ago

The truth hurts, doesn't it! If only we realise that this is all the wealth created by the sweat and toil of the common people of our motherland. And we knowingly/unknowingly elect these guys who siphon it all away. I wonder what Bapu would say to us today.


In Reply to Mario Rodrigues 5 years ago

If you mean that it would make Bapu turn in his grave then read this: An honest man dies and goes to Haven. He wishes to meet Bapu there. So approaches the guard in an area where Bapus are living. " I wish to meet Bapu"
"There are many here. Could you identify him?" Yes. He said he would be turning in his grave if his followers committed big crimes".
Ho! Ho! That Bapu. We call him ' Rotating Bapu'. Gate number 3.


5 years ago

Very good piece , could not agree more. Yesterday on TV we had an eminent lawyer who charges exorbitant appearence fees(supposed to be in the range of 25 lakhs per appearence, and you know to protect what type of clients) arguing loudly and stupidly about the Anna team crossing limits and not using proper language while referring to and talking about our Elected representatives currently in Parliment. I wonder whether he would argue with such passion as a citizen about the complete inept , incompetent , lazy or intentional waste of public resources that the same parlimentarians have presided over in the last 7 years of this govt. We need to understand that Team Anna is under stress , which is natural given the amount of work, effort and pressure they have been in the last 30 days. We should give them the lattitude and support to take this effort forward. Here is wishing that we get a strong Lokpal and then continue the agitiation to get Black money from the "Kale Angres" as aptly worded by Anna back to India.



In Reply to sunil 5 years ago

Thank you for your views, Sunil, and I can only request you to help by spreading this and similar articles as much as you can, as well as generating debate on the subject of asset theft from India.


Adi Daruwalla

5 years ago

With great respect for Mr. Veeresh Malik, what the Indian public is lacking is the B's as in B---S. I am surprised at the flagrant use of the word 'pornography" by Mr. Malik. Its more like an orgy.



In Reply to Adi Daruwalla 5 years ago

Thank you for writing in, adi Daruwala, and I can only submit in response that I think that the Indian public is, in quite a few ways, going to be able to do a lot in case things do not improve soon.

The word "pornography" was used in the context of its meaning as linked to obscene and/or vulgar. Not sexual, as is the more common usage, but valid all the same.



5 years ago

Was looking forward to a candid piece like this one...which MoneyLife alone can bring to readers !!


5 years ago

Looks like advertising support from the strangest of organisations, for example ESIC, which is sponsoring an automobile show on NEWSX television channel that is bleeding money since hardly anybody watches the channel, is perhaps influencing the rhetoric.

==being a holder of ESIC card-a SAMPLE live example of mountain of corruption-at Mumbai-MIDC-Andheri-east-marol-chakala hospital of ESIC.

Earlier State owned ESIS-hospital which might have been built with adultared cement in 1960/1970-by equally unscrupulus building contractors- is being just renoweted/repaired AT THE COST OF crores of rupees -instead of rebuilding entire building from scratch.

Probably one can make make more money under option of repairs AND RENOVATION ?????


Crores worth NEW equipments(indian and imported),furnitures are being purchased and dumped everywhere.

OLD JUNK AMBULANCES LYING IN THE COMPOUND and New equipments are being purchased.Hospital building ceilings are leaking all over. OPD Patients do not have proper waiting and washroom area.I AM SURE ELSEWHERE IN THE COUNTRY SIMILAR SITUATIONS EXISTS.




In Reply to shastrids 5 years ago

dear Shastri DS ji, thank you for writing in.

May I suggest you please file an RTI Application at ESIC on the issue?


s kaushik

5 years ago

One should not expact the MPs & parilament to accept the Anna's Bill as it is, Every political party is directly or indirectly involved , They derive pleasure by unsrupulous methods of churning money from people of india.
They will not give up , they will try en number of excuses to see that bill does not get approved by the parliaments.

Rajan Vaswani

5 years ago

See this:

Rajan Vaswani

5 years ago

I tend to believe that the legal system we have inherited was flawed in favour of the British (those in power), and we built our laws on the basis of those flawed laws, that were lop-sided to favor looters or those who abet them. Now, all politicians are worried about their rosie-roti being taken away once a strong bill on anti-corruption is passed.

Logically, why would one tax value-creation by introducing service taxes and continuing with non-competitive laws such as excise (which is a tax on manufacturing). Ridiculous... Indian principles of jugar have caused nothing but problems.



In Reply to Rajan Vaswani 5 years ago

Rajan vaswani, thank you for writing in, and yes, you have a valid point. However, corruption and asset theft in India is now way beyond and more than just for politicians and their campaigns.



Should home seekers put off buying a house because of high interest rates?

The series of rate hikes has resulted in the EMI on home loans going up by more than 20% to Rs1,016 on every one lakh rupees. However, with rates having climbed so high, it would not be wrong to assume that any further increases should be very limited

The past 12 months have seen interest rates on home loans rise from 8% to 10.75%. This has resulted in equated monthly installments (EMI) going up by 21% from Rs837 for every one lakh rupees on the loan to Rs1,016. The question facing home buyers today is whether to go ahead and buy a house if and when real estate prices do decline, or wait till interest rates drop too. Before we answer that, let us understand why interest rates increase or decrease and what the long-term implications are for home buyers.

Interest rates in India are largely a function of the monetary policy, which is decided by the Reserve Bank of India (RBI). The RBI has several goals; the most difficult of them is to maintain a balance between the need to ensure economic growth and control inflation. When inflation rises and threatens to spin out of control, as it has today, the RBI 'tightens' monetary policy. This amounts to reducing, or making expensive, the money supply in the economy.

The RBI achieves this by either increasing the repo rate (the rate at which banks borrow from the RBI) which increases borrowing costs, or increasing the cash reserve ratio (CRR) which has the effect of reducing money supply in the economy. Though the RBI's policies could take up to a year to have their full intended impact, they are perhaps the most effective way to reduce inflation.

The RBI has increased repo rates nine times in the past 12 months, from 5.25% to 8%, towards curbing stubborn inflation. This has resulted in an increase in the base rates of banks and the prime lending rates (PLR) of housing finance companies by 2.5%-3%. Consequently, home loan rates have increased from around 8% per annum to 10.75% and the EMI has shot up by 21%.

This increase in EMI impacts buyers' budgets and often persuades them to wait for the interest rates to come down. As almost all home loans are offered on a floating rate basis, the interest rates applicable would increase in line with rising interest rates. This would mean that even if you had taken a loan at 8%, the current rate would be 10.75%, and either the EMI would have gone up or the tenor (repayment period) of the loan would have increased. Clearly, home-buying decisions should not be influenced by the level of interest rates prevailing at the time of the purchase of house.

However, there are long-term implications for home buyers who take a mortgage, since interest rates are cyclical in nature (illustrated below by repo rate movement over the past six years).

Interestingly, when interest rates are high, there is a smaller probability of a further increase in the interest rate, and thereby a lesser risk of the burden of an increase in EMI. Conversely, in a low interest rate environment, the risk of a subsequent increase in interest rates, leading to a bigger EMI burden is higher.

The correct strategy, especially in a low interest rate environment, would be to assume that interest rates can go up by as much as 2%. Interest rates have averaged 10% over the past 10 years for home loans and hence the assumption of a 10% interest rate is a good thumb rule to calculate your repayment capacity.

The tax benefit available on housing loans is an important consideration since it reduces the effective cost of borrowing. As illustrated (below), the effective cost of borrowing is still below 8% for an average home buyer.

In conclusion, current high interest rates should not deter one from buying a house, but it would be wise to keep some cushion in one's borrowing capacity, to provide for increases in interest rates and the consequent increase in EMI.

(Gagan Banga is a writer and CEO of Indiabulls.)




5 years ago

this information is very useful for home loan tatker

Govind Shanbhag

5 years ago

Gagan jee - Buying a house for many is an impulsive decision. For the last 2-3 years I have been hearing the rate is coming down which has not happened. Many of house buyers they dispose off existing house buy a new one, adding extra space, room and/or in improvement in area. In such an event, the house which they are now disposing off will also command lesser rate. One thing is sure, due to slow down in redevelopment of old buildings, the rentals in suburb has come down marginally.

Samarth Singh

5 years ago

The writer does not take into consideration the purpose behind the purchase of a house i.e. whether it is an investment or a first-home purchase.

The reasons for a first-home purchase can be numerous and the timing is really dependant on personal reasons, preferences, needs and wants.

In the case of a purchase made as an investment - the interest rate environment is irrelevant. What really matters is the expected yield on the investment. A purchase made at a higher than normal yield will be reflected in substantial capital gains in the future and vice versa.

A high interest rate environment simply increases the possibility of being able to purchase a property (or any other asset for that matter) at an attractive rental yield.

Another way to think about this is if you consider purchasing a piece of real estate as investment without a mortgage. In this case, interest rates are irrelevant to you. The only thing that should matter is if you are getting a good return (in terms of rental yield) on your investment vis-a-vis other investment opportunities available to you.

On another note - as I have mentioned above, a good return on investment should be measured by rental yield and not by at what price you expect to sell to the next fellow. The greater fool's theory (i.e. let me buy today because a greater fool is going to buy from me at a higher price tomorrow) is a fine form of speculating but not an intelligent form of investing.

Govt likely to soon approve SBI capital infusion

The finance ministry received a proposal from SBI in this regard a few weeks ago, sources said, adding that it is being examined and a decision will be taken shortly. As per the proposal, SBI requires Rs20,000 crore to fund its growth plans over the next two fiscals

New Delhi: The government is expected to provide capital support to the country's largest lender State Bank of India (SBI) during the current fiscal and a decision in this regard will be taken soon, reports PTI.

"We will capitalise SBI adequately so that the Tier-I capital is maintained over 8%, in line with the government's intent," official sources told PTI.

The finance ministry received a proposal from SBI in this regard a few weeks ago, sources said, adding that it is being examined and a decision will be taken shortly.

As per the proposal, SBI requires Rs20,000 crore to fund its growth plans over the next two fiscals.

Based on the proposal, sources said, various possibilities are being looked at for the capital infusion. It could be by way of a rights issue, preferential share issue, warrants, etc.

It is too premature to comment on the exact mechanism for the capital infusion, as all the options are still being explored, the sources said.

The government is committed to providing adequate capital to all public sector banks so as to maintain their Tier-I capital at 8% and the government's stake over 58%, sources added.

As of June, 2011, the Capital Adequacy Ratio (CAR) of SBI stood at 11.6%. Of this, Tier-I capital stood at 7.6% at the end of first quarter, against the minimum 8% level desired by the government.

Earlier this month, SBI chairman Pratip Chaudhuri had said, "We are already in a dialogue with the government for the rights issue to bring new Tier-I... It should happen by the end of this fiscal."

The government is committed to maintaining the public sector character of the bank and after amendment of the State Bank of India Act, the percentage of government holding cannot go below 51%, he had said.

"So in various scenarios, what would be the requirement of the rights issue, what would be contribution required for the government? The number would be as high as Rs14,000 crore to Rs9,000 crore," he had said.

"Rs 14,000 crore if it retains at 59%, Rs9,000 crore for 51% and Rs11,000 crore for 55%," he added.

Currently, the government has a 59.4% stake in the bank. In case a rights issue is approved and the government wants to retain its holding at the current level, it would need to subscribe to 59.4% of the total rights being issued.

It is to be noted that the country's largest lender had raised over Rs16,000 crore through a rights issue in 2008. In the last SBI rights issue, the government contribution was in the form of bonds to the bank instead of cash.


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