Why re-examine the Gadgil Committee report on Western Ghats?

Even as the deadline for inviting comments on the report of Dr Kasturirangan-led HLWG ended today, former secretary EAS Sarma had questioned the motive in re-evaluation of the Gadgil Committee report on Western Ghats

 
EAS Sarma, former secretary of the Government of India (GoI), has questioned the appointment of another committee, a high-level working group (HLWG) under the chairmanship of Dr Kasturirangan to evaluate the Western Ghats Ecology Expert Panel Report (WGEEP) submitted by the Prof Madhav Gadgil Committee.
 
In a letter written to Jayanthi Natarjan, minister of state for environment and forest, the former secretary has questioned the motive behind the constitution of new committee to revaluate the exhaustive report of the Gadgil Committee. “Many of us felt distressed and distraught when your ministry had constituted yet another committee, this time under the chairmanship of Dr Kasturirangan, member of Planning Commission, to re-evaluate the Gadgil Committee report. How is that committee more qualified to question Gadgil Committee’s studies? Did it not result in wasting the tax payer's money?” he said.
 
Mr Sarma said, “In fact, on the same lines as HLWG, I had earlier requested you to set up a similar expert committee to evaluate the threats to the Eastern Ghats. Perhaps, sensing opposition from your colleagues who are clearly in league with the crony capitalist promoters of industry, you have preferred not responding to my appeal,” Mr Sarma said in the letter.
 
After orders from the Central Information Commission and the Delhi High Court, the ministry of environment & forests (MoEF) in May 2012 published the WGEEP report on its website. The reluctance of the ministry was obvious.
 
The WGEEP report submitted by the 13-member panel headed by noted Pune-based ecological expert Prof Gadgil has damned the construction of big dams; the ongoing mining activities; the devastation of chemical industries on the fragile environment of the Western Ghats that comprise 1.29 lakh odd km stretching over six states (Tamil Nadu, Kerala, Karnataka, Goa, Maharashtra and Gujarat).
 
What was hurting to the powerful developmental lobbies were the stringent recommendations made by the WGEEP in terms of making all the 142 talukas that come under the Western Ghats, into Environmental Sensitive Zones (ESZs) of three categories—ESZ I, ESZ II and ESZ III as per order of fragility. 
 
Here is the letter sent by Mr Sarma...
 
To
Smt. Jayanthi Natarajan
Minister of State (Environment & Forests)
Govt. of India
 
Dear Smt. Natarajan,
 
Subject:- Why re-examine the Gadgil Committee report on Western Ghats? How is the new Committee competent to undertake such a re-examination?
 
I refer to the comprehensive report submitted by the Committee constituted under the chairmanship of Prof Madhav Gadgil (HLWG report) and the report of yet another committee under the chairmanship of Dr. Kasturirangan to re-evaluate the HLWG report.
 
Having interacted with Prof Madhav Gadgil in one session while he was in the process of formulating his views on Western Ghats a couple of years ago, I thought that there could be no better person than him to evaluate the ecology of the Western Ghats and recommend measures to protect it. The Committee under his chairmanship had gone about in a systematic and professional manner and come up with suggestions that would save the Western Ghats and its resources for the posterity. I felt disturbed when MOEF had displayed inexplicable hesitation in releasing that report. It was under intense public pressure that your Ministry had to place the report in the public domain.
 
Western Ghats are rich in biodiversity and the health and the well being of their ecology will determine the future of that region for centuries to come. As a result of indiscriminately set up industrial and mining projects, the ecology of that region has already come under a serious threat.  The region cannot bear any additional stress. If at all, the stress that already exists may have to be reduced.
 
In fact, on the same lines as HLWG, I had earlier requested you to set up a similar expert committee to evaluate the threats to the Eastern Ghats. Perhaps, sensing opposition from your colleagues who are clearly in league with the crony capitalist promoters of industry, you have preferred not responding to my appeal.
 
Many of us felt distressed and distraught when your ministry had constituted yet another committee, this time under the chairmanship of Dr. Kasturirangan, Member of Planning Commission to re-evaluate the Gadgil Committee report. How is that committee more qualified to question Gadgil Committee's studies? Did it not result in wasting the tax payer's money?  Apparently, the Gadgil Committee report would hurt the interests of several corporates and, therefore, is unpalatable to the rulers of UPA! The way the HLWG report has so far been handled by the Prime Minister, the Planning Commission and MOEF confirms my strong feeling that most decisions of UPA are dictated these days by crony capitalists who seem to permeate the system like never before!
 
What worries me most in the latest report (Kasturirangan's) is that it contemptuously dismisses the role of the people at the grass-roots in economic decision making. The authors of the latest report seem to be oblivious of the fact that the Indian Constitution begins with the words, “We, the people of India...” Ours is a democratic system. The authority that is implicit in the Constitution emanates from the people. The Gram Sabhas are a Constitutionally created entity. The real wisdom and the knowledge about the ecology of any region rest in the local communities. To think that the ultimate wisdom rests with the Planning Commission, or the South Block, or Paryavaran Bhavan, is to delude oneself.
 
I feel pained to read the letter written by Prof Madhav Gadgil to Dr. Kasturirangan on the latter's report. I have enclosed a copy of that letter for your ready reference. I am sure that several persons among the civil society have also written to you, expressing their concerns.
 
I realise that MOEF has fixed a ‘deadline’ for submitting comments on the report and it so happens that today is that deadline! When the ecology of the country comes under the threat of crony capitalism of the worst kind, these deadlines have no relevance.
 
I fully endorse what Prof Madhav Gadgil has said in his letter to Dr. Kasturirangan. I wish Dr. Kasturirangan and his colleagues in his committee had the courage and conviction to tell MOEF that they would not re-evaluate Prof Gadgil's report.
 
I request MOEF to reject Dr. Kasturirangan Committee report and, instead, accept HLWG report without any hesitation. The sooner that MOEF does this, the greater will be its credibility as a body obligated under Article 48A of the Constitution to protect the environment of this country.
 
I am confident that you will accede to this appeal unhesitatingly.
 
I have marked copy of this letter to the Prime Minister and Deputy Chairman of Planning Commission, hoping that they would introspect on what I have said here..
 
Regards,
Yours sincerely,
 
 
EAS Sarma
Former Secretary to GOI
Visakhapatnam
 
Separately, Prof Gadgil in an open letter to Dr Kasturirangan pointed out that out that the WGEEP report has advocated a graded approach with major role for grassroots level inputs to safeguard the Western Ghats. On the other hand, the HLWG rejected the framework and advocated partitioning of the natural and cultural landscapes. 
 
Prof Gadgil said, “This is like trying to maintain oases of diversity in a desert of ecological devastation. Such fragmentation would lead, sooner rather than later, to the desert overwhelming the oases. It is vital to think of maintenance of habitat continuity, and of an ecologically and socially friendly matrix to ensure long-term conservation of biodiversity-rich areas, and this is what we had proposed”. 
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After 21 years, Maharashtra issues circular for anti-terrorism day

After almost 21 years since Rajiv Gandhi was assassinated, the Maharashtra government issued a circular to observe 21st May as anti-terrorism day 

 
While several states across the country mark 21st May as anti-terrorism day, in remembrance of former prime minister Rajiv Gandhi, the government of Maharashtra has finally woken up to the idea. After almost 21 years, since Rajiv Gandhi was assassinated, the Maharashtra government on 16 May 2013 issued a circular to observe the anti-terrorism day from this year onwards.
 
Surprisingly, it took a letter (warning) from the Union home ministry for Maharashtra government to come up with its own circular for observing 21st May as anti-terrorism day in the state.
 
The letter was sent by Bhagwan Shankar, joint secretary in the Union home ministry, on 8 May 2013. Acting swiftly on the letter, the state government then issued its circular within a week after receiving the warning letter, claims social activist Anil Galgali.
 
Galgali, also an avid RTI activist said Maharashtra government was never serious on the issue (terrorism) and it took the warning letter from Union home ministry for the state machinery to issue a circular after 21 years.
 
Galgali had also sent a letter to the President of India, prime minister and chief secretary, urging them to enquire in to the delay in issuing the circular and take action against the officer/s responsible for the 21-year delay.
 
The day is observed to generate awareness in the country among all sections of people, about the danger of terrorism and violence and its effect on the people, society and the country as a whole. 
 
It was on this day in 1991 that Rajiv Gandhi fell to the designs of terrorists. This practice to observe 21st May as anti-terrorism day began in 1992. However many states including Maharashtra ignored it every year. 

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Cobrapost exposures: What next?

No need for more exposures as of now. What the common man is waiting for is a change that would reduce corrupt practices and infuse a semblance of ethical behaviour, on the part of individuals and organisations handling public funds, on which, in reality, they have only trusteeship rights

 
In its breaking news story (14th March), the online portal Cobrapost.com had talked about alleged violation of norms in acceptance of deposits and “money laundering” by three new-generation private sector banks (HDFC, ICICI and Axis).
 
The portal on 6th May came out with a second instalment of exposure, which gave details about its continuing undercover operation, spanning months. The portal accused as many as 23 public and private sector banks and insurance companies of “running a nation-wide money laundering racket, blatantly violating the law of the land”. Based on ‘action’ captured on video-tapes, Cobrapost explained how employees of banks and life insurers are helping customers launder unaccounted cash, bypassing know your customer (KYC) norms. They had allegedly offered to invest unaccounted cash in products that form part of the regular financial system and help launder the unaccounted money.
 
Cobrapost has come out with yet another ‘instalment’ of exposures involving more banks, in fact one doubts whether any major bank is now left out.
 
Though the exposures fell short of any evidence about “concluded deals”, they gave enough indication that the systems in place to prevent money laundering are not working as efficiently as they should. The officials approached by the representatives of the portal as part of its sting operation were all willing to help their prospective clients through all the three main stages of money laundering process. These three stages are:
(i) Placement, where the money launderer (the person who holds money generated from criminal activities—in this case money from undisclosed sources—introduces illegal funds into the financial system. This can be done by dividing large sums into smaller ones and deposited in different accounts.
(ii) Layering, where the launderer converts or moves funds fast to hide the true origin of such funds and to distance the converted funds from the original source.
(iii) Integration. The money travels back to the financial system with legitimacy gained. 
 
Those named in the exposés include two Kerala-based banks (Federal Bank and Dhanalaxmi Bank), State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank, Indian Bank, Indian Overseas Bank, Oriental bank of Commerce, Allahabad Bank, Central Bank of India, Dena Bank, Corporation Bank, IDBI Bank, Yes bank, DCB Bank, Life Insurance Corporation of India (LIC), Tata AIA, Reliance Life, Birla Sunlife, and many others. 
 
Some of the banks facing allegation have started fire-fighting operations to restore image.  Some banks including SBI India have initiated internal inquiries. Indian Overseas Bank stated that the bank is inquiring two lower level officials identified in the exposure, but adding that “action can be taken once we identify any wrongdoings”. Federal Bank for instance has come out with a statement which says “As a responsible bank, we conduct our business with strict adherence to extant regulatory guidelines, including specific focus on know your customer, and anti-money laundering norms” and has confirmed that the bank has initiated investigations into the matter. Meanwhile, the government said action had been taken against 31 employees as on 7th May. Fifteen officers/employees of various public sector banks (PSBs) had been suspended, 10 officers had been divested of their work and six had been asked to proceed on leave. Regulators including the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority (IRDA) also have swung into action. Besides, the finance ministry has asked public sector banks and LIC to take action against employees “appear to be advising” customers on ways of violating know-your-customer (KYC) and other regulatory norms. 
 
Following his own approach of denial on the earlier occasion, RBI deputy governor Dr KC Chakrabarty was quick to refute money laundering charges levelled against various banks and claimed that all exposures by Cobrapost.com were connected to KYC norms. His casually observed: “There are certain differences in reporting of KYC norms. We are seeing how banks are following up. Based on this, we will issue show-cause notices and action will be taken. We need to strengthen KYC guidelines and respective departments have to take action.” It looks as if this was not taken very seriously, even by his own men. On the earlier occasion Dr Chakrabarty had taken shelter under “financial illiteracy” saying that “it is not money laundering… it is your financial illiteracy!” 
 
Last week, in an interview given to a mainstream financial newspaper, the same deputy governor lamented that “If bank boards aren’t capable, nothing much can be done”. 
In the given situation, where some exposure or the other reminds us everyday that we are going through a phase of continuous violations of legal norms and ethical behaviour (in the financial sector these get easily ‘quantified’!) the deputy governor may not have ready answers to all the questions posed. But the positions taken by him on the following issues are not professional and a layman’s view is not what one expects from the regulator:
“If bank boards are not capable, nothing much can be done”: If Dr Chakrabarty means what he says, RBI and GOI should take responsibility and take immediate steps to put in place “boards which are capable”.
“Banks might have indulged in ‘traffic rule violations’ but ‘no accident has taken place’:” Cobrapost’s exposure hovers around allegations that bank officials were liberal in offering to violate traffic rules. The position that “no accident has taken place” is a “legal denial”. ‘Accidents’ are taking place and it is for the regulator, supervisor and other authorities including the finance ministry to find out how many of them are ‘caused’ by ‘traffic rule violations’.
“Reputation will be hampered if one or two banks do it. If everyone indulges in this, where is the issue of reputation? My question is why banks should take so much commission in selling insurance/mutual fund products”: If the regulator starts asking questions like this, where does the customer go when he has a grievance? The position that “If everyone indulges in this, where is the question of reputation?” though goes well with the stand political parties take these days, brings down the image of the institution (RBI) Dr Chakrabarty serves today. 
“Restructuring is a perfect commercial phenomenon, practiced across the world. It is like a medicine but it has to be used judiciously. If you don’t use it properly, it will not give you the result. If banks are taking undue advantage, then banks are going to suffer”: Very true. But when banks ‘suffer’, the real loss is passed on to the depositor and the tax-payer. The government and RBI are duty-bound to protect public interest, in such situations.
 
Interestingly, the RBI governor did not take the risk of defending the banks or the regulators on the issue. Dr D Subbarao made the following observations on the subject:
“RBI is not directly involved... Even banks are not directly responsible. They are not expected to inquire about the source of income. It is for government and tax authorities to check money laundering,” he said while addressing students and academicians as part of the Platinum Jubilee celebrations of Jammu & Kashmir Bank on 8th May, adding that “there was no conclusive evidence of money laundering in the expose of Cobrapost”.
 
Ironically, most part of the exposure talks about how bank officials were “very helpful” in circumventing norms and rules. Here, it would be appropriate to recall some of the provisions of the Prevention of Money Laundering Act, 2002 (PMLA).
 
PMLA which came into force with effect from 1 July 2005 and was last amended effective 15 February 2013, forms the core of the legal framework put in place by India to combat money laundering. PMLA and the Rules notified there under came into force with effect from 1 July 2005. Director, Financial Intelligence Unit-India (FIU-I), which is the body responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions to enforcement agencies and foreign financial units, and Director (Enforcement) have been conferred with exclusive and concurrent powers under relevant sections of the Act to implement the provisions of the Act. 
 
The PMLA and rules notified there under impose obligation on banking companies, financial institutions and intermediaries to verify identity of clients, maintain records and furnish information to FIU-I. PMLA defines money laundering offence and provides for the freezing, seizure and confiscation of the proceeds of crime.
 
Clause (2) of Section 9 of PMLA relating to verification of the records of the identity of clients reads asunder:
 
“ Where the client is an individual, he shall for the purpose of sub-rule (1), submit to the banking company, financial institution and intermediary, as the case may be, one certified copy of an ‘officially valid document’ containing details of his identity and address, one recent photograph and such other documents including in respect of the nature of business and financial status of the client as may be required by the banking company or the financial institution or the intermediary, as the case may be.”
 
The purpose of quoting the above provisions of PMLA is to emphasize that the allegation hovers around non-compliance with the requirements under the Act. The portal has alleged that many bank officials were more than eager to help the prospective client to do things hush-hush and in some cases had offered to create non-existent documents to enable opening of accounts. Some bank officials allegedly offered to accept huge amounts of cash running into tens of lakhs of rupees (first to be deposited in large lockers which will be later credited to accounts to be opened) as deposits. The bank officials were lured by the promise of further deposits of crores of rupees.
 
Let us leave the story, the legal position and the follow up here. 
 
The question arises, in 2013, do we need a Cobrapost, a Tehelka, Wiki-leaks or a new TV channel struggling to improve its own TRP to tell us that all is not well in the goings on in India, when it comes to handling public funds (“public funds” comprise money collected from public which includes bank/company deposits and other funds with private organisations)? After all, this much has been told to us by the highest court (Supreme Court of India), Comptroller and Auditor General, Election Commission and several other “usually reliable” government and private bodies, from time to time in recent years. Most of the political parties also have endorsed this view during their bickering among them. What the common man is waiting for is a change which will reduce corrupt practices and infuse a semblance of ethical behaviour, on the part of individuals and organisations handling public funds, on which, in reality, they have only trusteeship rights.
 
While delivering the Second Annual Lecture at Transparency International in Delhi on 19 February 2011, Dr Bimal Jalan, ex-governor, Reserve Bank of India made the following observation:
“Thus, taken as a whole, corruption is undoubtedly an important cause for rising disparity, persistence of high incidence of poverty, and enormous delays and low productivity of public investments in India.”
 
On an earlier occasion (Seventh Nurul Matin Memorial Lecture, Bangladesh Institute of Bank Management, Dhaka, 2007) speaking on “Ethics in Banking” Dr Jalan had this to say: “Adherence to the ‘Rule of Law’ in a democratic society is an essential minimum requirement of ethical behaviour” He agreed with Professor Nurul Islam who had observed on the same dais that “…..ethics in banking, economic transactions and in society in general, are all interrelated. The solution needs to cover all related areas, including the systematic political factors.” 
 
Remembered the above, in the context that deterioration in ethical behaviour is not confined to financial sector alone. I genuinely feel, we need all voices which bring to surface unethical practices including corrupt behaviour on the part of “public servants”. More importantly, media should help citizens to follow up such cases until the guilty meet with exemplary punishment.
 
(MG Warrier is former general manager, Reserve Bank of India, Mumbai, and is a regular contributor for Moneylife.)
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COMMENTS

SuchindranathAiyerS

5 years ago

The question, for which there is NO answer, is why should India's rulers change? They never had it better. Loot and rape with impunity and "Z" Class security with lathis and bullets for anybody who objects.

REPLY

M G WARRIER

In Reply to SuchindranathAiyerS 5 years ago

Aiyer
You are in the company of one billion people who share your feelings.When all of them start asking, why India shouldn't get the change the country deserves, change is inevitable. So many things have changed during the last hundred years.

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