What are the types of scam that a person in an influential position can perpetuate?
One type of scam is to sell something that belongs to the Government at a cheaper than market rate. That buyer then sells the asset at prevailing market price and pockets a profit. Typically, discretionary land allotments fall in this category. Such benefits often accrue to ‘people who are close to power’ or ‘loyal’.
The second type of scam is the opposite of this one. Where the influential person enters into a contract to buy something (Guns, Submarines) for the forces or Government or infrastructure at an inflated price. A variation of this is to buy substandard or outdated technology or non standard items. In either of these cases, the cost is inflated.
Now, in buying and selling assets — it is entirely possible that the official in question is naive or stupid. But to expect in these times that any politician can be so stupid as to not see his (or his backers) self interest is a little bit of a stretch. So we can assume that people at influential positions make transactions based on self interest as much as national interest (the former may trump the latter as we have seen).
Leaving stupidity aside, benefits from both the above transactions (in the former case, the profit is often a reward for loyalty) can flow back to the “person of influence”. This is known as a kickback. Kickbacks can be in cash and kind. Kickbacks in kind varying from a simple job or jobs to a stake in business to real estate. Kickbacks in cash may be to varying non persons, benami friends and Swiss accounts.
The reason why this elucidation is required is because there is attempt in some quarters to shift the goalposts on the spectrum scam that the loss is notional.
The loss is not notional because some other entities made money on the spectrum almost overnight — since the spectrum was sold on 2001 valuations in 2007. The loss would have been notional, had the holders of the spectrum made no money on it.
This argument assumes that the Government does not need that extra money or that the extra money would have made the Government spend more on pork barrel schemes.
But that argument is simply stating a known fact that the Government is corrupt. If the mug does not leak, the bucket will. That is no basis to justify the underpricing of an asset and selling it off to favoured bidders.
In fact, the argument could be equally strong on the other side that the extra money would have helped the Government lower taxes or invest in defence and infrastructure and in many other much needed areas.
The second shifting is to say that customers benefited because of lower tariff on account of the low cost of spectrum sale.
On this count, if the Government was so concerned about offering low cost to customers, it should have taken a very nominal licence fee and opened the floodgates to multiple operators with a profit sharing clause. Clearly, the reason of the low cost of sale was not about benefiting customers. This is now being added to the argument — perhaps by the operators who benefited. If this was true, why did people lobby for a particular man to head the Ministry? And as far as I know, customers did not lobby for him to be there.
The fact is that the money that should have gone to the exchequer went into private hands. Whether it went into politicians hands is a matter of investigation which as we all know will run into millions of years and zillions of dead ends — by which time it will fade from public memory and the beneficiaries will enjoy the high life. The money, in the meantime, will be invested in real estate, gold or in tax havens and may even come back as FII investment in the stock markets.
But for now, it is important that we let the focus remain on the fact that the exchequer was robbed.
(This piece was published as an Op Ed in Pioneer on 26th Jan 2011)
Friday, January 28, 2011
What are the types of scam that a person in an influential position can perpetuate?
Saturday, January 15, 2011
In my many visits to Kerala over the past many years, the one thing that I have found resilient in the state is the unstinting love for its language. The language is Malayalam. If you speak Malayalam, stuff happens. If you speak other languages, things wont move. They will, but at a slighty different pace. And while English would grudgingly win you a few brownie points for being a tourist - not too many other languages would - perhaps in the corridors of 5 star hotels, but on the street - no way. And Hindi - well, the less said the better. I was amazed at the reluctance of the state to learn Hindi.
But a few months back, on a routine visit I was amazed to see quite a few people converse in Hindi. It turns out that along with the emergence of Yadav Bhelpuri Centers there are quite a few north Indians and east Indians working in Kerala. They are there to supplement the labour pool. After all you don't want a post graduate waiter do you? So, in a hundred percent literate state, there are either no takers for certain jobs or the pay is too less - so they migrate to other states in search of jobs. And who comes in their place? People who are willing to do those jobs. Thus it has happened that there are quite a few "Northies" in Kerala and this time I heard people converse in Hindi with them. That's quite a change.
But now, as a certain Raj Thackeray asks and soon a Raj or Reji or Rehman in Kerala will ask - why arent they learning Malayalam?
Interestingly, it will also result in better North Indian food in Kerala apart from Yadav Bhelpuri centers and hopefully better phulkas and rotis...
This entire GTDC video series nothing less than awesome. Its radio ads (that are playing now in the Big Bs voice) are pretty cool too.
Note the choice of words in this Somnath ad though - Foreign invaders or Videshi Hamlavar, but as the history will tell you, it was not always foreign invaders - we had local, homegrown iconoclasts too...but do enjoy the videos - they are really good and the Big Bs persuasive voice makes it awesome.
Friday, January 14, 2011
Many moons ago, on our annual vacations to Kerala - we would maintain that is only the availability of Bhelpuri that makes Bombay a better place to live than Kerala and all my relatives maintained that Bhelpuri had no place in a place like Kerala.
But it looks like the Yadavs have done what the BJP has not - bought a slice of North India into Kerala. More on this later - a longer post coming up on how while once upon a time Mallus helped the middle east, today it is the Biharis and UP-ites who are heading to Kerala - for work!
On a recent visit to Kerala - we were stuck in a longish traffic jam at Kadavanthara junction - which really has to be among the top ten destinations to visit in India as far as a traffic jam is concerned.
Thursday, January 13, 2011
Every recent comment on Pakistan never forgets to include that it was the Senior Bhutto who first got into bed with the Islamists. Which resulted in him appointing Zia Ul Haq as his military head - for which he was duly repaid by the latter. Zia continued the path of encouraging Islamists and Islamism - as did successive governments" and the result today is there for all to see. A "pious" man who was the bodyguard of a "liberal" gunned him down - for no great offense except that he attempted to save the life of a "blasphemer". That was enough for the "pious" man to take his life. Those who claim to be shocked by this should realise by now that this was the writing on the wall all along.
As the Pakistani society is discovering, riding a tiger has its pitfalls. As the character of Bhaloo says in Jungle Book while holding a tiger by its tail - how can I let go - it has teeth at the other end. Riding a tiger or holding its tail is a nice ride until its teeth bite - and bite it will. Nobody who has ridden a tiger has got off safe and sound - either the tiger has to die or the rider. There are no two ways about it. And if the tiger in question is a nuclear teethed tiger, you can safely assume that it not go down quietly.
Today Pakistan civil society (if something like that exists) is hiding from a tiger - the same tiger that they encouraged either by denial or fear or plain ignorance or even a dash of arrogance - "it will bite others, but won't bite me". And the same tiger is out to get them.
The same applies to the US - it rode the Islamic tiger from Arabia to Afghanistan to Pakistan so that it could defeat the Soviets. "Defeat" it did, but today the same tiger is out to get the US and its interests. It has done considerable damage to the US already - something that the Soviets could never do. And the US is attempting to de-fang the tiger smoothly. Which is a historical impossibility. No evil has ever gone down silently.
What the US is learning China refuses to learn. China is in bed with various evils - North Korea, Pakistan and if it doesnt actively encourage them - it surely does not discourage them. Very soon, the tigers will come home to roost - even for China.