As a COVID-19-induced slowdown marks the Modi 2.0 term, there is a desperate need to get the economy back on track. The country urgently needs a revival of the spirit, ultimately it is a question of the survival of over a billion people. Next-generation reforms include opening most of the railways to foreign direct investment (FDI), allowing more private sector participation in coal production and FDI in construction projects, extending the validity of industrial licenses, removing the last 20 remaining protected sectors under the small-scale industries list, and deregulating diesel pricing.
Reforms noticeably slowed as the Modi 1.0 term progressed but the government managed to institute two key reforms by its mid-term; the goods and services tax (GST) and the Insolvency and Bankruptcy Code (IBC). By contrast, two years into Modi’s 2.0 term, only two reforms namely 25 percent corporate tax limit and the controversial Farm Bills 2020 were pushed by the government.
The compulsion to remain in power has refocused the government’s political energies on socio-political issues like ending the temporary special status of Kashmir, doing away with triple talaq, fast-tracking citizenship for regional minorities through the Citizenship Amendment Bill, and starting the Ram Mandir construction. Socio-political issues are popular but detract energy from taking steps to revive the economy. Reforms that can spur economic activity, boost confidence, and put people back to jobs are the real game-changers yet the focus is largely missing on economic management. The need for reforms, although ever-present, becomes even more critical in a COVID-19-induced slowdown. The government recently announced a slew of reforms that were akin to budget announcements, though implementation timelines are unclear.
Big-ticket and high-impact reforms are required. Lifting foreign equity restrictions in protected sectors and giving more autonomy to major ports can provide a quick bump in growth. Other reforms related to judicial reform, securing timely business licenses/clearances, and making land acquisition easier are long-awaited and can boost business and investor sentiment amidst a slowdown. Some reforms that made sense pre-COVID are even more relevant today, like creating a paperless court system, pushing e-governance, reducing the fiscal deficit, reducing oil imports and promoting clean energy sources to make the country self-reliant. Narendra Modi is blessed with a majority government and the present leadership must take urgent steps to bring back focus on the economic management of the country before it is too late.
Prashant Tewari: Editor in Chief
The mayhem that took place in Delhi on R-Day has hurt the farmers as they have lost their bargaining power
After democracy was put to shame by unscrupulous elements in the garb of farmers and Nihangs (Sikh religious warriors) who hoisted the ‘Nishan Sahib’ on the Red Fort after laying siege to the iconic-building when India was celebrating its 72nd Republic Day, deep fissures have started to appear among different factions of the protesters who are now apparently pitted against each other. This means that the majority of the cultivators are not in favour of what happened on the fateful day when thousands of farmers stormed the Capital, vandalised public property, attacked policemen, ran amok on the streets and captured Red Fort. The protesting farmers allege that antisocial elements orchestrated the violence which was part of a “larger conspiracy” to derail the movement. With police hunting down the perpetrators of the violence, a name which is making the rounds is that of Punjabi actor Deep Sidhu who is being blamed for instigating the growers as well as changing the route. Sidhu is currently absconding.
The Bharatiya Kisan Union (Bhanu) called off its protest from the Chilla border connecting Delhi and Noida. At the Singhu border, the two farmers’ unions protesting from separate daises blamed each other for the violence. The Rashtriya Mazdoor Kisan Sangathan and the Bharatiya Kisan Union (Lok Shakti) are also ending their protests against the farm laws. The unions have also called off the February 1 march to Parliament. As many as 25 cases, including those of rioting and criminal conspiracy, have been registered and arrests and detentions are the order of the day. The police claim that the protesters violated all conditions that were agreed upon by not following the predetermined route, starting the tractor rally before the scheduled time and by carrying firearms, swords and other weapons. With the widening differences and growing disagreements among the farmers, it is safe to predict that the protest will not last long and the farmers will have to return empty-handed. Although the Government has indicated that it will keep its communication channels open and its previous offer to put the three farm laws in abeyance for 18 months stands, right now it doesn’t seem to be a workable proposition for the farm unions who had rejected it earlier. With the growers’ unity in shambles, their leaders no longer find themselves in a position to bargain or exert significant pressure on the Government. And with that, a farmer’s movement which fought all odds for roughly two months now hangs by a thread, courtesy of the violence and mayhem caused by a select few who infiltrated their ranks. The real victims of the violence on R-Day are the farmers themselves and the movement that had united the country in their favour.
The Farm Divide
Whosoever wins this ‘war of prestige, the poor peasants will still remain at the receiving end
No matter who wins the tug-of-war between the farmer unions and the Government, the poor cultivators will continue to remain at the receiving end. Who are these tens of thousands of farmers protesting on Delhi’s borders for almost two months, demanding a repeal of the three new farm legislation and remunerative Minimum Support Price (MSP)? They certainly do not belong to the class of peasants that is neck-deep in debt and many of whom die by suicide every year as they see no option to bail themselves out of the vicious cycle of interest payments on loan by moneylenders. A majority of those camping at the interstate borders are big and upper-middle-class landlords from Punjab, Haryana and western Uttar Pradesh who are part and parcel of the strong arhatiya (commission agents) lobby, a community that drives the Agricultural Produce Marketing Committee’s (APMC’s) mandis. These farmers constitute a sizeable chunk of the vote bank of various political parties who cannot afford to go against the populist stance taken by the community. Only the APMC-licenced traders are allowed to purchase produce from farmers within that particular APMC’s jurisdiction. This helps the cartel of traders and prevents the hardworking farmers from receiving a fair price for their produce. This is why, perhaps, the hectic parleys and several rounds of dialogue have yielded no result and the farmer leaders have even turned down the Centre’s offer to put the new laws on hold. The latest round of talks on Friday also remained inconclusive, with no date fixed for the next meeting. The growers remain adamant on the full repeal of the farm Acts and for enacting legislation on the MSP. The farmers have also raised doubts over receiving fair treatment at the hands of the members of the Supreme Court-appointed expert committee and termed it “biased”. On the other hand, the apex court has made it clear that the panel, tasked to submit its report after noting the farmers’ reservations, would proceed with or without their participation.
However, the farmers’ apprehensions cannot just be brushed aside. The NDA Government’s haste in finalising the three laws, the lack of consultation with stakeholders and the Bills’ passage in Parliament without thoroughly discussing and debating these ought to raise reasonable doubt over the Centre’s intention. Further, these laws were first introduced in June 2020 as Ordinances before being approved by Parliament in September by a voice vote. The farmers allege that the Centre has made laws for benefiting big corporate houses and is not concerned about the welfare of the peasants. It cannot be denied that by promoting private investment in the sector and allowing outside-APMC trade of farm produce, the Government will subsequently buy less from farmers, and it will eventually make the MSP system irrelevant. Further, there is no denying that India’s MSP system is the costliest Government food procurement programme in the world. It’s high time the Government and the farmers think about the pertinent issues impacting the agriculture sector. The Green Revolution has given us food self-sufficiency but chemical fertiliser-centric farming has also led to enormous health and environmental hazards, besides degrading the soil’s fertility. These harmful carcinogens have become embedded into our food web. Further, the introduction of hybrid and transgenic varieties of seeds and crops, just for the sake of increasing productivity and meeting the market demand, is a potent threat to indigenous varieties. These local varieties are naturally resistant to many diseases and pests, and are part of our rich genetic stock. Apart from focusing on eco-friendly agriculture, the Government must devise an effective policy to help the poor peasants who are in distress and who are always at the receiving end, no matter what.
Protesting farmers enter Red Fort, man climbs flagstaff to hoist flag
Deviating from the designated route for the proposed tractor parade, a section of protesting farmers entered the Red Fort on Tuesday and hoisted flags from some domes of the iconic monument in the national capital.
Pushed back by the police form the ITO in Central Delhi a section of the protesting farmers drove their tractors to the Red Fort complex.
The crowd swelled at the monument as some protesting farmers and 'Nihangs' (traditional Sikh warriors) were seen entering the Red Fort and hoisting a flag from the staff from which the prime minister unfurls the tricolour on Independence Day.
Earlier, a clash broke out between police and protesting farmers after the latter reached ITO and tried to push towards Lutyen's Delhi, prompting the force to resort to lathicharge and use tear gas shells against them.
The farmers who began their march from different border points, much before the time permitted to them for their tractor rally, reached ITO in Central Delhi despite the force denying them permission for it.
The Delhi Police had given permission to farmers protesting the three farm laws to hold their tractor parade on selected routes only after the official Republic Day parade on the Rajpath concludes.
However, chaos ensued as the farmers were adamant of heading towards central Delhi.
(Courtesy – The Pioneer)
The chaos and confusion, allegations and counter-allegations, and social media war are the new order of the day. On every contentious issue, citizens are on roads to settle their grievances. The redressal mechanism through the courts has become extremely weak and our country is under seizure for the entire year. Farmer’s protest in India’s national capital has created headlines globally but why the farmers are protesting, what is controversial in the contentious farm laws is hardly known to the majority of the people. The situation worsened further on republic day as a section of protesters reached the Red Fort on their tractors and stormed into its ramparts. The protesters climbed onto the ramparts of the Red Fort and waved their religious flags. One of them even climbed the flag post where the Tricolour was hoisted by the Prime Minister of India on Independence Day and replaced it with a religious flag there. Later, the police resorted to mild lathicharge and removed the people from the red Fort premises. It is imperative to fix the responsibility for this grave security failure that has led to the shaming of 1.3 billion people living in India. The weakness shown by the government will prove extremely costly in the times to come.
Farmer leaders have clearly stated that the agitation would continue till the farm laws are repealed. The entire confusion is fueled by the exit of NDA partner Akali Dal from the government in protest of the passing of the Farm Bill 2020 without enacting the MSP clause in the final draft of the Farm Bill 2020. It is fair to suggest that the Narendra Modi-led government being in the absolute majority is ignoring the sentiments of its allies since their absence has no impact in the lower house of the parliament for the government's survival. But as rightly suggested by Punjab Chief Minister Captain Amrinder Singh that anti-national forces are looking for an opportunity to penetrate any controversial movement to destabilize the country. Failed Khalistan push by overseas forces may trigger confusion in the minds of the sulking farmer community of Punjab to misguide them on the pretext of ethnic-religious divide hence the government of the day must remain vigilant and the requisite concessions should be extended to the farming community to defuse the unnecessary bitterness and heartbreak between the government and its people.
The government is lacking in communication skill set hence on every contentious issue - strikes and lockdowns are setting in. Lastly, the uncalled international intervention by certain groups and foreign leaders in an internal matter of the country is highly deplorable and it must be condemned in the strongest words. The government must defuse the crisis at the earliest and restore normalcy to accelerate the pace of developmental work that has suffered due to the Covid lockdown. The budget presented has a long-term vision and the government must focus on economic rejuvenation without any manmade disruption.
(The writer is Prashant Tewari, Editor-in-Chief, Opinion Express)
Amateur, inexperienced and perhaps innocent late Rajiv Gandhi was crucified by a powerful cartel of middlemen leading to the destruction of India’s oldest political party. The present government and the proactive courts must order a re-investigation of the BOFORS SCAM to focus on exposing middlemen rather than the past ruling establishment because we felt that the Bofors scam triggered birth to a new class of “dalals” in India and they overpowered the crucial institutions, establishing India as one of the most corrupt countries in the world. Though we are fortunate to have fiscally clean Prime Minister in the last few decades yet corruption is rampant in the country. Where it went wrong? The answer is simple, the country is held hostage at the mercy of middlemen operating in politics, bureaucracy, legal and media. The country is bleeding from corruption and the common man's misery continued unabated.
Against this backdrop, it is vital to explore the Bofors scandal that changed the politics of the country some 33 years ago in 1987. With revelations in 1987 by Swedish Radio alleging kickbacks in the purchase of guns for the Indian Army tremors started in Indian polity and press that shook the roots of the Congress regime under Prime Minister Rajiv Gandhi. Unfortunately, there were several bigwigs cutting across party lines with incriminating links to this scam and they colluded to sabotage this case allowing several culprits to escape public scrutiny and legal prosecution.
Part 1: Background
A healthy democracy evolves through the legislature, executive, judiciary and media. The Bofors scandal in 1980s set in motion a process of decay in all the organs of democracy whereby they were compromised to save the guilty that were among the country’s powerful elite. It may well be that the allegedly guilty leader of the then-ruling party was beguiled by his cronies for their own vested interests. It is also true that propriety demands that a dead person should not be accused since he cannot respond and clear his name (We will strictly follow the convention). However, the country has a right to know the whole truth once it was established that money exchanged hands in the deal. Corruption in the defense establishment should be treated as treachery against the nation and it must be investigated under IPC and stringent NSA guidelines. In 2005, the Delhi High Court quashed charges against all other people who were accused in the Bofors case, including the Hinduja brothers who were also accused of being middlemen in the deal. The CBI plea against the High Court verdict was filed in February 2018 after an extraordinarily long delay of 13 years; it was rejected by the SC. The Court should have taken note of the fact that UPA I & UPA II were in power from 2004-2014, hence the question of an appeal in the top court during this period would have been impossible. However, one ex BJP worker and Advocate Ajay Agrawal had filed an appeal against the Delhi High Court judgment in 2005. The Supreme Court agreed to hear Agrawal's plea and the case is currently pending in the court. The Supreme Court told the CBI that it could make itself heard during the hearings on Agrawal's plea. Will the CBI under the BJP regime now file an Intervention Application (IA) in Ajay Agrawal’s case?
Background: Mohan Guruswamy wrote investigative reports on the case to know the scam's political background and the business nexus behind it. Olaf Palme, the Prime Minister of Sweden was an influential and respected name in world affairs and had strenuously opposed the US war on Vietnam. He inspired Rajiv Gandhi to take the initiative on nuclear disarmament. The quid pro quo for facilitating Rajiv Gandhi's easy entry to the global high table was the purchase of the Bofors FH45 Howitzer. Palme was also facing re-election and his party's coffers needed topping up. The Indian Army’s Howitzer order would do the trick. The competition was shortlisted in to M/s Sofma of France, M/s AB Bofors of Sweden, M/s International Military Services of the United Kingdom, and M/s Voest Alpine of Austria. In the first six evaluations, the Sofma 155mm TR howitzer, with its extended range, was decisively preferred to the Bofors gun. Financial considerations also gave the French manufacturer what seemed to be an unbeatable lead. The donation by the Bofors Foundation at Karlskrona to the Swedish SDP is solid proof.
Losing this lucrative order made the Arun Nehru-led Austrian competitor Voest Alpine furious since it was confident of bagging it, largely because its product was the best gun and preferred choice of the armed forces technical committee. Austrian leader Eisenberger told the parliamentary committee that the funds they wanted accounted for were paid to the Congress party and that a kinsman of the Indian Prime Minister had received them. The Austrian government then advised the Indian government to have this money returned and close the matter. This was the first time the new Indian Prime Minister heard about the dirty game played by his known set of close people. He was furious. A very powerful Minister in his government was summarily sacked. Now a way was sought to set this account right. Bofors were required to close this hole. This was being arranged via a Swiss banker Francis Laffont. The route went like this. Bofors pays Laffont, Laffont pays Voest Alpine and the money already paid in India stays where it is. Eisenberger alleged that Voest Alpine's representative in Delhi, a man called Unterweger was Ottavio Quatrochhi's neighbor in New Delhi. Being expatriate businessmen, they became good friends and both were good friends of Rajiv Gandhi’s wife Sonia Gandhi and her sister Anushka’s then-husband Walter Vinci. It is a well-documented fact that Vinci was in the group of Rajiv Gandhi’s delegation which signed the Bofors deal. BJP leader Subramanian Swamy many times petitioned to Central Governments on probing the role of Vinci who got a major cut in the deal and later buzzed off from Sonia’s family.
As was the well-established practice then, Unterweger also cut a deal with Quattrocchi. What Unterweger did not know was that Quattrocchi had similar deals cut with Bofors and Sofma, the French howitzer manufacturer. When the Voest Alpine deal collapsed, Quattrocchi was required to close that account, as did the Congress party. So one more payoff stream was organised by Bofors to Quattrochi to close this hole. The Hinduja brothers took this to the next level. People like the Hindujas have friends in all parties and many countries. Lest we forget, it was Atal Bihari Vajpayee who wrote to then Prime Minister PV Narasimha Rao seeking closure of the Bofors case against the Hinduja brothers. And it was Srichand Hinduja who accompanied Vajpayee’s Principal Secretary Brajesh Mishra to his meetings with then-British PM Tony Blair and then-French PM Jacques Chirac after the nuclear tests in 1998. Vajpayee and Mishra were actively canvassing for approval of the controversial proposed Hinduja power plant at Vizagapatam. Not surprisingly, even today the plant is under tremendous debt burden and the public sector banks are at high risk of losing tax payers money. Adding to the trouble, there is a massive litigation going on between the state government, state power regulator and the Hinduja’s.
So far, the Indian Government has been given two names by the Swedish journalists who are involved in the story. One is Win Chadha, a Delhi-based arms dealer who represents a number of companies abroad, including Bofors. Chadha has denied that he received any payments and claimed that he stopped representing Bofors in 1985 after the agreement between Rajiv and the then-Swedish premier Olof Palme that no middlemen would be involved. A photograph published in several Swedish dailies, which elicited amused comment in Stockholm, was that of a jubilant Chadha celebrating with champagne, with Bofors officials, after the contract was clinched. The other name given is that of Commander M.R.A. Rao, who used to represent Bofors in the late '70s, but retired from the arms business after Chadha's appointment. Moreover, there is a big hidden aspect in this Bofors saga. The kickback money paid to Quattrocchi and Walter Vinci came from a shell firm AE Services. BJP leader Subramanian Swamy, who was also Law Minister during 1990-91 and saw many prosecution files and investigators reports, repeatedly stated that M/s AE Service was first promoted by Congress leader P Chidambaram’s elder cousin and industrialist AC Muthaiah. Swamy many times demanded a probe into Muthaiah’s role in Bofor's kickback arrangement. However, CBI even during the BJP regime from 1998 to 2004 and till now in 2020 has kept silent on this fact. Even BJP leader Arun Jaitley, whose career brightened as Additional Solicitor General (ASG) in charge of the Bofors case during VP Singh's regime, always kept quiet on this aspect due to his proximity with Chidambaram. Like Jaitley, all BJP leaders kept silent on the role of the Hinduja brothers due to the latter's proximity to Vajpayee. The worst role in the cover-up was that of the Law Minister Ram Jethmalani who handled the files of Bofors in the law ministry and later against all norms of administrative and political morality, became the advocate of Hinduja Brothers.
Such is the sordid and nefarious saga of the Bofors case in which powerful businessmen and politicians cutting across party lines colluded to deceive the Indian public and nation.
Bofors Scandal – The murky tale of sabotage: Who are all responsible?
The real sabotage started in the Bofors case when the trial started in 2000. The corruption case came to light in 1987 and it politically finished Rajiv Gandhi though the subsequent investigation showed his innocence in person. The beneficiaries could have been his colleagues, close family acquaintances and surely the middlemen and corporate Dallas.
Part – 2
In 1997, Swedish Government submitted a box full of documents about the Bofors case to India. Journalist Chitra Subramanium, who first exposed Swedish Radio’s revelation of 1987 was present in the function of the box handed over to the Indian Ambassador by the Swedish Federal Bureau of Police along with other journalists. Defence Minister George Fernandez many times complained that Prime Minister AB Vajpayee never allowed him to touch this box or any of the Bofors files. Why? The answer is simple: the role of Vajpayee protégé Hinduja Brothers in the Bofors kickback would have been exposed. Now the question is where is the box handed over by Swedish Police to CBI? CBI never mentioned about this box in their charge sheet filed after five years.
Legal Battle: The charge sheet filed on October 9, 2000 by the Central Bureau of Investigation (CBI) in the Delhi court of Special Judge Ajit Bharihoke, along with the detailed post-April 1987 record of the media investigation and other documents and reports to make two things clear. While there is nothing new in the claim made by the Hinduja Brothers about their "non-involvement in the Bofors case", a mass of multi-faceted documentary evidence and information gives the lie to this claim. On April 22, 1987, the respected Swedish daily newspaper Dagens Nyheter (DN), quoting highly placed company sources in an original report, identified the Hindujas as recipients of the "commission" paid by Bofors in connection with winning the Bofors-India howitzer contract of March 24, 1986. The first irrefutable documentary basis of the Hindujas’ involvement in the Bofors-India payoff scandal came in the form of six documents relating to the PitcoMoresco: 'Lotus', 'Mont Blanc', 'Tulip' accounts track of 'commission' payments, amounting to nearly SEK 81 million, published and analysed in The Hindu of April 22, 1988 and June 25, 1988. Especially important were three transaction documents which made the link, "Pitco, c/o Sangam Ltd" and "Pitco, c/o Mr G.P. Hinduja Sangam Ltd.," for 1982 and 1984. By June 1988, the independent media investigation had acquired and published a large number of authoritative Bofors documents that gave the lie to the 'winding up', 'no middlemen', 'no commission', 'no Indian recipient' story. By late1989, a great deal of further evidence and information, notably from the Martin Ardbo diary entries and notes for 1987 seized by the Swedish police and from The Hindu investigation's interaction with the Hindujas had revealed the involvement of the Hinduja Brothers as lead actors in the crisis-management and cover-up. In fact, these developments strongly indicated that the Hinduja's role in the Bofors howitzer scandal went deeper than the role of anyone.
After a regular criminal case was registered by the CBI in 1990, this strategy of blanket denial continued with S.P. Hinduja and G.P. Hinduja reportedly claiming to the CBI investigators, as late as 1991, that "our family has never dealt with Bofors" and S.P. Hinduja going so far as to assert, in a newspaper interview published on April 14, 1991, that "we are not an appellant before Swiss courts on the Bofors matter." This unsavory chapter should have come to an end with the incriminating documents received in December 1999 by India's premier criminal investigation agency from the Swiss authorities in the execution of the letter of rogatory of February 7, 1990. But during a phase of pre-charge sheet jitters, the denial continued with new variants of the falsehood in desperate attempts to block and even derail the lawful investigation. No longer was it possible to deny the fact of Bofors payments into the coded accounts opened by a Panama-based front spelled as M/s Mc Intyre Corporation and M/s Mac Intire Corporation, or ownership of this 'M...' corporation (by whatever name spelled) by the three Hinduja brothers, Srichand, Gopichand and Prakash Hinduja.
The Bofors case, as investigated by the CBI, is about criminal conspiracy, bribery, criminal misconduct by public servants, cheating, criminal breach of trust, forgery for the purpose of cheating, and using as genuine a forged document in respect of the Bofors-India howitzer contract of March 24, 1986. The first charge sheet, filed in October 1999, was against the former Defence Secretary, S.K. Bhatnagar, Ottavio Quattrocchi, W.N. Chadha, Martin Ardbo, M/s A.B. Bofors for various offenses under the Indian Penal Code. The charge sheet against G.P., S.P. and P.P. Hinduja alleges that they were "party to the criminal conspiracy with Martin Ardbo and others during the period 1985-1987 and thereafter, in pursuance thereof, they also received commissions from M/s AB Bofors"; that the Swedish arms manufacturer paid the three brothers, through the 'M...' corporation, SEK 80.80 million; that although the Government of India had laid down a requirement of no middlemen and no commissions in the howitzer deal and Bofors had agreed, "in pursuance of the criminal conspiracy, the accused persons dishonestly led the government to believe that there were no agents and induced the government to part with" an amount that included "commissions," thus cheating the government and putting it to "a wrongful loss."
The supplementary charge sheet makes clear that in the CBI's professional judgment, there is abundant evidence linking the 'Arab-Tulip," "Lotus," and "Mont Blanc" coded payments (SEK 37.03 million, SEK 31.99 million and SEK 11.77 million) into three Hinduja Swiss bank accounts with the 1986 Bofors-India howitzer contract and the consequent payoffs. A CBI analysis of the nine discrete payments made by Bofors into the three coded Hinduja accounts between May and December 1986 showed that the payments were contingent on, and linked precisely to the advance paid to Bofors by the Government of India and the payments made on account of the actual delivery of the gun systems, ammunition and so on. The evidence is absolutely clear that these were 'commissions' in accordance with the 3 percent of the total contract value laid down in a Moresco-Bofors contract, as revealed to the Government of India by the Bofors officials.
The CBI charge sheet documents blocking maneuvers by the three Hinduja brothers in Switzerland, undertaken to prevent the Government of India from receiving the legal assistance requested under the 'dual criminality' provision. It also calls attention to the significance of the change of nationality by G.P. Hinduja in June 1998 and by S.P. Hinduja in April 1999; it found a direct link between these events and "the stages of execution of the Letters Rogatory in Switzerland. The charge sheet asserts that such conduct by the three Hinduja brothers "shows that they are also conspirators along with M/s A.B. Bofors." The three Hinduja brothers, two of whom have become U.K. nationals and the third has reportedly acquired Swiss nationality, have defied the CBI's summons and have, in effect, kept away from the law. They have been unable to come to India to attend to their substantial business interests and other matters because the CBI would, without doubt, have knocked at their door and taken whatever action, under the law of the land, that it considered appropriate in the interests of its investigation. However, they have cleverly put their fourth brother Ashok Hinduja to regulate the business interest in India. The CBI has also had a 'look-out' notice issued against the three Hinduja brothers which meant that had they landed in India; immigration would have alerted the CBI about their arrival. Once the charges are framed by the Special Judge and the action moves decisively to a trial, it could be a new and even more worrying ball game for the brothers from the standpoint of both personal and business interests. After the charges are framed, the CBI's leverage in making the intransigent accused submit themselves to the law of the land will increase considerably - with summons, warrants, legal sanctions against properties and business assets and extradition proceedings becoming theoretical possibilities and there could be a high cost to staying away notwithstanding the influence in high political places the Hinduja brothers are reputed to enjoy. It was during the UPA1 rule that Hindujas managed to kill the case in the Delhi High court. The Hinduja Brothers had access everywhere from Congress to BJP, to even regional parties like Samajwadi Party, too many journalists who purposely obscured their specific role and wrote only about unreachable foreign brokers.
In nutshell, Indian journalists concentrated on hazy, inaccessible foreign brokers and shut their eyes to the easily traceable links of Hinduja Brothers and AC Muthaiah’s role. It was somewhat similar to highlighting the responsibility of unreachable US citizen Anderson in the Union Carbide case while whitewashing the criminally negligent role of a local Indian group in the Bhopal Gas Tragedy. And, at last, CBI buried the Bofors case in 2008 by filing a closure report when Ashwani Kumar was Director, who was close to Sonia Gandhi and died recently by committing suicide in mysterious circumstances. He was earlier Security In-charge of Sonia Gandhi when working in the Special Protection Group (SPG). In 2008 Ashwani Kumar was brought in as CBI Director by Sonia Gandhi bypassing persons shortlisted for the post and having done his job, he got a reward from his ultimate patron Sonia: the governorship of a state as a quid pro quo after retirement from CBI.
The subsequent behavior of successive Governments did indicate that while there is something to hide, they were not in agreement on what to hide. The Congress kept sheltering Quattrochi and the BJP was more intent on shielding the Hinduja brothers. The two roads crisscrossed and neither the truth prevailed nor did the law take its course. And to add misery to the wound, the perpetrator has recently complained about the rotten system of India in an international magazine. It is clear that the middlemen have destroyed the transparency in governance and the system works according to the wimps and fancies of the “dalals”.
Opinion Express explained the players involved in the sabotages and why it is vital to expose middlemen and corporate Dalal’s and to delink politics from the subsequent investigation; it was an international conspiracy to desterilize the country via middlemen. The same practice is almost repeated in the Rafale fighter jet deal wherein the opponent pressed the accelerator to defame the government and the middlemen continued to enjoy the cream.
The conspiracy, timeline & Road Ahead:
The special investigation team has said that 'Rajiv Gandhi’s name appears not as a beneficiary but because as Prime Minister and defense minister, as he was involved in one of the swiftest government decisions ever of awarding hefty defense contracts". One is at a loss to understand what was wrong with it. It was for the government and the defense ministry to decide how quickly they needed the equipment and simply because the government took a quick decision in clinching the deal, it does mean something was fishy about it. Generally, it is said that delay and red tape lead to corruption but here SIT people strangely took a different view. R.C.Sharma who succeeded Joginder Singh as CBI chief has publicly remarked, there is no evidence to blame Rajiv for the Bofor's pay-offs. The press has a view that Sharma was close to Congress in general and Sonia in particular.
Especially in arms deals, agreements are signed between two countries but it is common practice that it is helped along the way by some individuals called middlemen or brokers who are generally expert negotiators. It was Rajiv Gandhi who insisted with the Bofors that no middlemen should be employed and Bofors issued the 'no middlemen' certificate to India. Rajiv earlier in his talk with Olaf Palme discussed the no middlemen condition with him and the Swedish Prime Minister gave his word on it. Later Olaf Palme was killed under mysterious circumstances and Rajiv went to Stockholm to attend the funeral of Palme. Then the new Prime Minister Ingvar Carlsson and told him that he had recorded his decision on the file approving the award of the contract for the Howitzer gun to Swedish company Bofors subject to certain certifications from the Swedish government regarding the financial terms of the contract. That all anybody received any money from Bofors, it was purely a legitimate business deal between that person and Bofors; and Rajiv was neither aware of it nor had he to do anything with it.
The Hindujas having a wide network of international business are also said to have a hand in the Bofors commission money. It was reported that the Swiss authorities have told CBI informally that the Hindujas made the mistake of channeling money from other deals through the same account into which the Bofors pay-offs were transferred. The Hindujas are worried that their Swiss account would expose many of their illegal gun deals in Iran and Contra Rebels. Therefore, since 1991, the Hindujas have been protecting their Bofors account by imposing legal hurdles in the form of appeals and so on.
From the maze of information available from the CBI investigations into the Bofors scandal, one thing becomes clear the Bofors paid money by way of commission or winding up charges to some intermediaries who had something to do professionally in such deals and the linking of Rajiv Gandhi's name in such transfer of money is a politically motivated attempt to tarnish his image and also to put hurdles in the purchase of necessary weaponry for the Indian Defence Services.
The Hindujas are among the alleged recipients of the pay-offs in the Bofors scam. The details of Hinduja's Swiss account were released by the Swiss authorities in the second installment of papers but it was followed up with no action. AB Vajpayee was alleged to have close links with the Hinduja brothers, and it is said they have done intense international lobbying for Vajpayee to project his image. Vajpayee was the guest of honour at the inauguration in Mumbai of the Indus-Ind Bank owned by the Hindujas. Earlier he had been a guest of honour at the Diwali banquet hosted by the Hinduja brothers in London. It was said Vajpayee often listens to Hinduja's advice on the formulation of India's economic policy. No one seems to be worried about such connections but everybody linked Rajiv Gandhi with the alleged receipt of money by Hinduja from Bofors. On the contrary, the probe should have also focused on Vajpayee Hinduja links to target Rajiv Gandhi. This relationship suited both: Vajpayee was politically rewarded and Hinduja got away from a confirmed corruption case conviction. The Bofors scandal was a political ghost created by the international destabilisers of India. Later, some Indian politicians and a group of sensation-mongering journalists gave it disproportionately demonic dimensions with a view to discrediting Rajiv Gandhi. The final conclusion is emerging from the investigation that the middlemen in the deal were acting as the double agent; this is the conclusive outcome of the investigation. They certainly made money in the transaction and then conveniently shifted to the other side to defame the political adversary by using selective leaks in the press from time to time and taking business advantages from their new political masters.
The road ahead: Unlike the old Atal-Advani soft BJP, the present Narendra Modi-led BJP government is relentless in dealing with white color criminals no matter how high and mighty. Apart from the Ram Mandir movement, people’s anger on the Bofors scandal and various scams of the Congress era was a significant factor for the surge of the BJP. Given its unquestioned commitment to bringing about a corruption-free India, it becomes the natural duty of this Government to undo the cover-ups in the Bofors case. And the present government must think of setting up an SIT to investigate all the defense deals and purchases during the UPA period 2004-2014 as corruption was rampant during that time.
The Supreme Court rejected the appeal of CBI in 2018 (citing the Swedish investigator’s revelations) with advice to club the petition with the pending Ajay Agarawal case. It is imperative for the present Government to investigate the matter without any political witch-hunting and delinking the name of Rajiv Gandhi from the process to avoid giving political colors to the investigation. The Bofors Scandal was exposed 33 years ago and Swedish Police gave a box full of documents 23 years ago to CBI. The country has waited for over three decades to know the truth of the matter that has ruined the political life of many prominent leaders and in the process has established new alternative leadership based on the “Bofors politics”. Today, the sanctity of the four pillars of democracy is in crisis because the process that started with the Bofors scandal has vitiated our democracy and spawned so many subsequent frauds and scams. One can't help wondering as to how many subsequent cases of corruption would have been avoided had the Bofors scam not provided a veritable template to the Kalmadi's and Rajas that followed. The pride of 1.3 billion countrymen, our defense forces and their valour, demand a just and definitive denouement to this protracted murky saga of treachery to the nation. It is high time that the CBI intervened in Ajay Agrawal’s petition in the Bofors case pending before the Supreme Court with complete details of documents in the box given by Swedish Police in 1997 to reinvestigate the case and bring guilty to books. India must eradicate and punish “Dalals” from the system to leap-bound herself at the global level and lead the new world order. The onus is on the present Narendra Modi government and hyperactive Supreme Court of the country to order reinvestigation in the case without any political overtone and present correct facts to undo the damage done by middlemen by giving them exemplary punishment for breaking the backbone of the vital institutions of this glorious country. It will act as a strong deterrent to the operating middlemen community and certainly, it will clean the toxic system.
By Prashant Tewari Editor in Chief of Opinion Express with India’s most well-known Investigative journalist J Gopikrishnan.
The downtrend of the Congress party can be traced back to one single event when the Bofors scam rocked the nation. The perception of the Congress party subsequently is built around corruption thereafter. Amateur, inexperienced and perhaps innocent late Rajiv Gandhi was crucified by a powerful cartel of middlemen facilitating the destruction of India’s oldest political party. Consequently, the wrong man died and middlemen flourished. Till today, Congress has reluctantly defended itself despite the established fact that the late Rajiv Gandhi was fooled by his associates to bring about his political death during his lifetime. Later, the Gandhi family handpicked middlemen namely Ahmed Patel, V George became leaders and party-junked PV Narsimha Rao, ND Tiwari, Pranab Mukherjee, Buta Singh, GK Moopanar, K Karunakaran, JB Panaik, SM Krishna, HR Bharadwaj, Shukla Brothers, Jagan Reddy, Mamta Banerjee in their lifetime. The middlemen take over pushed crony capitalism: Anil Ambani, Hinduja, Dhoot’s, BR Raju, Vijay Mallaya, GVK Reddy and many more became rock stars of the corporate world, together they milked the public sector banks with impunity to bring India’s growth story to a grinding halt.
The government of the day and the proactive courts must reopen the investigation of the BOFORS SCAM with a focus on exposing middlemen rather than the past ruling establishment primarily because the Bofors scam triggered birth to a new class of “dalals” in India and they gained tremendous control over the crucial institutions, establishing India as one of the most corrupt countries in the world. Though we are fortunate to have had fiscally clean Prime Ministers in the last few decades yet corruption is rampant in the country at every level. So, where it went wrong? The answer is simple, the country is held hostage at the mercy of middlemen operating in politics, bureaucracy, corporate, legal and media domains. The country is bleeding from corruption and the current sufferings of the desperate poor masses are synonymous with this system's failure.
Today, the sanctity of the four pillars of democracy is in deep crisis because the process that started with the Bofors scandal has vitiated our democracy and spawned so many subsequent frauds and scams. One can't help wondering as to how many subsequent cases of corruption would have been avoided had the Bofors scam not provided a veritable template to the Kalmadis and Rajas that followed. The pride of 1.3 billion countrymen, our defense forces and their valour, demand a just and definitive denouement to this protracted murky saga of treachery to the nation. It is high time that the CBI intervened in Ajay Agrawal’s petition in the Bofors case pending before the Supreme Court with complete details of documents in the box given by Swedish Police in 1997 to reinvestigate the case and bring guilty to books. India must eradicate and punish “Dalals” from the system to leap-bound herself at the global level and lead the new world order. The onus is on the present Narendra Modi government and hyperactive Supreme Court of the country to order reinvestigation in the case without any political overtone and present correct facts to undo the damage done by middlemen by giving them exemplary punishment for breaking the backbone of the vital institutions of this glorious country. It will act as a strong deterrent to the operating middlemen community and certainly, it will clean the toxic system.
(The writer is Prashant Tewari Editor in Chief, Twitter: prashanttewar11 FB:email@example.com)
The chaos and confusing, allegations and counter allegations, social media war are the new order of the day. On every contentious issue, we are on roads to settle the grievance. The redressal mechanism through the courts have become weak and our country is under seize for entire year. Farmer's protest in India's national capital has created headlines globally. But why the farmers are protesting, what is controversial in the contentious Farm Bills is hardly known to majority of the people.
The farmers are protesting against two Farm Bills that the Rajya Sabha recently passed: (1) the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, and (2) the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020. The two bills had already cleared the lower house – the Lok Sabha. When they were introduced in the Rajya Sabha, there was ruckus and finally, the Bill was passed through a voice vote. It is noteworthy to mention that NDA ally Akali Dal has quit the government in protest of the passing of the bills in the parliament.
This Bill allows the farmers to sell their produce outside the Agricultural Produce Market Committee (APMC) regulated markets. The APMCs are government-controlled marketing yards or mandis. So, the farmers clearly have more choice on who they want to sell. This Bill makes provisions for the setting up of a framework for contract farming. The farmer and an ordained buyer can strike a deal before the production happens. The farmers of Uttar Pradesh, Punjab, and Haryana are angry fearing that the Minimum Support Price (MSP) guarantee that was their safety net since the Green Revolution of the 1960s kicked in, maybe snatched away from under the pretext of giving the farmers more playing ground and better platforms. Farmers fear the two recent bills as they feel these agriculture reform processes will kill the government procurement process as well as the MSP. And why do we see most protesters from Punjab and Haryana? That is because they are the biggest beneficiaries of this safety net.
Farmer leaders have clearly stated that the agitation would continue till the farm laws are repealed. The entire confusion is fueled by the exit of NDA partner Akali Dal from the government in protest of the passing of the Farm bills 2020 without enacting the MSP clause in the final draft of the farm bills 2020. It is fair to suggest that Narendra Modi led government being in absolute majority is ignoring the sentiments of its allies since their absence has no impact in the lower house of the parliament for the government survival. But as rightly suggested by Punjab Chief Minister Captain Amrinder Singh that anti national forces are looking for an opportunity to penetrate in any popular controversial issue to destabilize the country. Failed Khalistan push by overseas forces may trigger confusion in the minds of the sulking farmer community of Punjab to misguide them on the pretext of ethic religious divide hence the government of the day must remain vigilant and the requisite concessions should be extended to farming community to defuse the unnecessary bitterness and heart break between the government and its people. The government is lacking in communication skill set hence on every contentious issue, strikes and lockdowns are setting in. Lastly, the uncalled international intervention by certain groups and foreign leaders in an internal matter of the country is highly deplorable and it must be condemned in strongest words.
(The writer is the Editor-in Chief of The Opinion Express Group)
Taiwan is a part of the geographical area of operation of India’s Look East Policy (LEP). Although India does not recognise Taiwan as a sovereign state, its functional and people-to-people contacts with Taiwan are explainable under the LEP. Besides, India’s economic activities are on the rise in the vicinity of Taiwan. Though commercial in nature, India’s presence in the South China Sea, along with improvement in its bilateral relations with Asia-Pacific countries — especially in the realm of politics and defense cooperation — is of strategic significance. In the overall strategic context of the region, increasing functional ties with Taiwan without undermining the support of the one-China Policy would be a stiff challenge requiring clarity of vision and skilled diplomacy. Thus, it is imperative for India to have a much better understanding of Taiwan, and the Asia-Pacific region.
In the author’s view, functional ties/cooperation and people-to-people relations could make a separate category without attaching any diplomatic, political or strategic meanings. The main attributes of this category can be listed as below:
Its unique geographical location and political situation would also contribute to India’s understanding of the Asia-Pacific region. Taiwan is situated in the middle of the disputed waters of the South and the East China Seas. Considering the continued threat from the People's Republic of China (PRC) to its national security, Taiwan not only has a natural interest in the modernisation of the People’s Liberation Army (PLA), China-Japan tensions, and the dynamic of Sino-US relations but also a natural expertise on them. Taiwan and China have a historical and cultural affinity, but political and strategic distance. Strategically, Taiwan is close to the US and figures in Japan’s security considerations. It is obliquely mentioned in the US-Japan Defence Guidelines, 1997. But the US and Japan’s support for PRC’s One-China Policy has set a limit on their relations with Taiwan. Thus, Taiwan is not fully open to either of the major regional players. This situation leaves it marginalised and dissatisfied with every major power in the region and makes it a neutral interpreter of the region’s politics. India could tap into this consultative potential of Taiwan.
Functional cooperation with Taiwan is even more valuable. Taiwan is a thriving and industrialised economy that is closely integrated with the international economy. It is amongst the world’s leading exporting and importing countries. It is the leading producer and manufacturer in the world in foundries, IC packages, blank optical discs, mask ROMs, mobility scooters/powered wheelchairs and chlorella. If the products made by Taiwanese companies outside Taiwan are also taken into account, the list of products commanding a high share in the world is even longer. Notebooks, Tablets, LCD monitors, IC packages, motherboards (System & Pure MB), WLAN CPEs, cable modems, and digital blood-pressure monitors are a few examples. Apart from electronics, Taiwan’s agro-industries, particularly food processing, maintain international standards. It also holds a high rank in the international rating by agencies like the Institute for Management Development (IMD), Business Environment Risk Intelligence (BERI), the World Economic Forum (WEF), and the Heritage Foundation. Its business environment, research and development, and innovation are recognised worldwide. (Data relating to all these is available in the tables at the end of this monograph). Further, Taiwan’s education system ranks quite high. For instance, fourteen Taiwanese universities in 30 disciplines are on the list—compiled by the QS World University of the UK—of the top 200 universities in the world.1 India could become an important destination for Taiwan’s new Go South policy for diversifying Taiwan’s a trade and investment basket. India could also become an alternative to China for many Taiwanese companies in view of rising wages and costs in that country. In fact, a regulated flow of skilled labour from India can help overcome the problem of high costs in Taiwan itself. Taiwanese FDI can contribute to India’s manufacturing, infrastructure and other sectors. India and Taiwan make a case for mutual benefit by being substantial complementary economies, as India’s computer software industry complements Taiwan’s computer hardware capability. India’s demography, with a more than 300 million strong middle class, offers an economic opportunity for Taiwanese entrepreneurs. India is also one of the leading suppliers of natural resources. It can be a gateway to South Asia, and even West Asia, for Taiwanese companies. Further, like Taiwan, India too has a reasonably impressive record of achievements in science and technology. For instance, India has gained international recognition in the automobile, electronics and space science sectors. In education, India has internationally recognised institutes— like the Indian Institutes of Technology (IITs) and Indian Institutes of Management (IIMs). Besides, there is sufficient space for co-operation between the two countries in the spheres of culture and tourism. This monograph deals with Taiwan as it exists in the world today. It does not deal with the legal question, of whether Taiwan is an independent state or a Chinese province. Despite its ambiguous diplomatic status, Taiwan remains an important factor in the East Asian security scenario. In spite of the Cross-Strait relations in their best phase, the solution to the Cross-Strait conundrum remains elusive. Taiwan and the People’s Republic of China (PRC) have signed 19 agreements related to functional areas since 2008. However, a formal political dialogue or a peace agreement that the PRC is pushing hard for is not in sight. Taiwan does not appear inclined to yield on the question of sovereignty. Any formula that would downgrade Taiwan’s international standing is unacceptable to both Taiwan’s political class and the common Taiwanese. Contrary to Chinese expectations, the prospects of economic cooperation and integration have not made the Taiwanese amenable to Chinese claims over Taiwan. Similarly, on the other side of the Taiwan Strait, Taiwan’s unification with China continues to be a powerful reference point for Chinese nationalism. China still has its missiles deployed against Taiwan. Moreover, it is yet to renounce the use of force as an option to resolve the Cross-Strait problem. This reinforces Taiwan’s perception of China as a threat to its security. Finally, the US, the security guarantor of Taiwan under the Taiwan Relations Act (TRA) 1979, continues to maintain diplomatic ambiguity over the Cross-Strait issue. Therefore, any conflagration in the volatile waters of the Taiwan Strait could result in a US-China face-off.
Taiwan is also a part of problematic territorial claims in the East China Sea and the South China Sea. Its claims overlap with those of China and are ignored by the other concerned parties. Taiwanese claims mostly address the domestic constituency. It appears content with the practical arrangements for resource-sharing. A good example is its fishery pact with Japan in 2013. However, since these claims stoke popular sentiment in Taiwan, it is difficult for the Taiwanese government to ignore public opinion on these issues. Therefore, overlooking Taiwan in the regional security map would bring pressure on the US alliance in the region, of which Taiwan is a part. Taiwan successfully drove this point during the standoffs between Japan and China in the East China Sea over the Senkaku/ Diao Yu islands in 2012-13 through its diplomatic maneuverings. In fact, the Japan-Taiwan fishery pact has effectively made the dispute tripartite and implies that Taiwan is a player in the dispute. In May 2013, the government of Taiwan conveyed that diplomatic recognition or not, it is capable of taking care of its citizens when it flexed its economic muscle against the Philippines over the killing of a Taiwanese farmer-fisherman by the Philippines coastguard.
Finally, accelerated interaction and cooperation in functional areas between India and Taiwan would, in the long term, also contribute to increased mutual awareness. Cross-Strait unification would not be the only eventuality in the dialectics of Cross-Strait relations. Whether Taiwan would eventually unify with China, the status quo would persist, or some other form of Cross-Strait relations would emerge, is difficult to predict. Studying and engaging Taiwan is important irrespective of the scenarios because each scenario will shape the regional security dynamics in its own way.
It has taken almost fifty-eight years since 1962 to settle the India-China relationship at a comfortable level but Covid 19 pandemic has forced confused President Xi Jinping to pick up a fight with the almost entire world including India by making the borders hot since March 2020. India has no option but to react with aggression to safeguard its national interest. India, following the ‘One China policy, does not have diplomatic relations with Taiwan but India is having commercial, economic and cultural ties with Taiwan. While nearly 23 countries have formal diplomatic relations with Taiwan, several countries have opened offices in Taipei. These countries, which include the United States, western European, Japan, Australia, and many others, follow ‘One China policy. However, the current hawkish Taiwan President Tsai Ing-wen of DPP is pushing for nationalistic agenda. The Taiwanese know fully well the might of China. Yet, they are constantly looking for expanding their room for maneuver. US support is vital to Taiwan and supplies arms to Taiwan while maintaining a ‘One China’ policy: India has a unique diplomatic tool to push for renewed ties with Taiwan since China is continuously pushing armed insurgency in North East, J&K via Pakistan, arming Maoist rebellion against in several states via Nepal, endorsing terror by saving Masoor Azhar in United Nation.
The assertions of sovereignty by China over the South China Sea and US’ pivot to Asia policy have led to the rise of tensions in the region. The Taiwanese, taking note of India’s growing influence in regional and global affairs, want to engage with it in the hope that their room for maneuver vis-à-vis China will increase. Keenly watching the development of India’s ‘look east’ policy, they want to understand how India defines and protects its interests in Asia. India, which has a delicate and sensitive relationship with China, is naturally careful in dealing with Taiwan. India has sought to enhance functional linkages with Tai-wan without offending China. The bilateral trade between India and Taiwan crossed $15 billion in 2019-20. A joint study has been launched to explore the possibility of a free-trade agreement between the two sides. India has interests in Asia, particularly, the South China Sea. The Indian integration with ASEAN, South Korea and Japan is deepening. Given the large complementarities between India and Taiwan, the latter can be a good economic partner for India. India’s software skills and Taiwan’s hardware capabilities can be combined in joint ventures. Taiwanese companies can invest in Indian infrastructure. Further, Taiwan, which boasts of some high-quality universities, think tanks, and academic institutes, can be a good source for Indian institutions for academic exchanges. Presently, nearly 1000 Indian students are studying at Taiwanese science and engineering universities.
India is a large country following independent policies. India can pursue a functional relationship with Taiwan without deviating from its ‘One China' policy, however, if China plays deceptive games at border, trade and foreign policy: Taiwan and Tibet should be raked up by India at international forums to expose China’s expansionist regime. But India must have a consistent foreign policy in respect of Taiwan in alignment with the democratic nations of the world so that Taiwan can react to Chinese hostility with conviction. When China can defy the world and promote all-weather friends Pakistan and North Korea then India should act independently to frame its foreign policy.
—Prashant Tewari, Editor-in-Chief
India’s big corruption cases and their aftermaths
Due to the Covid-19 pandemic, many ongoing major corruption cases are delayed and the Accused people might be relieved. Be it the 2G case appeal in Delhi High Court or former Finance Minister P Chidambaram involved bribery cases in INX Media and Aircel-Maxis deals or politically sensitive National Herald case in trial courts and its linked appeal cases by the Accused persons Sonia Gandhi and Rahul Gandhi in Supreme Court on tax evasion and Herald House eviction. Now CBI and Enforcement Directorate (ED) sought a daily hearing in the 2G case appeal in Delhi High Court citing the retirement of the current Judge Justice Brijesh Sethi on November 30.
In corruption cases, what we see is generally the backdoor games in the trial stage, after the public attention fizzles out later. A classic example is the Bofors case. When you look at the timeline of the past 22 years, politicians from Congress and BJP wanted to save their preferred accused persons in the Bofors case. Congress leadership wanted to save Ottavio Quattrocchi and BJP leadership of the late 90s wanted to save the Hinduja brothers. These two are the major kickback money distributors. Still, the case filed by Adv. Ajay Agarwal (BJP’s candidate against Sonia Gandhi in the 2014 Lok Sabha election in Rae Bareli) against the CBI closure report is pending in Supreme Court. Bofors scam was a turning point in Indian politics that smashed out the Congress party’s single-party regime in India. The scam linked to Prime Minister Rajiv Gandhi’s family collapsed the prospectus of the Congress party which was having 425 MPs in Lok Sabha and got reduced to 195 MPs in the 1989 General Election, leading to the united Opposition from BJP to Socialists to Left parties led India’s first coalition Government.
Congress party’s downfall started with the exposure of the Bofors scam in 1988. There were a lot of twists and turns in the Bofors case and the opposition lost steam on the matter after the assassination of former Prime Minister Rajiv Gandhi in May 1991, leading to the return of the Congress party which remained in power up until 1996. Though BJP led Government came to power from 1998 to 2004, the situation has not changed. BJP’s Law Minister Ram Jethmalani became an Advocate of Hinduja Brothers, who was part of the gang of middlemen in the Bofors deal. Next Law Minister Arun Jaitley was also not keen on the matter though he was the Additional Solicitor General in the case in 1989. Jaitley many times said publicly that he drafted the chargesheet in Bofors. Next Congress-led UPA Government, simply forced CBI to close the case.
Still, the main petitioner Ajay Agarwal’s appeal against CBI closure is pending in Supreme Court. In 2018, CBI made a curious petition to Supreme Court to revive the case on a flimsy angle. The flimsy angle was based on a revelation in 2018 by a retired Swedish Police Officer in the newly launched Republic TV Channel. Fun is the same CBI filed closure and facing the appeal of Ajay Agarwal against closure in Supreme Court filing a petition based on a Republic TV saying that they are going to probe into the new angle aired in a TV channel. Anyway, Supreme Court trashed CBI’s new flimsy funny petition and still, Ajay Agarwal’s petition is pending. Don’t know why Ajay Agarwal lost interest.
After Bofors Scam, Jain Hawala Dairy Scandal shook the Country. Actually, this whole episode started with the arrest of a JNU student from Kashmir in connection with the money trail from terror-linked outfits in late 1990 by Delhi Police. The money trails lead to the Hawala operator's Jain brothers in Delhi and the Police got a long list of names from diaries kept by them. Obviously, the case got frozen for 3-4 years due to the names in the dairy ranging from so many politicians. In 1994, the diary names were exposed in the media, ranging from LK Advani to many politicians and Cabinet Ministers. Still, people say names in the diary were leaked by the top leadership of Congress and BJP to settle their internal rivalries. Activist and Journalist Vineet Narain, and lawyers Ram Jethmalani and Prashant Bhushan approached the Courts. Meanwhile, as usual, Ram Jethmalani switched the side to save Advani and became his Advocate and won the case. The Case got collapsed after Supreme Court said that mere naming in diaries can’t be treated as evidence. Though the case collapsed, the outcome was a landmark Judgment popularly known as the Vineet Narain Judgment which changed the entire structure of CBI and ED and got the Supreme Court’s monitoring and strict norms for the appointment of officers in these probe agencies.
After the Hawala Diary scandal, two corruption cases rocked the country. One was Tehelka Magazine’s sting operation on Defence deals. It collapsed then ruling BJP’s President Bangaru Laxman, who was caught on camera accepting a few lakhs of rupees. He was convicted and later out on bail he is no more now. Recently in August 2020 another accused Jaya Jaitly, who was the companion of then Defence Minister George Fernandez was convicted by a trial court along with former military officers. Somehow she was lucky to manage bail from Delhi High Court in the evening itself, while other accused are still languishing in jail. How she got bail on the same evening from High Court is a matter of debate. Sometimes justice is delivered on seeing the face. Tehelka Magazine exposed how pliable are people in politics and bureaucracy, and the army. The sting operation exposed how BJP first time landed in power pliable in deals. The Defence Minister’s companion and BJP President were caught accepting money in the sting operation.
After this Tehelka’s reporter, Aniruddha Bahal 2006 exposed a big sting operation through his website Cobrapost. This sting operation actually shook the Parliament revealing how MPs were taking money for asking questions. This exposes exposed how questions and matters were raised by MPs by taking money from Corporate Houses and their rivals. After an internal probe, Parliament expelled all the nine MPs caught in the sting operation. This was a black chapter in the Indian Parliament.
Mega scams rocks Congress-led UPA Government
The first major scam that rocked the UPA Government was Commonwealth Games (CWG) scam from 2009. The CWG Scam was started by a movement called India Against Corruption (IAC) which was essentially blessed by RSS, and supporters of spiritual leaders Sri Sri Ravi Shankar and Baba Ramdev. At that time main Opposition party, BJP was in shambles due to their electoral defeat in May 2009 Lok Sabha elections. Congress-led UPA got rattled and shaken in the 2G Scam followed by Coal Scam.
The CWG Scam was limited to the role of the Games Committee Chairman and Congress leader Suresh Kalmadi. Actually, then Sports Minister Mani Shankar Aiyer was against Kalmadi and his displeasure letters leaked into the media became the Scam. Interestingly, though the budget of the CWG was more than Rs.75,000 crore, the scam allegations were only limited to Suresh Kalmadi (might be his stars not correct at that time) who had spending power of below Rs.1700 crore. He also picked fights with big media organizations on advertisement allotments in the Games. Anyway, all jumped on him on purchases and the CBI case was registered and was in jail for some months. The case is still on trial and expected to take more than 2-3-4 years to finish. That is our system in the judicial process.
Interestingly two big cases related to CWG were later closed by CBI. One was regarding Rs.15,000 crore worth of construction of flyovers in connection with the CWG in Delhi in 2010. The over-expenditure in the construction of the flyovers (Barapullah Flyover) was pointing to none other than then-Delhi Chief Minister Sheila Dikshit. The second one was a much bigger scam of about Rs.35,000 crore spent on the construction of CWG Village. The builder MGF Group was so close to Sonia Gandhi’s family that and case reached nowhere and ultimately CBI closed the case. Now CWG cases are limited only to Kalmadi and small cases against Municipal officers in the long trial stages.
The 2G Scam
The Congress-led UPA Government collapsed because of the 2G Scam which was highlighted by “The Pioneer” newspaper through continuous series of 100s of reports from December 2008 leading to Telecom Minister A.Raja’s resignation in November 2010. This case changed my career prospects as a Journalist. I am always thankful to my Editor Chandan Mitra and Bureau Chief Navin Upadhyay for assigning this mega work, where God smiled at me. This was the first case where the Comptroller and Auditor General (CAG) fixed the role of Corporate Houses. BJP leader Subramanian Swamy and noted lawyer Prashant Bhushan deserve full credit for their legal fights which ultimately collapsed the mighty Sonia Gandhi-controlled UPA regime.
So many good things happened in the Country due to the 2G Scam expose. The Supreme Court verdict of February 2012, cancelling all 122 licenses and subsequent Presidential Reference led to the auction of all natural resources. This Judgment also affected the Coal Scam cases and auction of Coal Mines. From the auction of Telecom Spectrum alone, the Country during 2010-2016 earned Rs.3.6 lakh crores in the exchequer. The 2G Scam led CAG to find other scams like Telecom AGR hushed up revenues which now found the payment of Rs.1.65 lakh crore by telecom giants to the public exchequer.
However unfortunately criminal cases in the 2G Scam collapsed in the trial court. I am not commenting on the very very bad Judgment passed by the trial Judge OP Saini. His Judgment acquitting the scamsters is so bad in law and laughable. Now CBI and ED have approached the Delhi High Court for a speedy hearing in September 2020.
As the trial court, Judge Bharat Parashar was a bold Judge many are convicted in the Coal Scam including the former Coal Secretary HC Gupta. However, then Prime Minister Manmohan Singh escaped from the Scam, as CBI decided to shut his eyes. Manmohan Singh was summoned by the trial court but he managed a stay from another Bench of the Supreme Court. Why CBI did not challenge it? For certain things, you don’t have answers.
Niira Radia Tapes and CBI Director Ranjit Sinha’s case
Controversial lobbyist Niira Radia’s conversations made tremors in many sectors. There were more than 6000 conversations, though only around 500 conversations landed in the public domain. From Ratan Tata to who is who in industry, media, bureaucracy and politics got hit in the Radia Tapes expose. Supreme Court in late 2012 Ordered CBI to probe into 12 matters of corrupt practices mentioned in the tapes. However, the case lost steam after CBI reported back to the Court that there was no criminality found in these conversations. The Court also did not pursue the matter on findings submitted in a sealed cover.
Another biggest shocking incident was in late 2014, the CBI Director Ranjit Sinha was caught meeting many 2G Scam and Coal Scam accused Corporate tycoons. This was exposed by certain good officers in CBI by verifying tainted Ranjit Sinha’s visitors’ book kept at his residence. Supreme Court’s 2G Bench had removed Sinha from the cases and Coal Scam Bench had ordered a probe into Sinha’s dubious activities. Even after the Supreme Court indicted, Modi Government did not take any action against the tainted CBI Director. CBI has not yet filed FIR in this regard against its tainted former Director.
Cases against Sonia Gandhi, Rahul Gandhi and P Chidambaram
After winning the 2G cases in Supreme Court, BJP leader Subramanian Swamy went ballistic. He got Sonia Gandhi and Rahul Gandhi in the National Herald case. His exposure in the Aircel-Maxis scam led to the fall of former Finance Minister P Chidambaram, who during the probe got trapped in another bribery case known as the INX-Media case. All these cases are in the trial stages which are expected to take 2-3 years in the judicial process. The Income Tax case in the National Herald case and Herald House eviction cases are pending in Supreme Court. Sonia Gandhi and Rahul Gandhi lost in all forums and their appeal is pending before the Supreme Court. Enforcement Directorate has attached the Mumbai and Panchkula properties in the National Herald case. Now we have to wait for the normal working of courts after the Covid-19 pandemic is controlled.
A lot of scams were exposed during 2012-2014. One of the KG Basin loot where Mukesh Ambani’s Reliance Group was caught. Another was the humongous scam in the Civil Aviation sector where the main culprits were Jet Airways and Tata Group. Somehow Prashant Bhushan’s case against the illegalities in Reliance Jio not became successful. The case ended with an open tussle in Supreme Court between then Chief Justice of India TS Thakur and Prashant Bhushan, who later walked out from the Court. The merits of the case were lost in the war of words between the two. Certain high-flying cases end up like this in a mysterious way.
Corruption in Judiciary
For a long time, there are allegations of corruption in the Judiciary and they reached nowhere. The simple reason for this is the only action available against High Court Judge and above is possible only through Impeachment by Parliament. Only once a retired High Court Judge was arrested was in September 2017 in a medical college scam. CBI took a bold step to arrest retired Judge IM Quddussi which ultimately led to the culmination of the controversial press conference by the senior four judges of the Supreme Court in January 2018. Four senior-most Judges Justices J Chelameswar, Madan B Lokur, Kurian Joseph and Ranjan Gogoi conducted a press conference expressing displeasure on the style of functioning of Chief Justice of India Dipak Misra.
Retired Justice Quddussi was caught fixing case and handling bribery with a case involving a medical college listed in Supreme Court. Justice Chelameswar ordered for senior-most five judges to probe rather than probe by CBI. In his Order, Justice Chelameswar said how CBI officers are capable to deal with a case involving the role of certain Judges in the Supreme Court. But the next day, Chief Justice Dipak Misra took over the case illegally or not as per custom and diluted the matter. This was the trigger of the four Judges' press conference against the Chief Justice of India. This incident shows the grey areas and rotten side of the Judiciary.
It is not easy to probe into the corruption in the judiciary. It is not easy in the lower level of the judiciary also though the Police are empowered to register cases. Once a district-level Judge was arrested by CBI in a bribery case of allowing bail in a Bellary mining case. Some Judges in District and subordinate levels were punished by the High Courts and ended up termination of their service.
In the 2G case, the ED has come out with the report that a week before the controversial acquittal judgment, the stock prices of the companies owned by the accused persons were shot up multiple times. Somehow no action was taken.
BJP and AAP became the beneficiaries of the anti-corruption movement that started in December 2010. In politics, so many twists and turns will be witnessed. In November 2013, AAP-led Arvind Kejriwal came to power in Delhi State with the help of the Congress party which they opposed for the past two years. The AAP was formed against the corruption of the Congress party and in the 2015 and 2020 Delhi Assembly elections; it is a well-known fact that AAP got the support of Congress in sidelining BJP in Delhi.
BJP which came to power in May 2014 was not keen on fixing the corruption cases to its logical conclusion. There happened many deals under the table. There were open attempts to derail the cases against Chidambaram and in 2G cases by certain people in power. Many Officers dealing with corruption cases faced all kinds of hardships. Subramanian Swamy was sidelined in BJP and Prashant Bhushan was removed from AAP. The worst was the dilution of the Prevention of Corruption Act by the BJP Government.
My experiences in studying and reporting corruption cases have taught me many lessons. The main thing is whoever comes to power the Corporate Houses somehow control them. Politicians may lose jobs but the Corporate Houses, the bribe givers remain as the politicians we elect lack the courage to tackle these buccaneers. What we need is an educated and vigilant public and fight against the corruption is not like an item is like the items to be delivered immediately like in fast food counters. The fight against corruption is a long battle and one should not lose heart during the setbacks. We have to remember that in the end truth and only ultimate truth will win – Satyameva Jayate.
[J Gopikrishnan is a Journalist working with ‘The Pioneer’ newspaper]
Rampant corruption is a way of life, an accepted evil in India. Today, the mega political scams are restricted but the crony capitalists have continued their practice unabated leading to a slowdown in technological advancement, a lack of competition and an era of monopolies. While we must give the present government some credit for its implementation of the GST to expand the formal economy platform, since the shadow economy leads to an unorganized workforce, where workers face problems regarding salaries, job security, contract agreements, working conditions, etc. An informal workforce hampers the growth of manufacturing firms through lower degrees of productivity. It should not be surprising that India is a country that largely consists of an informal workforce and the continuation will have an effect on both the quantitative and qualitative aspects of growth in the long run.
The present government was clear with its agenda when it came into power six years ago and to some extent the intention to get rid of corruption through the main economic reforms that the government introduced (demonetisation and GST). The reality of the situation however reflects the plain and simple fact that nothing has changed or it has gone worse. The PNB scam is a clear indication of this, and of course, the situation has been reflected in Transparency International’s global corruption index. A lower ranking for India compared to previous years is certainly a black mark on the BJP government’s report card. Bofors Scam, Spectrum Scam, CWG Scam, Fodder Scam, FCI Scam, Coal Scam, Aircel Maxis Scam, National Herald Scam, Banking Scams of Nirav Modi, Mehul Choksi, Vijay Mallya, Sandesara scam have largely gone in sleep mode. Congress or BJP, fraudsters have mastered the art of over-power the system.
All wings of democracy are infected by the corruption virus. Legislative, Executive, Judiciary and Media are overpowered by corporate money power. Today, Lok Sabha elections are heavily funded by corporate money hence irrespective of the outcome, they decide the leadership issue. The prime posting in the key government positions for bureaucrats is decided by a third party in consultation with the ruling elites to secure their interests. In recent times, the appointment of Judges in the higher judiciary is pushed by vested interest groups to safeguard their interests and lastly, the national media is completely controlled by select big pocket corporate houses directly or indirectly to set up a narrative that suits the interest of their business. The essence of democracy is crushed by the vested interest lobbies and the common man on the street is left off-guard to secure his basic rights guaranteed in the constitution. It is conclusively said that unless the nexus between money and governance is smashed, the common citizen of the country will be treated as the consumer by the so-called ruling elites and their super bosses and the dream of establishing an ideal democracy will remain an illusion.
—Prashant Tewari, Editor-in-Chief
Even before the Covid 19 catastrophe, Emperor Xi Jinping decided that 2020 is the year to establish the Chinese century. American think- tank predicts in 2019 the Chinese GDP was already larger than the USA’s GDP and by 2030 it could be up to 70% larger. As a share of Global output, China would grow to 32% from 20% currently, as opposed to the USA declining from 16% to 10%. In terms of Global Market capitalisation the Chinese would grow to 25% from 5% in 2019, whilst the USA would decline from 40% to 18%. China’s share of global exports would rise to 18% from 12% whilst the USA would be static at 8%. The above forecasts were supported by massive Chinese investments in Education in the fields of Mathematics, Science, Technology, and Medicine and rapidly improving the quality of education. Starting with the 1980’S the Chinese successfully got the world’s manufacturing supply chain to relocate to China, and was truly the “factory of the world”. From a pure labour arbitrage offering, they created world-class infrastructure (Cities, Roads, Ports, and Airports) to support it. The top 2500 corporates outside China all had a business presence in China. This aggressive export-led growth model allowed the Chinese to radically improve per capita income, and in the process also create a massive domestic consumption engine. A 40% domestic savings rate supported the huge developments that happened on their Eastern Seaboard. Till 2012 the Chinese government was sitting on Foreign Exchange Reserves of close to $5 Trillion. Over time Chinese labour had become a very skilled workforce, moved up the value chain and was no longer cheap. China now imports/consumed 45-50% of virtually every commodity in the world even though more than half of it was re-exported.
Chinese leaders till 2012 had made the country keep a low profile, hiding their strengths, whilst they relentlessly gained market share from the world. Asian growth engines Japan and South Korea had also felt compelled to move/make tangible manufacturing investments in China. The Chinese had mastered the skill of acquiring the world’s IPRs by any means. Their Chinese Communist Party(CCP) command and control structure had also silently expanded their Foreign Ministry with requisite resources to create a Public Relations repository in every- major country, to manage the national discourse on any prickly subject in their favour. This three-decade profile started changing with Xi Jinping’s ascension to Chairmanship in 2012. The Chinese strategists now started believing that the Middle Kingdom deserved to rule the world. They changed the nomenclature of the 21st century from being an Asian century to a Chinese century. They mapped that post-2008 Global Financial Institutions were weakened, substantially dysfunctional and lacking leadership. They unleashed a project of achieving complete Chinese dominance in the manpower of every multilateral agency and United Nations body in the world. Chinese students were encouraged to study overseas and many were persuaded to join these organizations, so many FBI investigations are now showing made instruments of government policy.
The collapse of the USSR in the 1990S and the profligacy of the US financial sector in 2008 had left a leadership vacuum in many areas. Xi Jinping moved rapidly to occupy the vacancies. China needed to secure its supply chain as it neither produced adequate food for its population nor was endowed with manufacturing or energy raw materials. Chinese leadership wanted to avoid supply-side shocks and created strategies to acquire assets surreptitiously. They moved rapidly to fund every country and project that the World Bank or the rest of the world would not find viable. The Chinese wanted to eventually acquire the underlying asset and default was hence a preferred option for them. This juggernaut covered 150 countries and nearly $5 Trillion in loans/investments. The new Chairman had successfully overinvested the Chinese USD reserves and left his country very vulnerable. They desperately needed their Dollar engine (Foreign Direct Investment, Foreign Portfolio Investment, and Foreign Currency Loans) to keep firing quickly to recoup their position, or alternately fast-track their long-term vision to get global trade out of the dollar and into the RMB.
Unluckily for the Chinese two things changed the landscape in 2017. President Trump had won the US election and was a wildcard that the Chinese read wrongly. Secondly, the world economy started topping out, and growth started stalling. The Chinese engine was not designed to handle economic contraction. Fault lines in the domestic economy are led by huge nonperforming loans in domestic state-owned Enterprises. Ghost cities started appearing, as domestic demand stalled, whilst domestic real estate started going belly-up. The country was overbuilt and no more infrastructure spending was needed.
Trump started the trade war and insisted that the Chinese reduce the Trade surpluses. President Xi erred massively in not giving Trump a cheap victory, and getting the Americans riled. American strategists had clearly war games that the days of the USD hegemony were numbered, and if their political dominance was to be extended, a war with China was not an option, the only question was timing. By a strange coincidence, the two technology hardware giant’s USA and China were tangibly dependent on Taiwan for their Semiconductor underbelly. Taiwan has a dominant share in the Semiconductor foundries globally, and both the USA and China are dependent on them. The Americans had anticipated this and a JV with the Taiwanese would go operational in Arizona in 2023. Till then any military threat to Taiwan would be an attack on its technological dominance, an intolerable thought for them. Democrat Presidents had soft-pedaled on the one-China policy, and the Chinese had succeeded in getting away with their wish lists. The Americans had celebrated access to a large consumption market but landed up creating a rival.
The Chinese People’s Liberation Army (PLA) in manpower terms is the largest standing armed force on the globe. The PLA and CCP moved fast to upgrade weapon systems, stealing blueprints and buying where they could not, theoretically, they were a lethal strike force. However the navy is their Achilles heel, and they lack best-in-class aircraft carriers and submarines. This limits their ability to protect their interests spanning 150 countries. 75% of Chinese oil still moves in tankers through the narrow Malacca Straits. To reach the Arabian sea by land they invested in bankrupt Pakistan by constructing the CPEC which links Xinjiang to Gwadar Port and is a dedicated economic corridor. They also engaged east European and European countries to construct the Belt and Road Initiative (BRI) for creating dedicated freight corridors to 50 European cities. In the process, they have de-risked their trade supply routes, but their oil buy routes lie exposed. The nightmare for China to achieve dominance is that Indian land illegally occupied by Pakistan is being used by CPEC and India reacquiring PoK by use of military power could render their $66 Billion investment in Pakistan useless, blocking the oil supply. The Chinese realized that economic sanctions against Iran had crippled the proud country with 15% of the world’s oil, needed investments, and so decided to bust sanctions on Iran imposed by the United Nations (they were party to imposing them). China and Iran signed a 25-year Trade and Military alliance in June 2020. China has bet on the USA exiting Afghanistan in 2020, and by using the Pakistani’s to install a puppet regime in Afghanistan, they could take a pipeline from Iran to Xinjiang. In turn, the Chinese have to pump in the equivalent of $400 Billion into Iran’s development, which they can crank their RMB economy to deliver. Where does that leave the Pakistani’s?
In the interim President Xi got the CCP to appoint him as the leader for life and emerged as an emperor. The CCP decided that by its 100th anniversary in 2021, they would stamp themselves as “numero uno” in the world. A few pinpricks remained: Taiwan and Hong Kong as independent democracies were an eyesore and raised aspirations of the good life in mainland Chinese youth. They had to be acquired by coercion or force at the earliest. The South China Sea had $5 Trillion of the supply chain that transited the route. China laid claims to territories/islands of all its neighbours and started constructing artificial islands as missile bases. They started bullying and humiliating Australia since 70% of Australian mining exports are bought by China. Singularly none of the Asian countries could take on China, but many could exact a heavy toll if it came to conflict. The Chinese flirted with conflict with all their neighbours using “wearing down” tactics.
The success of this gambit hinged on the continuity of their trade with the USA, heavily skewed in their favour. President Trump not getting an early trade war win, upped the ante, imposing a $250 Billion annual hit on China. Chinese perhaps felt that US corporations would not listen to their government and continue business as usual. They floated a trial balloon by abrogating the agreement with Hong Kong which would have lapsed in 2047, and suppressing protests with brute force. Then they ostensibly colluded/ manipulated the WHO and unleashed the Covid 19 pandemic on the world infecting every- country on the planet. This collapsed world economies and has created a very strong anti-China sentiment. It has resulted in fast-tracking the creation of the Quad, an alliance of the USA, Japan, Australia and India to take on the Chinese. UK, France and Israel are openly in support of the Quad, whilst Vietnam, Myanmar, Philippines, Indonesia, Taiwan and South Korea have alerted their armed forces for battle readiness. In the Chinese camp are North Korea, Pakistan, Iran and Turkey with anti-India squeaks may emerge from Nepal, Bangladesh and Sri Lanka.
With China designated as world enemy number 1, even Joe Biden has ratcheted up the anti-China rhetoric, lest President Trump steals the thunder and a potentially lost election by a war with China before November this year. The Indian and Chinese armies are facing off across 3400 Km. border and a tense peace prevail currently. The Middle East has so far stayed quiet, but by default will have to choose sides as a Shia Iran and a Sunni Pakistan and Turkey side with the Chinese. It is an uneasy time for the Saudis and the UAE. It is ironic that the OIC and its 54 member countries including the ”Turkish caliphate” maintain a studied silence on China incarcerating nearly 3 million Uyghur Muslims in Xinjiang.
The Koreans however had seen this coming two years earlier and Samsung had moved an $18 Billion annual capacity out of China to Vietnam. Japan has incentivized its corporations to exit China totally. USA and UK have banned Hauwei telecom with immediate effect to secure data for national security. India has banned Chinese Telecom equipment and Apps with immediate effect. There is a very strong anti-Chinese imports movement starting in India and may set an example for the world to follow. China’s partners in BRI and in Africa are resenting the usurious conditions in their loan agreements. The Americans are shutting off access to their Capital markets to the Chinese, and the cancellation of the Hong Kong treaty will kill the USD supply route to China. The Chinese Balance of payments is negative for the last few months, and days of surpluses are now a memory. They still need to buy food and oil and commodities.
Even nature seems to have conspired to ruin Emperor Xi’s timing. China is being ravaged by the worst ever floods in the last 100 years with 29 of its provinces impacted, and the survival of the showpiece three Gorges Dam is under threat from heavy rain which could affect nearly 400 Million people as downstream cities including Shanghai could be impacted. Scams like fake Gold collateral have shaken China’s $5 Trillion Shadow banking industry as the Kin- gold default is by a powerful former CCP member. It also puts a question mark on the credibility of China’s domestic gold production which is part of its National Reserves, as to how much of it is gold-plated copper. Will anyone in the world now ever trust a Chinese certification of gold? This scandal has seriously damaged China’s plans of having a partially gold-backed alternate currency to replace the dollar.
The world now sits on a powder keg in the midst of the Covid crisis. Funnily it is China’s 150 debtor countries (especially Pakistan) that must be praying for a fall and dismemberment of their Lender, for them to escape losing their sovereignty which they have so negligently mortgaged. President Trump and Emperor Xi now have gone too far for either of them to back down without losing their crowns. For Trump, it’s just an election, but the world knows what happens to deposed Chinese dictators. The South Asian countries all want Tibet to regain its independence after being annexed by the Chinese in 1950 so that they all get their freshwater security back.
Meanwhile, the domestic market collapse will force Emperor Xi to take a few more hasty decisions. China’s banking regulator has advised domestic banks to be prepared for sharp rises in bad loans once the Covid moratorium period is over. It has guided banks to conserve capital by not paying dividends and bonuses. Three Chinese banks have collapsed in the last three years, and 15% of the financial sector is supposedly past a high-risk stage. Tax revenues have grown under 5%, and budget deficits exceed 11%. The season of discontent for 1.4 Billion Chinese has arrived. China created the BRI to use the surplus capacity in its construction materials and equipment sector, and to keep Chinese labour occupied. Experts estimate that this project needs another $5Trillion over the next five years to complete it. The money given to 150 countries cannot be recalled. The Hong Kong door may be closed by the Americans if push comes to shove. The FDI and FPI flow post-Covid may flow outwards. China’s $10 Trillion foreign debt is realistically supported by $2 Trillion of reserves. With the Balance of Trade going negative, even diehard Chinese supporters are a highly nervous lot. If China’s trading partners do not agree to settlements denominated in the RMB, a run on the currency is highly possible.
It is a serious reason to worry for 1.3 billion Indians. Already, we were facing an economic downtrend for the last three years, the GDP growth rate is gradually slipping towards the 5% mark and Covid 19 has destroyed a large section of the economy permanently. Xi Jinping has taken the Chinese virus as an opportunity to attack its neighbors to distract the world’s attention from the pandemic. Now it is India’s turn to return the gesture to China. This crisis offers a tremendous long-term strategic advantage for policymakers to deal with Chinese threats permanently. India must immediately recognize Tibet and Taiwan as sovereign countries and allow them to run official embassies in India and vice versa, this will open the floodgate for several countries to follow in the footsteps of India in shaking up Chinese hegemony globally. Secondly, India must supply subsidized arms and military technology to Vietnam and Philippines to create multiple fronts for China and its PLA in response to what China is doing by arming Pakistan to be used for India in a proxy war. Thirdly, India should take a lead in Indo pacific command with the USA, Japan, and Australia to choke the Chinese trade route; it will hurt PRC and its ambition to be a global economic leader. Fourth, India must use weapons and its army on a regular basis when it is spending billions of dollars on armed forces and weapon procurement. Countries like Pakistan, Nepal and others must be fearful of the consequences if they plan to go against the interest of India. Lastly, restrict Chinese import of nonessential goods by imposing tariffs and focus our attention on building a formidable self-reliant economy with a target of $10 trillion by 2030 to face hostile China, this threat is permanent and China should be treated as a permanent adversary even when the times are good. India and the world must escalate the information warfare to expose the draconian CCP and its oppressive regime working against the interest of native Chinese. The dilemma for the Xi-led CCP is what they tell their domestic audience. In the age of the internet, you can censor but not hide. News spreads like wildfire with every citizen carrying a smartphone. Do the Chinese need to beat the war drums to transfer the blame for their miscalculations? The world scenario is evolving every week, and 2020 threatened to be a very long year indeed.
(Prashant Tewari Editor in Chief Opinion Express & Sanjit Paul Singh Managing Partner S&S associates)
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