How come people in Bangladesh, Sri Lanka and Pakistan pay less for
petrol and diesel, while we in India have to shell out higher fuel
prices? Even as the number of poor in the country rises with every
passing day, India is flooded with luxury goods that are beyond the
reach of even the upper middle class. How come the luxury goods segment
of the country is doing roaring business while official figures estimate
that more than half the Indian population is living in poverty?
Harvard professor of economics and former Union cabinet minister
Subramanian Swamy has the answer: corruption and black money are at the
root of all our woes. This is the underlying message of his latest
book '2G Spectrum Scam', which traces the genesis of the infamous scam,
uncovers the role played by the various characters involved in it, and
tracks how the black money generated from every scam is laundered
through the hawala process. Full spectrum loot Incidentally, it was
Swamy who first blew the whistle on the multi-billion dollar scam
through his letter to Prime Minister Manmohan Singh in November 2008.
And this was much before the Comptroller and Auditor General of India
came out with his report about the Rs1,76,000 crore loss to the
government due to the spectrum scam. In his letter to the PM, Swamy
had provided details about the complex and illegal partnership between
Swan Telecom and Anil Ambani’s ADAG Group. According to Swamy, Reliance
Telecom, which is owned by Anil Ambani, managed to get spectrum
allocation and licenses to operate telecom services in various circles
of the country by paying exorbitant bribes to people in power. How
various businessmen walked away with telecom licenses, and how
politicians, bureaucrats and industrialists colluded with one another
to hoodwink the general public and amassed wealth form the content of
the book. Considered by many to be a maverick, it is worth noting that
not one of Swamy’s allegations against anyone has ever proved to be
false. One politician who is losing his sleep right now is none other
than India’s super-articulate home minister. Through a series of
investigations and Right to Information queries, Swamy has sought to
prove that Chidambaram is equally culpable in the 2G spectrum scam for a
host of reasons, ranging from misinforming the PM about the pricing of
the spectrum to, more damagingly, withholding key information he had
received from the country’s security agencies regarding the spectrum
license applications of Etisalat and Uninor. Both Etisalat and Uninor
had been blacklisted by the Intelligence Bureau and the Research and
Analysis Wing for their illegal connections with Pakistan’s ISI and the
Chinese PLA. Though the home ministry passed on the information to
Chidambaram, suggesting that the telecom ministry should be advised
against entertaining these firms, Chidambaram, the then finance
minister, just slept over the file! Swamy has devoted a section
exclusively to describing the entire ‘spectrum’ business in a language
that laypersons could understand. After unraveling the seemingly
impenetrable jargon of GSM, CDMA, ITU, etc and the economic, social and
global ramifications of spectrum allocation, Swamy moves smoothly to
demystifying India’s hawala culture. He explains how ill-gotten
wealth, accumulated through bribes, is taken out of India and brought
back to the country with the tacit approval of the state. The process of
money laundering is explained with examples and anecdotes. As a
reporter, I have been covering Swamy’s press briefings since 1998. It
was in February-March 2007 that Swamy forecast the impending telecom
scam. He even spoke about the illegal telephone exchange operating out
of Dayanidhi Maran’s residence. Unfortunately, no one took it seriously.
Now the younger Maran is on the run. How PNs play havoc Another
highlight of the book is the detailed description of the destructive
role played by Participatory Notes (PNs) in the Indian economy. The
economist in Swamy has been warning the country’s policy makers about
such financial instruments, which could easily be misused to bring dirty
money into the country for funding terrorist activities. What makes PNs
so attractive is that operators need not furnish any details for
buying and selling them. “An Indian citizen has to furnish a hell of a
lot of information for opening a simple savings bank account. But PN
dealers and operators need not reveal anything, including the source of
money, to the authorities. When SEBI questioned Goldman Sachs Investment
for its failure to report the issuance of PNs to an undesirable
company, the Securities Appellate Tribunal slapped a fine of Rs1 lakh on
SEBI, the market regulator, for harassing Goldman Sachs,” writes Swamy.
The author further quotes MK Narayanan, the then national security
adviser, who alerted the Union government about the manipulation of the
Indian stock markets by elements using PNs. “Instances of terrorist
outfits manipulating the stock markets to raise funds for their
operations have been reported. Stock exchanges in Mumbai and Chennai
have on occasion reported that fictitious or notional companies were
engaging in stock market operations, some of which were later traced to
terrorist outfits,” said Narayanan, at a conference on security policy
in Munich in February 2007. So didn’t the SEBI (Securities and Exchange
Board of India) do anything about the use of PNs to manipulate the stock
market? Well, Swamy points out that former SEBI chairman M Damodaran
paid a heavy price for questioning the legality of PNs — he lost his
job. As for Narayanan, he remained silent on the issue after coming
back to India, But there was one gentleman who made it a point to
repudiate what he had said in Munich — it was none other than P
Chidambaram, the then Union finance minister, who, ironically enough,
would go on to become the country’s home minister. The author poses
also some inconvenient questions as he tracks the spectrum scam. “Why is
India dilly-dallying over the United Nations Convention Against
Corruption adopted by the General Assembly in October 2003?” asks Swamy.
“Its asset recovery provision is very appealing and yet the Indian
government has not yet moved to ratify the Convention.” The book does
have its shortcomings — it could have benefited from better copy editing
and production values. But it is a must read for anyone interested in
understanding why no government will ever muster the ‘political will’ to
act effectively against corruption — the stakes for the cabal of
politicians, bureaucrats and businessmen who effectively run the country
are far too high. That’s why today we have civil society groups, with
the support of the average citizen, applying pressure on the government
so that the country gets an effective anti-corruption bill.Interested
readers can buy this book online.
2G Scam
How come people in Bangladesh, Sri Lanka and Pakistan pay less for
petrol and diesel, while we in India have to shell out higher fuel
prices? Even as the number of poor in the country rises with every
passing day, India is flooded with luxury goods that are beyond the
reach of even the upper middle class. How come the luxury goods segment
of the country is doing roaring business while official figures estimate
that more than half the Indian population is living in poverty?
Harvard professor of economics and former Union cabinet minister
Subramanian Swamy has the answer: corruption and black money are at the
root of all our woes. This is the underlying message of his latest
book '2G Spectrum Scam', which traces the genesis of the infamous scam,
uncovers the role played by the various characters involved in it, and
tracks how the black money generated from every scam is laundered
through the hawala process. Full spectrum loot Incidentally, it was
Swamy who first blew the whistle on the multi-billion dollar scam
through his letter to Prime Minister Manmohan Singh in November 2008.
And this was much before the Comptroller and Auditor General of India
came out with his report about the Rs1,76,000 crore loss to the
government due to the spectrum scam. In his letter to the PM, Swamy
had provided details about the complex and illegal partnership between
Swan Telecom and Anil Ambani’s ADAG Group. According to Swamy, Reliance
Telecom, which is owned by Anil Ambani, managed to get spectrum
allocation and licenses to operate telecom services in various circles
of the country by paying exorbitant bribes to people in power. How
various businessmen walked away with telecom licenses, and how
politicians, bureaucrats and industrialists colluded with one another
to hoodwink the general public and amassed wealth form the content of
the book. Considered by many to be a maverick, it is worth noting that
not one of Swamy’s allegations against anyone has ever proved to be
false. One politician who is losing his sleep right now is none other
than India’s super-articulate home minister. Through a series of
investigations and Right to Information queries, Swamy has sought to
prove that Chidambaram is equally culpable in the 2G spectrum scam for a
host of reasons, ranging from misinforming the PM about the pricing of
the spectrum to, more damagingly, withholding key information he had
received from the country’s security agencies regarding the spectrum
license applications of Etisalat and Uninor. Both Etisalat and Uninor
had been blacklisted by the Intelligence Bureau and the Research and
Analysis Wing for their illegal connections with Pakistan’s ISI and the
Chinese PLA. Though the home ministry passed on the information to
Chidambaram, suggesting that the telecom ministry should be advised
against entertaining these firms, Chidambaram, the then finance
minister, just slept over the file! Swamy has devoted a section
exclusively to describing the entire ‘spectrum’ business in a language
that laypersons could understand. After unraveling the seemingly
impenetrable jargon of GSM, CDMA, ITU, etc and the economic, social and
global ramifications of spectrum allocation, Swamy moves smoothly to
demystifying India’s hawala culture. He explains how ill-gotten
wealth, accumulated through bribes, is taken out of India and brought
back to the country with the tacit approval of the state. The process of
money laundering is explained with examples and anecdotes. As a
reporter, I have been covering Swamy’s press briefings since 1998. It
was in February-March 2007 that Swamy forecast the impending telecom
scam. He even spoke about the illegal telephone exchange operating out
of Dayanidhi Maran’s residence. Unfortunately, no one took it seriously.
Now the younger Maran is on the run. How PNs play havoc Another
highlight of the book is the detailed description of the destructive
role played by Participatory Notes (PNs) in the Indian economy. The
economist in Swamy has been warning the country’s policy makers about
such financial instruments, which could easily be misused to bring dirty
money into the country for funding terrorist activities. What makes PNs
so attractive is that operators need not furnish any details for
buying and selling them. “An Indian citizen has to furnish a hell of a
lot of information for opening a simple savings bank account. But PN
dealers and operators need not reveal anything, including the source of
money, to the authorities. When SEBI questioned Goldman Sachs Investment
for its failure to report the issuance of PNs to an undesirable
company, the Securities Appellate Tribunal slapped a fine of Rs1 lakh on
SEBI, the market regulator, for harassing Goldman Sachs,” writes Swamy.
The author further quotes MK Narayanan, the then national security
adviser, who alerted the Union government about the manipulation of the
Indian stock markets by elements using PNs. “Instances of terrorist
outfits manipulating the stock markets to raise funds for their
operations have been reported. Stock exchanges in Mumbai and Chennai
have on occasion reported that fictitious or notional companies were
engaging in stock market operations, some of which were later traced to
terrorist outfits,” said Narayanan, at a conference on security policy
in Munich in February 2007. So didn’t the SEBI (Securities and Exchange
Board of India) do anything about the use of PNs to manipulate the stock
market? Well, Swamy points out that former SEBI chairman M Damodaran
paid a heavy price for questioning the legality of PNs — he lost his
job. As for Narayanan, he remained silent on the issue after coming
back to India, But there was one gentleman who made it a point to
repudiate what he had said in Munich — it was none other than P
Chidambaram, the then Union finance minister, who, ironically enough,
would go on to become the country’s home minister. The author poses
also some inconvenient questions as he tracks the spectrum scam. “Why is
India dilly-dallying over the United Nations Convention Against
Corruption adopted by the General Assembly in October 2003?” asks Swamy.
“Its asset recovery provision is very appealing and yet the Indian
government has not yet moved to ratify the Convention.” The book does
have its shortcomings — it could have benefited from better copy editing
and production values. But it is a must read for anyone interested in
understanding why no government will ever muster the ‘political will’ to
act effectively against corruption — the stakes for the cabal of
politicians, bureaucrats and businessmen who effectively run the country
are far too high. That’s why today we have civil society groups, with
the support of the average citizen, applying pressure on the government
so that the country gets an effective anti-corruption bill.Interested
readers can buy this book online.
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Such an amazing article..Thanks a lot for sharing your knowledge..!!
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