Swimming in a sea of sharks

27 April 2015, New Delhi, Pankaj Sharma

Developing sound and healthy institutions is essential for maintaining financial stability

It is perhaps only in India that Non-Performing Assets (NPAs) for government banks can reach an astronomical Rs 2,60,531 crores. So alarming is the situation that the Prime Minister’s office (PMO) is supposedly going to announce strict punitive action against a number of prominent real estate, diamond and media firms that are being probed by Central Bureau of Investigation (CBI). The Department of Financial Services (DFS) has also been keeping an eye on these high value defaulters for several years. The Governor of the Reserve Bank of India, Raghuram Rajan, has sent a detailed report to the PMO listing these willful defaulters, the reasons for delays in their investigations and the status of cases with the CBI. Governor Rajan while speaking at a seminar in Anand, Gujarat, last year, had stern words for companies who have willfully defaulted on loans to banks, saying that such borrowers should be seen as freeloaders rather than being celebrated as captains of industry.

The bank accounts cited by the RBI belong to Winsome Diamond and Jewellery, Zoom Developers, Tiwari Group, Surya Vinayak Industries, Deccan Chronicle Holdings, First Leasing Company of India, Biolor Industries, Surya Pharmaceuticals, Prime Impex / Prime Pulses, and a person identified as Shivraj Puri. The PMO has told the DFS secretary to examine these defaulters regularly and take it up with the cabinet secretary. It has also asked all concerned agencies to pursue the cases vigorously. The PMO has asked the DFS to suggest a mechanism for coordinating and pursuing high-value banking defaulters, including structural changes that may be required in bad-debt reporting, apart from suggesting regulatory changes where necessary.

One of the biggest defaulters as far as Indian banks are concerned is Vijay Mallya’s flying white elephant which he ironically named Kingfisher Airlines. Banks claim that he is a willful defaulter, a fact that Mallya contests vigorously. Even though he may not agree, he is a defaulter nonetheless and owes the banks a massive Rs 2,673 crores. In effect the average tax payer has paid for Kingfisher airline’s failings and not Vijay Mallya who should have been the primary person held responsible.

Until December 2011, Kingfisher Airlines had the second largest share in India’s domestic air travel market. The 14 banks, led by State Bank of India, which collectively lent Rs 6,500 crores to the airline, are now involved in litigation over the money, as Mallya has sued them in multiple courts. Mallya owes money to banks, employees, tax officials, caterers, aircraft leasing companies, fuel supplier Hindustan Petroleum Corporation and to random taxi operators, too. As Mallya continues to run away from paying debts that he owes all and sundry, his IPL and Formula 1 teams along with the annual swimsuit calendar his company releases seem to be doing all right.

The  list of these defaulters ironically includes top ranked companies in their industries such as Sterling Biotech Limited, Surya Vinayak Industries, Corporate Ispat Alloys, Forever Precious Jewellery & Diamonds, Varun Industries Limited, Orchid Chemicals & Pharmaceutical, Kemrock Industries & Exports, Murli Industries & Exports Limited, STCL Limited, Surya Pharma, Zylog Systems (India) Limited, Pixion Media Pvt. Limited, Deccan Chronicle Holdings Limited, K.S. Oil Resources, Indian Technomac, Century Communication Limited and Moser Baer India Ltd. & Group Companies. All of them owe between Rs. 500 to 2700 crore to different banks. The list of Board of Directors in these companies is an eye opener.

Developing sound and healthy financial institutions, especially banks, is an essential condition for maintaining the stability of India’s financial system. The high level of NPAs in banks and financial institutions is a matter of grave concern and could have serious repercussions down the line. Therefore any steps the Narendra Modi-led government takes to tighten the ‘metaphorical’ noose around the neck of defaulters must be welcomed by the opposition.

I still vividly remember the immense difficulties Rajiv Gandhi faced in 1985, when he introduced the first ever system of asset classification for the Indian banking system. Until then the management of NPAs was left to banks and auditors. Rajiv Gandhi implemented the ‘Health Code System’ (HCS) which involved classification of bank advances into eight categories ranging from 1 (satisfactory) to 8 (bad and doubtful debt). It was again during the Congress government’s reign in 1991 that the classification of assets according to the HCS was synced with international standards. The Narasimhan committee, which led the efforts, suggested that for the purpose of provision, banks should classify their advances into four broad groups--standard assets; substandard assets; doubtful assets; and, loss assets. Following this, prudential norms relating to income recognition, asset classification and provisioning were introduced in 1992 in a phased manner.

Thanks to these efforts the gross NPAs, which were 11.8 percent of the total assets of the public sector banks two and a half decade are around 2 percent today. India, in that sense, is trying to match up with powerhouses like Australia and Singapore. India must manage its NPA situation with all the seriousness it can muster. Furthermore, there should be constant efforts at all levels to ensure that NPAs do not go out of control and willful defaulters are dealt without any leniency whatsoever. But let’s also remember that there are people who do the work and there are those who try to take the credit for it. If India is managing its NPA situation in a far better manner than other Asian countries, I have no hesitation in saying that it is because of the visionary initiatives taken by Rajiv Gandhi during his tenure as Prime Minister.

Author is Editor and CEO of News Views India

 

 

Lets watch a new Rahul Gandhi

Pankaj Sharma


20 April 2015, New Delhi, 

Congress vice-president is ready to lead from the front in upcoming Parliament session.

Rahul Gandhi is back from his brief sabbatical. These two months, when Rahul had taken time off, were full of political gossip and baseless speculation. Most of the gossip doing the rounds was predicting that Rahul’s days in active politics were over. These political pundits must now be shocked to see Rahul back in action and that too full of zest and vigour. When news of Rahul Gandhi’s sudden leave of absence became public, there was a mixed reaction of sorts in the political arena. 

Even some of the senior Congressmen felt that Rahul had chosen an inopportune time to take a sabbatical. Every self-proclaimed political insider had a different story about his location, reason for taking a sabbatical and the date of his return. To me this trivia was never important, as I have been watching his style of politics for more than a decade. 

The first clear indication of Rahul Gandhi’s strong political will and determination was seen five years back, when he went to Bihar in February 2010. Nitish Kumar, who is now with the Yadav duo--Lalu Prasad and Mulayam Singh, was a Bhartiya Janata Party (BJP) ally then; and Ramvilas Paswan, who is now with BJP, was roaming hand in hand with Lalu Prasad Yadav back then. The writing on the wall for Congress back in 2010 election was so clear that a majority of its central and state leadership had already given up. Rahul, however, was not ready to accept defeat without a fight. In the end the Congress could win only 4 seats, but the fact remains that due to Rahul’s combative leadership, a party, which was trying to survive with the help of leaders from other political outfits, got 24.31 lakh votes. Also, the party’s candidates found some firm ground under their feet in 243 constituencies. It must be noted that in 2005, the Congress was virtually absent in Bihar. Therefore the advantage Rahul Gandhi gave to the Congress was the presence of its flag and workers at all the assembly segments in 2010.

Bihar will go to elections again in November this year. This event would be the first litmus test for Rahul Gandhi. Despite a concerted and pre-meditated effort at insinuations and innuendos by the BJP and others, a vast majority of Congressmen across the country were never in any doubt that these two months were a period of political introspection and contemplation aimed at laying down a well thought out road map for the future. Rahul Gandhi is no Amit Shah and the Congress is no BJP. Any well meaning individual would have chosen to prepare before taking on any such a major responsibility. In this regard, Rahul took a leave of absence to think through key issues. This is exactly what Rahul did. There is nothing wrong in taking a sabbatical.

However there is something egregiously wrong in taking over the reins of a party and marginalising its senior most leaders ruthlessly. This is not the way the Congress and its leadership functions.

 We saw Rahul Gandhi guide the Congress on each and every issue of importance and consequence during this period of contemplation. His indelible stamp can be seen on every decision and action that the Congress party took during the past couple of months, that led it to establish a clear line of attack on the anti-people and anti-farmer policies of Narendra Modi-led central government.

Immediately after coming back from his sabbatical, Rahul met a delegations of farmers and launched a massive attack on BJP’s anti-poor policies at the Kisan Rally held in the national capital this Sunday. One thing is clear: Rahul Gandhi has been fighting for the have-nots and has dedicated himself to this cause for a very long time. His efforts are bound to yield results sooner or later.

It is irrelevant where Rahul Gandhi was for these two months. What matters is whether his sincerity is unquestionable or not? Whether his sense of purpose and dedication to the cause of the poor of India is unquestionable or not? Is he leading the Congress from the front and exposing Narendra Modi’s pro-corporate government or not? These are the questions that need to be answered.

It is no wonder that the Modi brigade is jittery about his return. Within three days of Rahul’s return it is evident that all speculations in the media space about an internal crisis in the Congress were baseless and deliberately manufactured propaganda on BJP’s part, which has failed miserably. 

Nobody could have imagined till a few weeks back that the Congress party still has the organisational capacity to unify a mass movement and vocalize the distress of farmers against the draconian Land Acquisition Ordinance of the Modi-led government. I have no doubt that Rahul Gandhi is well aware of the massive responsibility that lies upon his able shoulders; the responsibility of protecting our pluralism, multi-culturalism and democratic traditions against the constant onslaught of sectarian, divisive and dictatorial forces. 

He understands that the Congress party’s onwards march has to take into consideration multiple aspects of immediate responses, long term strategies, ideological reaffirmation, course correction and a robust response to people’s aspirations. There are also expectations from the Congress party that Rahul has to fulfill. It is the right time for Rahul Gandhi to go off in a new direction, with complete confidence that he is leading his people in the right direction.

Author is Editor & CEO of News Views India

Maligning our national icons

Pankaj Sharma


13 April 2015, New Delhi, 

Such acts are extremely uncharitable to the legacies they have left behind

The conspiracy mill has been working overtime; the latest we hear from it is that the governments headed by Jawaharlal Nehru, Lal Bahadur Shastri, Gulzarilal Nanda and Indira Gandhi were involved in carrying out covert snooping and spying operations on the family members of Netaji Subhash Chandra Bose. The selectively leaked files of the Intelligence Bureau claim that the agency had been keeping a close eye on the two Bose family homes in Calcutta: 1 Woodburn Park and 38/2 Elgin Road, from 1948 to 1968. Apart from intercepting and copying letters written by Bose’s family members, agency sleuths shadowed them on their domestic and foreign travels. Surveillance was also reportedly conducted on Bose’s nephew and sibling Sisir Kumar Bose and Amiya Nath Bose.

India had four reigning prime ministers during the 20 year period which is mentioned in IB files. The intelligence Bureau directly reports to the Home Minister and seven political stalwarts looked after this onerous responsibility from ‘48 to ‘68. They were Sardar Vallabhbhai Patel, Chakravarty Rajopalachari, Kailash Nath Katju, Govind Vallabh Pant, Lal Bahadur Shastri, Gulzarilal Nanda and Yashwant Rao Chavan. Shastri and Nanda held the positions of Home Minister and Prime Minister at different times during this period. Even if we believe the stories that Bose did not die in a plane crash; and no plane was crashed on 18 August 1945 in Taiwan; and Netaji was present at the time of Nehru’s funeral in May 1964; can the nation believe that the nine of greatest nationalist leaders were so ‘afraid’ of losing their chairs of power to Bose that they ensured that he did not return to his motherland and kept on spying on his family? The Bhartiya Janta party-led union government, however, wants us to believe that leaders such as Nehru, Patel, Shastri and others who fought for India’s freedom, reshaped the destiny of this country, rewrote its history and made it a great nation; in reality were power hungry unscrupulous men.

Those who are part of this selective, systematic and sinister propaganda of selective leaks and half truths to malign our national icons must realise that the first batch of files was declassified during the tenure of the Congress-led UPA government in 2012 and sent to the National Archives. In a sharp contrast to this, the BJP-led government had refused to make classified files public. In January 2014, when the Lok Sabha election campaign was at its peak, the then BJP president Rajnath Singh, during a visit to Cuttack - the birthplace of Netaji - on the occasion of his 117th birth anniversary, had demanded that the UPA government make public the records related to the freedom fighter. Singh is ironically now the Home Minister himself.

The Prime Minister’s Office had accepted in a recent Right To Information (RTI) reply that there were 41 files related to Bose, of which two had been declassified, but refused to disclose them taking a position that “Disclosure of documents contained in these files would prejudice and affect relations with foreign countries. As such, these files are exempted from disclosure under Section 8(1) (a) read with Section 8(2) of the Right to Information Act”. Rajnath Singh had claimed during the election campaign that there was a larger public interest in the disclosure of the documents, but the PMO under Narendra Modi seems not to be in agreement with this stance, as is evident from the reply which considered the larger public interest disclosure clause - section 8(2) - of the RTI Act but chose to withhold the documents. The section 8(2) says, “Notwithstanding anything in the Official Secrets Act, 1923 nor any of the exemptions permissible in accordance with sub-section (1), a public authority may allow access to information, if public interest in disclosure outweighs the harm to the protected interests.” The PMO gave a list of 41 files; of which two related to the Indian National Army treasure and appointment of a inquiry commission to go into circumstances of death have been declassified. These have been sent to the National Archives. The office, in its response, admitted that there are 10 files which are unclassified but still invoked exemption clause of section 8(1) to withhold them from disclosure. Four ‘Top Secret’ files which are held by the PMO include: miscellaneous correspondence with the widow and daughter of Netaji, transfer of his ashes to India and two files on the Justice Mukherjee Commission of Inquiry looking into his death/disappearance.

The files sent to National Archives by the UPA government contained the material placed before the Justice Khosla Commission and Justice MK Mukherjee Commission that were set up to inquire into the circumstances of Netaji’s death. The two intelligence files which have raised the recent controversy were sent from the West Bengal government’s intelligence branch to the Intelligence Bureau. The documents were stacked away in over 20 trunks at the home ministry; before sending them to National Archives under the Public Records Act in October 2012. But it was only in November 2014 that the Archives completed the task of arranging the files and giving access to research scholars. Besides the papers relating to the two inquiry commissions, the Archive also has four other files related to the Azad Hind government. But a big chunk of the files still remains locked away at the ministries of home, external affairs and the Prime Minister’s Office on grounds that it could affect India’s relations with some countries. On 17 December 2014, the government told Parliament that the ministry of external affairs was holding on to 29 files and the PMO still had 60 files related to Netaji.

The controversy has raised several questions which need answers. Why is the Modi government not telling the nation that most of the reports documenting the surveillance are related to the state government’s intelligence wing and not the central intelligence agencies? Why only ‘notings on file’ have been released while withholding the ‘correspondence portion’ of these files? There is no record in National Archives of any media correspondent as having visited and perused declassified files. Then, who in the government is making the selective leaks and for what ulterior purpose?

Loose lips sink big ships

Pankaj Sharma

6 April 2015, New Delhi

Uncivilized language is unacceptable in a parliamentary democracy like ours

        Giriraj Singh was a minister for Animal Husbandry in Bihar for around three years till 2013. I do not mention this with any satirical intent whatsoever. To me it is more important that Giriraj Singh is now a minister of state in Narendra Modi’s government and moreover he represents Nawada in the Parliament. Nawada is a part of the historical Magadh region and is famous for its people’s culture, values, ethics and intellect; incidentally it also played a very important role in India’s freedom struggle. I am saddened that despite the rich heritage and culture of the people of Nawada, Giriraj Singh refuses to behave in a responsible and sober manner. Instead, he seems to be more motivated and enthused by the fact that Nawada is the birth place of Jarasandh (a warrior who fought with the Pandavas), according to the Mahabharata. Giriraj seems to be very excited about the fact that Jarasandh’s two daughters were married to Kansa and that he lent his army and personal advise to the latter for a coup d’état in Mathura. Given this context, it’s not surprising that Giriraj Singh, one of Modi’s blue eyed lieutenants, routinely puts his foot in his mouth and embarrasses his party on a routine basis. 

            It was Giriraj Singh who had declared a war against Modi’s opponents during the campaign for the 2014 Lok Sabha elections. He had asked Modi detractors to go to Pakistan if they did not like Narendra Modi. By that point in time the language of abuse, which is now increasingly being used by the leaders of Bhartiya Janta Party, Rashtriya Swayam Sevak Sangh and its affiliates alike had crossed all boundaries of decency in public discourse. Even those who are holding responsible official positions in the union government headed by Narendra Modi and Bharatiya Janata Party-led governments in the states do not hesitate in using foul language to express their feelings of hate against communities or individuals. The right winger’s gallery of celebrities has portraits of pride placed on the wall of Giriraj Singh, Yogi Aditya Nath, Sadhvi Niranjan Jyoti and Varun Gandhi. 

            It is reasonably expected that in a parliamentary democracy every politician should avoid making insensitive and offensive remarks. Those who assume public offices must refrain from making statements that can hurt the sentiments of any person or group. However, BJP leaders don’t shy away from using un-parliamentary, inflammatory and even abusive words every now and then. This trend has assumed epidemic proportions in recent times. Politicians such as Giriraj Singh receive encouragement from the fact that even after putting their foot in their mouth on a regular basis, even the prime minister cannot dare to evict him from his cabinet. Moreover politicians like him end up getting the support of BJP intellectuals like Meenakshi Lekhi, who quoted Patrick French’s book “India: A Portrait” to justify his statements. Once again this is not surprising at all considering that she is the same Meenakshi Lekhi whose gloves came off when she was fighting the New Delhi Lok Sabha polls in April 2014. Lekhi had made nasty remarks about the Congress President’s father and said that Sonia Gandhi and Rahul have fascism in their blood due to their Italian ancestry.

I strongly feel that it is only because Narendra Modi condones such language and vitriol that the tendency of using abusive and foul language by BJP leaders is increasing. When Vishwa Hindu Parishad president Pravin Togadia says that Muslims should be stopped from buying houses and properties in areas where the majority people are Hindus, the Modi government listens to him quietly and does not take any action. When Baba Ramdev says that Rahul Gandhi goes to Dalit homes for honeymoon and picnic, BJP leaders listen to him with a wry smile and do not feel ashamed. When Modi’s minister Niranjan Jyoti asks the electorate during the Delhi assembly elections to choose between ‘Ramzaadon’ and ‘Haramzaadon’, Modi himself tries to defend her on the floor of the Parliament, saying that the minister has apologised. Modi’s defence extends to the fact that she has grown up in a village.

            If instead of defending the minister Modi had sacked her, BJP leaders would have learnt a lesson in how to maintain decorum in public life. But first he tried to play the Dalit card and when the balloon of bluffs was punctured because the Sadhvi is not a Dalit; a stubborn Modi came out with the twisted logic that she was from a rural background. What message did Modi want to give out when he said this? Was he implying that Dalit or rural women are uncivilised and uncultured? To me such a statement is unpardonable and objectionable. The BJP is well known for its regressive and archaic mindset about backward communities. Not too long ago, when Uma Bharati, former chief minister of Madhya Pradesh and currently a Union Minister, had revolted against the BJP, the then RSS chief KS Sudarshan had made a similarly insensitive remark. The RSS chief said that Uma Bharti was a woman from the backward community. Such remarks obviously speak of the Sangh’s culture and outlook towards women. Don’t forget that Modi’s campaign manager in Uttar Pradesh, Amit Shah who is now the president of BJP was himself banned from holding rallies and making speeches by the Election Commission in April last year. It was only when Shah vowed not to use abusive or derogatory language that the Commission rescinded the ban. We have also listened to Narendra Modi spewing vitriol during his early days as Gujarat Chief Minister and then later during his time as a Prime Ministerial candidate. He had made objectionable statements like, “are you getting the funds from your maternal uncle’s home”,”if madam is unwell, hand over the work to her son”, calling Rahul Gandhi “Shahazade’ in his public speeches. How could you then expect any better from the other leaders of the BJP? 

            The endorsement and rejection of political representatives must always be grounded in issue-based political debates. It is a fact that the BJP grew out of the strong anti-Congress ideological pool. Modi is its inheritor, trying to mould the party in his own image as the now ubiquitous masks show; idolatry minus ideology is the mood de jour at his rock star-like receptions. It’s not just the traditional BJP vote base that’s rooting for him, but sections of the apolitical middle class, too, which is the new claimant on a newborn political space. It is perhaps for these reasons that the BJP leadership thinks that only crude and direct language works and there is no scope of subtlety. But let us remember that loose lips sink ships. Whatever comes easily goes by easily as well; and if you give a person very a long rope, he will soon hang himself. There is no place for abusive language in politics. People of India do not deserve such undignified behaviour from its elected representatives and eventually they will ensure that they get what they deserve.

The author is Editor and CEO of News Views India