TWO "G" SCAM

  The 2G scam

While there is little doubt that the spectrum has been allotted to a favoured few in an opaque manner, I have doubts about the figure of $40b (Rs.176,000 crore) that is being bandied around.

This figure is based on extrapolating the fee received for 3G to 2G. I doubt if biddrs would have paid as much for an earlier generation technology. And had they paid an extra $40B for 2G, they wouldn't have had resources to bid so high for 3G.

Few of those who obtained 2G licenses promptly sold it to others at 10x the price. I would say that this difference is the real loss that 2G has caued to the govt and citizens of India.

This figure is closer to Rs.10,000 crore or $2.25B.

Not that this excuses the corrupt, but then the scale is far less scandalous.

The Press in India has been sensationalising news of late.

Corruption Tops Indian Minds
Country
Issue
Persons share
India
Corruption
69 %
China
Climate Change
68%
Pakistan
Terrorism
64%
US, UK
State of Global Economy
61%
Russia
Extreme Hunger/Poverty
59%
Source: Times of India, 11 December, 2010

Who is the Real Indian.

Most Currepted India

India has been rocked this year by a series of corruption scandals that have embarrassed the ruling Congress party, rattled markets and delayed reform bills as the opposition stalls parliament.

The country, 87th in Transparency International's rankings based on perceived levels of corruption, is no stranger to scandals.

Here are some of the biggest in the last two decades:

2010 - LOAN BRIBERY CASE

The case broke after a year of investigation on Nov. 24 when the Central Bureau of Investigation (CBI) arrested eight people, accusing them of bribery for corporate loans.

The arrests included the chief executive of state-run mortgage lender LIC Housing Finance and senior officials at state-run Central Bank of India, Punjab National Bank and Bank of India.

While the size of the scandal is not yet known, local media have reported it could run into hundreds of millions of dollars.

The CBI is probing 21 companies involved in India's booming infrastructure sector for links, but has not named them.

The bribes were allegedly paid by private finance firm Money Matters Financial Services, which acted as a "mediator and facilitator" for the loan beneficiaries, the CBI said.

Companies whose officials have been arrested have all denied any wrongdoing. Individuals arrested have not yet commented.

Government officials, including ministers, have said this is a case of individual wrongdoing and not a widespread scam.

2010 - TELECOMS LICENCE ROW

Telecoms Minister Andimuthu Raja was sacked after a report by India's state auditor said his ministry sold licences and spectrum below market prices, depriving the government of up to $39 billion in revenues.

The scandal swept up as high as Prime Minister Manmohan Singh, who had to explain to the Supreme Court why he sat on a request for permission to charge Raja with corruption.

In its report, the Comptroller and Auditor General of India (CAG) also said rules were flouted when the licences were given in 2007-08 which led to many ineligible firms getting them.

The CBI has launched an investigation into alleged corruption at the ministry. Nobody has been charged yet and Raja has denied any wrongdoing.

The CAG said Unitech units got licences despite having inadequate capital, Swan Telecom got a licence even though there were monopoly issues and Reliance Communications got undue benefits as it sought permission to offer services under the more popular GSM technology.

Revenue authorities have questioned Nira Radia, a top lobbyist, as part of an investigation into whether money laundering and forex laws were broken when the licences were purchased. Radia has denied any wrongdoing and has said she is cooperating with the probe.

2010 - COMMONWEALTH GAMES

Allegations of corruption over the international sporting event that took place in Delhi in October are being investigated by several bodies including the anti-corruption watchdog, the state auditor, the CBI and a special committee set up by Prime Minister Singh.

The Congress-party led coalition government came under fierce criticism for mismanagement and ineptitude over the sporting extravaganza which cost up to $6 billion.

Allegations of corruption spanned a broad spectrum including issuing of contracts and purchase of equipment -- from treadmills to toilet rolls.

India's anti-corruption watchdog has identified more than 16 projects with possible irregularities.

The Congress party eventually sacked Suresh Kalmadi, chairman of the organising committee, as secretary of the party's parliamentary wing.

Aides have been arrested and local media has said Kalmadi could be arrested once he returns back from a foreign trip.

2010 - HOUSING SCAM

Congress party politicians, bureaucrats and military officials have been accused of taking over land meant for building apartments for war widows. The CBI has begun investigating the case.

Local media say apartments with a value of $1.8 million were sold for as little as $130,000 each in the apartment block, which faces the Arabian Sea in one of the world's most expensive stretches of real estate in Mumbai.

The government has sacked the chief minister of western Maharashtra state, Ashok Chavan, who is a member of Congress.

The apartment block is also being investigated for several violations of norms, including environmental laws and land-use rules.

The government has now effectively taken back permissions allowing owners to occupy the apartments, which are required for water and power supplies, leading to the disconnection of these services.

2009 - SATYAM

The founder of Satyam Computer Services, one of India's top software firms, resigned in January 2009 after admitting profits were falsely inflated for years.

The fraud, estimated at $1 billion, was India's largest corporate scandal and was dubbed "India's Enron".

With clients abandoning it, shares were hammered down to near-penny-stock levels.

The government stepped in to save the firm by appointing a new board of directors and midwifed its sale to Tech Mahindra. The firm is now called Mahindra Satyam.

The founder chairman of Satyam, Ramalinga Raju, and other officials including the then chief executive officer and chief financial officer, were arrested under several charges including fraud. The cases continue in court. The defendants have said they were not involved in the fraud.

1992 - SECURITIES SCAM

Several Indian stockbrokers were accused of siphoning off over 35 billion rupees ($778 million) of funds, mostly from inter-bank transactions, to fuel a rise in the Mumbai stock market in 1992. It involved top officers of state-run and foreign banks and financial institutions, bureaucrats and politicians.

News of the scam led to an over 40 percent fall in shares over two months, wiping millions of dollars from market value.

Harshad Mehta, the main accused, died in 2002, convicted in only one of the many cases filed against him, for misappropriation of funds in a case involving the use of money from the bank account of carmaker Maruti Suzuki for trading in stocks.

Several bank executives were convicted for fraud in allowing bank funds to be used for trading stocks.

1986 - BOFORS GUN DEAL

India's purchase of artillery guns from Swedish firm Bofors in 1986 was rocked by allegations that 640 million rupees ($14.2 million) -- a huge sum then -- was paid as bribes to people close to then prime minister Rajiv Gandhi to swing the deal.

The scandal caused an uproar in parliament, led to a split in the ruling Congress party and the defeat of Gandhi in federal elections in 1989.

Its fallout has stymied India's defence expansion, with officials for years unwilling to take decisions on purchases that could later be probed for corruption.

Amongst the people probed were the London-based Indian business family of the Hindujas, who were later acquitted by a court of any involvement.

The case has dragged on for years without any result.

Common Wealth Games Curruption

India’s Corruption Games 2010

Geopolitical notes from India

M D Nalapat

The only two countries in the world that each have a billion-plus population are India and China, and there is corruption in both. However, the difference is that even dishonest officials in China seek ways of implementing approved policies, in the process, earning some money on the side. However, in India, so far as the huge army of corrupt politicians and officials is concerned, the entire objective of decision-making is to earn money. In the process, if some good gets done, that is entirely accidental. So, whereas in China the making of money is a by-product, with the focus being on ensuring results, in the case of India, results are the (rare) by-product. The sole objective behind each decision is to make money, as much of it as is possible.

During the first five years of the present Sonia Gandhi-led United Progressive Front government in New Delhi, then Union Finance Minister Palaniappan Chidambaram (now Union Home Minister) greatly increased the powers of the tax collection and regulatory agencies, so that these days, they are as operationally unaccountable to the public as was the case during the years when India was ruled by the East India Company. The stock market regulator - the Securities and Exchange Board of India, or SEBI - passes a slew of orders that either bar some companies from doing any business or help other entities in theirs. On record, there seems to be very little justification for either step, so clearly the actual reasons are such as to be invisible to the naked eye. The Reserve Bank of India (RBI) curries goodwill in financial markets in the European Union (the only location that the RBI’s colonial-era higher-level team respond to) by repeatedly raising interest rates and accelerating the very inflation that they profess to reduce.

The RBI top brass is fully aware that in an economy such as India, with myriad supply distortions, raising the interest rate will have zero effect on price rise. However, acting as a trade union for the big banks (all of whom are happy at the high interest rate regime that covers up their inefficiencies), the RBI ensures that Indian business get forced to pay much higher interest than their overseas competitors. Naturally, overseas entities - the beneficiaries of RBI policies - are filled with admiration for the RBI. A former Governor, Yaga Reddy (who was known for his zeal to raise interest rates) even wrote a book, in which he hinted that but for the daily rising of the sun, every positive thing that had taken place in the Indian economy during his time in office was because of his policies.

A modest man, Reddy Chidambaram paid particular attention to taxes, making the Indian taxpayer the highest tax individual on the planet. For example, thanks to multiple levies, the price of petrol in India is far higher than almost anywhere else in the world. There are several thousand separate taxes in India, much of which gets collected by the Income-tax Department. The “democratic” Chidambaram made sure to ensure that the ordinary citizen (those with no access to Congress Party bigwigs) would have zero rights vis-a-vis the department, which has today become known for its intimidation and extortion of the politically unconnected, labelling individuals as tax-evaders at will, even while turning a blind eye to the Everest-scale corruption within Chidambaram’s own party, something that some zealous officials in London uncovered a few days ago, when they came across details of apparently unmerited payments by the Commonwealth Games organisers to a tiny UK-based company. This revelation was followed by an avalanche of others, that reveal scam after scam in the disbursement of more than $ 5 billion for the Games, an unconscionable luxury in a country where more than 200 million people go to bed hungry even while millions of tones of foodgrain rot in government storage dumps so as to keep market prices high for a few well-connected grain speculators.

Although he was unnaturally quiet during UPA-1 (2004-2009), standing aside while scam after scam took place within the government he headed, the Prime Minister who has emerged after the Congress victory in 2009 is a different person. An honest man himself, Manmohan Singh has refused to allow those guilty to escape exposure. Indeed, several of the most recent revelations of graft within the Commonwealth Games setup in Delhi have come from government channels. These days, more and more VVIPs are being exposed and made accountable for corruption. The PM seems to have decided that enough is enough, and that if he wanted to protect his legacy, he needed to go after the big fish rather than - as sual - toss a few minnows before the public. In what is being termed the 2010 Corruption Games, treadmills were hired for just 45 days for Rs 9 lakh, when even the best costs only Rs 4 lakhs to buy outright. At a huge cost, a blimp will circle the Games Stadia, video graphing the ceremonies. All sorts of unknown entities based abroad have been paid vast sums of money for tasks that even a village idiot could perform with ease. If the media revelations prove to be correct, out of the $5 billion, more than $3 billion may go into the pockets of a few VVIPs.

These are now frantically looking to the Prime Minister to escape with the loot, but indications are that Singh is determined to clean up the rot, even if in the process, some of his own party persons are shown to be corrupt. Although more than $2 billion is supposed to have been spent on Delhi, the reality is that the city still looks as dysfunctional as it used to be. Traffic is a mess, power keeps shutting down, while water gets mixed with sewage before reaching households, presumably a population control device. The only commendable work has been on the Delhi Metro, which has taken on new routes and works with reasonable efficiency. However, the 2010 Commonwealth (sorry, Corruption) Games seems to have become a curse rather than a blessing, in large part because most of the stadia have been situated in the heart of the city. The reason for such a decision was to ensure that VVIPs reach the stadia from their residences in less than 20 minutes, escorted by fleets of police cars. Had the stadia been situated outside crowded areas, the city would not have become the nightmare that it today is, but in India, decisions get taken only for the convenience of VVIPs, of course in the name of the common man. Should the PM manage to succeed in his mission of ensuring that the guilty behind the Games get booked, the nation would owe him an immense debt of gratitude. However, it is still early days, and the pressure for a whitewash is growing.

This columnist has no doubt that the ISI plans and seeks to execute several actions designed to weaken India. However, none of these – even should all succeed - have the same negative effect on India’s prospects as corruption. The philosophy of basing decisions on personal interest and financial greed has permeated the system, even in matters as vital to the nation as Defense procurement. The revelations about the Games only highlights this situation. The only difference between the present day and that of the British Raj is that then, the loot was carried out by foreigners. These days, the dacoits are Indian citizens themselves, of course helping several unscrupulous foreign nationals to make money. Only a handful - such as Manmohan Singh - have remained unaffected by the grime. The question is: can they stem the rot? If India is to become an economic superpower, the PM will need to choose between the interests of the\ common man and that of the VVIPs, and continue on the path he is taking, of seeking accountability. In October, the Commonwealth Games will take place. When it ends, there will still be 200 million people going to bed hungry each night in India.

—The writer is Vice-Chair, Manipal Advanced Research Group, UNESCO Peace Chair & Professor of Geopolitics, Manipal University, Haryana State, India.

Nation Of CURRUPTION

It is a no brainer that Corruption In India is at its rampant best.There is not one section of the society that is spared from it.Corruption in the form of bribery takes the cake and given that it begins at the grass root level makes it even more difficult to monitor and control.The  Corruption and Bribery Report published at trak.in earlier , gives a detailed breakdown of the scale of the bribes and the reasons why bribes are given.
The striking though well known findings of the report points out that close to half the bribes are requested by the Government Officials both at the state and national level.The same government personnel who are entrusted with the development of the nation are filling their own pockets.No wonder then the nation’s politicians are the most corrupt lot.

However, it it was only for the petty money minded officials filling their own pockets, the enormity of the bribery might be restricted to a certain level.What if corruption takes the shape of a billion dollar behemoth.According to Management Guru C.K.Prahalad , the cost of corruption to the country might as well exceed Rs. 250,000 crores.
The total spending for the 2009 Lok Sabha elections is pegged at a whopping Rs. 10,000 crore.The breakup of this spending throws up some interesting insights too.

• Rs 1,300 crore (Rs 13 billion) by the Election Commission
• Rs 700 crore (Rs 7 billion) by the Centre and state governments
• Rs 8,000 crore (Rs 80 billion) were spent by political parties and individual candidates

8000 crore spent by political parties and individual candidates ? Where do they get hold of this kind of money to spend. Again, it comes as a no brainer that it is hugely attributed to the Private Funding that political parties attract from big pocket industrialists.The reasons why private spending of this scale happens again is rather simple Favourtism.It is a well known fact that government support is crucial for industries small and large.One favourable swing in a huge tender or a favourable policy, and all the benefits can be reaped.
C.K.Prahalad fitting compares politicians with Venture Capitalists :-)

Given the risky nature of the investments in elections, politicians as venture capitalists, we can assume, will not settle for less than a 10-fold return.

More than spending by individuals and political parties, what i fail to understand is , Why is a 10,000 crore rupee spend needed for carrying out Elections.There can be infrastructure and operational costs, but they can never amount to such alarming numbers.
Now, when the government is well aware of crores of amount spent on election campaigns and product like advertisements with politicians selling themselves door to door, why cant regulations be implemented to stop all this waste of money.Why cant the regulatory bodies impose a maximum cap on the amount spent on election campaigns failing which the political party is banned to contest.However, accountability is something that leaves a lot for asking and barring which none of the measures to put a stop to corruption can reap rewards.
It is embarrassing that billions of dollars are being spent on electing leaders who do nothing more than succumbing to taking bribes after getting elected.
The gory facts are for everyone to see but then a solution as usual is not in sight. Can you think of a possible solution to this massive problem?