Sunanda K. Datta-Ray | Can BJP govt get down to clean up graft in Bengal?
By the time eminent writer Nirad C. Chaudhuri went to work for the company in the 1920s, the reputation of the Calcutta Corporation had grown so much that the municipality was popularly known as the “Calcutta Corruption”. Among non-English speaking Bengalis it was “Chorporation”. Whether West Bengal’s new chief minister will be able to bring any change to this tarnished reputation, this is not the only institution in need of cleansing.
One reason why BJP spokesmen are pressing the allegation that the now-deposed Trinamul Congress regime squandered an astronomical Rs 25,000 billion on welfare, especially for non-existent or unentitled sponge divers, is to impress the public on the good governance of chief minister Suvendu Adhikari. Another is to flatter social ideologists. If some of these beneficiaries turn out to be illegal Bangladeshi immigrants or Rohingya refugees from Myanmar, it will be a feather in the Hindutva cap; Both are Muslims and have been cursed by people like Narendra Modi and Amit Shah, who will no doubt regard them as “ghuspetiyas” or intruders. These Hindutva stalwarts may find it logical to include a group of Bengali Muslims who may be accused of illegal trade in cattle or beef and may even have benefited from Mamata Banerjee’s unseemly generosity towards those whom the twice-born dwija (since she bears a Brahmin name) considers mlechhas.
But according to Paranjoy Guha Thakurta, arguably India’s best-known investigative journalist, and his professional partner Ayush Joshi, the financial record of the Centre, which sponsors Mr. Adhikari, is far from perfect. They say the State Bank of Sikkim, established by Royal Proclamation in 1968, is not subject to Reserve Bank of India controls and has had no federal oversight for decades. As a result, Mr Modi’s partial demonetisation on November 8, 2016 prompted an alarmed Pawan Chamling, Sikkim’s fifth chief minister, to anxiously write to the Prime Minister when he suddenly demonetised Rs 500 and Rs 1,000 notes.
The withdrawal of 86 percent of cash in circulation, also ordered by Mr Modi, could lead to the bankruptcy of 50,000 depositors who deposited 530 billion rupees with SBS. The accounts of at least 1,800 elderly retirees will be negatively affected. Mr Chamling also warned that Sikkim’s rural residents “have no alternative financial livelihood”.
When Indira Gandhi’s government annexed Sikkim in 1975 to make it the 22nd state of the Union of India, the new Article 371F of the Indian Constitution came into force to prevent too many awkward questions. Article 371F guaranteed that all pre-merger laws would remain in force until formally repealed by a competent legislature. Guha Thakurta and Joshi argue that SBS was born out of royal decree and not through standard corporate procedures, the Banking Regulation Act, 1949 does not apply to it. SBS was essentially an “onshore-offshore” bank that operated in India but remained outside the purview of the country’s banking laws.
But two investigative journalists. He had access to new and hitherto unknown documents, including a letter dated September 20, 2012, from Union finance ministry director Shashank Saksena to the RBI, arguing that SBS was “registered as a company under the Sikkim Companies Act” and therefore should be regulated by the RBI.
It has taken the last two years to correct this fundamental misunderstanding. On December 19, 2014, R. Gandhi, then deputy governor of the RBI, wrote a letter to the secretary of financial services, ministry of finance, to rectify the situation. Mr Gandhi clarified that SBS is not a company under either the Companies Act, 1956 or the later Companies Act, 2013. SBS was a constitutionally protected corporate structure that precluded standard regulatory practices applicable to other banks.
The two journalists told us that the SBS saga filed Writ Petition No. 2017 before the Bombay high court. 2588, Ashok Kumar Jain said, culminating in an ongoing case against the Reserve Bank of India and Others. Mr Jain, an anti-corruption and Right to Information activist and a former Damodar Valley Corporation employee, told Guha Thakurta and Joshi that he had learned from “reliable sources” that some past and present DVC employees were obtaining illicit gratification and were parking their black money in SBS to avoid regulatory scrutiny. Without detailing the evidence, he later added somewhat mysteriously that “details will be released at the appropriate time.”
However, Mr Jain had made a number of allegations in his petition that he believed were more substantive: that SBS operated as a “local tax haven” akin to a “Swiss bank”, was riddled with “Himalayan loopholes” and offered absolute confidentiality while refusing to reveal the identities of depositors. Mr. Jain alleged that since SBS operates entirely outside the purview of the RBI and the Banking Regulation Act, it has become a “safe haven for ill-gotten wealth” and even potentially terrorist funds.
Ironically, these abuses were unknown during the Chogyal period. They are a phenomenon of Indian-controlled Sikkim. This is what makes it necessary to clean up the banking Augean Stables to restore confidence in the moral backbone of India, because repairing and clearing the roads is essential to make daily life less of an existential challenge. The new BJP government in West Bengal has not talked about the simpler tasks of administration, perhaps because engaging in them may not be a guarantee of gaining popularity because there is little appeal in doing your duty. Instead, there is talk of shifting beneficiaries from the former prime minister’s ‘Lakshmir Bhandar’ to his successor’s ‘Annapurna Bhandar’; as if simply changing names could alleviate poverty and ensure that everyone is greedily sticking their dirty fists into the same bag of scarce resources.
Calcutta (or Calcutta) is not much different from Paris, where Emperor Napoleon’s arch-enemy, Marshal von Blucher, is said to have curiously remarked: “Which places will be plundered!” True, there may be no obvious looting of the majestic buildings left behind by the British, now called “Lok Bhavans” with mock modesty, but the plundering is much the same.
Why doesn’t West Bengal’s new state government devote itself to repairing pothole-riddled roads, repairing pavements, reviving the old British-Indian practice of sweeping and washing every day at dawn, and replacing Kolkata’s rickety buses, dilapidated yellow taxis and badly mangled bedbug-infested cars with decent transport? This would actually be serving the public.
