Which is the biggest corruption in India?

 Which is the biggest corruption in India?

The Strategic Implications of Indian Corruption

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As a result of COVID-19, heavy hitters in the United States and elsewhere are talking about shifting investments and supply chains out of China. This dovetails with existing strategic concerns about Beijing. When looking around the Indo-Pacific for an alternative democracy-compatible, large market that has the potential to be increasingly strategically useful, India pops to the fore.

The Indian strategic community knows it and is chomping at the bit to “take the tide at the flood” and use the opening to redefine India’s place in the world. There is even talk of floating an Indo-Pacific Charter to replace the Atlantic Charter.

There is enormous potential, and at least one major roadblock. One of the biggest strategic mysteries of the past few decades is why India hasn’t lived up to its vast economic potential. Its relatively lackluster growth has not only affected the lives of a billion Indians, it has stunted Delhi’s geopolitical reach at a time when a strong India could be an effective counter to an expanding China.

A series of court cases currently underway in India is starting to decode some of that mystery. What is being alleged is a decades-long complex, sophisticated, high-stakes scheme that led to the multibillion-dollar capture and manipulation of core elements of the Indian economy, masterminded by some of India’s most senior leaders. This is serious.

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The highest profile arrest so far is India’s formerly untouchable finance minister, Pallaniappan Chidambaram. The cases against Chidambaram are spearheaded by two investigative agencies, the Enforcement Directorate (ED), a specialized financial investigation agency under India’s Ministry of Finance, and the Central Bureau of Investigation (CBI), India’s main police investigative agency.

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Corruption allegations have dogged Chidambaram for years. So why lay charges now? India’s two main political parties, Congress (Chidambaram’s party) and the ruling BJP, spar in public but there seemed to be close ties between some individual members of the two parties, especially where large amounts of money are concerned.

Chidambaram was finance minister on and off for over a decade, most recently in 2014. When Congress lost to Narendra Modi’s BJP in that year, Chidambaram’s old friend Arun Jaitley became the BJP finance minister. In spite of Modi coming in on an anti-corruption vote, there seemed little interest in investigating members of the previous Congress administration and Jaitley continued with many of Chidambaram’s policies.

In 2019 Modi was re-elected and Jaitley was replaced as Finance Minister due to ill-health. As Jaitley’s health waned, so did his influence. Coincidentally or not, Chidambaram was arrested on August 21; Jaitley died August 24.

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Since then, the increasingly public allegations against Chidambaram have started to sketch out a massive network of corruption that has major geopolitical and security implications that reach far beyond India.

The allegations involve four elements: how money was made illegally in India; how money was moved out of the country; how money was used abroad; and how money was moved back into India. They involve a network of politicians, bureaucrats, bankers, regulators, financial service providers, money launderers, front companies and more. Chidambaram is not alleged to have been involved in all elements, but rather was part of an extended, embedded system that resulted in stifling economic growth and creating security risks such as opening up some of the highest levels of governance to blackmail.

How Was Money Made in India?

It is alleged that Chidambaram and his network used their positions to put in place people, policies, regulations, and regulators that enabled them to funnel money flows through their offices and favorites, while at the same time shutting down any competition from clean alternatives.

For example, Chidambaram and his network seemingly wanted to promote and protect the National Stock Exchange (NSE) as India’s primary exchange. Competing exchanges, especially successful ones such as those run by Jignesh Shah, were targeted, with the powers of the state used to pound competitors into submission through arrest, audits, seizure of assets, and more. By the time the charges made their way through the courts and are dismissed, is it too late; the competition is destroyed.

Meanwhile, the value of the NSE to its patrons was maximized through a range of mechanisms. One currently being investigated is “co-location,” in which favored brokers were allowed to place their servers adjacent to the exchange, giving them millisecond arbitrage advantages over off-site brokerages. That time advantage combines with high-frequency trading algorithms to produce consistent profits.

Often the manipulation wasn’t that sophisticated. Rumors might be started about problems with the Indian economy; shares drop, are bought low. Then there are statements about corrective measures and shares recover and are sold off. Similar games were allegedly played to manipulate the value of the Indian rupee.

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The case that triggered the initial arrest of Chidambaram involved his role as finance minister. His ministry was responsible for approving applications to the Foreign Investment Promotions Board (FIPB), a mechanism for bringing foreign direct investment into India. When the principals of INX Media made a request to fast-track their FIPB application, they were allegedly told by Chidambaram to consider his son Karti’s consulting business. Subsequently, a substantial amount found its way to Karti and the request was approved.

How Was Money Moved out of India?

There is a range of ways to move money out of India, but one of the most concerning is hawala networks. Hawala trading was pioneered in the Islamic world as a way of transferring money without having to physically move cash. If “Joe” in Delhi wants to transfer $50,000 to his brother “Jack” in London, Joe can go to his local Delhi hawala trader, “Bob,” and give him $50,000 cash. Bob calls his hawala contact in London and instructs him to give the $50,000 cash (in local currency) to Jack. The two hawala traders settle their books periodically. And that’s it — no paper trail, no tax, no customs.

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That is why hawala is so popular with criminal organizations, terrorism financiers, drug dealers, arms traders, and human traffickers. The network works on what INTERPOL calls “trust” – a trust usually backed by the brutal enforcement of criminal or terrorist organizations. As the money of corrupt politicians joins that flow, they become “invested” in protecting the whole system – and are subject to being blackmailed by the people who run the system itself. This means they are more likely to block prosecution of those facilitating their money flows even if they pose a national security risk to the country.

At one point, Congress leader D. K. Shivakumar was in the same jail as Chidambaram, on pending charges of money laundering via hawala transactions. Congress Party President Sonia Gandhi visited them both in jail.

Sometimes the traditional banking system is used as well. One of the most notorious pending money laundering cases is that of politically well-connected Hasan Ali Khan, who reportedly casually moved an estimated $8 billion.  In one case, according to investigators, $300 million was transferred from a Chase Manhattan account into a UBS Khan-linked account for a hotel purchase in Switzerland. The note attached was tagged “Funds from weapons sales.”

Khan’s case has moved at a glacial pace, and the billions that passed through his accounts have disappeared.

How Was Money Used Abroad?

The Enforcement Directorate has identified multiple properties around the world linked to various members of the Chidambaram family. Bank accounts are harder to identify as there are allegations that the Indian government is reluctant to request full lists of illicit accounts held abroad from willing countries.

How Was Money Moved Back Into India?

There are myriad ways of moving money into India, but a popular one during Chidambaram’s time as finance minister was Participatory Notes (P-Notes) handled by companies such as Goldman Sachs. Foreign investors could use P-Notes (via brokers) to buy shares in India, for example on the NSE. Under Chidambaram, the identity of those individual investors was not diligently pursued.

So, if someone got a bribe in India, moved it abroad via hawala, then brought it back in via P-Notes, that money has now been nicely laundered and, if they happen to be running it through a co-locating broker, their investment has also grown.

Meanwhile, however, honest entrepreneurs and investors have come up against invisible walls, been harassed into oblivion, and had their livelihoods destroyed. Tata research estimated that Jignesh Shah’s markets were supporting up to a million jobs. When he was shut down, seemingly for being too much competition to a corrupt system, a lot of that potential was shut down as well. That’s happened all over the Indian economy.

It is remarkable that Chidambaram is awaiting trial. But the tentacles constricting the Indian economy still reach deep into the system. There are desperate and well-resourced efforts to scupper the cases. This is a crucial inflection point not only for India, but for global balance of power.

If India is freed from the shackles of deep corruption, it could help spread growth and stability beyond its borders. Those fighting corruption in India need all the support they can get: more external media coverage of the issues, cooperation from foreign governments in tracking illegal money flows, more scrutiny of the operations of international financial institutions, and more. If not for India’s sake, then for our own.

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Cleo Paskal is Non-Resident Senior Fellow for the Indo-Pacific at the Foundation for the Defense of Democracies.

02

The Transformation of India’s Anti-Corruption Warriors

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They were once comrades-in-arms, giving a clarion call to Indians from all walks of life to fight the system, reform politics, and end corruption in India. They wanted a Jan Lokpal, or Ombudsman, bill to root out political corruption. Behind the banner of the old Gandhian, Anna Hazare, they were the most prominent and recognizable faces of the anti-corruption movement that stirred the India’s national conscience some four years ago.

At the center of the anti-corruption movement back then were Anna Hazare, Arvind Kejriwal, Kiran Bedi, Shazia Ilmi, and Ramdev, among others. They were largely non-political figures and well-known in their areas of work. Their call to change the system and rid India of corruption stirred the whole country. Jantar Mantar became India’s Tahrir Square at that time.

The energy and anger released by the movement overwhelmed the established political parties and  greatly undermined  the ruling Congress-led coalition.

But once the general elections drew closer and the poll for the Delhi Assembly eventually came calling in 2014, the movement began its disintegration. Two years of continuous protest politicized the movement’s figureheads and had emboldened them politically. Popular pressure forced the parliament to pass a toned down version of the Ombudsman bill.

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During the movement’s heyday, several questions were raised about the credentials of the leaders and their larger aims. Several analysts pointed out that the anti-corruption activists are playing the game of the now-dominant Bharatiya Janata Party (BJP)  and that the movement is a project of the right-wing Hindu organization, the Rashtriya Swayamsevak Sangh (RSS) — the ideological godfather of the BJP. These same critics claimed that the movement’s larger aim is to dispose of the ruling Congress Party. The protagonists of the protests dismissed these insinuations with a vengeance.

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Some four years later, Kiran Bedi is the BJP’s mascot in Delhi and the right-wing group is pinning its hopes on her to pull out a victory for the party in the Assembly elections slated for the first week of February. Shazia Ilmi, another prominent face of the anti-corruption agitation, is also part of the right-wing contingent. As is Vinod Kumar Binnya a legislator from the Aam Aadmi Party (AAP, or Common Man’s Party) — Arvind Kejriwal’s brainchild.

One vocal votary of the anti corruption movement was Yoga guru Ramdev. He was not only active in Delhi’s Jantar Mantar but also in spreading the message across the country. He virtually converted his daily yoga classes into a platform to create awareness about the anti-corruption movement. Today Ramdev is dead silent on the issue of corruption. He is on the contrary exploiting his proximity to the BJP regime in expanding his business of Ayurvedic products.

Today, everything is clear. The anti-corruption movement was not aimed at cleaning the country of corruption and ushering in a new political culture in India. It was largely an agitation aimed at dislodging the previous Congress-led government.

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Veteran political commentator, Harish Khare, in his recent book “How Modi Won It,” writes that “an unholy convergence of calculations and conspiracies among corporate, political and ‘Hindutva’ crowds saw the emergence of an ‘an anti corruption movement.'” He says that the movement “reached a fork” as “he assorted right-wing groups who were providing ‘boots on the ground’ gradually and quietly withdraw their helping hand.”

Khare in his insightful book surmises that the Gandhian Anna Hazare was used “to delegitimize the Congress and weakened liberal and progressive voices.”

Whether or not one agrees with Khare, one thing that is certain is that that the biggest beneficiary of the anti-corruption movement has been the BJP. The party leader Narendra Modi launched his march to Delhi on ground prepared by the protests. Similarly, most of the activists of the Anna movement have joined the BJP.

Arvind Kejriwal, who charted a different route than some of his comrades, did so at the cost of the Congress party, a centrist liberal organization. He indirectly helped the right-wing Hindu group to come to the center stage at the cost of India’s larger liberal and secular voices.

The purported aim of the anti-corruption campaign was to reform politics; it was a voice against the prevailing corruption in the political system. Has it achieved that goal? Has India found a mechanism or way to address its endemic and systemic corruption?

We all know the answer.

Why are the protagonists of the anti-corruption movement now so silent on the issue of corruption? Why have people like Ramdev gone silent and grown hesitant to utter the word “corruption” to the present regime?

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No doubt the anti-corruption protests of 2011 were a movement for a noble cause, but the movement’s leaders had shortsighted political interests. They were opportunists and careerists. India’s millions who came on the streets with the hope of seeing a new beginning have been left high and dry. People like Bedi, Ilmi and Ramdev were playing games with the people. These people were more concerned about their career and business interests rather than the larger cause they rallied for. Naturally, their honesty and integrity falls into question.

Kejriwal, who was the most vocal proponent of the Ombudsman Bill and stood uncompromising on the issue of corruption, is a changed man now. His sole purpose now is to win the upcoming Delhi elections. He does not talk about addressing the issue of corruption or reforming politics with the same vengeance he used to just under two years ago. The rebels have become part of the system.

Kiran Bedi is now standing election for chief minister in Delhi as the BJP’s candidate, representing a party she has called corrupt and compromising numerous times. She shares the platform with the BJP’s president, Amit Shah, a man who has cases pending against him from when he was the deputy home minister of Gujarat. Shah was banned from entering his home state for two years by the Supreme Court for his murky political activities.

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How will Bedi justify her political turn?  How will Kejriwal justify his politics? Is financial misappropriation the only definition of corruption? What will the country call the abandoning of the once-noble cause of anti-corruption?

It is worse than corruption: it is a betrayal.

India will not forgive the betrayer.

03

How will India become a mature and more sensible nation in thought?

Tragidies are not a stumbling stones in the daily path of existence.

We as Indians move on, no magnitude of tragedies slow us down.The recent rape and slaying of two minor girls n the Lakhimpur Kheri district shook the sensitivities of the sane people in our nation again. Such horrific and tragic incidents to my knowledge have been happening for the past five decades of my existence. I have read and wept in silence over such tragedies and at the end of the day went to sleep whether ever anything will change in our country. But the pace of the nation goes on without a stumbling stone. Such weak is our collective memory that we forget (sic.conveniently) the horrors and tragedies of the recent past.

India is now in its 75th year of Independence when it started its journey as a nation again. Still, countless misery, tragedy, and discrimination have happened among Indians for years together. From the early days of Independence, the biggest terrible human tragedy was the partition with its insufferable bloodbath, to the modern twenty-first century Indian suffering from rape, riot, and murders every day. Nothing has changed moreover Indian behavior passivity, behavior, and brotherhood to more of an ‘only me’ aattitude and behavior.

“Corruption is paid by the poor”, said once the Holy Pope Francis. In India, we experience it daily in our routine life. Not a single day goes by when the media is covered in the unearthing of corruption to scales unimaginable running in hundreds of crores. The Indians themselves are in cohort with the corruption. Humans’ instinct is to avoid any threat, and we InIndians have to take to it by heart. Whether we bribe the corrupt officials or the overtaking from the wrong side it’s sheer avoidance of threatening situations in a fast-growing economy we want money, and power at any cost. Recently we crossed the U.K. As the fifth largest economy a moment to cherish for the Indians, yet also a moment to reflect upon the losses we are suffering. If you read and pause for a minute the losses it’s titanically huge. We have lost, mental health, brotherhood, physical well beings, and more things.

Why did Charles Darwin ever postulate the ‘Survival of the fittest theory? and the greatest modern Indian tragedy is that we have taken the theory to heart. Tragically we are more leveled up against love thy neighbor anymore, we just try to selfishly fulfil our desires, and satiate our hunger, powers, and greed. India has evolved(though it shouldn’t ever) into a cesspool of corruption, and countless discrimination whether caste or religion. I am not trying to expose something new because since Independence we are dealing with these miseries, yet my valid question is will we ever mature as a nation and become more kind, just, and sensitive towards our fellow citizens?

In 1976 Richard Dawkins thought of the ‘Selfish Gene’ theory which helps us understand the Indians to a larger extent. The tragedy of trampling of ideas, filling and thoughts of others and manipulating to fulfill our self desires is now the new norm, in fact as the country matured it should have gone away but no it has not. A simple example of the ‘Selfish Gene’ theory is the mad rush by the passengers(though with reserved seats) for the approaching train on the platform. Pushing, shoving, and shouting at fellow passengers is a stupid routine. More hilariously stupid is the honking at a car ahead who is rightly fully going in his lane, just to get ahead of the person is our selfish attitude. Why can’t we handle queues in the temples and other places of worship as if the first reach to God is reserved for the person who shoves and tramples his way to reach the sanctum? Sometimes this shoving resulted in unfathomable tragedies of the stampede in the temples and destroyed lives and families.

The nation which gave the world idea of “Vasudhaiv Kutumbakam”. Why is it tottering?

Indian culture and traditions have already engraved amongst us the idea of recognizing the world as a community, promoting peace, brotherhood, and love. Have we Indians forgotten this idea or just want to ignore it for our primeval gains? Fraught with sectarian, language, religious, and border conflicts seems to like to each his own. The constitution of India had envisaged a fair and just society but we have all but forgotten the pledge to the constitution.In my view, Maslow’s theory of motivation holds for the Indians.The majority of Indians are still at the bottom Basic needs of the pyramid here we are striving hard for food, water warmth, and rest. So it’s far-fetched to think about inner peace and calm in our lives or for our families in recent times.

Indians are a fighter community, they have faced myriad subjugations, foreign invasions, and internal prejudices. Yet remained unscathed in the core and soul, one convincing reason can be that we are religious by heart and birth. With various religious teachings of brotherhood and inner peace. So the sane mind says sooner we will be a maturer nation in our thoughts and behaviour.