Cronyism and Corruption: Hallmark of Modi Government

Modi and Shah

Narendra Modi and Amit Shah

The BJP won the 2014 election highlighting the corruption under the previous UPA regime. The Prime Minister Narendra Modi in his poll speeches repeated his gimmicky slogan – Na Khaunga, Na Khaane Dunga. But what is the reality? In the past four years, we have seen huge scams and instances of crony capitalism.

Narendra Modi Loot-and-Scoot Sewa

First Lalit Modi, then Vijay Mallya, then Nirav Modi and Mehul Choksi were all helped by the Modi government to quietly leave the country after massive corruption or defrauding Indian banks of enormous sums of money!

The latest instance is that of the Punjab National Bank, the second biggest bank in the country after the State Bank of India, which was defrauded of an amount as huge as nearly $2 billion (over Rs13,000 crore) by Nirav Modi and his uncle Mehul Choksi (whom Narendra Modi publicly praised and called ‘Mehul Bhai’).

The scam came to public knowledge only in Feb 2018, after Nirav Modi had quietly relocated his entire family abroad! Modi govt’s helping hand in this loot and scoot scam becomes evident from 3 crucial facts: (a) Nirav Modi after leaving India had surfaced at the World Economic Forum in Davos in the company of Prime Minister Narendra Modi, despite the fact that complaints against Nirav Modi and Choksi had been pending in the PMO since 2016! (b) CBI has categorically noted that most of Nirav Modi’s fraud LoUs issued or renewed in 2017-18. (c) Just days back in July 2018, the Antigua government said that it had granted citizenship to bank-fraud accused Mehul Choksi because India had not red-flagged it at any stage of the paperwork, though complaints against Choksi had been pending with the Corporate Affairs Ministry, Mumbai Police, the Ahmedabad Economic Offences Wing, the Prime Minister’s Office and SEBI for several years.

Was our self-styled chowkidar Narendra Modi sleeping while the thief ran away with the booty or was the chowkidar also a bhagidar in ensuring safe passage for the thieves!

Close on the heels of Nirav Modi-Choksi scam came the Rotomac scam of Rs 3,700 crore defrauding of 7 banks!

“In the wake of the alleged PNB and Rotomac frauds, the government has seen the value of its investments in public-sector banks drop by about Rs 30,000 crore ($4.6 billion) in the last seven days.” (TOI, 21 Feb, 2018)


Jio ‘Institute of Eminence’

The decision of the Empowered Experts Committee (EEC) set up by the Modi Government’s Ministry of Human Resource and Development (MHRD) to award the “Institute of Eminence’ tag to the as yet non-existent Jio Institute of Reliance Foundation has underscored the brazen cronyism that marks the Modi model of governance.

Facts suggest that MHRD scripted the Rules for the ‘Greenfield Category’ (for proposed institutes which are yet to be set up) specifically to ensure that none but the Ambanis could qualify. To begin with, the Empowered Experts Committee (EEC) is headed by former chief election commissioner N. Gopalaswami, who is now head of the RSS-affiliated Vivekananda Educational Society! Is not this a brazen Sangh interference in the policies of the country’s higher education? Further, in a classic case of conflict of interest, Vinay Sheel Oberoi was an MHRD Secretary at the time the IoE scheme (then called the ‘World Class Institute’ scheme) was conceived, and was then part of the eight-member Jio team led by Mukesh Ambani that made its presentation before the EEC!

The crony tango between the Modi Government and the Ambanis is even clearer when one notes that the Reliance Foundation Institution of Education and Research (RFIER) was registered as a company on the very same day that the UGC issued a press release inviting proposals for the ‘Institution of Eminence’.

The Rules notified for IoEs were tailor-made to exclude most other institutes and ensure that only the Reliance Foundation’s Jio Institute would be eligible. One rule stipulated that the individual members of the “sponsoring organisation” of the proposed Institute must have a collective net worth of over Rs 50 billion. How many individuals barring a handful like Mukesh Ambani can boast of such a humongous “collective net worth”? The other Rule stipulated that the organisation must have a proven track record of “translating plans into real achievements in any field (not necessarily in the field of higher education, but preferably in it)” – this wording ensured that Reliance, in spite of having zero experience in higher education, could stake a claim for ‘Eminence’ in the field!

The entire process whereby the IoEs have been selected (both the ‘Greenfield’ ones as well as existing public sector institutes) is full of wilful violations and manipulations. The EEC made the selections, admittedly without making any field visits or tabular appraisal and rankings of the various higher education institutions, as mandated by the UGC guidelines for selection.

Meanwhile, another noted crony of the Modi Government and top funder of the BJP, the Vedanta group, got a one month extension of the deadline to apply for the “Institution of Eminence” tag for a proposed University in Odisha (the same state where a huge people’s movement finally defeated the Vedanta project to set up an aluminia refinery that would destroy the Niyamgiri mountain).

More importantly, what is the Reliance and Vedanta vision of education? The private institutions on which the IoE title is conferred will get ‘autonomy’ – i.e the freedom to charge exorbitant fees and avoid implementing reservations for oppressed castes. The Dhirubhai Ambani International School at Mumbai charges Rs.2.05 lakhs per annum for LKG to Class 4th and Rs.9.65 lakhs per annum for class 11th and 12th. Such steep fees have ensured that the school caters only to the children of the super-rich. In its application to the government, Reliance Foundation’s proposed Jio Institute has projected earnings of Rs 100 crore from tuition and hostel fee to be paid by roughly 1,000 students (annual fee of massive Rs.10 lakhs per student) in its first year of operation.


Rafale Deal – For Another Crony, the Younger Ambani

While the IoE fraud unfolds in the sphere of higher education, the Rafale fighter jet deal by the BJP Government with the French company Dassault Aviation is turning into the mother of all defence scandals. A Mukesh Ambani company bags ‘Institute of Eminence’ though it has zero experience in higher education; a Anil Ambani company bags defence deal at the cost of PSU Hindustan Aeronautics Limited (HAL) though it has zero experience in the defence sector!

What are the facts? The previous deal that the UPA Government was making involved buying 126 Rafale jets for Rs 54,000 crore – 18 of which would be in a ready-to-fly condition while the rest would be manufactured by the public sector Hindustan Aeronautics Limited (HAL) using technology that Dassault would be obligated to transfer. This deal was cancelled, and overnight the new deal signed by the Modi Government instead obtained 36 jets (in a ready-to-fly condition) at Rs 58,000 crore, minus the transfer technology. Anil Ambani, owner of the Reliance Defence Limited (RDL) Company, registered just 2 weeks before the deal, accompanied Prime Minister Modi on his France trip and secured the partnership with Dassault and 30,000 Cr worth ‘’offset contract’’ instead of experienced public sector company HAL.

So – let’s sum up this crony tango. Just as Reliance Foundation Institution of Education and Research (RFIER) was registered just in time to snag the ‘Institute of Eminence’ gift from the Modi Government, the Reliance Defence Limited (RDL) was registered just in time to snag the defence ‘offset’ and production partnership as part of the Rafale deal freshly negotiated by the Modi Government. Why was the inexperienced two-week-old RDL preferred over the experienced public sector HAL? Why did the new deal cost India two and half times more than the cost negotiated by the previous Government? Why did the new deal lack the transfer technology which was part of the previous deal? How did Ambani’s RDL get the lion’s share of ‘offsets’ after the deal, despite zero experience in the defence production?

Bogus ‘Secrecy’ plea: Bristling at questions in Parliament over the Rafale deal, the Modi government claims that revealing price details in a Defence deal would impact national security. This is rubbish.

The Rafale Deal secrecy clause cites the 2008 security agreement between India and France which is aimed at protecting “classified information” which “could impact security and operational capabilities of the defense equipment” – it does not prevent disclosure of the sale price. The French Government also has made it clear that the Modi Government is free to tell the Opposition details of the price.(India Today, 8 March, 2018)

Also, the Modi Government’s ‘secrecy’ plea is being trotted out late. Earlier, the same Government had, soon after the deal, given defence journalists a detailed briefing on the price break-up, claiming that the Rafale aircraft cost just Rs 670 Cr and the remaining more than Rs 900 Cr was for some mysterious “India specific upgrades” of weapon systems. The MoS Defence had also revealed the price in Parliament in November 2016. Prashant Bhushan compared this claim to saying “that your car cost 10L but the seat costs 20L.”

The Defence Minister, Nirmala Sitharaman, in her Press Conference on 17 November 2017 assured that the exact price of the 36 Rafale jets would be made public. However, soon after, on the floor of the parliament, the Defence Minister backtracked saying that price can’t be revealed because of a “secrecy clause” and that it would impact national security! What is the Government hiding in the name of “secrecy clause”? Whom are they trying to shield with these excuses?

Procedural Violations: The Rafale Deal is not only marred by a massive loss to the public exchequer, but there were also unashamed violations of the procedure of defense procurement. For instance, there was violation of the well-established procedure of sanction from the Cabinet Committee of Security (CCS), in the time of announcement of the deal.

String of Scams: Recently, several other shocking details of the Rafale scam have come to light. There is another Reliance subsidiary company, Reliance Aerostructure Ltd. The Defence Ministry provided the license to manufacture fighter aircrafts to this company. But shockingly, the company did not own any land or building on the date of the license (22 February, 2016). So how did it get the license to manufacture fighter aircrafts? Did the Government even cross-check these basic facts before granting license? 

Another important fact is that the Reliance Aerostructure Limited came into being on 24 April, 2015 – just 14 days after Modi Government’s deal with the Dassault Aviation. So, one Reliance company was registered just two weeks before the deal and another came into existence just two weeks after the deal and got the contract!

Lies and Cover-Up Bid: Several appalling new facts have also emerged about the Defense Offset Contract. Reliance Defence Limited (RDL) through a press release of 16 Feb 2017, claimed that it has secured the Offset Contract from Dassault Aviation for Rs.30,000 crore and a consequent Lifecycle Cost Contract of Rs 1 Lakh Cr. The Dassault Aviation too, in its Annual Report 2016-17, mentioned about the offset contract.

But on 7 February, 2018, the Defence Minister Nirmala Sitharaman, in a PIB release claimed that the “no Indian Offset Partner for the 2016 deal for 36 Rafale Aircraft has been so far selected by the vendor”!!!! So, is the Defence Minster not even aware of such an important contract worth 1 lakh 30,000 crore? Can Reliance and Dassault Aviation sign such huge ‘offset and life cycle cost contracts’ without the approval of the Defence Minister? Or is the Government just blatantly lying in a desperate bid to cover-up this shameful and inexplicable offset contract favouring junior Ambani?


Projects like the Sterlite copper smelting plant and the Chennai-Salem Green Expressway also raise questions of possible corruption: why are corporations like Vedanta, Jindal and Adani, known to be cronies of the Modi Government, allowed to violate laws and rules and set up destructive projects?

BJP-ruled Jharkhand amended its energy policy in 2016 to benefit a single company owned by Modi’s crony and funder Gautam Adani, allowing it to charge a higher price than what other thermal projects bill the state. An audit report by the office of Jharkhand’s state accountant has found that the agreement with Adani amounts to “preferential treatment” resulting in “undue benefits” to the company.( 12 June 2018)

Moreover, the Jharkhand Government is violating The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and the Santhal Parganas Tenancy Act – laws which protect adivasi land – to grab land from villagers for the Adani project.


Demonetisation ‘Deposits’ and Amit Shah

5 days after demonetisation was announced, District Cooperative Banks (DCBs) were banned from accepting deposits of the banned currency notes from the public, to prevent money-laundering. But, it seems that the very same DCBs which were under directorships various BJP leaders including Amit Shah became the convenient window for Notebadli (or laundering) during those first 5 days of Notebandi !

  • The Ahmedabad District Cooperative Bank, which has BJP President Amit Shah as a director, collected the highest amount of deposits – worth Rs 745.59 crore – of banned notes among cooperative banks! This startling revelation came through an RTI reply received by Mumbai activist Manoranjan S Roy
  • The second highest deposits received were by the Rajkot District Cooperative Bank, whose chairman Jayeshbhai Vitthalbhai Radadiya is a cabinet minister in the BJP’s Gujarat government; this bank received Rs 693 crore withdrawn notes in the first five days.
  • Old notes worth Rs 3118.51Cr were deposited in the first 5 days of DeMo in 11 District Co-op Banks in Gujarat, all of which had prominent BJP leaders as Directors!
  • Rs 14293.71 Cr were deposited in Co-op banks in BJP-ruled states after demonetisation.(India Today, 22 June 2018)

Many media stories about the suspiciously high deposits in District Cooperative Banks with Amit Shah and other BJP leaders as Directors, were pulled down without any explanation – needless to say under whose pressure!

While the poor suffered and more than 150 died in queues trying to exchange their own hard-earned money which had been cruelly demonetised overnight by Modi, it seems huge amounts of currency were exchanged in District Cooperative Banks headed by Modi’s right-hand man Amit Shah and other BJP leaders! 


Piyush Goyal, Modi govt’s Minister of State with Independent Charge for Power, Coal, New and Renewable Energy, sold the entire stock of a company he and his wife owned, at nearly 1000 times the face value, to a group firm owned by Ajay Piramal – a billionaire with substantial interests in the infrastructure sector including power – a transaction smacking of quid pro quo and conflict of interest. Goyal failed to declare this transaction in the mandatory statement of assets and liabilities that he made as a Minister to the PMO in 2014 and 2015. (The 28 April 2018)


1600 Times Rise of Jay Amitbhai Shah

A company owned by BJP President Amit Shah’s son Jay Amitbhai Shah mysteriously increased its turnover 16,000 times over – from Rs 50,000 in 2014-15 to Rs 80,00,00,000 – in the year following the BJP govt coming to power!

His Temple Enterprise (a company with no assets or inventory) showed a negligible turnover till 2014-15 (it recorded losses of Rs 6,230 and Rs 1,724 for 2012-13 and 2013-14, and a profit of Rs 18,728 on revenues of Rs 50,000 in 2014-15). And then, it recorded a stupendous 16,000 times jump in turnover to cross Rs 80 crore in 2015-16! Temple Enterprise made a declaration to stop all business activities in October 2016, shortly before the November 8 announcement of demonetization!

Jay Shah has tried in vain to muzzle The Wire which exposed this dubious story, by threatening them with defamation cases.


Deposits in Swiss Banks Soar – Modi Jumla on Black Money Recovery Exposed

Money deposited by Indians in Swiss banks rose over 50 per cent to CHF (Swiss franc) 1.01 billion (Rs 7,000 crore) in 2017 – the year after demonetisation. Remember when Modi – and his propagandists like Baba Ramdev – promised that if he were elected PM, black money would be recovered from Swiss Banks and distributed to the poor (at Rs 15 lakh per account)?! And now, when there is no sign of black money recovery and instead Indian deposits in Swiss banks  are soaring, Modi Ministers Arun Jaitley and Piyush Goyal (the indirect and direct Ministers of Finance!) are shamelessly saying, “Why assume the deposits in Swiss Banks are black money or illegal?” (TOI, 29 June 2018, Indian Express, 29 June 2018)


BJP Leaders in Manipur and Goa Linked To Illegal Drug Trade

ON June 18, 2018, the Department of Revenue Intelligence (DRI) in Mumbai questioned senior Goa BJP leader Vasudev Parab for more than six hours, in connection with a huge haul of drugs, including the ‘date rape drug’ Ketamine, recovered by the DRI in a raid on a factory owned by Parab. A ‘date rape drug’ is a drug used to drug women on social occasions without their knowledge, in order to rape them.

On June 20, 2018 PTI reported that “A huge quantity of heroin and party drugs worth around Rs. 40 crore were seized from the official residence of the chairman of Autonomous District Council (ADC) in Manipur’s Chandel district” – Lunkhosei Zou, a BJP leader. A sum of Rs 13 lakh was also seized from the BJP leader’s house.

So, the party that claimed demonetisation would wipe out black money in the form of liquid cash, has leaders dealing drugs and hoarding lakhs of black money in their homes!



Who will probe cases of corruption?

Tainted Officers in CBI

In July 2018, the Central Bureau of Investigation (CBI) has taken the unprecedented step of writing to the Central Vigilance Commission (CVC) suggesting that the Bureau is being asked to induct officers who are tainted and “under examination by the CBI as suspects/accused in criminal cases under investigation with the Bureau”! The CBI has pointed out that its second most senior officer, Special Director Rakesh Asthana is himself under the scanner in several cases and therefore “cannot be consulted for inducting officers into CBI” in the absence of the Director Alok Verma. (Indian Express, 16 July 2018) The question is – why is the Government keen to make the CBI induct officers who are suspected and are under investigation?


No Lokpal After 4 Years and Dilution of Prevention of Corruption Act

Although the Lokpal act has been in force since 2013, the BJP government did not implement the act till date! Whistleblowers Protection Act not being operationalised till date despite it was passed in February 2014.

And now in July 2018, Modi govt passed the amended ‘’Prevention of Corruption (Amendment) Bill 2018’’ replacing the existing Prevention of Corruption Act, 1988. The law has added a hurdle for probing the corrupt govt officials by adding the clause of ‘’prior permission by competent authority’’ to initiate a probe. While the earlier law required ‘’prior sanction’’ by the government at the stage of prosecuting an offender, the amended law by introducing the condition of ‘’prior sanction’’ even for taking up investigations has empowered unethical governments to shield dishonest officers!

E.A.S Sarma (Former secretary, dept of economic affairs, ministry of finance) has aptly noted:

‘’One should look at these amendments in the overall context of how the NDA government has proceeded with other anti-graft laws. The Lokpal and Lokayuktas Act (2013) was diluted in 2016 to exempt public servants’ families from disclosing their assets. The Whistle Blowers Protection Act was diluted in 2014 to prohibit disclosures running counter to the Official Secrets Act, a provision that could nullify the primary intent of the legislation.

Electoral corruption sets the tone of governance. By amending the Companies Act to lift the ceiling on political donations, introducing a system of non-transparent electoral bonds to ensure anonymity of donors/ donees, and amending the Foreign Contributions (Regulation) Act to clear the way for larger foreign political donations flow, the NDA has taken retrograde steps in its avowed campaign against corruption.

Neither the BJP nor its allies in the NDA are willing to submit themselves to the stringent transparency requirements of the RTI Act.’’ (The Print, 25 July 2018)

Conclusions :  Cronyism has become the hallmark and new normal of the Modi Government. The Adanis and Ambanis are allowed to get indefinite extensions on loan repayment deadlines, and have laws and rules tailor-made to benefit them, while the Nirav Modis and Mallyas are allowed to plunder public sector banks, default on loans and get smooth passage to flee the country with their loot.

Journalists covering these instances of blatant cronyism are threatened with defamation, while much of the ‘Godi Media’ (lapdog media) plays diversion tactics, running stories to fan up communal prejudices and fake news against minorities, activists and Opposition leaders rather than doing their job of demanding answers from the Government on such corruption.

As the dominant and big media are suppressing the big ticket corruption charges and helping the govt to cover-up, it is up to the people of India to expose and resist the Company Raj of the Modi Government which has become synonymous with cronyism and corruption.

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One Comment
  1. Allahabad: Listing out its achievements, BJP today said the economy has gained and decision making process strengthened since the Narendra Modi government came to power two years ago.

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